1

NETWORK RATIONALIZATION

SSC - 4 WALLS INITIATIVE

2

Expected SSC Savings

F1 & F3B Workhours

District Functions % Share Dollars WorkhoursAlaska FN1_3B 1.6% $1,439,155 30,640 Arizona FN1_3B 13.7% $12,291,625 301,846 Central Plains FN1_3B 7.3% $6,561,318 165,386 Colorado/Wyoming FN1_3B 11.9% $10,655,804 262,460 Dakotas FN1_3B 6.0% $5,363,542 140,015 Hawkeye FN1_3B 6.7% $6,053,927 155,177 Mid-America FN1_3B 10.2% $9,149,529 232,713 Nevada-Sierra FN1_3B 5.1% $4,547,255 111,123 Northland FN1_3B 12.2% $10,994,534 273,600 Portland FN1_3B 8.4% $7,517,934 187,174 Salt Lake City FN1_3B 6.0% $5,374,439 132,152 Seattle FN1_3B 10.9% $9,808,665 241,178 Western FN1_3B $89,757,727 2,233,464

Key Principles

There IS an overnight delivery standard for commercial mail

There IS NOT an overnight delivery standard for Single Piece First Class Mail (SPFCM)

There is an overnight delivery performance for both commercial mail and single piece first class mail

Anticipate that 66% of current overnight delivery performance will remain under Phase 2 Network Rationalization

3

Letter/Flats Processing - Outgoing

All collection mail must be worked day of entry

Service Standards for 2D and 3D have not changed Realignment of surface network to secure arrival of

2 day committed mail to destinating office by 8:00am

Revaluation of STC network Evaluate Fedex Contract impact

Continuous processing of FIM mail

4

Letter Mail Destinating Operations

Two Critical Entry Times for Commercial Mail 8:00am

Mail tendered by 8:00am destined for that plant’s local delivery area requiring a primary sortation, will have an overnight delivery standard

Noon Mailers who enter presorted mail, properly

prepared and containerized and entered by CET as of noon, will have an overnight first class service standard for mail destinating to the local plants service area

5

Type 

Bundle Sort Needed

3-Digit and Up Container

No Bundle Sort Needed

5-Digit / Scheme Container

Direct 5-Digit Carrier Route

Pallets

NonFSS 1100 1400 1700

FSS 0800 1100 1100

Periodicals CETs – Under Phase II

Periodicals CET Matrix – Phase II

7

Driving Efficiency

FUTURE NETWORK – ALL PLANTS Preserves Approx. 66% of Overnight Delivery Volume

Revised Entry Times

Reduced Equipment

Reduced Footprint

Priority Mail – No Change

0800 1200 1600 24002000 0400 0800

Current Processing

Originating(1700-0115)

Destinating(0800-0400)

Future Processing

Originating(1700-0115)

Destinating(0800-0400)

8

Originating FCM Letters/Flats

0800 1200 1600 24002000 0400 0800

Current Processing

Cancellation (1700-2200)

Outgoing Primary (1730-2300)

Future Processing

Cancellation (1700-0050)

Outgoing Primary (1730-0100)

Outgoing Secondary (1800-2400)

Outgoing Secondary (1800-0130)

Expansion of outgoing operating windows only for those sites consolidating originating mail

9

Destinating Letters

0800 1200 1600 24002000 0400 0800

Current Processing

Incoming Primary (0800-2000)

DPS Processing(2200-0600)

Future Processing

Incoming Primary

(0800-1200)

DPS Processing(1200-0600)

Remittance/Caller Service (0800-0600)

Remittance/Caller Service (0800-0600)

10

DPS Processing

DPS to start at noon and continue until 6:00am

Ensures some turnaround SPFC is delivered overnight

Staging lanes critical

Increase of first class on hand volumes

11

Remittance Processing

Anticipated that delivery times for Remittance mail will improve

Moving 2D committed volumes to 8:00am and continuous process of FIM will improve FIM process by 10-12 hours

All turnaround FIM will have an overnight delivery performance

12

Destinating Flats

0800 1200 1600 24002000 0400 0800

Current Processing

Incoming Primary (0800-2000)

Carrier Route Processing(2200-0600)

Future Processing

Incoming Primary (0800-1600)

Carrier Route Processing(1600-0600)

FSS Processing(1200-0600)

FSS Processing(1200-0600)

FIM/Remittance Mail Model

Committed Primary

Non-Committed Primary

Originating FIM Window

DPS First & Second Pass with CR-RT

AMP (Outlying) 897

Window

City (Near) 897 Window

T-1 Full Time Staff T-3 Full Time Staff T-2 Flex Staff

T-2 Full Time Staff T-1 Full Time Staff T-3 Flex Staff

PM Window

7-8

PM Window

6-7

T-3 Full Time Staff T-1 Flex Staff T-3 Full Time Staff T-2 Full Time Staff

T-1 Flex Staff T-3 Full Time Staff T-2 Flex Staff

Fully Utilized Machine Staffing Model Examples

15

F1 Savings

PROCESSING OPERATIONS Operating Window Changes

Work Equipment to Capacity

Reduced Equipment Set, Elimination of Phase 1 DBs

Utilize RPGs and DPS Optimization Tool

Complement Impacts & Staffing Realignments – Use Baseline Staffing Model

16

F3A Savings

TRANSPORTATION Match new processing profile to

transportation

Optimize trips from plant to multiple stations

Consider trailer utilization

Eliminate early DPS runs

Zero Base schedules to match new processing profile

17

F3B Savings

MAINTENANCE Reduced machine need; down to the machine number which gives us a machine

type; each machine type has a PM value associated with it some more labor intensive than others

Greater opportunity for Operations to compact/condense machine usage; said otherwise no reason to dirty up (use) a DB for small runs on t-2 and 3; as this will reduce our benefit or need to PM them and to provide OPMS for them       

1. Example would be running LAMM whether 1st or standard mail on one machine and then use the same machine to run primary and secondary runs on instead of moving to a different machine because you have time to sweep it down later.

2. On Saturday night when you go to start 1st pass runs for Monday delivery don’t run every machine (zone) just because you have the Ops staff only run them if the Monday morning volume warrants it. Every minute that machine is on we have a minimum amount of work on the equipment that must be done.    

  Be smart about the machines you want to keep; they are all DB’s and we should

be able to make them run well i.e.… a phase 6 vs phase 2 – 5 or a DIOSS D vs  B

Stacker module increases have an impact on PM’s but is minimal; increase number bins where it makes sense

Standardize equipment types as best you can because that will help us save on part usage and storage space i.e.. an opportunity to get rid of phase 2 stacker modules that may not have been modified in the past

Consider how you will alleviate bypass/residue/residual volumes in your smaller plants that remain open