# Presentation: 726427

## MTE Forecasting and TrackingWorkgroup #108

- Ability to effectively forecast and fulfill Mail Transport Equipment needs for customers and plants.

## Update (Since 8/2/06)

**3 Meetings:**
**August 3, 2006**
- MTESC Presentation
- Key Industry Concerns
- USPS Challenges
- Output:
- Need to bridge the gap between forecasting information the Postal Service needs (3 – 6 mos) and availability of accurate information mailers can provide (8 – 14 days)
- Laundry list of issues and suggestions

## 2nd Meeting

**September 21, 2006**
- Addressed/discussed each of the suggestions raised at August 3 meeting
- Agreed on key areas of focus and developed four subgroups:
- Contingency Plan
- Education/Communication
- Forecasting Pilot
- Standardization
- (	Note:  Rate/Automation Impact tabled for January)

## 3rd Meeting

**November 1, 2006**
- 2005 IBM Forecasting Model (New Buys)
- Methodology for determining next year’s buys
- Physical Inventory Levels
- Daily Demand
- Required Days of Inventory
- Current Year’s New Buys
- Key Assumptions
- Networks, operations & behaviors remain the same
- Demand remains constant
- Leakage, condemnation and equipment misuse are all inherently factored into the analysis
- Days of the week weighted equally when calculating average daily volumes (7-day operation)

## IBM Forecasting Model

- Forecasting Outputs for 2006
- Recommended Purchase vs. Actual Purchases
- 	Pallets		1,244,273  vs.  1,700,010
- 	EMM Trays	0     vs.     6,440,448
- 	MM Trays	6,693,470	vs. 	0
- 	1257 Tray	4,351,115	vs.	7,000,552
- 	Pallets remain the only concern for FY’06
- The data suggests a leakage cost for pallets in the amount of **$39,650,201.50** (purchases vs. inventory)
- How do we stop this leakage?????

## Why didn’t the model work?
Based purely on historical 
Did not consider customers future needs
Did not consider industry/marketing changes
Did not consider mail preparation changes
Inventory tracked does not include that in the Postal Service and mailers plants.
How can  it be improved
Ongoing dialogue/input re customer needs
Ongoing discussion re industry/marketing changes
Ongoing analysis which includes rate changes/make-up changes/industry trends.
Inventory knowledge in USPS/mailers plants

- Based purely on historical
- Did not consider customers future needs
- Did not consider industry/marketing changes
- Did not consider mail preparation changes
- Inventory tracked does not include that in the Postal Service and mailers plants.
- How can  it be improved
- Ongoing dialogue/input re customer needs
- Ongoing discussion re industry/marketing changes
- Ongoing analysis which includes rate changes/make-up changes/industry trends.
- Inventory knowledge in USPS/mailers plants

**The Downfall of the IBM Forecasting Model**

## Subgroup Reports
MTE Forecasting Pilot
FY06 Fall/Holiday Mail Planning
BSN Service Improvement Team working in collaboration with Network Operations (weekly meetings)
Created Beta Forecast Process (14 days out)
Identified 14 Customers for Participation
Analyzing Forecast Data vs. Actual Orders

**MTE Forecasting Pilot**
- FY06 Fall/Holiday Mail Planning
- BSN Service Improvement Team working in collaboration with Network Operations (weekly meetings)
- Created Beta Forecast Process (14 days out)
- Identified 14 Customers for Participation
- Analyzing Forecast Data vs. Actual Orders

**Workgroup Focus**

## MTE Forecasting Pilot Subgroup Reports
Preliminary Findings
Template Revision
Some mailers asked if they could use their own (some very rudimentary – some very sophisticated)
Forecast Responsiveness
Some mailers were more responsive than others.  As mailers started to see a return on investment, they were more responsive. 
Data Findings
There were large variances in the forecast vs. actual orders placed
?? Lack of ability to forecast? (mail pieces vs. equipment needs)
?? Inventory was already in the mailers plant?

- Preliminary Findings
- Template Revision
- Some mailers asked if they could use their own (some very rudimentary – some very sophisticated)
- Forecast Responsiveness
- Some mailers were more responsive than others.  As mailers started to see a return on investment, they were more responsive.
- Data Findings
- There were large variances in the forecast vs. actual orders placed
- ?? Lack of ability to forecast? (mail pieces vs. equipment needs)
- ?? Inventory was already in the mailers plant?

