Embed Size (px)
DESCRIPTION
SVP Advisors presents the key features, capabilities and applications of the BULRIC model for Postal Services, which covers all relevant services and activities of the Postal Value Chain through a comprehensive process parameterization and modelling.
Citation preview
Model Capabilities and Applications
Costing Model for Postal Services
March 2012
2
About SVP Advisors
International Footprint
SVP Advisors is an international
management consulting firm
specialized in the broad technology
sectors
We serve clients across four verticals:
Strategy and Innovation, Regulation,
Operations and Profitability, and
Corporate Finance
Our international client base includes
operators and equipment providers,
technology firms, policy makers and
regulators, international or multilateral
organizations and financial institutions
We are present in developed and
emerging markets, including Europe,
Latin America, Middle-East and India
SVP Advisors Assignments (18 countries)
Previous Team Experience (24 countries)
Miami
Madrid
(HQ)
Bangalore
(Associate Office)
SVP Advisors Offices
3
Applications include wholesale tariff setting,
Universal Service Obligations costing, price-
squeeze tests, efficiency analysis, cost
forecasting
Introducing SVP Advisors’ Costing Model for Postal Services
1st bottom-up (BU) LRIC model used for Postal
services’ costing and regulation in the
European Union
Incorporates traditional postal services as well
as courier, periodicals, etc…
Multi-Purpose
Can carry out scenario and sensitivity
analysis, geographical disaggregation, cost by
activity and driver
Re-conciled with actual financials and
operational figures (hybrid approach) to
provide a high level of confidence
Can provide costs under different standards
(Historic, LRIC, LRIC+)
First-in-class
Accurate
Whole range of services
Powerful Analysis
Multiple Standards
4
A Geographic Model defines the optimum routes
between the different network nodes
Model structured in three main blocks…
Routes CALCULA-
TION
Routes OUTPUT
OUTPUTSINPUTS
OUTPUTSINPUTS
The BU LRIC Model (core model) contains the core
calculations for the determination of postal services’ costs
The Competition Tool (external module) establishes the
cost and margins of postal services available in the market
5
…and in a highly structured way for easy update and expansion
General Architecture of SVP Advisors’ BU LRIC Model for Postal Services
Source: SVP Advisors
List of servicesList of geo-typesList of ext. Factors
List of service groupsList of driversList of activities
List of resourcesList of Routes
List of cost types
1. INPUTS 3. DIMENSIONING 5. OUTPUTS2. ALLOCATION MATRIXES
4. COSTING (ALLOCATION TO SERVICES)
DEMAND
By serviceBy geo-typeBy time
By service
PROCESSES
EXTERNAL FACTORS
GEO - MODEL
UNIT COSTS
By geo-type
By route
By resource
NETWORK
DIMENSIONING
Resource by activity
MAPPING TO
DRIVERS
MAPPING TO
ACTIVITIES
COSTING AND
ALLOCATION
OUTPUTS
By resourceBy cost categoryBy activityBy service
CHARTS
LRIC analysisGraphsKPIs
SCENARIO ANALYSIS
Sensitivity
PARAMETERISATION
6
The Geo Model automatically calculates optimum conveyance routes
How the Geo Model works
STEP 1. Geo-localization of postal offices
Actual geographical coordinates of all postal offices are introduced in the costing Model
STEP 2. Real Distances and Times for national transport
The model automatically calculates the real (road/air) distances and times between any pair of main nodes
GeoData
NationalDistances
STEP 3. Real Distances and Times for local transport
The model automatically calculates the real (road) distances and times between any pair of local nodes
Local Distances
STEP 4. Determination of Optimum Routes
The model determines the optimum routes for conveyance subject to constraints
Optimum routes
Automatically integrated with cloud-based GIS and fully
implemented in MS Excel
Source: SVP Advisors
7
All relevant Services and Activities of the Postal Value Chain are covered...
