Postal Reporter- U S POSTAL CORPORATE FLATS STRATEGY

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USPS Corporate Flats Strategy

posted June 15, 2003

source: USPS
• USPS Corporate Flats Strategy FAQ• USPS Corporate Flats Strategy

Senior Vice President, Operations, John Rapp presented the Postal Service's near and long term strategy for processing flat mail.

The Corporate Flat Strategy calls for bringing flat mail -- newspapers, catalogs, magazines and other periodicals -- up to the same level of sophistication that letter mail processing provides today. That is, automate sorting down to the order that letter carriers deliver their routes.

Between 1993 and 2001, letter mail processing productivity increased 83 percent. Following deployment of 534 Automated Flat Sorting Machine 100s just two years ago, flat mail processing productivity jumped
78 percent.

To continue this success Rapp said the Postal Service must continue to find ways to increase customer involvement. He said it entails involving the customer in developing rate structure incentives, mail makeup
requirements, bar coding more mail, and making sure customers understand the importance of providing correct bar codes and readable addresses.

He also outlined the delivery vision to sequence letters and flats into a system that will provide one "package" of mail for each address. Rapp said two options are being explored. The first hinges on the
feasibility of a Delivery Point Packager (DPP) R&D effort. Equipment is expected to be available for testing during the 2005-2006 timeframe. source: USPS

USPS Awarded Flat Sequencing System (FSS) Contracts to:

Northrop Grumman Corporation -1,455,840 Phase I
Lockheed Martin Systems Integration-1,500,000 Phase I

Flat Sequencing System
The Flat Sequencing System (FSS), as the first initiative, will automate flat sorting to delivery order. While this will not merge flats and letters into one package, its goal is to place flats in delivery sequence within one or more five-digit zones. "This program essentially strives to replicate the success we have achieved with Delivery Point Sequencing of letters," he explained. "We'll work with vendors to develop a machine to perform three key functions: Induct flats at high speed; automatically manage trays throughout the process; and sequence flats to delivery order."

Flats Sequencing System (FSS): This system provides flat mail in "Delivery Point Sequence" (DPS) or "walk" sequence to all carriers within one or more delivery zones. Currently, the USPS has sorting equipment to sort letter mail to full DPS level and flat mail to zone and carrier level. The FSS system approach could add flat mail sorting systems to the existing automation fleet to walk sequence flat mail for carriers. The FSS system must be able to handle all types of flat mail, currently processed by the USPS AFSM100 and the UFSM1000 (upgraded FSM1000) flat mail sorting machines. The FSS must demonstrate a minimum machine throughput of 40,000 pieces per hour for a single pass operation and/or a cumulative 16,350 pieces per hour for a multi-pass operation. The FSS may use image processing to automate sorting using bar codes, optical character reading and online video encoding to achieve a minimum of 95% sort rate to the delivery point with an error rate not to exceed 1% of the volume sorted.

USPS Awarded Delivery Point Packager (DPP) Contracts to:

Delivery Point Packager
The second initiative, Delivery Point Packager (DPP), reduces the time carriers spend casing flats and reduces the time they spend delivering by creating packages of mixed letters and flats for each delivery stop. Previous tests of this method have shown a 20% reduction in the time required to deliver when mail is prepared in these bundles.
Day said applying this twenty percent savings in delivery time to the 7,000 locations results in a delivery savings of approximately $2.8 billion annually. He noted however, that this amount excludes some additional mail processing costs. Field tests were conducted in Carson City, NV and Sterling, VA where letters and flat mail were manually sorted into plastic bags to simulate the output of a Delivery Point Packager. Letter carriers then delivered the bags to customers.

