24th November 2015 Mark Andrew Ryder, Prime Competence

Delivering the strategy: Innovation

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Prime Competence and shareholders

The largest research institute in

The Netherlands. Conducts contract

research, offers specialist consulting

services, and grants licenses for patents and

specialist software.

Praised in the postal industry for it’s

innovativeness and operational excellence.

Frontrunner in sorting, resource planning,

postal retail, digitalization in the last mile

and IT.

Prime Competence is an independent, knowledgeable and skilled consultancy organization

working at arm’s length of its two shareholders PostNL and TNO.

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Looking to the future

You’ll be ready for 2025!

• Network optimization for changing mail volumes in the

future

• USO compliance with future-proof sequencing

processes

• Market position validation for national operators

• Defining investments in operational processes

• Adding fresh business models and value to current

Postal operation

• Support and lead new development projects

• Inject external knowledge, ideas and innovation

• Co-creation and co-entrepreneurship

Process Optimization Innovation & Business Development

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Last mile challenges

Two focus areas for the future

Adding value (new business models) into

the last mile

Hit rate of parcels whilst volumes

increase by e-commerce

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Last mile of parcels

Examples of hit rate challenges

Recipient customers are demanding

more choice in the delivery and timing

of parcels. Lead times and hit rate are

improved to better serve the higher

expectations. To be achieved without

adding operational costs.

The operational challenges of

shipments which cannot be delivered

are growing. Delivery processes are

not organized optimally, whilst not-at-

homes are there for a next attempt or

other delivery method.

“ “

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Last mile of parcels

Table of parcel deliveries

Val

ue

Urgency of receiving the parcel

Anytime solution

Registered

Deferred

Parcel Locker

Timeframe indication

Retail Pick-up point

Same day delivery

Courier / insured

Deferred

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Last mile of parcels

Introducing always at home

Always at home

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Last mile of parcels

Introducing always at home

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Last mile of parcels

Life cycle of idea

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Declining volumes

Problem

Solution

Declining volumes will mean operational costs won’t be covered

Postal companies can leverage their key competitive advantage.

They cover every square meter of the country nearly every day, a

unique capability. This competitive advantage strengthens their

USO position and can deliver add-on revenues

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Examples of new business models

Postal Mobile Data Network “Lost & Stolen”

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personal mailbox

mail delivery truck

post office building

mailman on bicycle

mailman on moped

street mailbox

Postal Mobile Data Network

How can this be achieved?

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Postal Mobile Data Network

What are the benefits?

A Postal network is very dense,

so good coverage, also indoors

Cost effective compared to

alternatives

Additional revenues for

postal companies

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Postal Mobile Data Network

What can this technology help with

Sales offers from merchants in the

vicinity

Local weather measurements

Information on traffic flows

Helping blind and visually impaired

Location based tourist information

Collecting data from sensors for businesses

and (local) governments

A mailmen is able to independently measure

coverage.

Air quality and other environment data

Air pollution and ozone measurements

Measuring noise levels in populated areas

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Lost & stolen

Our proposal for a solution

I have equipped my bike with a tracking tag/sensor. It should help me find it.

My bike has been stolen! I will notify the network to start looking for it.

This new tracking service is very cool! They have located my bike in no time.

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Lost & stolen

Showing some figures

€600,000,000 in damages

And that is not all. There are a lot of other stolen goods that add up to this sum. Tablets, umbrellas, baby strollers, watches etc.

Smartphones Bicycles Motorcycles Cars

10M

30K

TOTAL

STOLEN

22M

600K

TOTAL

STOLEN1.8M

16.5K

TOTAL

STOLEN1.3M25K

TOTAL

STOLEN

Electric bikes

8M

11K

TOTAL

STOLEN

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Lost & stolen

Pricing the solution we offer

our solution

€0.30per item

v.s.

alternate solution

€25-300per item/system

Our solutions are much less expensive than other solutions

Prices are depending on local situations

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And finally, one more look at….

….Declining volumes

Problem

Solution

Declining volumes will mean operational costs won’t be covered

• Leverage competitive advantage and USO position (covered earlier)

• Dynamic scaling of capacity to demand

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Capacity Planning

The current paradigm for many posts

Historical data

Seasonal factors

Market factors

Equipment / systems

Business req’s / SLA

Analysis / modeling

Plan for next week

Plan for next month

What you did on this day last year becomes a critical factor

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Capacity PlanningOur client was inspired by developments in the airline industry

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Capacity Planning

Airline industry : postal industry – many similarities

Live capacity planning within the baggage handling operation of most airports has delivered huge cost-savings

and efficiencies, whilst increasing quality of service. Previously, operators were on hand for the full operating

window, whether there were planes arriving/departing or not.

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Capacity Planning

Big-Data led technology offers the prospect of live planning

Live demand data

Live weather conditions

Live utilization

Business req’s / SLA

Plan for now

Plan for 1hr, 12hr, 24hr

What you did on this day

last year becomes irrelevant

Live Model

Market factors

Sorting capacity

Transportation assets

Fixed manpower

Resources

Flexible manpowerLocation of assets

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Capacity Planning

Workforce planning & scheduling program for a major European post

“projected savings in manning postal operation of 90% and an ROI of less than 30 months”

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Looking to the future: Delivering the strategy

Expertise Innovation

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Thanks for your attention