second terminal dues workshop

UNIVERSAL POSTAL UNIONUNIVERSAL POSTAL UNION

QoS Project Group StCom WorkshopQoS Project Group StCom Workshop

BerneBerne

12 June 200712 June 2007

UPU Global Monitoring System (UPU GMS)UPU Global Monitoring System (UPU GMS)- Current Status -- Current Status -

Berne 12 June 2007 QoS Project Group StCom Workshop

System Overview


Underlying concept for the Global Monitoring System (GMS)

UPU Global Monitoring System

• Sole focus on Inbound stretch (no end-to-end measurement at the beginning)• Country classification based on total inbound mail volumes and not on status (e.g. DC / IC):

– Category 1: < 2,000 tons/year – Category 2: 1,000 to 1,999 tons/year– Category 3: 500 to 999 tons/year– Category 4: 250 to 499 tons/year– Category 5: > 250 tons/year

• Ensure affordability by implementing a volume-based approach:– High inbound real mail volumes = High test mail volumes = Higher accuracy– Lower inbound mail volumes = Lower test mail volumes = Lower accuracy

• Same rules for all (depending on total inbound volumes only)

• System which ensures minimum statistical design but offers flexibility by allowing customisation

• Use of RFID transponder technology as the common technical basis for all

• Cost for the GMS is Inbound based meaning that countries pay for items they receive


Basic requirements

• Classification of countries into 5 categories solely based on inbound mail volumes

• Statistical parameters are seen as the minimum in order to be linked to TDs

• Many parameters can be upgraded (“boosted”) for each country if a higher statistical accuracy is required by the users


Country Categories 1 2 3 4 5

Total mail annual inbound (in tons) > 2,0001,000 to

1,999500 to 999 250 to 499 < 250

Minimum number of inbound cities 4 to 8 3 to 6 2 to 4 1 to 2 1

Total annual statistical accuracy 1% 1.5% 2% 3% 5%

Permanent country flows in test 18 13 8 3 1*

Annual items per permanent flow 250 200 150 100 50

Total vaild items 4,500 2,600 1,200 300 50

Pool I Total valid items (cat. 1-4) 1,000 800 600 400 125

Pool I I Total vaild items (cat. 5) 500 400 300 200 125

Total number of items for GMS 6,000 3,800 2,100 900 300

Permanent Flows

General Parameters

* For category 5 the requirement to have 1 permanently measured flow might be relaxed in cases where this would lead to substantially higher costs.


Example for Category 1

Inbound OE

• 6.000 items / year• +/- 1% accuracy• 4 to 8 cities

• 18 biggest flows • Permanently

measured• On each link 250

items/year• Each flow weighted

according to real mail volume

Pool I Cat. 1-4

countries• Items are being sent

randomly from both pools

• Pools technically treated as 1 country• weighting according to real mail of all countries

in a pool

Country 1 Country 18


Pool II Cat. 5

countries

1,000 in total

500 in total

(250 items per link)

4,500 in total


Example for Category 4

Inbound OE

• 900 items / year• +/- 3% accuracy• 1 to 2 cities

• 3 biggest flows • Permanently

measured• On each link 100

items/year• Each flow weighted

according to real mail volume

Pool I Cat. 1-4

countries• Items are being sent

randomly from both pools

• Pools technically treated as 1 country• weighting according to real mail of all countries

in a pool


Pool II Cat. 5

countries

400 in total

200 in total

(100 items per link)

300 in total

Country 3


Weighting Model Scenario


• The distribution of countries into 2 separate pools is important in order to keep a link between the actual real mail volumes and the weight given to each test item

• Therefore the 2 pools provide a very simple and cost-effective weighting system

• However, the weighting model can -within limits- be adjusted by TDPG

Permanent links

Result of Pool IWeighted Total Result

Calculation of Total Result (cat. 1 country)

Result of Pool II *

Result of flow 1

combined real mail weight of all countries in pool I

combined real mail weight of all countries in pool II

… up to link 18

Result of flow 2

X

X

X Weight of flow 1 20%

Weight of flow 2 13%

… up to link 18 1.5%

* Due to the fact that in many cases the total mail weight of pool II might be too small to have an impact on the final weighted result, a threshold (e.g. of 5%) could be considered.