Delivery Point Packager (DPP): This system provides for an all encompassing, seamless operational approach that results in a single bundle of "packets" containing letters and flats individually packaged for each delivery point on the carriers' route. To fulfill this vision requires mail sorting and packaging equipment that efficiently sorts, merges and packages the letter and flat mail streams in delivery sequence order for the letter carrier. The DPP system may result in reduction or complete elimination of some or all, existing USPS mail sorting equipment. A key component of this new approach is a sorting system that assembles a large range of letters and flats into delivery point packages. The system will accommodate all sizes, and weights of letters and flats. A DPP sorting system will be able to process all carriers' flat and letter mail for one or more delivery zones and capable of sorting the mail volume for the next day's delivery within the time window available. The output volume will meet or exceed the existing carrier volume levels available from current sorting methods. Current machine throughput for the equipment is 35,000 pieces per hour. The DPP may use image processing to automate sorting using bar codes, optical character reading and online video encoding to sort all letter and flat mail to the delivery point with an error rate not to exceed 0.5% of the volume sorted.

USPS Corporate Flats Strategy and Delivery Vision (doc)

USPS Corporate Flats Strategy -(PDF file 864k)

Excerpts of CORPORATE Flats StraTegy

Highlights:

• reduce carrier in-office costs • Delivery Vision • Processing & DeLIVERY Changes

• Using the ASFM 100 to Sort Flats in Delivery Sequence• FLAT SORTING MACHINE INVENTORIES

• IMPLEMENT FLATS SEQUENCING SYSTEM

Improving CURRENT Flats operations

In previous years, flats processing and delivery costs have trended upward and have caused substantial rate increases for flat shape mail. Despite these adverse trends, flat shaped Standard Mail continues to be second only to First-Class Mail in total revenue contribution. Standard Mail is also a product line that is subject to substantial competition, but can be price sensitive even without competition depending on the economy. Periodicals Mail, while contributing significantly less to the USPS bottom line, is considered the mailbox “anchor.” That is, Periodicals Mail is a product that consumers in most cases subscribe to and look forward to receiving, therefore adding to the Postal Service’s overall value.

To ensure that these and other flat-shaped products remain affordable, the Postal Service must continually work to minimize operating costs. This section describes activities that will improve operating performance in the near term. These activities fall into the following general categories: deploying and using automation equipment and programs, reducing mail preparation costs, standardizing operational processes, improving manual productivity, tracking performance, capturing savings, and adjusting complement.

The Postal Service will also take the initiative to research and develop new methods to distribute and deliver flats. The Postal Service anticipates that certain technological innovations under development will make the following programs possible in the long run:

Delivery Point Packaging (DPP), a one-pass system of sorting both letters and flats.
Flats Sequencing System (FSS), a two-pass system for sorting flats in delivery sequence order.

Many of the tasks associated with evaluating DPP and FSS will be either in progress or completed during the near term. The methods used by the Postal Service to incorporate these results into the Corporate Flats Strategy are described in the mid-term section of this document.

1. DEPLOY FLAT SORTING EQUIPMENT IN THE NEAR TERM

Deployment of the Automated Flat Sorting Machine (AFSM) 100s has been completed. Based on their performance, the Postal Service has determined that the entire fleet of FSM 881s can be excessed without a negative impact on operational performance. Offices that use FSM 881s because their flats distribution operations could not be centralized into larger processing centers will be provided FSM 1000s as replacements. The table below contains actual and projected end-of-fiscal-year national equipment inventories. It is important to note that even though the total number of FSMs will be reduced during the near term, the overall system processing capacity will increase due to the higher throughput of the AFSM 100s and modifications to the FSM 1000s (described later in this section).

FLAT SORTING MACHINE INVENTORIES
	FY2001	FY2002	FY2003	FY2004
AFSM 100	355	534	534	534
FSM 1000	353	353	353	353
FSM 881	379	66	0	0
Total	1,087	953	887	887

2. DEPLOY PROGRAMS THAT INCREASE PERFORMANCE IN THE NEAR TERM

The Postal Service will deploy several programs that incorporate technological improvements into current operations and that support the near term goals. An overview of each program is provided below:

Upgraded FSM (UFSM) 1000 Conversion

The FSM 1000 was originally deployed with three barcode readers and/or keying stations. The UFSM 1000 conversion program will replace one keying station with an automated high-speed flats feeder and replace the three barcode readers with one Optical Character Reader (OCR).

