Case Studies Posti Group Implemented RouteSmart to Realize Significant Cost Savings

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	Posti Group Implemented RouteSmart to Realize Significant Cost Savings

Posti Group Implemented RouteSmart to Realize Significant Cost Savings

Technology Category	Analytics & Modeling - Predictive Analytics Functional Applications - Fleet Management Systems (FMS)
Applicable Functions	Business Operation Logistics & Transportation
Use Cases	Fleet Management
Services	System Integration Training
Challenge	Business challenges for Posti included measuring and increasing delivery efficiency, improving operating scenarios, and increasing cost savings throughout the organization. From an operations perspective, Posti needed to measure, plan, and optimize its routes, as well as perform analytic modeling to more effectively react to changing delivery volumes. To start, Posti first had to integrate RouteSmart into its existing infrastructure and improve geographic data such as delivery location information and street data for all of their service areas. Posti’s ambitious goal of 5% targeted cost savings at each delivery center needed to be met by decreasing total travel distances, effectively modeling the proper number of routes based on delivery volumes, and increasing vehicle utilization. In addition, Posti desired to achieve even higher service reliability. Read More
About Customer	Posti provides businesses and consumers with delivery services for letters, direct mail, newspapers, and magazines throughout Finland and 11 other countries. The state-owned postal service of Finland has been operating for nearly 400 years and achieved 2020 net sales of EUR 1.6 million. Posti’s five divisions include Postal Services, Parcel and eCommerce, Transval, Aditro Logistics, and Itella Russia. Through its 20,000+ employees, 1,000 post offices, and 400+ parcel stations, Posti serves 5.5 million locations and delivers 9 million sendings every day. Read More
Solution	Posti built a team of experts and spent time and resources to become proficient in the operation of RouteSmart and ArcGIS. The company was able to integrate RouteSmart into its operations and improve the quality of geographic data. This served as a critical base for the project. RouteSmart also worked with Posti to create custom tools to allow for leveraging business processes, especially for newspaper delivery operations. Taking into account other components, like sorting systems, and defining those processes as they relate to RouteSmart has been a key to the success. Posti also had a need to design routes for changing daily volumes, but other factors, including existing sorting systems, put boundaries on this ability. With RouteSmart customized tools, Posti was able to create modules that could be managed — increasing or decreasing the number of modules per route on a daily basis — while still being able to use existing mail sorting systems. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Functional Applications - Fleet Management Systems (FMS)

Applicable Functions

Business Operation

Logistics & Transportation

Use Cases

Fleet Management

Services

System Integration

Training

Challenge

Business challenges for Posti included measuring and increasing delivery efficiency, improving operating scenarios, and increasing cost savings throughout the organization. From an operations perspective, Posti needed to measure, plan, and optimize its routes, as well as perform analytic modeling to more effectively react to changing delivery volumes. To start, Posti first had to integrate RouteSmart into its existing infrastructure and improve geographic data such as delivery location information and street data for all of their service areas. Posti’s ambitious goal of 5% targeted cost savings at each delivery center needed to be met by decreasing total travel distances, effectively modeling the proper number of routes based on delivery volumes, and increasing vehicle utilization. In addition, Posti desired to achieve even higher service reliability.

About Customer

Posti provides businesses and consumers with delivery services for letters, direct mail, newspapers, and magazines throughout Finland and 11 other countries. The state-owned postal service of Finland has been operating for nearly 400 years and achieved 2020 net sales of EUR 1.6 million. Posti’s five divisions include Postal Services, Parcel and eCommerce, Transval, Aditro Logistics, and Itella Russia. Through its 20,000+ employees, 1,000 post offices, and 400+ parcel stations, Posti serves 5.5 million locations and delivers 9 million sendings every day.

Solution

Posti built a team of experts and spent time and resources to become proficient in the operation of RouteSmart and ArcGIS. The company was able to integrate RouteSmart into its operations and improve the quality of geographic data. This served as a critical base for the project. RouteSmart also worked with Posti to create custom tools to allow for leveraging business processes, especially for newspaper delivery operations. Taking into account other components, like sorting systems, and defining those processes as they relate to RouteSmart has been a key to the success. Posti also had a need to design routes for changing daily volumes, but other factors, including existing sorting systems, put boundaries on this ability. With RouteSmart customized tools, Posti was able to create modules that could be managed — increasing or decreasing the number of modules per route on a daily basis — while still being able to use existing mail sorting systems.

Impact #1	On completion of Posti’s initial RouteSmart project, the organization achieved their minimum 5% cost savings from delivery costs per delivery center. In many delivery centers, Posti well exceeded those savings.
Impact #2	Posti was also able to create equitable compensation terms for delivery operations because of the improved geographic information and measurement. Juha Tolvanen, Head of Network Design with Posti Operations, stated, 'In many instances, the new compensation model enabled delivery personnel to improve their own compensation.'
Impact #3	The project began to pay for itself while it was still ongoing. Tolvanen notes, 'We had a one-year development phase and went into production even though we were still in the development phase to start gaining savings. Just before one full year in the production phase, the project had already shown a positive return.'

Impact #1

On completion of Posti’s initial RouteSmart project, the organization achieved their minimum 5% cost savings from delivery costs per delivery center. In many delivery centers, Posti well exceeded those savings.

Impact #2

Posti was also able to create equitable compensation terms for delivery operations because of the improved geographic information and measurement. Juha Tolvanen, Head of Network Design with Posti Operations, stated, 'In many instances, the new compensation model enabled delivery personnel to improve their own compensation.'

Impact #3

The project began to pay for itself while it was still ongoing. Tolvanen notes, 'We had a one-year development phase and went into production even though we were still in the development phase to start gaining savings. Just before one full year in the production phase, the project had already shown a positive return.'

Benefit #1	Achieved a minimum of 5% cost savings from delivery costs per delivery center.
Benefit #2	2020 net sales of EUR 1.6 million.
Benefit #3	Serves 5.5 million locations and delivers 9 million sendings every day.

Benefit #1

Achieved a minimum of 5% cost savings from delivery costs per delivery center.

Benefit #2

2020 net sales of EUR 1.6 million.

Benefit #3

Serves 5.5 million locations and delivers 9 million sendings every day.

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Overview

Posti Group Implemented RouteSmart to Realize Significant Cost Savings

Operational Impact

Quantitative Benefit