September 06 – 08
International Conference on Operations Research

Patrick Briest (McKinsey & Co.) & Ingmar Steinzen (ORCONOMY GmbH)

Strategic network analytics for the postal industry

Advanced analytics are permeating almost all aspects of network operations of postal and logistics companies and result in significant improvements in planning accuracy and agility. A vast number of both off-the-shelf and proprietary tools exist to support most aspects of day-to-day operations from depot-level volume forecasting to sort center yard management or dynamic delivery route planning. Interestingly, however, there seems to remain a last bastion within most companies that hasn’t been taken by analytics by storm yet – that of long-term strategy making. Many times, decisions on significant real-estate investments, long-term contracts or regulatory issues are taken with little consideration of complex resulting effects on network operating cost, service quality implications or agility to support an evolving product portfolio (moving, e.g., into time-window or same day delivery). Is this because existing tools aren’t suited to fully support strategic decision processes? What would be needed in terms of tools, capabilities and processes to bring truly analytics driven decision making into postal board rooms? In our talk, we will briefly outline strategic challenges most postal networks will face (or are already facing) in a world of ever-growing and diversifying eCommerce, globalizing trade flows and increasing competition. We will then argue that a new and different kind of analytics will be needed to address these challenges and allow decision makers to understand their networks as core strategic assets rather than a complexity to be dealt with. Finally, we’ll provide a brief overview of CEP2NET powered by OPTANO, McKinsey’s proprietary and tailored solution for postal network analytics.