AFSM 100 Improvements

Improvements to the AFSM 100 include adding a “doubles” detector to identify and divert double fed mail pieces and enhancing the feeder modules to reduce damage, reduce jams, and increase throughput.

Flat Interim Remote Encoding System (FIRES)

FIRES uses the current AFSM 100 Video Coding System (VCS), which has been relocated from the AFSM site to a Remote Encoding Center (REC). This system in effect simply "stretches" the wire between the AFSM and VCS operation and uses the same hardware and software. Most sites use a T-1 line to transmit images from the AFSM to the REC.

Flat Remote Encoding System (FRES)

The FRES program will be used to improve the efficiency of the AFSM 100 REC keying operation by allowing a larger “pooling” of image keyers at each REC and by providing software and equipment to ensure the workload is evenly balanced. As additional AFSM 100 keying workstations are relocated from the processing centers to the RECs, images from up to six individual machines from multiple locations can be processed at any given time. Eventually, the FRES program will allow each AFSM 100 keying workstation at the REC to process images for up to 99 machines at any given time. The FRES will use commercial-off-the-shelf (COTS) computer hardware and standard interfaces to ease maintenance, ensure long-term viability of the technology, and provide the infrastructure needed for future enhancements.

Flat ID Coding System (FICS)

The FICS program will print an ID TAG on a label that will then be placed on non-barcoded flats. Pilot tests will be conducted to identify the essential modifications needed for flats sequencing and to incorporate flats processing into the Postal Automated Redirection System (PARS).

Secondary Address Readers (SAR)

The SAR program will increase address recognition rates while decreasing errors. The SAR program is part of the AFSM 100 OCR contract that provides for incentive based software improvements. The Secondary Address Readers add additional hardware processing equipment and new OCR applications to the AFSM 100 OCR.

Flats Recognition Improvement Program (FRIP)

The FRIP will enhance the address recognition technology used in flat mail automation equipment. It will improve Optical Character Reader acceptance rates and reduce error rates on all AFSM 100 and UFSM 1000 equipment.

The ATHS program provides selected AFSM 100 machines with automatic tray handling capabilities. The ATHS automatically places empty flat mail trays onto the AFSM 100, removes the full trays, labels, and transports the trays to the Tray Management System or other material handling system. A requirements analysis will be conducted to determine how many AFSM 100s will require the ATHS. Initial estimates suggest that only those facilities with utilization times of 16 hours and higher will receive the ATHS.

The APPS provides automatic (single or dual induction) package sorting, capable of six-sided OCR/VCS keying with up to 200 output bins. The APPS is projected to have throughput capacity of 11,000 packages per hour with a productivity rate of 550 packages per hour.

The MERLIN program provides the Business Mail Entry Units with a method of ensuring that flat mail received from customers is eligible for worksharing discounts and automates verification procedures.

The table below provides an approximate period for the implementation of each program or modification described above as well as a summary of the impact each should have on operations:

PROGRAM	IMPLEMENTATION PERIOD	PRIMARY IMPACT ON OPERATIONS
UFSM 1000 Conversion	FY2003	Increased Productivity
Flat Interim Remote Encoding System (FIRES)	FY2003	Increased Productivity
AFSM 100 Improvements	FY2003 & FY2004	Increased Productivity
Flat Remote Encoding System (FRES)	FY2003 & FY2004	Increased Performance
Flat ID Coding System (FICS)	FY2003 & FY2004	Increased Performance
Secondary Address Readers (SARS)	FY2003 & FY2004	Increased Performance
Flat Recognition Improvement Program (FRIP)	FY2004 & FY2005	Increased Productivity
Automated Tray Handling System (ATHS)	FY2003 & FY2004	Increased Productivity
Automated Package Processing System (APPS)	FY2003 & FY2004	Increased Performance
Mail Evaluation, Readability, and Lookup Instrument (MERLIN)	FY2003 & FY2004	Increased Quality