Source: SVP Advisors
General Overview of Operating Activities
8
... through comprehensive process parameterization and modelling
Illustrative Process Parameterization
Manual sorting
National outgoing 5,00%
Out of specifications from the machine
International outgoing 5,00%
Out of specifications from the machine
International incoming 10,00%
Out of specifications from the machine
Small packages (micro-parcels) 100,00%
Newspapers, printed papers and books 100,00%
Advertising mail (addressed) 100,00%
Registered/insured 100,00%
Automatic sorting
National outgoing 95,00%
International outgoing 95,00%
International incoming 90,00%
Standardized address
National outgoing 80,00%
International outgoing 50,00%
International incoming 20,00%
Non standardized address
(video room recognition)
National outgoing 20,00%
International outgoing 20,00%
International incoming 20,00%
Ready to go after sorting program 1
National outgoing 50,00%
International outgoing 45,00%
International incoming 40,00%
Illustrative Activity Workflow
Source: SVP Advisors
Note: values altered for confidentiality reasons
9
Letter 51-
100g
0,15
0,31
Letter 21-50 g
0,100,23
Letter up to 20g
0,090,21
LRIC
ATC (FAC/CCA)2,07
0,92
0,67
0,420,330,31
1,21
0,360,27
0,180,130,12
Letter up to 20g
Letter 51-
100g
Letter 21-50 g
Letter >350g
Letter 201-350g
Letter 101-200g
Regular mail Bulk mail
Powerful and user-friendly reporting…
Service Cost by Activity
SERVICE CATEGORY Domestic Letter Mail
SERVICE SUBCATEGORY Regular
UNIT COST (EUR cents) SERVICE TYPE
Lett
er up to 2
0g
Lett
er 21-5
0 g
Lett
er 51-1
00g
Lett
er 101-2
00g
Lett
er 201-3
50g
Lett
er >
350g
VALUE CHAIN SEGMENT COST DRIVER 30,77 32,14 45,77 62,49 94,81 320,94
Collection Letters-Number of items 7,17 6,82 7,35 7,00 6,72 3,96
Collection Letters-Weight 1,03 1,63 4,22 8,38 16,10 29,24
Outward Sorting Letters-Number of items 1,88 1,79 2,56 2,44 2,34 2,62
Outward Sorting Letters-Weight 0,36 0,57 1,14 2,27 4,35 14,62
Transport and Distribution Letters-Number of items 0,17 0,16 0,17 0,16 0,16 0,17
Transport and Distribution Letters-Weight 0,22 0,36 0,93 1,83 3,52 11,83
Inward Sorting Letters-Number of items 0,51 0,48 0,52 0,50 0,48 0,53
Inward Sorting Letters-Weight 0,30 0,47 1,21 2,41 4,63 15,55
Delivery Letters-Number of items 12,11 11,52 12,41 11,82 11,35 71,52
Delivery Letters-Weight 1,92 3,05 7,87 15,62 29,99 129,06
Others Letters-Number of items 4,38 4,16 4,48 4,27 4,10 4,59
Others Letters-Weight 0,71 1,12 2,91 5,77 11,08 37,23
Total Letters-Number of items 26,23 24,94 27,50 26,21 25,15 83,40
Total Letters-Weight 4,54 7,20 18,28 36,29 69,65 237,54
Unit Cost by Standard
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Letter up
to 20g
Letter 21-
50 g
Letter 51-
100g
Letter up
to 20g
Letter 21-
50 g
Letter 51-
100g
Letter
101-200g
Letter
201-350g
Letter
>350g
BULK REGULAR
Collection
Others
Transport
Delivery
Inward Sorting
Outward Sorting
Source: SVP Advisors
Total Cost by Activity
Service Cost by Driver
Note: values altered for confidentiality reasons
10
RURAL A
URBAN A
RURAL B
URBAN B
RURAL C
URBAN C
RURAL DURBAN D
RURAL E
R² = 0,8313
Po
st It
em
s p
er
Cap
ita
Unit Cost
Unit Cost vs Post Items per capita
NON PROFITABLE AREAS
PROFITABLE AREAS
Uniform pricing policy
0,20
0,40
0,60
0,80
1,00
1,20
1,40
1,60
- 500 1.000 1.500 2.000 2.500
EUR
Weight (g)
Price Trend Reasonable Margin Trend Unit Cost LRIC
…supporting a wide range of operational and regulatory applications
Source: SVP Advisors
USO Costing
Competition Assessment
Wholesale Tariffs
Operational Forecasting
Price > ATC
Predatory in exceptional cases
LRIC < Price < ATC
Predatory if demonstrated intent
Price < LRIC
Presumed predatory
ATC
LRIC*
Price / Cost
NOTE*: LRIC as best proxy to Average Avoidable Cost (AAC)
Note: values altered for confidentiality reasons
For further information please contact:
SVP Advisors SL
Almagro, 15, 528010 MadridSpain
SVP Advisors LLC
One SE 3rd Avenue, 25th Floor,Miami FL 33131,USA
Tel: +34 91 310 28 95 | Fax: +34 91 141 28 11
Email: [email protected]
Julio Villalobos
