National Postal Forum Automating Flat Mail

® ® National Postal Forum Automating Flat Mail Preparation in the Future Anita Pursley – Worldcolor Brent Raney - USPS Flats Track for Periodicals, Catalogs & Printers

® Agenda National Postal Forum q Volume Reduction is driving changes to: • Distribution Network • Delivery processes • Processing operations • Mail preparation • Mail entry locations • Mail arrival times How does this impact you and your business? Flats Track for Periodicals, Catalogs & Printers – NPF 2010 2

® National Postal Forum Declining Volume -- Action Imperative RPW Flat volume decline FY 2009 -13. 8% FY 2005 – FY 2009 Flat volume decline 26% 14. 3 billion fewer flats annually Flats Track for Periodicals, Catalogs & Printers – NPF 2010 3

® Flats Process Today National Postal Forum Mailers Bundle Distribution Bundle Prep Flats Track for Periodicals, Catalogs & Printers – NPF 2010 Piece Distribution Delivery 4

® National Postal Forum Eliminate Non-Value Added Work/Processes Mailers X X Bundle Distribution Bundle Prep X X Flats Track for Periodicals, Catalogs & Printers – NPF 2010 Piece Distribution X Delivery 5

® Flats Process Future National Postal Forum Mailers Automated Bundle Preparation Flats Sequencing Delivery Flats Track for Periodicals, Catalogs & Printers – NPF 2010 6

Overview of Flat Process ® National Postal Forum Mail Owner Design Mailing Mail Preparer Print Bind Strap / Wrap Palletize Create Mailing Personalize Stitch/Staple Strap/wrap bundles Load bundles & wrap pallets Mailer USPS & Industry Focus of process improvements Deliver Integrate flats / letters & deliver Sort & Sequence Piece distribution Manual / AFSM & FSS Flat Prep Dump & Sort Unload & Transfer Unwrap / unstrap bundles Bundle Distribution APPS / SPBS Flow to bundle distribution or dock transfer USPS Flats Track for Periodicals, Catalogs & Printers – NPF 2010 7

® Joint USPS / Industry Workgroups National Postal Forum 1. MTAC 58, 2000 – 2002 ● 2. MTAC 71, 2002 – 2003 ● 3. Address Location for Flats Sequencing System MTAC 115, 2007 – 2009 ● 7. Develop Interface to AFSM 100 Auto-Induction Process MTAC 101, 2006 - 2007 ● 6. Flat Mail Preparation Optimization MTAC 96, 2005 – 2007 § 5. Flats Container Development MTAC 81, 2003 – 2005 ● 4. Preparing Flats Using Alternate Packaging Requirements for preparation and entry of flat mail in the Flats Sequencing System (FSS) environment. MTAC 134, 2010 - TBD ● Implementing FSS Presort Parameters Flats Track for Periodicals, Catalogs & Printers – NPF 2010 8

® History of Flat Prep Optimization National Postal Forum q Mailer Logs (MTAC WG 71) Ft. Myers ● Idea § ● Create logs of finished books similar to signatures (pages) used in binding process Issues § § § Required Counter-stacking of books within log Required change to finishing lines Required Mailer Development/Investment of new equipment Output: Standardized Prep and Ai at the AFSM 100 Flats Track for Periodicals, Catalogs & Printers – NPF 2010 9

® MTAC Workgroups Refined Solutions National Postal Forum q Ship Mail in ACTs/Dollies (MTAC WG 96) ● Idea § ● Mailers prepare and ship flats in ACTs on Dollies or on pallets Issues § § Not as cube efficient as pallets, could double trucking requirements Required large space to store empty stock at mailer plants Output: Ship Bundles on the Auto-Ready Pallet Flats Track for Periodicals, Catalogs & Printers – NPF 2010 10

® Solution: Single Flats Flow National Postal Forum q Standard Size Bundles (MTAC WG 115) ● Idea § ● Mailers prepare and ship flats in standard size bundles on pallets with strap-only or belly band Benefits § § § Combining multiple flats flows on one pallet lead to shipping efficiencies Utilized existing equipment in mailer plants Paved way for new efficiency opportunities Output: Multi-Scheme Pallets and Automated Flat Prep Flats Track for Periodicals, Catalogs & Printers – NPF 2010 11

® Outcome of MTAC Efforts National Postal Forum q Adopt “Auto-Ready” Pallet Finishing Process “…preferred method for the Ai environment as we move toward FSS” q The Auto Ready Pallet considers the output of a mail preparer as the input to a piece of postal automation – either AFSMai or FSS. 6 sort plans Flats Track for Periodicals, Catalogs & Printers – NPF 2010 12