The Postal Service is taking steps to move all AFSM 100 or FSM 1000 compatible flat volumes away from manual and keying distribution to more efficient automated operations. This “up-the-ladder”[1] approach will continue to serve as a measure of operational efficiency. Incoming secondary operations that process flats manually in both the processing centers and post offices offer the greatest opportunity for reducing costs. Centralizing the distribution of machinable flats from associate offices, stations, and branches into locations that have AFSM 100s will ensure that machine use is maximized and that Function 4 workload is reduced. The table below lists the “up-the-ladder” goals for total flats handlings:

The table below lists the national throughput goals for each operational category:

VOLUME PROCESSED PER MACHINE PER A/P
	FY2003	FY2004
AFSM 100	4.3 million	4.8 million
FSM 1000 / UFSM 1000	1.0 million	1.0 million

The Postal Service will continue to increase the number of zones and carrier routes processed on the FSMs. The table below provides the national goals for the near term period:

ZONES AND ROUTES DISTRIBUTED ON THE FSMs
	FY2003	FY2004
Zones	9,888	10,382
Routes	189,891	199,386

The “up-the-ladder” program focuses on using the FSMs (the most efficient level of distribution) to process flats instead of manual (the most costly and least efficient form of distribution).

It is anticipated that all of the FSM 881s will be removed from service prior to the end of FY2003.

All of the existing FSM 1000s should be converted to UFSM 1000s by the end of FY2003

Delivery Vision

Longer term, the Postal Service will take the next step of incorporating automation into the delivery process. Several options for expanding address sequencing of flats will be explored and these will extend the full benefits of automation to carrier operations. Actions to improve long-term delivery office and street efficiencies must be consistent with the delivery environment of the future.

The Postal Service’s ultimate vision for delivery is a seamless operation that produces one package of mixed letters and flats for each delivery point (Delivery Point Packaging or DPP). This vision is based on having high-speed mail sorting and packaging equipment that will efficiently sort and merge the letter and flat mail streams into delivery sequence for the letter carrier. This equipment will be optimally located so that the operational savings can be maximized. Ideally, all presorted mail sequenced using this system would have an 11-digit POSTNET barcode[1] with a standardized address, or address label, format and placement so that the equipment output will result in an address orientation that facilitates efficient delivery.

DPP would replace the labor-intensive carrier casing and pull downs inherent in the existing manual system. This new carrier/delivery unit environment will not involve delivery unit sortation, case pull down, or fixed casing equipment. The packaged volume will then be made available at a central carrier point or location, which may or may not be a traditional delivery unit.

The Postal Service has a long history of testing innovative methods to implement changes in distribution, delivery, and transportation systems and is continuing this tradition by investing research and development funds to evaluate the benefits and costs of implementing the delivery vision.

Delivery Point Packaging (DPP) technology represents the best opportunity to use innovation to improve operating performance. In addition to saving work hours within the carrier function, the resulting packaged volume would enable the Postal Service to explore new transportation alternatives for letter carrier delivery. A major step in the planning process will be determining customer and operating changes needed to prepare and distribute flats prior to incorporating the volume into delivery sequence. DPP planning will start in the near term (the next two years) and should be completed during the mid-term period (within three to five years).

DPP research will initially focus on developing a delivery point packaging machine (Option 1) that uses a one-pass system to sequence both letters and flats. While in-depth analysis of the DPP (Option 1) simulation results is being performed, parallel evaluations of other systems will take place. The Flats Sequencing System (Option 2), a machine that will sequence flats in delivery order using a two-pass system, will also be evaluated.

