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A winning combination

December 14, 2015

Left: The Vantage mail sorting system

Following the introduction of an €8.50 (US$9) minimum wage for German workers in January 2015, private postal provider Logistic Mail Factory (LMF) faced increased running costs that potentially threatened the future of the business and halted any immediate growth strategies. LMF was founded in 2002 as the first private postal service provider to operate in the Bavarian region of Swabia. The company has more than 2,000 postal delivery workers delivering an annual volume of 40 million mail pieces.

Rather than trying to circumnavigate the new legislation or inflate its prices, LMF looked to Pitney Bowes to optimize its mail sorting process. LMF required a solution that would tackle the increase in labor costs (manually sorting mail to sequence requires 150-200 hours per day); support the company’s growth strategy with added capacity and greater efficiency; offer a scalable solution to react to business needs; mitigate against risks of compliance on customer service level agreements; provide the required security on their investment; and reduce the stress and workload of LMF postal workers to ensure an improved employee experience.

Pitney Bowes’s solution was to meld a number of its proprietary technologies into one comprehensive postal system that would meet the objectives set forth by LMF. The proposed system unified Pitney Bowes’s Spectrum and Vantage technologies – fusing intelligent software with innovative hardware at LMF’s sorting center.

“I am incredibly proud of the sequence sorting project,” said Mirco Wieck, managing director, LMF. “We took a certain risk by installing the latest technology as a pioneer. This required great personal commitment on all sides over a very long project duration. Together with Pitney Bowes, our team had made a great effort to successfully implement this project. This successful implementation requires a deep understanding of our needs. Thanks to the new system, we are now able to manage our document output more accurately and more securely. Thereby, we are able to assert our position as an innovative postal service provider in Germany.”

Hardware – Vantage

The Vantage mail sorting system allows LMF to sort up to 45,000 mail pieces per hour, thanks in part to its state of the art optical character recognition (OCR) and handwriting recognition engine. The solution is driven by Pitney Bowes’s Business Logic Processing (BLP) software, allowing it to be customized to suit individual business applications.

The Vantage sorting solution can be configured for up to 1,000 sorting pockets meaning that LMF’s requirement of 288 pockets was easily achieved by utilizing a double-sided four-tier configuration and a U-turn module. Pitney Bowes was also able to maximize efficiency by adding sequencing numbers to each mail piece. This meant that not only were postal routes optimized, but that each mail bundle correlated precisely with the optimized delivery sequence.

Software – Spectrum

Spectrum location intelligence software from Pitney Bowes is used to analyze geographic and delivery route data, allowing operators to make smarter business decisions regarding delivery routes. At the heart of Pitney Bowes’s Spectrum technology is its data management and spatial functions. It enables a seamless, fully automated back office process of integrating data from different business processes, matching data to a postal address reference database, creating geocodes, calculating optimal routes and enriching the delivery address data for an optimized mail sorting.

By generating a fully optimized delivery route, Spectrum is able to tag each delivery address with a unique sequencing number that corresponds to the destination of each individual mail piece. Spectrum’s level of intelligence means it can even sort mail to apartment levels within multiple floors and buildings. This method of sequencing not only allows Spectrum to map the most effective route, it also allows the sorter to place mail pieces in the order in which each mail piece will be dispatched.

Spectrum is also flexible enough for future amendments to be made to optimized routes. With approximately 2,000 districts to cover, LMF postal workers have an intimate knowledge of their postal districts. Therefore routes can be modified to match this on-the-ground knowledge. Furthermore, a sequence can be re-optimized if a new house is built or a road is closed off. Additional flexibility means the system can react to last-minute changes, such as priority mail pieces or an absent carrier (responding to this particular problem by dynamically dispersing mail to adjacent carrier routes).

“The system has optimized my route very accurately; I just made a few tweaks based on short cuts I know I can make,” said an LMF postal worker. “Receiving my mail in a bundle ready to go in the right order is going to save me so much time. This makes me happy as it means I can get on with doing the part of the job I really enjoy – getting outside and delivering the goods.”
 

Right: The new sorting system developed by Pitney Bowes allowed LMF to sort up to 45,000 mail items per hour

 

Since the installation of the new automated solution in August 2015, the sort to sequence process has sped up by up to 70%. This has resulted in significant savings that LMF can reinvest into expanding the business. The new solution will also help LMF to maintain its record of meeting client SLAs, even as volumes increase.

Furthermore, with the sorting system automated and delivery routes optimized, postal workers have benefited from reduced workloads and reduced stress levels. Postal workers no longer have to sort letters by hand and are on their feet for fewer hours. They also have the support of geo-location to underpin their district knowledge.

Christian Stach, project manager and pre-sales consultant at Pitney Bowes, said, “Overall it was a long journey together with the customer. We had team members working on this from both sides of the pond, with experts from Pitney Bowes and LMF involved from the beginning. We scheduled workshops, organized meetings and instilled a sense of trust throughout that we would deliver a solution fitting of all LMF’s strategic requirements.”

December 14, 2015

 

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