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Focus on the Last Mile: The Cost Savings Opportunity

Oct 20, 2016 12:11:12 PM / by Assurety Consulting

The Last Mile is where the Post Office thrives. The USPS touches every single household in the United States—approximately 130 million of them—every day that it delivers mail. That’s why major carriers like FedEx, UPS, and DHL and major mailers like RR Donnelley, and Quad and over a million business customers use the Post Office to deliver letters and packages to households across the country. And it’s why most Post Offices across the globe are trying to optimize their Last Mile delivery strategies for faster, cheaper delivery.

The Last Mile is the USPS’ territory, but it still offers many efficiency gains for mailers. By understanding the drop ship programs and the opportunities in bypassing First Mile and origin entry when volumes allow and optimizing every step of the postal supply chain, mailers can optimize their mailing strategy from First Mile to Last Mile, every time.

 

The Mutual Benefits of Full-Service IMb and Intelligent Package (Parcel) programs

One of the benefits of the Full-Service Mail program is the visibility the USPS gets into mailers through data. The Post Office built a platform called USPS Informed Visibility that allows the Post Office to see how the mail is moving across the Postal supply chain, where the bottlenecks are located, where mail is getting stuck, and ultimately determine what to do about it.

Mailers can expand that technology for truly end-to-end mail and parcel tracking by exchanging data with their cominglers, copalletizers, and transporters to see where the mail is at any given time.

Last Mile Impacts: Mailers provide their commercial entry and shipping information upfront—where it’s going, how many pieces are planned for  a given facility and when—and the USPS creates dynamic routing models and improves its operations and delivery plans accordingly to allow for faster and efficient delivery. The USPS also conducts regression and predictive modeling through SAS data analytics to look at the past history to predict future and improve operational and delivery planning.

 

 View the Video: Focus on the Last Mile: The Cost Savings Opportunity

Presenter: Shariq Mirza, CEO and Founder of Assurety Consulting

 

A Post Office in Every Mailbox

The USPS plays a critical role in the Last Mile because the Post Office is the only entity that goes to every home in every place in the United States, from the bottom of the Grand Canyon to the tops of the highest buildings in New York City. This granular and regular delivery allows the USPS to show the industry the value it adds, the cost points it provides, and when it’ better to use USPS then a FedEx or UPS or DHL for much faster service at competitive rates for parcels and shipping products. Plus, mailboxes and P.O. boxes are the exclusive property of the USPS, which means that delivery to both dense cities and rural areas is best left to Posts.

For the commercial industry, in-home dates and postage discounts play a critical role in the Last Mile of the postal supply chain. For example, if a mailer wants coupons to reach every household on a fixed date, those mailers rely on the Postal Service for date-specific delivery to all households in their targeted campaign. Posts are tasked with providing insights starting with the commercial supply chain to report what drop dates and what processing plants are required in order to meet their target. With the data available through Full-Service, USPS FAST Drop Ship Product, labeling Lists, and Informed Visibility, it is easier than ever for mailers to plan their Last Mile. Digital solutions for mailers can automate appointments and provide complete visibility from induction to delivery against a mailer’s in-home dates, and ultimately allow mailers to modify their decision-making in real-time in order to optimize efficiencies upstream to meet Last Mile targets.

On the Postal end, the same data provided by Full-Service, Shipping Services File, and Informed Visibility allows the USPS to more consistently meet in-home date targets more efficiently than ever before.

 

Assurety Combats Last Mile Inefficiencies

The US Postal Service has worked extensively to identify revenue leaks and process problems, proactive resolution of operational and delivery bottlenecks, and automation of verification and payment processes across the Last Mile. The USPS has worked hard to minimize these inefficiencies by sending its middle managers through Lean 6 Sigma training; the majority of its employees understand the Last Mile mailing process and can work to identify and rectify inefficiencies. These investments help the commercial mailing and shipping industry with  improved delivery of their products.

Assurety has played a key role in that business process engineering by helping develop solutions for a billion dollar leak in the drop shipment channel identified more than a decade ago by OIG and helping the Postal Service go through a pilot to develop a scanning solution called Surface Visibility that helped it secure its revenue and allowed mailers to automate their appointments and remove paper from the process. These systems help the Postal Service triangulate the volume at plants, anticipated shipments, and fixed costs to secure its own revenue and pass efficiencies on to mailers.

Assurety is also helping the USPS with automation and verification of parcels through processing equipment, matching physical packaging, postage, and dimensional data against the manifest for automated revenue assurance and using SAS and big data analytics with both regression and predictive models to pinpoint areas of concern and automate assessment processes.

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Ultimately, data will differentiate successful mailers from unsuccessful ones. Data will identify efficient and successful parcel and Postal delivery organizations from the less efficient and higher-cost competition. Upfront planning, consolidation entry planning, and deciding what options to implement across the postal supply chain can save costs and increase accuracy and efficiency for mailers. Using a solution like the AIMS platform that provides a centralized data platform for big data build out to enact decision analysis, regression, and predictive analysis can all improve operations and steer mailers in the right direction. Assurety’s Postal Logistics consulting services can help Posts and delivery organizations improve efficiencies through automation of processes and improve delivery of products and services. Our decision analysis and business intelligence professional services organization can provide insights to enable faster, cheaper delivery from end-to-end for mailers and delivery organizations.

Assurety Consulting

Written by Assurety Consulting

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