The research and development time frames for each option will be different and therefore the results of the Flats Sequencing System (FSS) may be available for consideration in advance of the Delivery Point Packaging system. In that event, a corporate decision to postpone implementation of FSS would be required, pending final results of the DPP simulation. Since the Delivery Point Packaging system would use only one pass to finalize letters and flats in delivery sequence, the economic return for the Delivery Point Packaging system may eliminate the need to develop and deploy FSS machines. back to top

1. EVALUATE THE USE OF ZIP+4 TO ESTABLISH FIRM AND OTHER DIRECTS ON THE FSMS, AFSM 100s, AND UFSM 1000s

In order to reduce the overall volume of flats that must be sequenced, the Postal Service will explore the possibility of using the POSTNET barcode or ZIP+4 to establish additional firm holdouts and carrier shelf sortation on the AFSM 100s. Using ZIP+4 to establish firm holdouts proved to be very effective during letter automation implementation for those firms that had a unique +4 add-on. This process was accelerated when the volume sorted to each separation increased due to the shift from a 9-digit to an 11-digit barcode.

Successful migration of the firm direct concept into flats sortation will depend on whether bin assignment separations are available and whether the volume can be finalized in a one-pass process. Flat sorting machine depth of sort will depend on the number of routes being sorted and on the volume destined for each firm or separation. The expected benefit from this process is a reduction in carrier office time.

2. SEQUENCE FLATS IN DELIVERY READY CONDITION

The Postal Service will develop and deploy the Flats Sequencing System to reduce carrier in-office costs for sequenced flats that do not require casing. An overall reduction in the volume of cased flats will result in a comparable reduction in carrier office time. The Postal Service will work with customers and the Postal Rate Commission to change the rate structure and mailing requirements to maximize the amount of 11-digit barcoded flats produced by mailers.

While Option 2 (Flats Sequencing System) will support the delivery vision by deploying flats sequencing machines, it does not fully realize the delivery vision. The problem of incorporating the carrier cased letters and flats with the sequenced volumes into a delivery point package would remain. One possible solution would be to package the DPS letters and FSS sequenced flats separately, with the carrier casing the remaining volumes. Another solution may be to develop a mail merging machine that could be used to combine machine and carrier sequenced volumes.

Should Option 2 be selected, the Postal Service would need to determine if these or other viable alternatives exist to sort sequenced letters and flats and residual volumes together into a single package for each delivery point. Lacking this, the Postal Service would forego much of the potential street savings in the full delivery vision, but would achieve smaller savings primarily from the reduced carrier casing time in the office. back to top

3. IMPLEMENT DELIVERY POINT PACKAGING

This option will provide a seamless carrier delivery operation while reducing carrier in-office and street delivery costs. Packaging mail for each delivery point as a single pre-packaged unit eliminates the need to “finger the mail” to find breaks between delivery addresses. Additional savings include reductions in loading times, improved mail orientation in the delivery vehicle, and the elimination of carrier office time.

Businesses and residential customers have responded favorably to the convenience and weather proofing afforded to their mail when it is delivered as a packaged unit. Ergonomic impacts on street delivery for letter carriers also provided significant improvements over current delivery methods. Packaged mail also provides an opportunity for the Postal Service to explore additional revenue generation potential for “date certain” or “time sensitive” advertising.

The Postal Service is in the process of defining functional and design requirements for the proposed DPP or FSS processing equipment. These machines will be used exclusively for incoming secondary distribution to the delivery sequence point and will not be used to process other volumes. In addition to satisfying throughput and sortation quality issues, there are other factors that must be considered including calculating support costs, facility modifications, and service expectations.

Several contractors that produce mail processing equipment and their systems suppliers are collaborating with the Postal Service in developing and testing prototypes. Each equipment type being tested supports flats sequencing.

The Postal Service will also investigate mechanized material handling systems (flats preparation, loading, induction, and sweeping) that could improve the efficiency of either the DPP or FSS processing option.

