Effective Regeneration: Without It You're Burning Money

By Michael Field, Director, Professional Services, Pitney Bowes Production Mail

Take a £10 note, light a match and set fire to it. You're burning money. It's not as obvious, but whenever you put customers in the position of having to call your customer service department, you are also burning money. And it's worse when the problem the customer is calling about could have been avoided, such as missing or incomplete mailpieces. Furthermore, the customers who call to complain are only the tip of the iceberg. You can bet there are many more who are disgruntled but didn't bother to pick up the phone.

Most production mail personnel understand the "cost of quality" and could point to a variety of quality-control efforts. Many, however, could not tell you exactly what an undelivered mailpiece costs the business. It's easy to start the discussion by estimating the float - interest on the money lost while a bill remains unpaid - but that's only part of the problem. Customer mailpieces, including bills, statements, letters, checks, trade confirmations, E0Bs, policies, etc., reflect your company's image and credibility. When they arrive late, inaccurate or incomplete, you run the risk of damaging your company's credibility and, even worse, of losing customers.

Measuring the "Impact of Failure"
Whenever any of your business processes falter or break down, there are direct and indirect costs incurred. By calculating all the costs, you are measuring what is being called the "impact of failure" on your business. Understanding the "impact of failure" associated with a particular process is important in helping you decide how much you should invest to avoid such failure. Alternatively, when you do not understand or you underestimate the total exposure to risk, it becomes harder to make good decisions about what you should invest to improve a specific operation's performance.

Cost of quality and impact of failure are really two views of the same issue. Cost of quality focuses on an organisation's definition of quality, and is generally product and data driven. Impact of failure looks at the production processes from the view of potential impact on the customer and tends to be analytical and "what if", but also broadens the scope to explicitly include remedial activities.

Miscalculating "impact of failure" is common in production mail operations. A failure in the finishing operation may show up as a call to a customer-service line in a separate building, be charged to a different cost centre and reported through a different part of the organisation chart. It takes a thorough and skillful operational analysis, often by internal audit or a specialised consulting organisation, to attribute the costs of quality to their causes of failure.

Pitfalls In Print Finishing
This problem is particularly common in the finishing operation for outbound transaction documents, such as statements, trade confirmations, letters, etc. Usually these documents are processed in batches of several hundred or several thousand on automated insertion equipment. However, a human operator is generally responsible for detecting and rectifying process errors.

During many hours of operation, however, thousands of documents, envelopes, return envelopes, advertising inserts and regulatory notices are placed onto the inserter. There are numerous jams and stoppages that require the operator's intervention to remove damaged material, restart the inserter and hand stuff the damaged documents into new envelopes for a separate mailing process. There are calls from accounting with orders to not mail accounts 10-37823~03 and 10-30645-04. Damaged mailpieces are placed in a box for a data entry clerk to key some time later into yet another process for reprinting and mailing the next day. There are coffee breaks, a lunch break and often a production meeting. And after all this, the quality image of the company depends on the error-free execution of a single action - audit balance.

Quality Is Hanging in the Audit Balance
Audit balance is where the operator compares the number of pieces that should have been mailed as indicated on a preprinted, corn computer-g en crated job ticket, against the number on a counter or computer screen attached to the inserter indicating how many were actually mailed. Audit balance is where the operator checks to see if the numbers agree by subtracting the number of damaged mailpieces and "pulls" and then adding back the number of mailpieces diverted by the inserter, then cleared and subsequently mailed by the operator. Audit balance, which lets the operator initial the job ticket or pencil in the counter number to assure that the numbers balance. Audit balance, where if the numbers don't agree, the operator executes a tedious, time~consuming inspection process to identify and rectify the cause of the imbalance. Audit balance, which assumes that since the "impact of failure" hasn't been calculated, it can't be very great so therefore it really doesn't matter much if the numbers have to be fudged to agree.

Despite all that, audit balance is still the most commonly used quality-control process in production print/finish operations. Furthermore, the numbers almost always agree. The inserter operators almost always go home on time. And a few days later, the phones almost always start ringing in the customer service centre or in the outsourced customer servicec centre in some other location that is billing purchasing on a per-call basis.

Reconciliation and Regeneration
Made Easier There are really two problems here. The first is the inability to effectively assure the quality level of mailings by detecting all failures before they are mailed. The second is controlling the costs of remedying the failures as they are detected. Fortunately solutions exist to both of these problems. The solution to the first problem is reconciliation. The solution to the second problem is regeneration. Reconciliation involves identifying the mailpieces as they are processed and detecting which ones were processed correctly. Those not checked off need to be regenerated (or reprinted) and run through the finishing process to complete the mailing. The two processes are complementary and together provide a means to reduce the "impact of failure" in the production mail operation.

