TMX were engaged to investigate the opportunity of transforming the network of mail sortation facilities to accommodate future volume growth, and reduce fixed costs. The client was facing sharp decline in letter volume, yet huge increases in packet and parcel volume, causing processing capacity issues.
TMX reviewed current processes and DILO from end-to-end and identified tactical and strategic opportunities. TMX also proposed the alternative network that will support growth in eCommerce demands and prepared a business case.
TMX were able to generate significant results through the identified tactical and strategic approach, including;
- Developed a clear understanding of end-to-end network flows, processing cost and expected growth by product.
- Identified overall network footprint by ~20%, >$40M p.a. opex benefit derived from labor cost savings and rent arbitrage.
- Identified tactical opportunities for immediate implementation and network bottlenecks to inform the future design.
- Designed a future network with flexible, scalable sortation solution that maximizes labor and footprint efficiency.
- Identified suitable processing technology (including automation) to significantly lower labor cost.
- Recommended overall strategy on processing facilities for Letters, Flats, Packets and Parcels.
- Identified consolidation opportunity in downstream delivery branches by leveraging automation upstream.
- Developed a 10-year transition roadmap and business case for board approval of the strategy.