DMA Post Haste: Towards a speedy reversions solution
1. Post haste: Towards a speedy reversions
solution
10.30am Registration & refreshments
11.00am DMA Welcome
Chris Combemale, DMA
11.05am Council Manifesto and proposed solutions
Howard Matthews, Vice Chair, DMA Mailing House Council
11.25am TNT/DSA proposed solutions
Charles Neilson, Group services director, TNT Post
11.45am Present proposed solutions and updated processes
Jenny Ledgar, Network Access Director, Royal Mail
12.05pm Interactive Question & Answer session
13.00pm Lunch & Networking
#dmapost
3. Council manifesto and proposed
solutions
Howard Matthews, Vice Chair, DMA Mailing House Council
#dmapost
4. DMA Mailing House Council
1. Product specifications cannot be consistently
achieved in volume mail production
2. Surcharges are not proportional to either the
failure rate or the additional cost incurred
3. Lack of objective evidence of failing to meet
specification
5. DMA Mailing House Council
4. No process for mail producers to challenge
surcharges and no independent adjudication
5. Little or no communication between mail
producers and RMW
8. Reversions are increasing
• Increase shows
increasing focus by Royal
Mail
• Not about your mail
getting worse!
• About improving
processing efficiency and
collecting due revenue
• Forcing compliance to NB 2012 figures include sealing
reversion charges of which 90%
specification or changing have recently been credited
basis of presentation
10. Contractual position
Customers Royal Mail
80% DSA
Providers
2%
18%
Mailing
Agents
NB Numbers are illustrative only
11. Contractual position
34%
Customers Royal Mail
66%
80% DSA
Providers
2%
18%
Mailing
Agents
NB Numbers are illustrative only
12. To whom do RM bill surcharges?
• Posting customer
– CDA Clients directly
– Carrier
• Carriers usually have back to back
contracts with their clients and pass on
reversion charges in full
• Posting customer sometimes charges the
mailing agent for its failure to meet
specification
13. Common Reversion types
– Address Clear zones
– Tap test failures
– Punctuation
– Barcode clear zones
– Sealing
• Technically these have failed current spec
• Mail can be sorted and delivered
• Are examples representative or the
exception?
14. What MCF would like to see
Transparency and reliability
• RM to share sampling methodology
– Best case with industry so we all know the
rules
– Worst case with some trusted third party
– Certainty that rules are followed equally in
both Wholesale and Retail mailings
• How else will we know if the process is
– Fit for purpose
– Fair and reasonable
15. What MCF would like to see
Proportionality
• Review of charging structures
– Charge proportional to the failure and its
consequences
– Not an arbitrary next service charge
– Charge levied on
• Only the Items that fail
• On some objective cost justified measure
16. What MCF would like to see
Realistic Trigger Points
• Review of trigger points
– What dictates a local or national reversion?
– Must take industry capability into account
• 100% compliance not achievable
• Specifications cannot require 100% compliance
• Fairer tolerance needed
17. What MCF would like to see
Evidence
• Tolerances are being properly measured
• That tests are being conducted fairly
• That the tests are being applied equally
across channels and providers
• That the problems reported result in cost
increases that justify the surcharge
• Detailed RP evidence can be provided to
prove reversion
18. Present proposed solutions and
updated processes
Jenny Ledgar, Network access director, Royal Mail
#dmapost
19. Royal Mail Revenue Protection
Stephen Agar - Managing Director, Consumer and Network
Access
Jenny Ledgar - Network Access Director, Consumer and
Network Access
Tim Cable - Director Products, Royal Mail Retail
20. Agenda
• Key industry issues & input from the Industry
• Proposed solutions to tackle key issues
Map of where the ‘speed cameras’ are
Full review of OCR and barcode product specification including
sealing specification
An interim approach to reversions
• More work to do
Improved communication with industry / process for the mail
producer to challenge any surcharge
Revenue protection on site – what are the options?
• Conclusions
• Questions
20
21. Key industry issues
• Proportionality
• Transparency
• Production difficulties with 100% specification
requirement
• Communication with the ‘bill payer’ / no
opportunity for the mail producer to challenge
any surcharge
• Provision of evidence when mail fails
specification
21
22. Input from the Industry
• Our customers
• Strategic Mailing Partnership members
• Mailing Presentation Advisory Group members
• DMA
Our thanks to all who have helped develop the
following proposed solutions
22
23. Solution – tackling transparency
• Map of where the ‘speed cameras’ are
Produce and publish a schedule of attributes that our
Revenue Protection teams will focus on, on a 12 month
rolling basis
e.g.