**Workgroup Focus**

## EIRS Revived
EIRS – Equipment Inventory Reporting System
Weekly Equipment Inventory
USPS Plants
Customer Plants
MTESS provides inventory levels available at 23 MTESC sites and 3 commercial warehouses.  There is no data available on the amount of equipment available at either postal plants or mailer plants.  This leaves a knowledge gap in understanding all inventory in the system.
Exploring SOP and means to automate reporting

**EIRS – Equipment Inventory Reporting System**
- Weekly Equipment Inventory
- USPS Plants
- Customer Plants
- MTESS provides inventory levels available at 23 MTESC sites and 3 commercial warehouses.  There is no data available on the amount of equipment available at either postal plants or mailer plants.  This leaves a knowledge gap in understanding all inventory in the system.
- Exploring SOP and means to automate reporting

**Workgroup Focus**

## Subgroup Reports
Standardization:
Mission:  Develop a standardized national process for ordering MTE with a focus on technology/ease of use/tracking.  Any “system” solution should fit in with overall USPS technology strategy. 

Telecon scheduled within the next two weeks. 

**Standardization:**
- Mission:  Develop a standardized national process for ordering MTE with a focus on technology/ease of use/tracking.  Any “system” solution should fit in with overall USPS technology strategy.
- Telecon scheduled within the next two weeks.

**Workgroup Focus**

## Subgroup Reports
Contingency Plan
Mission:  Explore and create a contingency plan for industry/USPS when there is an equipment shortage for submission of mail to USPS.
Identified Two Major Tasks:       
Communications plan to ensure that mailings with alternative MTE will be accepted by BMA and processed without delay.
Creation of a list of acceptable alternative MTE items to be used when insufficient equipment is available.

**Contingency Plan**
- Mission:  Explore and create a contingency plan for industry/USPS when there is an equipment shortage for submission of mail to USPS.
- Identified Two Major Tasks:
- Communications plan to ensure that mailings with alternative MTE will be accepted by BMA and processed without delay.
- Creation of a list of acceptable alternative MTE items to be used when insufficient equipment is available.

**Workgroup Focus**

## Subgroup Reports
Education Communication
Key Areas for Communication
Industry Best Practices
MTE Newsletter/Bulletin 
It’s A CRIME! Campaign
Improvement of system-generated communication (MTESS)
Whatever else may come out of other subgroups (Contingency Plan, Standardization, etc.)

**Education Communication**
- Key Areas for Communication
- Industry Best Practices
- MTE Newsletter/Bulletin
- It’s A CRIME! Campaign
- Improvement of system-generated communication (MTESS)
- Whatever else may come out of other subgroups (Contingency Plan, Standardization, etc.)

**Workgroup Focus**

## Subgroup Reports
Education/Communication
Communication Resources
USPS.com/RIBBS
E-Mail Alerts
Articles in trade magazines, company newsletters, association newsletters and/or websites
USPS publications, both internal and external
BSN
BMAU
Area MTE Coordinators
USPS Sales Force
PCC’s, etc.

**Education/Communication**
- Communication Resources
- USPS.com/RIBBS
- E-Mail Alerts
- Articles in trade magazines, company newsletters, association newsletters and/or websites
- USPS publications, both internal and external
- BSN
- BMAU
- Area MTE Coordinators
- USPS Sales Force
- PCC’s, etc.

**Workgroup Focus**

## NEW SUBGROUP

Industry Best Practices
Find customers who have developed successful MTE forecasting and inventory processes
Gather input from other stakeholders
Create a standard SOP/Guidebook based on their best practices

**Industry Best Practices**
- Find customers who have developed successful MTE forecasting and inventory processes
- Gather input from other stakeholders
- Create a standard SOP/Guidebook based on their best practices

**Workgroup Focus**

## 
Discussion/Possible Presentation from distribution trade organization (already contacted).
Discussion/Possible Presentation with FAST/Postal One regarding data values/communication link
Subgroup Meetings and output
Next Workgroup Meetings: 
 Mid-December (proposed)
 February 21, 2007

- Discussion/Possible Presentation from distribution trade organization (already contacted).
- Discussion/Possible Presentation with FAST/Postal One regarding data values/communication link
- Subgroup Meetings and output
- Next Workgroup Meetings:
-  Mid-December (proposed)
-  February 21, 2007

**MTE Workgroup****NEXT STEPS**