Some developers have suggested that any one-pass DPP machine would, of necessity, have a very large physical footprint. It has also been suggested that the footprint might not fit into older facilities that have closely spaced structural support columns. The design requirements for these systems must incorporate physical plant layouts, specifically recognizing that structural support columns are not standardized throughout postal facilities. The obvious solution is to develop a modular DPP machine that will be configurable to accommodate building structural members.

The following information provides an overview of the decisions made related to implementing either DPP or FSS:

Although the AFSM 100 was originally designed and deployed to sort flats to the carrier route level, computer simulations and limited field testing proved that the AFSM 100 could sequence flats in delivery point order. However, additional testing and research also confirmed that it could not produce the sequenced mail in a delivery ready condition efficiently within its current design configuration. Further, the inability to increase the mail sorting speed and the problems caused by improper mailpiece orientation in flat trays led to the decision to eliminate the AFSM 100 from contention as a delivery point sequencing machine. Therefore, the Postal Service has decided not to use the AFSM 100 to sort flats in delivery sequence order. back to top

The Postal Service has determined, as a matter of policy, that it will not be cost effective to spray POSTNET barcodes on non-barcoded flats. Therefore, the Postal Service has decided that it will not spray POSTNET barcodes directly on flats and will instead rely exclusively on the mailers to provide barcoded flats.

In the near term, simulation results will be available to permit decisions to be made on the following equipment and related issues:

The Postal Service will determine whether applying ID tags to non-barcoded flats will be compatible with DPP or FSS. The Postal Service will investigate whether the Identification Code Sorting (ICS) tagging system (now used to process letters) can be modified for flats processing. As with letters, the ID tag would reference the address information that resulted from either OCR resolution or video image coding. Additional studies will be conducted to determine if the AFSM 100 and/or the UFSM 1000 machine can be modified to apply ID tags on non-barcoded flats prior to DPP or FSS processing

The Postal Service will study the feasibility of using the Flats Feeder Assist Device to increase the productivity of loading mail onto flat sorting machines. Flat bundle sequencing models and equipment from several contractors will be live-tested in the field to provide proofs of concept. This equipment will be thoroughly tested in both lab and operating environments to validate performance and to ensure the Postal Service procures state-of-the-art technology.

The Postal Service is in the process of identifying and resolving operational issues related to implementing DPP or FSS. Planning will focus on:

Simulation results from earlier modeling efforts will be available to support decisions on the following operations issues:

Mailflow Changes

The Postal Service will determine which operating plan, transportation scheduling, and mailflow changes will be required to implement DPP or FSS. Both the DPP and FSS programs will be considered at the same time providing an opportunity to incorporate possible improvements from one into the other.

Option 1:

Machines performing DPP will sort both letters and flats at the same time. This simultaneous processing emulates manual casing and represents a major change to automated mailstreams. The following is a list of items that will need to be considered during DPP planning:

§ Eliminating DPS letter processing for DPP zones.

§ Eliminating all FSM incoming secondary processing for DPP zones.

§ Eliminating manual letter and flat distribution and casing, pulldown, and tie-out for DPP zones.

§ Eliminating bundle sortation of carrier routed volumes for DPP zones.

Machines performing FSS will sort flats in delivery ready condition using a two-pass system. The FSS two-pass process may not be the same that is used now for DPS letters. This is due in part to there being only one first pass, followed immediately by the second pass. Each FSS zone will be scheduled for processing at a specific time which will be determined by the volume arrival profile. While several factors may mirror DPS letter sort plan construction (wrap factor, carrier ID usage, etc.), the actual number of second pass trays used will be predetermined based on an average of 900 flats per carrier and a maximum of 65 flats per tray.

