Summary Master Thesis Simone Köhler
PostNL, the largest Dutch postal company, is facing lowering mail numbers and
strong competition. To deal with these facts, a strategy is formed to pursue cost
reductions in the postal supply chain to help mitigate the volume decline. One of
the bottlenecks in the supply chain is the facing process of mailbox mail. The
machine used in this process, the Culler-Facer-Canceller (CFC), is the reason of
the bottleneck. By the use of a network agreement the collection process is
adjusted to fit to the needs of the facing process (and therefore to the needs of
the CFC's). Currently, there is a discrepancy between supply pattern imposed by
the network agreement and actual supply pattern. This should lead to problems
in the facing process, but this is usually not the case. Therefore it is expected that
the coupling of both processes can be improved, leading to the main research
question of this thesis:
How can the coupling of the collection and facing process of mailbox mail be
improved to increase the efficiency of the postal supply chain at PostNL by
analyzing and modeling the processes?
Before looking into the case of PostNL a literature study is performed. It revealed
the postal supply chain satisfies the four characteristics of a service supply chain:
intangibility, heterogeneity, inseparability and perishability. A service supply
chains can be classified by many frameworks. Most of them classify the postal
supply chain as a \textit{"service factory"}, implying that the operational
challenges lie in capital decisions, technological advantages, managing the
demand, scheduling the service delivery, fighting cost increases and maintaining
quality. Methods to tackle the challenges are, for instance, Swift, even flow, Lean
Manufacturing, Six Sigma and the Theory Of Constraints. What is taken away
from these methods is that a bottleneck is a good starting point for supply chain
improvement, and that even though the primary focus point is different in each
method, the effects are similar.
With this knowledge the PostNL case is investigated thoroughly. This case
focuses on the sorting center of Amsterdam, and uses data from January to May.
After a systematic process analysis and simulation with the help of a SIMIOmodel is concluded that the facing process showed three different states: a
filling-, processing- and emptying-state. These are visible when assessing the
input buffer of the system. However, models currently used at PostNL take the
CFC's as a starting point to couple the collection process to the facing process,
neglecting the presence of different states. Additionally, in current practice the
belt conveyor, which transports mail to the CFC, delivers more mail to the CFC's
than necessary. This results in a belt conveyor that often stops, preventing a
swift even flow of mail through the system.
With this knowledge, the current coupling model is transformed to a model that
implies the different states of the process. Using the input buffer as the starting
point is not the only improvement: the actual collection rides are used in the
model to see tacit possibilities in the actual supply pattern. The model shows
that, with the predicted decrease in volume, 8 rides can be bundled without
creating idle time at the CFC's, resulting a decrease in costs of 120.000 euro/year
in Amsterdam. There are also possibilities to shift rides without creating idle
time at the CFC's, but the impact and feasibility is determined by factors out of
the scope of this study. Next to changing the collection process, the process time
of the facing process can be decreased caused by efficient coupling and
decreasing mail volumes. This result is promising for the other five areas and
sorting centers of PostNL.
In total four main points for improvement can be derived from this study, which
have a positive impact on the daily operations. The essence of the
recommendations can be applied in all sorting centers of PostNL. Still, the exact
degree of improvement might vary throughout the regions as each sorting center
has a different hinterland and a (slightly) different setup for the facing process.
The four points for improvement are listed below:
 By adapting the speed or fill rate of the belt conveyor to the CFC's, a more
swift and even flow is created. This gives room to improve the manual
culling process, causing the number of CFC failures to decrease. It is best
to implement a new setup for the belt conveyor which uses a low belt
speed in the first part (where the manual culling occurs) and a high speed
in the other belt parts (as they only have a transportation purpose). This
way the filling state remains short, even though the overall process
performance increases due to the improved manual culling process.
 With the decreasing mail volumes it it possible to bundle rides. In the
region of the sorting center in Amsterdam 8 rides can be bundled, saving
120.000 euro/year. This gives great promises for the other PostNL
sorting centers. There are also several possibilities to shift rides when
only mailbox mail is taken into account. To identify the actual opportunity
for ride shifting also other mail flows (mail from retailers and mail from
companies) and processes (for instance the delivery of parcels) have to be
taken into account.
 Due to an improvement in the coupling of the collection and facing
process, the process time of the facing process can be decreased.
Unfortunately the working hours scheme, determining the working hours
of the employees, can only be changed once a year. As the working hours
have a direct link to the process time, the process time can as well be
changed only once a year. For the new working hours schedule it is
therefore advised to create a tight schedule, as the decreasing volumes
over the year will make it fit soon. For sorting center Amsterdam is
shown by this research that the process time can be decreased up to 25
minutes on a Monday.
 The developed model improves calculations concerning the coupling of
the collection and facing process. It can be used for various purposes,
from creating a network agreement, to giving insight when making
decisions on assets, to giving support to a team leader during the facing
process. Due to the wide application it is advised to use this model
nationwide throughout the organization to obtain more accurate insights
and results. The model has to be turned into an online tool, which can be
maintained by a single administrator while the latest version can always
be used throughout the organization.
Based on this thesis there are several additional recommendations for PostNL. In
the coming years there are plans within the organization of PostNL that might
influence the volume of mailbox mail (for instance the plan to downsize the
number of mailboxes). As a change in this volume directly influences the
processes in the supply chain, it is important to keep track of the changes in
volume. The same goes for the trend of the fluctuating volume throughout the
year. For this purpose it might be necessary to improve the collection of data and
the systems containing the data.
The improved coupling model could be further improved by implementing
stochastic behavior. Also, an automatic solver could be build to improve the ease
of use of the model. Currently the data of the collection process has to be entered
in the model manually, therefore a big improvement would be to automate this
process. Finally, more insight in the process could be given to the Car Company
by not only present the network agreement (based on percentage of a volume) to
them, but also the necessary absolute volume at each point in time.
Even though this research focuses on the service supply chain of PostNL, the
drawn conclusions can be applied to more organizations. All systems with a high
dependency within links can learn from the used coupling method, by
acknowledging the presence of different states. When making agreements based
on behavior of a single element, it must be an element close to the coupling point.
This way the needs of one link in the system can be closely approached and
translated to demands for the other link in the system. Even when only one of
the links can be adapted, the improved coupling model can give insight how to
adapt this link optimally to the behavior of the other link.
When it comes to supply chain research in general it is recommended to not
study the reasoning behind improvement points for to long, but focus on creating
a wide base of possible improvement points and methods for supply chains with
certain characteristics. The main goal of this, is to create a good link between the
cluttered literature in this feel of study and the actual practice.