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Case Study: New Zealand Post

“Growing demand has led to pressure on our network. We need to increase our capacity and prepare for future growth.”

The Situation:

  • Growth of eCommerce, parcel and packet volumes putting significant pressure on the network
  • Network operations complex due to different flows for sortation of mail and packets and courier parcels
  • Sortation capacity needed to grow with volume, be able to deal with peak processing nearly double the average, and provide flexibility.

The Outcome:

  • Strategy for an efficient modular processing network backbone developed
  • Designed to grow with demand
  • Provided capabilities to differentiate the client from their competitors.

The Client:

New Zealand Post (NZ Post) is the state-owned postal service in New Zealand, offering mail and parcel services. It is the dominant delivery service provider in the nation.

The Situation:

Due to the growth of eCommerce, parcel and packet volumes are experiencing significant pressure and expected to continue to grow strongly into the future. The client’s sortation capacity was already under considerable pressure, breaching available capacity during peak times. Sortation of mail and packets and courier parcels had different flows, driving complexity in network operations. The network needed sortation capacity that could grow with volume, be able to deal with peak processing at nearly double the average and provide a high level of flexibility on a day-to-day basis.

The Process:

XAct Solutions were engaged to design an integrated delivery network strategy that would meet future customer expectations in a cost-efficient manner and enable NZ Post to maintain their position as the dominant delivery service provider in a dynamic open and competitive environment.

To begin with, we developed a clear understanding of the delivery network backbone flows, processing costs per product and expected growth by product and geography. We identified suitable processing technology (including automation) to optimise end-to-end network backbone cost. We then developed and modelled alternative delivery network flow and sortation depth scenarios and estimated OPEX and CAPEX requirements. These alternatives were quantitatively and qualitatively evaluated to identify the preferred future network backbone strategy.

We developed a ten-year transition plan and business case and supported the client leadership team in obtaining business buy-in and board approval for detailed design and implementation planning.

The Outcome:

We developed a strategy for an efficient modular processing network backbone that can grow with demand and provide capabilities to differentiate from competitors.