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Internet of Things and the USO: a unique selling opportunity?

December 1, 2015

Freek Smoes, innovation and concept development, Prime Competence, explores the growing potential of the Internet of Things in the postal sector and how it may lead to a paradigm shift in postal operators’ capabilities

The Internet of Things (IoT) – it sounds fantastic and promises big changes in the way we live and work. But what does it mean for posts and where does the industry go from here? In a way, the sheer scope of this technology can act as a disincentive. It’s like being told there’s buried treasure on top of Mount Everest. On a clear day, you can see the top but getting up there is another matter entirely.

In essence, what’s needed is expert navigation from someone who knows the terrain like the back of their hand and the same applies to unlocking the potential to the Internet of Postal Things (IoPT). Fortunately, it’s no longer a case of leaping into the unknown. Companies, such as the postal consultancy Prime Competence, have been actively piloting projects and gathering operational data for some time and can now cite tangible and proven benefits from IoPT implementation.

What’s in it for posts?
Numerous trend reports this year are highlighting the huge potential of IoT/IoPT in transforming posts’ fortunes, and how it could be the biggest paradigm shift since letter decline.

A report published in August 2015 by the Office of Inspector General of the United States Postal Service (USPS), said, “Interconnecting the postal network can provide endless opportunities for new, smarter applications, especially in the areas of delivery, transportation and logistics, building management, and government services.” Another IoT trends report published by DHL and Cisco earlier in the year predicted that IoT would deliver a US$1.9 trillion boost to supply chain and logistics operations.

While individual reports focus on specific areas of new capability, Prime Competence is looking at the bigger picture in its role as innovation partner and co-entrepreneur with many global posts. The fact is there is no limit to the impact that an IoPT strategy could have across the business, from doorstep to doorstep, from operations to new service development.

Why now?
Essentially there is a perfect storm of need versus capability. First, if we consider the capability. It would be integral to an IoPT strategy to integrate data generators, such as chips and sensors, into processes and physical points in the postal network, combined with ubiquitous access to data networks to collect data live across the operating area. These capabilities are here today as a result of huge cost reductions in the necessary chips and sensors, and nationwide high-speed data networks afforded by the mobile wireless data providers.

Secondly, we must consider the need. The postal industry is facing unprecedented challenges as a result of digitalization. Growth areas such as parcel deliveries fuelled by the e-commerce boom are presenting new opportunities, but along with them, also challenges in keeping up with consumer expectations for delivery options and a higher percentage of returns.

Well positioned
In addition to the need and capability, posts are in a unique position to execute a powerful IoT strategy, perhaps more so than any other business or industry. IoPT is all about leveraging existing postal assets to deliver more relevant services, timely options for consumers, competitive edge and efficiencies in the network and to exploit new potential revenue streams on the back of posts’ universal service obligations (USOs). To be truly effective in these areas necessitates trust (in the brand) and scale of operations across the country – both of which posts have in abundance.

Game-changer
Prime Competence, like DHL, Cisco and USPS, believe IoPT will be a game changer. As an expert innovation partner for posts globally, Prime Competence is already piloting many new initiatives in this field. As a result of these programs we are already gathering real operational data and experience and witnessing the impact these new innovations facilitate. For any post considering how to get started with their IoPT strategy, our team is able to share expertise and speed up the process. IoPT areas we are working on include our concepts for Digital Mailman, Smart Mailbox, Mailbox of the Future, Always Home, postal mobile data networks, asset location and tracking and environmental monitoring initiatives.

Potential
IoPT provides the means to deliver efficiencies from existing operations as well as new revenue streams on the back of existing operations and the post’s investment in meeting USO commitments. In terms of operational efficiency and performance, knowledge is power, i.e. the power to make informed decisions based on current (or predicted) circumstances. Essential assets in postal infrastructure are pretty much living in a data black hole in that you don’t necessarily know where they are at any moment in time, their status or serviceability. With smart sensors employed across infrastructure in an IoPT strategy, all assets have the potential to become smart assets, which in turn delivers posts with the power to make decisions in a timely manner. Assets such as roll containers, cages, bags, cars, trucks, bikes and carts but also persons critical to the process (mailmen). For the first time, posts are able to plan and scale the live postal infrastructure to suit the needs this day, this hour. Savings in time, fuel and maintenance, the ability to monitor and maintain service levels and quality, and to implement a predictive maintenance regime.

In terms of new revenue streams or business models, IoPT provides posts with the capability to offer deeper level track-and-trace, new services such as live re-direct, and live collection/returns based on current and predicted location of mailmen and vehicles. The USO is a commitment (and cost) to maintain service across the complete country, but it also presents another USO, a unique selling opportunity, as a result of having this network and frequency in terms of all sorts of extra services such as environmental monitoring, status reporting of infrastructure for municipalities and utilities and much more.

Conclusion
The time to understand and execute your own IoPT strategy is now. Your competitive edge and future depend upon it. The scope and potential for IoPT across the business is huge, so in getting started, focus is essential. An expert IoPT consultant such as Prime Competence can speed up this process and share relevant expertise from across the industry.

December 1, 2015

 

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