100%

14%

80%

6%


Parameters in the GMS



Main system parameters currently under discussion

Number of permanently measured flows:

• The number of permanently measured flows is currently fixed for each category (see table above)

• The proposed number of links results from the division of the total amount of items which are required to achieve the statistical accuracy by the number of items each link should have in order to be weighted reliably

• Example: category 1 foresees 4,500 items in total for permanently measured links and each link shall be measured with 250 test items, i.e. 4,500/250=18

• However, a fixed number might lead in some cases to unwanted design effects

Considerations in regards to permanently measured flows:

• Ideally 80% of the total inbound mail should be covered by permanently measured links and 20% by the pools I & II

• Category 1 countries will probably overachieve this target of 80% regularly as categories 3-5 will have difficulties to reach it

• In addition category 1 countries can not “save” on items as they are needed to achieve the statistical accuracy and category 3-5 countries would face an increase of items and therefore costs if 80% shall be achieved



Main system parameters currently under discussion

Classification of countries into categories 1 to 5:

• The classification of a country is foreseen to be based on the total amount of inbound mail per year (see table above)

• Based on the classification each country will be either in pool I or pool II – unless its volumes to a country are high enough to be covered permanently

• This approach has the advantage of simplicity both for the study design (hence the contractor and system manager) and the country itself as real mail volume information on each link is not required in all cases (e.g. for smaller countries)

Considerations in regards to classification:

• In some cases this fixed classification might not reflect the actual situation of a country

• Example: Country X might be a category 5 country due to its rather small inbound volumes but may have a high-volume link to a neighbouring country. For this link the classification in pool I might be more accurate than pool II (which would be foreseen under the current model)

• It could therefore be considered to let the individual weight of each link determine whether the sending country shall be included in the inbound country’s Pool I or Pool II



City & Country Coverage

City Coverage:

• The number of cities which are required to be covered varies between the categories

• The exact number and location of cities each category has to cover depends on the geographical and demographical situation in the country

• The definition of a “city” includes the larger city area (e.g. suburbs)

Open issues in regards to City & Country coverage

• For categories 1 to 4 the coverage of smaller cities and rural areas could be justified or even requested by countries

• Can countries “choose” additional cities?


In its initial phase the GMS design will only foresee the coverage of selected cities in each country. The extension to smaller cities and rural areas is currently under development (voluntary or mandatory for certain categories).


City Weighting


In case several cities are measured within a country the question of city weighting arises. In principle 3 main approaches are possible: • weighting based on equal weights between inbound cities • weighting purely based on real mail volume going to each city • weighting purely to population in each city• weighting according to a balanced approach (“political” vs. real mail weight)

Considerations in regards to city weighting:• take each city not only as the city itself but as a good indication also for the quality given

to the wider surrounding area (e.g. the entire state)• therefore take the population for each city as a good indicator and add a “cap and floor”

mechanism (e.g. no city less than 5% or more than 50% weight)


Panel Requirements

Panel:

• The minimum number of panelists per city should not be lower than 4

• The panel will only consist of private receivers (for system management reasons)

Open issues in regards to panel:

• Will the panel be used for item production / induction?

• P.O. box delivery will need to be considered in some countries

• Can a lower number than 4 panellists per city be accepted if the number of cities are increased (by country’s request, f.eg) and/or rural areas are included in the GMS?


The recruitment, management and the total number of panelists are one of the main cost drivers in the GMS. It is therefore important to find a good balance between costs on one side and statistical accuracy, system integrity and a good reflection of reality on the other side.