Oct-Dec 12 - sealing specification
Jan-Mar 13 - flexibility
Apr-Jun 13 - specific addressing standards
Jul-Sep 13 - dimensions
Note: We reserve the right to revert on any failed attribute of
the specification
Share schedule on RMW website, RM technical and via
industry groups i.e. SMP
Provide regular update on RMW website, RM technical and
via industry groups on key causes of reversions by number
23 and value
24. Solution- tackling the product
specification
• Full review of OCR and Barcode product
specification including sealing specification
underway
Due to be concluded Sept 12
New sealing tolerance defined and to be shared shortly
A phased reintroduction of sealing reversions between
Sept 12 and Jan 13
17th Sept – Oct revert 20% of any national reversion
Nov – Dec revert 50% of any national reversion
1st Jan 2013 full reversion
• Product specifications defined as having a high
operational impact or a low operational impact
…. see next slide
24
25. High / low impact attributes
• Examples of high impact attributes
sealing specification
visibility of address for OCR;
clear route and tag zones for OCR;
2mm clear zone round CBC
• Examples of low impact attributes
mail piece meeting specific flexibility requirement;
specific width of individual bars of a CBC;
delivery address only - Punctuation corresponding to PAF® or all punctuation
omitted
country name must not be used
type face - recommended fonts to be used (others permitted)
• We reserve the right to switch attributes between low and high
impact and vice versa depending on how the attributes perform in
our operation. We have focussed on getting this solution developed
and approach agreed and therefore, we have not had time to fully
test all attributes
25
26. Solution – tackling proportionality
An interim approach to
reversions for OCR/CBC in
Retail/Wholesale
Low volume High volume Auto
detected Medium volume detected detected Reversions
Find one container Up to 10% of mailing Over 10% of mailing Process needs to
Reversion with faulty detected detected be developed
Policy item/items, levy a
Defined fixed charge for
container.
Ops 10% of mailing reverted to 100% of mailing Process needs to
Impact £25 minimum plus a next applicable service reverted to next be developed
Retail charge * for each applicable service
(High)
container up to x
container. Above x 10% of mailing surcharged 100% of mailing Process needs to
container, non with a fixed unit charge surcharged with a be developed
Ops compliance will move based on a flat fee per item fixed unit charge
Impact to medium volume eg range 0.5p – 1.5p based on a flat fee per
(Low) detected item eg range 0.5p –
1.5p
Reversion Find one failed Find failed containers in Find failed containers Current process
container, revert that multiple IMC’s, revert the in many IMC’s, revert maintained for
Policy container to next total segment at those the entire mailing high impact
Defined applicable service IMCs. failures
Ops 100% of mail in identified 100% of mail reverted Current process
Impact IMC’s reverted to next to next applicable maintained
Wholesal applicable service service
e (High)
100% of container is
100% of mail in identified 100% of mail Process needs to
reverted to next
Ops IMC’s surcharged with a surcharged with a be developed
applicable service
fixed unit charge based on fixed unit charge
Impact a flat fee per item eg range based on a flat fee per
(Low) 0.5p – 1.5p item eg range 0.5p –
1.5p
26
Retail/ Rework/ Operational charges* for additional activity undertaken by RM Ops. Retail = additional charges.
New or revised
Wholesal Ops Wholesale = contractual charges already in place
e Charges
27. More work to do……..
Finalise solutions and prepare for
launch
Improved communication with
industry / process for the mail
producer to challenge any surcharge
Revenue protection on site – what
options are available?
27
28. In conclusion
• You said your issues with our processes were
with
Proportionality
Transparency
Production difficulties with 100% specification
requirement
Communication with the ‘bill payer’ / no opportunity
for the mail producer to challenge any surcharge
Provision of evidence when mail fails specification
• Our proposals provide an interim solution to
most.
• Aim to launch 17th Sept
28
30. Panel discussion
Chris Combemale, DMA
Howard Matthews, DMA Mailing House Council
Charles Neilson, TNT Post
Jenny Ledgar, Royal Mail
Stephen Agar, Royal Mail
Tim Cable, Royal Mail
#dmapost