Mail Network Optimization

Project
A study

Mail Network Optimisation project focuses on postal (mail) business,

which account above 50% of the departments revenues

India Posts revenues

Percent

Mail Revenue
Rough estimates in percent

100% = INR 5,862

crore

International mail
Speed
post
Postal
receipts

SB & Financial
services

Ordinary
and
registered
mail

There are 3 main reasons why improvement in

Mail Business is required
India Post is
losing volume
and market
share
significantly

India Post's total mail volume, million

items p.a.1
*
*
*

2004/05

2008/
09
Customer survey results2

Customers rate
India Post low,
especially in
reliability
India Post's
financial
performance is
poor compared
with that of
other players

EBIT3 margin of postal operators

> 30%
> 25%
> 20%

1 Based on annual report and book of information

2 Based on 50 extensive and structured interviews with 20 loyal and 30 former Speed
Post customers
3 EBIT = Earnings before Interest and Tax
4 Mail division only

Scope of the project

SCOPE

Optimise India Posts mail network

"Get the
core
right"

"Modern
ise the
look and
feel"

from collection to delivery

Standardise processes with focus on
quality improvement and reduction
in complexity
Establish an effective performance
manage-ment structure using KPIs
and regular reviews
Improve India Post's appearance to
make it more trustworthy and
reliable for customers
Broad approach to upgrade
processing facilities and improve
working conditions for employees
Make staff and customers proud of
being associated with India Post

Geographical reach

Project Roadmap
All
India

2012
Roll-out
2011

Priority
cities
"Wave 1"

"Wave 2"

Scenario-based design and pilots

Speed Post &

International mail

First class

"Wave 3"
Scenariobased
design
Second class

Product
range

pproach particularly reflects strong need for immediate tangible impac

City 3
Mail Office
PO 1
PO 2

City 1

What is the right

network?

What is the right network

schedule?

What are the right

processes?

How to measure India

Post's performance?

Mail Office 2
PO 3
Mail Office 1
TMO

TMO

City 2

Mail Office

PO 3
PO 1

PO 2

MNOP and Speed Post

operations

Objective
Reach a new level of excellence in speed post
handling
Educate each user in the system the overall
perspective and the importance of his/her role
in achieving excellence and meeting the
commitments to customers
Adopt standard practices in operations across all
handling units
Bring in transparency by generating viable and
transaction specific MIS to improve the
monitoring process

What excellence is aimed at?

Maximize next day delivery of
articles within and across cities
Bring in reliability to the service
Provide efficient after sales service
through increased visibility for the
articles passing through the system
Enhancing the look and feel

What are the changes?

Optimising the processing centres
introduction of sorting hubs
Standardising the equipments
Realigning the layout in processing
centres to improve handling
processes
Stringent commitment to cut off
times in bag closing processes

Introduction of sorting hubs

Existing system of closing bags by each SPC to others dispensed with
Bag handling process rationalised through introduction of sorting hubs
to
reduce the number of bags handled
bring in cost effectiveness
achieve scalability
89 SPCs identified as sorting hubs on the national network that can
close bags to each other; These are specialised processing centres
Intra circle hubs introduced to handle mail pieces within the circle
Booking interfaces not reduced
POs are mapped to hubs
Overall expedited processing, transit and delivery time, reduced
sorting complexity (back-routing to a small fraction of mail
notwithstanding)

Rationalising booking and delivery

Booking and delivery processes are through POs
POs to segregate articles as TD or NTD only and close
two bags to parent sorting hub or IC hub(if available)
89 SPCs which are now sorting hubs are optimised as
exclusive processing centres
BNPL centres handle articles from bulk customers with
large volumes
MBCs, RMS units and OSAs(collection agents) also
book articles
Post offices also accept BNPL articles and maintain
accounts of customers subject to certain restrictions in
payment processing

Revising layouts

Sample of new
layout

Introduction of
assembly line
functioning in hub

Standardising equipments

Sorting Cages

Roller containers Bag cutter and stool

Tray trolleys

Commitment to cutoff times to improve D+1

Receipt
from PO

1
Rationale

Cut-off to ensure Receipt of items

flight connectivity from other cities

Non-TD
sorting

Sort rest of India

volumes before
outgoing flight

TD sorting
(from own
POs)

Sort TD from
own POs while
waiting for
flight receipts

Cut-off
for POs

TD
sorting
(from
Rest of
India)
Sort TD from
rest of India
after receipt
from incoming
flight

Performance monitoring through KPI analysis

KPI
1

D+X
reports

Scan
compliance
reports

International
reports

1
b
1c
1
d
2
a
2
b
2c
3
a
3
b
3c
4
a
4

Support
-ing
KPIs

What does it do?

a

Transit analysis within city

Transit analysis across city
Time per leg of transit within city

Measures speed and

reliability of processing of
Speed Post articles from
booking to delivery

Time per leg of transit across city

Scans compliance in the entire network

Measures for each

processing step whether
Scan analysis per leg of transit within city
articles got scanned as
Scan analysis per leg of transit across city prescribed
Percent of F-scans in SpeedNet vs. F-scans in Measures for international
1
inbound article the
Percent of F-scans in IPS
IPS vs. D-scans in IPS
efficiency of movement at
Share of SpeedNet Delivery scans vs. IPS F- every step before merger
scans (TBD)
with Speed Post
Articles processed per hour per FTE
Supports achieving better
D+x and scan performance
Staff absenteeism

b
4c
Share of bags without bag labels
4
Share of articles not processed in SpeedNet
d
4
Share of articles closed after cut-off time
e
4f
Share of missorted articles
4
Share of articles with missing pin codes
g
Share of articles not dispatched same set
h

MNOP and first class Mail

Revised network
Existing mail offices classified into L1
and L2 offices to handle first class
unregistered and registered mail
89 L1 offices and 244 L2 offices
identified
Post offices mapped to L2 office or L1
office

Mail flow process for I class mail

Post
Post
Office Office

Post
Post
Office Office

Level-1
mail office

Level-1
mail office

Level-2
mail office

Level-2
mail office

Level-2
mail office

Level-2
mail office

Post
Post
Office Office

Post
Post
Office Office

Post
Post
Office Office

Post
Post
Office Office

Level-1 mail offices exchange mail with each other and with selected L-2 in the
Circle
Level-2 mail offices exchange mail with the level-1 mail office to which they are
mapped and the level-2 mail offices mapped to the same level-1 mail office,

Sorting pattern
Post offices prepare two kinds of bags
A
A
A
A

TD bag containing unregistered mail

NTD bag containing unregistered mail
TD bag containing registered mail
NTD bag containing registered mail

POs to retain station articles

L2 offices close bags to parent L1 office and
mapped delivery Post offices
L1 offices close bags to each other
The bags handled are treated as due bags

Network redesign for Second class

mail

The new network

Existing mail offices handling second class
mails reclassified as L1 and L2 offices
86 L1 and 241 L2 offices identified
Post offices to close one bag containing
both TD and NTD articles to mapped L1 or
L2 offices
POs to place the following bags in M bag
first class TD and NTD bags for both
unregistered and registered mail
Second class bag