Boosting Options

Options foreseen (to be extended):

• Increase of test mail volume on particular permanently measured links

• Increase of number of permanently measured links

• Increase of test mail volume in the pool

General rules:

• All extensions can only be applied to a whole year• All extensions must follow the same allocation pattern as the regular items• Only extensions are allowed which are specifically described in the project

manual• Always possible to upgrade (e.g. from category 4 to category 3)



Estimated Costs



Costs for the Global Monitoring System

• The cost estimates encompass 3 distinct areas: 1) the RFID costs, 2) the measurement system costs, and 3) the overhead and management costs.

• Apart from the cost estimates in the examples below, there will be additional costs for transponder investments and management of the GMS. It is premature to give a cost estimate at this time; however, the impact on the total costs will not be dramatic.

• The cost for the planned GMS is expected to be considerably lower than the current IC-IC system

• Country in Category 2 (countries with 1,000 to 1,999 tons/year):• Installation RFID: 20,000 Euro (RFID standard system with up to 4 gates including travel and man days)• Set-up Measurement: 15.000 Euro• Total Set-up: 35,000 Euro• Running Measurement: 30,000 Euro• Running RFID Standard System: 2,000 Euro (i.e. data transfer)• Total Annual Running Costs: 32,000 Euro

Examples for selected cases

Categories 4 & 5 see next slide



Costs for the Global Monitoring System – cont.

• Country in Category 4 (countries with 250 to 499 tons/year):• Installation RFID: 8,000 Euro (RFID single unit system with 1 reader site) • Set-up Measurement: 2.000 Euro• Total Set-up: 10,000 Euro• Running Measurement: 10,000 Euro• Running RFID Standard System: 1,000 Euro (i.e. data transfer)• Total Annual Running Costs: 11,000 Euro

• Country in Category 5 (countries with less than 250 tons/year):• Installation RFID: 8,000 Euro (RFID single unit system with 1 reader site) • Set-up Measurement: 2.000 Euro• Total Set-up: 10,000 Euro• Running Measurement: 3,000 Euro• Running RFID Standard System: 1,000 Euro (i.e. data transfer)• Total Annual Running Costs: 4,000 Euro



Next steps

• Develop full and detailed documentation of the entire GMS design concept, e.g.:– Development of accurate allocation model for test items (e.g. which countries/regions should send how many items to

which countries/cities/areas?)– Full revision of all statistical assumptions and models by independent experts– Development of rules which address potential problems or even short-comings of the GMS already beforehand (in order to

avoid unclear situation at a later stage)

• Ensure alignment between GMS proposal and requirements from QSPG SC• Initiate a process which ensures maximum involvement and feedback on GMS concept proposal from Developing

Countries• Involve expert organisations through a “Technical Advisory Group” in the development of the GMS concept to ensure

technical feasibility and efficiency• Actively assist the members of the QoS Project Group SC with their respective projects


In the next few months the GMS DG will have to deal with a number of issues, some of which are:


Possible Implementation & Timetable



Implementation - reflections

• Since the UPU ICIC System already provides a solution for Industrialised Countries, the main focus should be to first offer the GMS to the Developing Countries• As of 2011 (or later) the current ICIC countries will join the GMS • Participation in the starting phase of the GMS should be in batches of a limited number of countries• 2008 could be considered for a pilot and 2009 as the official start of the GMS• During the starting phase particular focus will be given to provide a stable system as well as to address potential problematic issues in regards to the diagnostic

monitoring (transponder gates), the panel and the system management• Roll-out of system will be spread over several years in order to maintain control of system (e.g. maximum of 15-25 new countries each year)• The final stage with having all countries integrated into the GMS will realistically not be reached before 2014 or 2015



Timetable

Approval of the system concept in principle

May2007

October2007

Evaluation of the detailed system documentation

Approval of UPU Global Monitoring System final system documentationApproval of the system financing

Approval of the system set up plan Approval of the system pilot plan

Approval of the framework for procurement Approval of the communication plan

January2008

Issue call for tenders

February2008

Select system suppliers Implement financing mechanisms

September2008

Start system set up

October2008

Start pilot

January2009

Start of the UPU Global Monitoring SystemStart financing of the UPU Global Monitoring System

June2009


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