The economic justification for the FSS program requires the elimination of carrier route volumes (other than walk sequence volumes). Flats that are to be delivered within one or more 5-digit delivery zones and that satisfy several physical constraints; i.e., the "machinable” flats would be passed through this 220-400 bin machine twice, and be finalized in walk sequence order for each letter carrier. The following is a list of items that will need to be considered during FSS planning:

The Postal Service will determine the impact that DPP or FSS will have on transportation and scheduling requirements. Depending on equipment location, both of these programs could potentially create the need for additional transportation runs thereby increasing costs. The following is a list of items that will need to be considered during the planning period:

§ Determining the need to modify vehicles to accommodate mail transport equipment changes.

The Postal Service will use simulation modeling to determine the number of machines and optimal locations. Should the FSS option be chosen, the machines will most likely have to be located in larger processing centers or leased space. However, should DPP be selected, the requirement for Delivery Bar Code Sorters and Flat Sorting Machines will actually be reduced. This reduction can be translated into excess postal space that could be reused, depending on the zone and carrier route to machine ratio. The need for these facilities will be examined and should the potential for their reuse be identified, decisions on extending ownership will be made.

The Postal Service will determine which internal processing and distribution changes must be made prior to implementing DPP or FSS. These changes will focus on the following areas:

The Postal Service will determine which changes must be implemented to ensure savings are captured and complement reductions occur. These changes will focus on the following areas:

The preferred choice would be to develop and deploy a single machine or system that sequences both letters and flats and permits the Postal Service to implement delivery point packaging using a one step process. While many of the specific implementation action items that may be required have not been identified, the general concept of sequencing letters and flats together has been approved by senior management.

Pending a successful research and development outcome, the Postal Service would be ready to implement DPP during FY2008, using one machine to process both flats and letters. The DPP machines could be deployed at optimal locations and all DPP related work could be performed at those sites. The DPP machine output would be packages containing letters and flats sorted by delivery point. Special handling procedures could be designed for accountable mail and delivery points that cannot accommodate packages. Shown below is a one-step DPP implementation time period schematic, that highlights potential activities of each time period:

Special handling procedures could be designed for accountable mail and delivery points that cannot accommodate packages. Shown below is a one-step DPP implementation time period schematic, that highlights potential activities of each time period:

[1] The “up-the-ladder” program focuses on using the FSMs (the most efficient level of distribution) to process flats instead of manual (the most costly and least efficient form of distribution).

[2] It is anticipated that all of the FSM 881s will be removed from service prior to the end of FY2003.

[3] All of the existing FSM 1000s should be converted to UFSM 1000s by the end of FY2003.

[4] These projections are trend-based and used for internal planning purposes only.

[5] Depending on the technology available during equipment design and development, it may be possible to substitute an OCR result or information derived from an ID Tag for the POSTNET barcode.

1. EVALUATE THE USE OF ZIP+4 TO ESTABLISH FIRM AND OTHER DIRECTS ON THE FSMS, AFSM 100s, AND UFSM 1000s

2. SEQUENCE FLATS IN DELIVERY READY CONDITION

3. IMPLEMENT DELIVERY POINT PACKAGING

As described in the previous sections, the Postal Service is exploring several options for improving the delivery of flats and letters. Much of the baseline work and the initial research and development of any sequencing machines will take place during the near-term period. Planning for the specific operational adjustments needed to do either the Delivery Point Packaging (Option 1) or Flats Sequencing System (Option 2) will occur during the mid-term time frame.

Consistent with the delivery vision, the Postal Service will consider several alternative courses of action. The speed with which each can be followed will depend on how quickly technological solutions can be found and on the level of customer involvement. During the mid-term planning period, the Postal Service will run simulation models to estimate the savings associated with moving directly to Delivery Point Packaging (DPP) or pursuing the Flats Sequencing System (FSS) options.

The Postal Service will work closely with several contractors to refine the operating environment, overcome the technical challenges associated with deployment, and implement flats sequencing in a timely manner. The Postal Service will prepare a detailed cost/benefit analysis to identify the most promising scenarios under varying product mix (classes of mail), schedules, operating windows, etc. Once the Postal Service has identified the viable options it will pursue, development of the associated equipment, technology, systems, and methods will follow.