Modernizing Postal CommunicationsServices and Logistics: The Operationsof Deutsche Post World Net
Amin Saidoun, Director UPU Affairs, New Dehli June 2005
Page 2Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Contents
Modernization of distribution and retail– Modernization of distribution– Modernization of retail outlets
Modernisation of Operations– Transport– Sorting centers– Delivery– Quality
Page 3Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Successful restructuring
Letter83 state-of-the-art mail sorting centers3,700 delivery bases95% J+1 (1.06 days)Parcel33 standardized parcel sorting centersMax. 3 handling steps95% J + 1 (1.1 days)Retail Outlets13,000 Outlets“Open service” conceptAgency concept
Postal Services in GermanyHigh quality (J + 1)Comprehensive customer serviceUp to 98% automationUniform IT systemsFull tracking and tracing
Letter328 sorting stations11,000 delivery basesLow quality (Approx. 75% J+1)Parcel140 sorting centersUp to 9 handling stepsPoor quality (J + 3 and J + 4)Retail Outlets29,299 OutletsInsufficient opening hoursHigh costs
Postal Services in GermanyLow qualityPoor customer serviceLow automationNo IT supportHigh costsVery poor DDR-Post
„Concept2000“
Modernisation of Distribution
Page 4Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Changing the letter mail logistics: Projects 1991 - 1998
Major Project to Improve Operational Efficiency
Year1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Computerized Forwarding System
33 new Parcel Processing Facilities
New 5-digit Postal Code
83 new Mail Processing Facilities
Optimization of Delivery Depot Structure
(number, location, size)
Modernisation of Distribution
Page 5Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Mail sorting centreentrance
Machinablestandard letterssorted by district
Non-machinablestandard letters
Machinablestandard letterssorted by DDG
Delivery base
Mail input
Preparation byletter carrier
Delivery
Mail automatically sorted in walk sequence
Flats/Maxibriefe
Parcel delivery(in 2,750 delivery bases)
Modernisation of distribution
Manual input sorting
District sorting – walk sequence sorting
Page 6Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Deutsche Post delivery: Facts and figures (2004)
1-wave delivery
approx. 3,000 delivery depots (of which 280 with local management function)
approx. 57,000 delivery districts (11 % foot, 33 % bicycle, 56 % car)
approx. 30,000 combined delivery districts (with parcels)
approx. 38.6 million handover locations, 80 % used daily
approx. 21.09 billion mail items delivered
Start of implementation of TVZ districts (1,200 districts planned for 2005)
Modernisation of distribution
Page 7Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
~ 12 million individuals& company addresses,
updated daily
Movers database
Forwarding service
Post Adress - Address management and re-direction services
Classical mail business
Address Management -Value added service business
Modernization of distribution
Page 8Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Modernization of retail outlets
Retail Outlets - Point of sales for Deutsche Post, Deutsche Postbank and DHL products targeted to private customers
Retail Network
Mail FinancialServices
ExpressLogistics
• Retail outlets are targeted to households and private customers• More then 13,500 outlets in Germany provide Universal Service• Regulation Authority provides framework for Universal Service in Germany
Page 9Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Multi-channel banking at its best
Online brokerage– 394,000 online brokerage accounts
Telephone banking– 3.0m telephone banking accounts
Retail outlets– 9,000+ retail outlets incl. 787 Postbank Centers
Online banking– 1.9m online banking accounts
Mobile sales force– 374 financial advisors
Agents network for home mortgages (DSL)– >5,500 independent agents
Rankings
2
1
1
1
(4) Postbank, best online Bank (magazine com! Issue 10/2004)
(4)
(1)
(2)
(3)
(3) Top performer according to 2003 e-sales banking study from Cambridge Technology Partners (best technical performance)(2) No 1 in Nielsen netratings banks (most clicks/most frequented financial webpage)(1) Ranked second best of all German financial institutions in Call Center test (magazine Capital 02/2004)
Modernisation of retail outlets
Page 10Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Further expanding advisory services
Driving forward risk adverse lending business
Attracting new business in Transaction Banking
Continuing strict cost management and strengthening active cost culture
Completing current insourcing projects
At least 15%(1) RoEp in 2006, even in an unchanged interest rate environment
Core(2) CIR < 65%
Major step towards achieving these goals in 2005
•(1) Calculation of target pre tax RoE based on at least €5,100m Equity•(2) Excl. Transaction Banking
Targets 2006:RoEp 15%(1)
Core(2)CIR < 65%
Cost efficiency remainsin focus
Successfulprogress in customerbusiness
2005 – Focussing on profitable growth
Committedto clearlydefined targets
Modernisation of retail outlets
Page 11Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Contents
