Service Measurement

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Service MeasurementReporting Format
MTACNovember 7, 2007
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Agenda

• Required Service Measurement
• EXFC System Overview and Expansion Plan
• Hybrid External Measurement Approach Leveraging
  Internal Data Systems
• Periodicals Challenge
• Report Format
• Wrap-up

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Required Service Measurement

• First Class (Single-Piece and Pre-sort)
• Periodicals
• Standard
• Single-Piece Parcel Post
• Library Rate
• Media Mail
• Bound Printed Matter
• Special Services
• Single Piece International

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Fundamental Requirements for Service Measurement

• Valid Start-the-Clock
• Valid Stop-the-Clock
• Established Standard for comparison

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External Performance Measurement Methodology
Quality Assurance
StatisticalDesign
Test MailFabrication
DataAnalysis
Test MailInduction
Test MailReceipt
Reporting
USPS Mail Processing
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• Current EXFC Design
• 463 3-Digit ZIP Code areas tested representing
  about 74 of total single-piece FC volume
• Sample size is approximately 2.7 million pieces
  per year
• Represents wide variety of characteristics
  designed to represent total FCM
• Panel of approximately 600 senders (droppers) and
  13,000 receivers used
• Mail entered in randomly selected collection
  boxes and mail chutes and received by households
  and small businesses

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Expand EXFC to all 3-Digit ZIP Code Areas

• Quarterly Testing in All 3-Digit ZIP Code Areas
• Continued coverage of key characteristics
• Continued focus on high quality
• Highly responsive receiver panel, currently
  report 96 of the mail sent to them
• Quality processes throughout the measurement
  system to prevent errors when possible and to
  identify and remove erroneous data

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Measurement of the Other Products

• Products entered in bulk or received in bulk
  present unique challenges for measurement
• Creating test pieces and emulating the mailing
  process is not viable because of nature of the
  product and cost
• Requires significant cooperation of mailers to
  seed pieces into mailings
• Requires tracking of single pieces of mail from
  start to finish
• IBM/USPS experience working with measurement of
  these products includes
• Pre-sorted First-Class Mail in original EXFC
  design (1990-1991) and Business Mail Measurement
  Feasibility Assessment as part of MTAC Workgroup
  83 (2004)
• Remittance Mail in the NPPC study (1992-1994) and
  Remittance Mail System pilot (1998-1999)
• Standard Mail in the EX3C study (1993-1996) and
  ADVANCE Quality Check System (1999-2005)
• Periodicals in the EX2C study (1993-1996) with
  limited measurement in AQCS

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Performance Measurement Strategy

• Leveraging internal systems for performance
  measurement has key advantages
• Greater representation of mail characteristics
• Allows for richer diagnostics
• Provides opportunities for reducing the cost of
  measurement
• External resources optimally support internal
  measurement by
• Assessing the viability of existing internal
  systems and developing / validating the business
  rules to be applied in measurement
• Filling in gaps where internal measures are not
  feasible
• Verifying the accuracy of internal measures /
  providing independent validation
• Measuring portions of products mail flow volumes
  not captured in internal systems
• Identifying performance issues and areas for
  improvement

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Hybrid Measurement Approach

• Combine the benefits of external measurement and
  internal systems to produce externally validated
  service performance measures
• External measurement focuses on validating
  internal data and on measuring the portion not
  visible in internal system

Visible with Intelligent Mail
External
Use random sample of live mail with IMBs to
calculate service performance results from
acceptance to final incoming processing. Use live
(non-test) mail received by EXFC receiver panel
equipped with barcode reader devices to capture
delivery of a sample of mail with IMBs to
estimate the delivery adjustment factor for each
product and sub-class.
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Hybrid Measurement Approach

• Benefits
• Reduces measurement costs (to USPS and mailers)
  because it does not require fabrication of
  additional mail or special seeding of mailings
• Mailers not required to provide special manifest
  information for the seeded pieces
• Allows for measurement of the end-to-end process
  from acceptance through delivery, even if mail
  falls out of automation or is not scanned
• Rich source of data necessary for diagnostics to
  identify service issues
• Key Dependencies
• Wide-spread adoption of IMB (as planned)
• Submission of electronic manifests to describe
  each mailpiece and the nesting logic
• Implementation of acceptance processes, such as
  FAST and Seamless Acceptance, to start the clock
  accurately
• Final processing scanning processes at delivery
  units for mail in containers
• Data systems to collect and manage the volume of
  IM data

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Background
Growth of IMB Usage

• Intelligent Mail Barcode (IMB) Volume showing
  continued growth
• Approximately 3 of current scans on automation
  are IMBs
• In first year of use, over 1 billion scans of
  the IMB
• 186 medium to large volume customers and data
  consolidators using IMB

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Service Measurement Approaches

• Use Existing External Measurement
• First Class (Single-Piece) - EXFC
• Single Piece International IMMS
• External measurement approach
• Supplements mail scans from internal Intelligent
  Mail system with externally collected data
• First Class (Pre-sort)
• Periodicals
• Standard
• Internal End-to-End Measurement
• Package Services
• New Internal Measurement Systems
• Special Services

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Measurement Approach at Full Roll Out
Start Delivery Confirmation scan
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Documented Arrival Time at Unit
Start Delivery Confirmation scan
Start Documented Arrival Time at Unit

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Special Services

• Delivery Confirmation, Signature Confirmation,
  Certified Mail, Registered Mail, electronic
  Return Receipt, and COD measure the time
  between when delivery information was collected
  and when it was made available to the customer
• CONFIRM and Address Correction use IMB to
  measure the time between the time scan
  information was collected and when it was made
  available to the customer
• Post Office Box Service will use scanning
  technology to ensure timely availability of mail
  by the posted uptime

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Special Services (continued)

• Insurance Claims Processing Measure time
  between start-the-clock all information
  available for claims processing and
  stop-the-clock the date the adjudicator pays,
  denies or closes the claim
• Address List Services will use an external
  customer survey to measure satisfaction with the
  timeliness of receipt

Single-piece Outbound International

• Will utilize International Mail Measurement
  System (IMMS)

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Measurement of Periodicals Presents More
Challenges

• External measurement requires participation of
  mailers
• The cost per piece (subscription) is
  significantly higher than most Standard and
  First-Class Mail
• The nature of typical subscriptions makes
  adding/dropping seeds to a mailing more
  cumbersome than for Standard Mail
• Testing may become obvious at delivery if
  Monitors receive a high volume of periodicals
• Measurement via IMB has not yet been piloted
• The USPS has asked IBM to assess the feasibility
  of using data from Red Tag and/or the DelTrak
  systems for measurement starting in 2008
• Longer term solution using the hybrid measurement
  approach employing IMBs for acceptance through
  final processing and external receivers for last
  mile offers the most promise for a representative
  system-wide periodicals performance measure

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Report Format
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• First-Class Mail - Quarterly
• Similar reports will be created for Standard Mail
  and Package Services
• Standard Mail will include separate measurements
  for Destination Entered and End-to-End mail
• Packages Services reports will include a combined
  measure for Bound Printed Matter, Library Mail,
  Media Mail and Parcel Post

On-Time Performance
Mail Variance
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• First-Class Mail - Annual
• Similar to Standard Mail, Periodicals, and
  Package Services

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• Periodicals - Quarterly
• Aggregated at the area level due to lower overall
  volumes and projected adoption rates

On-Time Performance
Mail Variance
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Questions Answers