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New world, new ways:
succeeding in a rapidly evolving
postal landscape
PostNL’s experience Herna Verhagen
Vienna, October 1, 2013
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Changed postal landscapeReduce costs and pursue new opportunities
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Strong volume decline Dutch postal market
- Cumulative� Annual
PostNL volume decline (%)
-10
-8
-6
-4
-2
000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
50
60
70
80
90
100
Average volume decline
outlook 2013 - 2015: ~ 8-10%
-4% to 0%-8% to -4%over -8%
Volume development 2011-2012selection European PPO’s (%)
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Strong competition
Diversified shareholders
Volume development competitor in NL (mln)
Strong differences in pension arrangements, VAT exemptions, business portfolio, etc.
+
&
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How to face the challenge
Reduce costs
Vision
Expand
Increase prices
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Explore growth opportunities
Growth opportunities
in mail, parcel & international business
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Additional advantagesAdditional advantagesAdditional advantagesAdditional advantages
Work togetherWork togetherWork togetherWork together
- Support physical mail with online (e.g. apps)
- Contributes to the innovative image of PostNL- Appeals to younger users of Mail
- Intensive cross functional cooperation - Other Posts have introduced similar concepts
What is itWhat is itWhat is itWhat is it - Online generated code that indicates payment for letter mail
PostNL an Innovative company Development of digital franking: stamp code
Digital franking helps PostNL to remain relevant
VisionVisionVisionVision
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PostNL an Innovative company Publication of leaflet: Folders.nl
Folders.nl helps physical mail to remain relevant
Additional advantagesAdditional advantagesAdditional advantagesAdditional advantages
Work togetherWork togetherWork togetherWork together
What is itWhat is itWhat is itWhat is it
VisionVisionVisionVision - Multichannel approach enhances the relevance of physical mail
- Helps to increase the reach of the leaflet as direct marketing medium
- Via app increases online accessibility of content
- Intensive cross functional cooperation
- Online publication of leaflets (unaddressed direct mail)
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PostNL an Innovative company mijnpakket.nl
Vision and industry leadership have resulted in a renewed focus on the real customer: the recipients of Parcels
Additional advantagesAdditional advantagesAdditional advantagesAdditional advantages
Work togetherWork togetherWork togetherWork together
What is itWhat is itWhat is itWhat is it
VisionVisionVisionVision - Reduction cost price one of main priorities of large web shops
- Recipients preferences increasingly drive delivery process
- Increases loyalty of recipients and delivery efficiency
- Created through commercial and operational cooperation
- Online application that allows consumers to set delivery preferences or retrieve delivery information
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PostNL an Innovative company Development .post strengthens postal business
.post is a platform for postal digital services and cross border e-commerce
- .post transfers typical postal assets to the digital world (trust, interconnectivity and visibility)
- Poste Italiane and PostNL are developing a cross border e-commerce platform on .post
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A few other examples in parcels
Extra@Home Mikropakket
trans-o-flex IPC Interconnect Programme
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Mail in NLPrice increases
Price increaseInflation
Price increaseInflation
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Long term planning of cost reductions and persistence enable tough changes
<2000 2000 - 2005 2005 - 2010 2010 - 2015
Postal officesClose postal offices, simple products
Close traditional postal offices
Stand alone shop in shops
Parcel focused pick up points
Structure ~180 units � ~30 regions � 6 areas � 5 areas � Full centralisation
Sorting &
delivery
Centralised auto-mated walk sorting
Decentral automated sequencing
Peak / off-peakEliminate Monday delivery
Parcels Separate sorting Seperate delivery Registered mail New infrastructure
Staff
Civil servant �100% private
Reorganisation by natural attrition
Design Mobility Programme
Fulltime � parttime
Savings ~€ 250m ~€ 235m ~€ 330m ~€ 390m
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Towards 20152012
260260260260 125125125125
2013 2014
210210210210 160160160160
2012 2015
Number of locations
Logistical redesignLess disruptive and smaller scale centralisation
9999
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Large cost reductions are a marathon, not a sprint
Lessons from cost reduction successes
Success factors
• Long term planning and persistent execution
• Employees - focus on voluntary outplacement
• Process - simple primary mail process as basis for large cost reductions
• Retail - more density at lower costs with shop in shop concept
• Management - strong change management organisation
Lessons learnt
• Always carefully pilot
• Invest in relationships with unions, workers' councils, politicians and ministries
• Carefully balance experienced and non experienced people
• Provide steering tools and data
• Do not forget the behavioural component in process redesign
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Vision for PostNL
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The end
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