Overview– The Group DPWN - Development and Structure – MAIL Division - Organisation– MAIL Division - Facts and figures
MAIL Division - Operations– Transport– Sorting centers– Quality
Preview / Summary
Page 12Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
BZ
Collection Letter Mail Delivery
Linehaul
BZ DeliveryOffice
Mail Operations in Germany – Basic Network Design
Page 13Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Deutsche Post Transport network
Collection / Inbound transport
109,000 post boxes (50 % are served by delivery)
More than 12,000 retail outlets
3,300 delivery offices
Business customers
Linehaul (J+1, J+4)
Outbound Transport
3,300 delivery offices
Business customers
MAIL Operations - Transport
Page 14Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Deutsche Post Mail sorting centers are standardised and high-technology production centers of various size
83 high-tech mail sorting centres(incl. International Post Centre in Frankfurt)
Straight-through mail centers for sizes ‘S’, ‘M’ and ‘L’
U – Mail centers for sizes ‘X’ to ‘XXL’ (are additionally equipped with materials handling technology)
Automatic sequence sorting machines are exclusively located in Mail centers
Rate of automation in mail centers: 89 % (67 % incl. sequence sorting machines)
MAIL Operations – Sorting Centers
Page 15Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Deutsche Post delivery: Facts and figures (2004)
One delivery round a day
Approx. 3,300 delivery offices (therefrom 280 with local management function)
approx. 57,000 routes (11 % foot, 33 % bicycle, 56 % car)
approx. 30,000 joint delivery routes (with parcels)
approx. 38.6 mn delivery points total, 80 % served daily
approx. 21.09 bn mail items deliverd
Start implementation of delivery routes with separated preparation (1,000 routes planned for 2005)
MAIL Operations - Delivery
Page 16Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Letter mail centreincoming
Machinablestandard letters
sorted on carrier routes
Non machinable standard letters
Machinablestandard letters
sorted on groups
Delivery base
incoming mail
Separate preparation
fordelivery
manual sorting
Delivery
automatically sorted letters(sequencing)
flats
Distribution of parcels(in 2.766 delivery bases)
Round sorting - sequenzing
Page 17Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Contents
Overview– The Group DPWN - Development and Structure – MAIL Division - Organisation– MAIL Division - Facts and figures
MAIL Division - Operations– Transport– Sorting centers– Quality
Summary
Page 18Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
89,1
91,3
92,9
94,4 94,695,0 94,8
95,8
94,595,3
98,398,8 99,1 99,3 99,3 99,3 99,2 99,5 99,4 99,4
86,0
88,0
90,0
92,0
94,0
96,0
98,0
100,0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Del
iver
y tim
e / P
erce
ntag
e
E+1
E+2
The key quality indicator ‘E+1’ is measured End to End by an external, independent institute. The process is certified (EN 13850)
Quality
Page 19Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Figures Target Results 2004
- Transit time J+1 94.5% 95.3%- Transit time J+4 Infopost 97.0% 98.6%- Infopost success rate 98.0% 98.6%- Damage rate 500ppm 600ppm- Correctly processed/delivered 1500ppm 1300ppm- Redirected successfully 96.5% 96.1%
- Transit time REIMS J+1 Import 93.0% 94.5%- Transit time Netherlands J+1 Import 94.0% 95.0%- Parcel transit time PZE+0 93.0% 97.1%- Parcel documentation rate 100% 98.1%- Parcel notification rate 6.5% 7.2%
Quality objectives
Page 20Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Survey design
Name
"Kundenmonitor" Germany
Frequency
Once a year (since 1992)
Method
Telephone interviews(German-speaking population ≥ 16 years of age)
Sample size
Approx. 2,500
KuBiS MAIL Once a year in 2 waves
Telephoneinterviews
Approx. 13,500
Target group
Private customers (incl. semi-professionals
Business customers (annual revenues up to €50,000)
and
Business customers(4.2% share) (annual revenues ≥€50,000)
Customer satisfaction
Two customer surveys to measure our customer satisfaction and customer loyalty
Page 21Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Quality evaluation systems
Quality controlling
Process-oriented management system DIN EN ISO 9001:2000
CD MAIL Quality management
Customer satisfaction Employee satisfaction
Employee surveyEvaluating product and process quality
Evaluating employee motivation and active management indicators
- Analysing KPI’s- Identifying areas of activity
=> Quality reporting=> Quality communication=> Quality checks
=> regular employee survey=> D+1, D+4, Backlogs, Damages ...
Managing employee commitment
- Analysing developing failures - Deriving recommendations foraction
- Supporting solutions
Main assignment of quality team
The Quality management is built on the requirements of DIN EN 9001
Page 22Amin Saidoun, Deutsche Post AG, New Dehli, June 2005
Five Key Statements for Success of modernization of mail operations
1. Striving for quality leadership
2. Increasing cost and process efficiency
3. Satisfying and monitoring customer needs
4. Striving for strategic managementcommitment
5. Getting employee satisfaction