® National Postal Forum q 3. 5 – 5. 5” (+-. 5”) bundles q Bindings aligned within the bundle q Auto-Ready Pallet Barcoded Flats – 11 digit IMB or Postnet q Multiple schemes per pallet q Cross-Strap (2) preparation - Centered ± 2” q Counter-stacking of bundles on pallets allowed for stability Flats Track for Periodicals, Catalogs & Printers – NPF 2010 13

® Automated Flats Processor National Postal Forum q Developed a prototype system “Automated Flats Processor” (AFP) to improve: ● Productivity of bundle processing ● Equipment space required to process daily volume ● Capability to accept multi-zone pallets ● Flats auto processing – induction to piece sorting Flats Track for Periodicals, Catalogs & Printers – NPF 2010 14

® National Postal Forum Automated Flat Processor Key Functions q Auto Depalletize Bundles – automatically unloads bundles from pallets q Distribute Bundles - based on sort plans with OEL readability – convey & prep bundles for processing q Process Bundles – cut and remove bundle strapping and load bundles into ACTs q Make Dollies – produce sort plan based dollies q Dispatch Dollies – full ACTs, produced for specific sort plans, released for induct into flats sorting equipment Flats Track for Periodicals, Catalogs & Printers – NPF 2010 15

® National Postal Forum Automated Flat Processor Overview Bundle Buffer/Sort De-palletized bundles Cut Straps and Load ACTs Stack ACTs Make Dollies Flats Track for Periodicals, Catalogs & Printers – NPF 2010 16

® National Postal Forum VIDEO Flats Track for Periodicals, Catalogs & Printers – NPF 2010 17

® AFP Bundle/Containers Tested National Postal Forum q Bundle / Container testing: ● Built on auto-ready pallet concept ● Evaluated – uniform bundle heights, compensation of bundles, containerization, and bundle securing methods ● Determined counter-stacked bundles of uniform height travel well through transportation / distribution system Flats Track for Periodicals, Catalogs & Printers – NPF 2010 18

® AFP Bundle/Containers Tested National Postal Forum q Bundle securing methods tested: ● Two cross-straps around length and girth ● Shrinkwrap “bellyband” with a single-strap as alternative to strap only ● Shrinkwrap “bellyband” only Flats Track for Periodicals, Catalogs & Printers – NPF 2010 19

® Workgroup Activities National Postal Forum q Evaluated potential pallet makeups: ● ● Pure FSS (multiple schemes) ● q Pure FSS (single scheme) Combined FSS and non-FSS Assessed impact of volume reduction ● ● ● q Volume reduction has required more ZIP Codes and FSS sites than original plan Some original sites receiving fewer machines Volume reduction makes preparation of FSS single-scheme pallets more difficult Considered single preparation solution ● ● Lowest end-to-end cost achieved with one bundle preparation method Prep compatible with FSS and AFSM process Flats Track for Periodicals, Catalogs & Printers – NPF 2010 20

® National Postal Forum q q q Test Findings Auto-ready pallet prep will allow bundles to flow directly to the bundle prep operation and bypass APPS processing Multiple sort plans (up to 6) can be accommodated by AFP Bundles with optimal heights of 3”, 4” and 6” processed with no issues Bundles with cross-straps (± 2” from center) processed with no issues Bundles with one strap and one bellywrap processed with few issues Flats Track for Periodicals, Catalogs & Printers – NPF 2010 21

® National Postal Forum Production Automated Flat Processor Configuration Automated Pallet Unloader Bundle Handling System ACT Stacker/Destacker Dolly Maker Cut, Stack & Load Tray Handling System 22 Flats Track for Periodicals, Catalogs & Printers – NPF 2010 22

® Flats Track Certificate Program National Postal Forum § What’s required to earn a certificate? § § Attend five workshops of the Flats Track for Periodicals, Catalogs and Printers How do I get my certificate? § Register for your certificate on the National Postal Forum Website before July 31, 2010 § www. npf. org § Answer the three true/false questions for each of the five sessions you attended § Certificates will be mailed upon certification Flats Track for Periodicals, Catalogs & Printers – NPF 2010 23

® Flats Track Certificate Program National Postal Forum True or False: 1. Uncompensated bundles are bundles with straps only? FALSE 2. The Auto Flat Prep (AFP) allows for more pallets to by-pass any upstream bundle distribution process? TRUE 3. An auto ready pallet will provide the capability to accept pallets made with mail for multiple different zones? TRUE Flats Track for Periodicals, Catalogs & Printers – NPF 2010 24

® National Postal Forum Flats Track for Periodicals, Catalogs & Printers – NPF 2010 25