Reconciliation is a straightforward process: a mailpiece list is produced as part of the document creation process. Then, at the point at which the mailpiece transitions into the mailstream, the mailpiece status is determined and checked off. Obviously, this process should be automated and is generally accomplished by a systems integration involving the document creation applications, print image processing, print spoolers and the finishing equipment. It is usually done in conjunction with job tracking. Results are then collected, analysed and distributed by an integrated control and reporting system.

The mailpiece list can be created in a number of ways, including direct creation by the application which creates the original documents, or by print image manipulation software, such as Pitney Bowes' StreamWeaver`. StreamWeaver can create the list as it accomplishes other value-added enhancements to the stream of documents prior to printing.

The key to the reconciliation process is establishing the status of the mailpiece as it transitions to the mailstream. This is most cost effectively done at the finishing process with sophisticated systems that work with the automated inserters to capture mailpiece identification. For it to work, each mailpiece must be identifiable to the system. This means placing a unique machine-readable code on each mailpiece. The code is generally in the form of a linear barcode, but newer scanning technologies are enabling more sophisticated symbologies such as OCR, two-dimensional barcodes and Glyphs.

In addition to knowing the identity of the mailpiece, the system must also know its status. This can be done by direct interface with the inserter system or can be inferred by assuming that only good mailpieces are being put onto the output of the inserter. This brings up a critical differentiator - in-line vs. off-line reconciliation. In-line is, by far, the preferred method since the mailpiece list is provided to the inserter and the reconciliation process is performed by the inserter in-line as it processes the mailpieces. The mailpiece ID is established by the inserter scanning system and the mailpiece status is known by the inserter control system. The inserter control system reconciles the W and status with the list of mailpieces and provides the results to downstream processing systems.

In-line Reconciliation to Increase Productivity and Quality
In-line reconciliation is a key feature of file-based processing whereby the information for automated document processing is included in the data file containing the list of mailpieces provided to the inserter. A simple ID number is encoded on the document which, when scanned by the inserter, links to the mailpiece data file and initiates a high-integrity process of piece tracking and reconciliation by the inserter control system. File-based processing with its in-line reconciliation feature provides the best way to increase productivity and quality by automating the quality inspection process and eliminating the need for audit balance.

The alternative, off-line reconciliation, is more prone to error and introduces critical time delays that prevent or significantly increase the cost of remedial action. Off-line reconciliation is generally used where file-based processing is not an available option. While it appears to accomplish the same error detection functionality, it is hard (and more expensive) to assure that the detected errors are properly resolved. Generally data from a scanner, either at the input or at the exit of the inserter, are logged to a data file. At some later point in time, often after the mailpieces have left the control of the inserter environment, the data file and the list of mailpieces are compared by a centralised control system.

Mailpieces which failed to enter the mailstream are regenerated. The downsides are many. There is no convenient way to detect and remove duplicate documents or other detected errors. Any devices that are downstream from the scanner can potentially introduce other undetectable errors, yet either devices or operators have to remove the bad mailpieces and both are prone to error. Further, there is no way to compensate for scanner misreads. A scanner misread has to be treated as a bad document and removed.

Whichever reconciliation process is used, one of the outputs is the same: a list of documents that did not get mailed. In the audit balance process, a similar list is created. At the end of the day, a data entry clerk takes the damaged documents out of the boxes, keys their ID codes into a data entry screen, and a list of documents to be regenerated is created. Because all inserters produce some damaged documents, all transaction mailers have a process for regenerating damaged documents. What varies is the "impact of failure". How long does it take and how much does it cost to get a regenerated document into the mailstream?

Automatic Regeneration:
Part of The Document Factory Solution
Regeneration is often taken for granted in mailing operations because of the perception that getting the document out is adequate. What is overlooked is the impact of poor service on customer satisfaction and life cycle customer value. One of the key metrics of regeneration is the delay between the original mailing and the reprinted mailpieces. Typically this is one full day but generally this means that the Service Level Agreement (SLA), established for the application, is missed.

In discussing regeneration, there are no processes or technologies that are universally used. Most operations will index the print stream, archive the print image file for retrieval, then retrieve and reprint as needed from the archive. However, some operations will go back to the original transaction data, regenerating the mailpiece by re-running a subset of the data through the original print application.

Increasingly, the platform for the archival and retrieval function is changing from the mainframe to a client/server architecture that uses computers deployed on a local area network. This moves control of the process closer to the production floor resulting in improved quality, reduced time delays and lower operating costs. These functions are best accomplished when combined with a shifting of the print spooling function to a specialised print server. State-of-the art document factories are deploying print spoolers that accomplish several value-added processes including document format conversion.

Another factor in regeneration is the degree to which manual intervention is required. It is generally acknowledged in factory automation that 'Urn lights" is preferable to "lights out" as some amount of operator oversight is required to effectively control remedial actions. In the regeneration process, this means that the data collection, transmission, retrieval, respooling, reprinting and reconciliation should all be automated processes but that a supervisor's approval should be required at a control point in the process to initiate regeneration.

Typically regeneration delays delivery of the mailpiece but with available technology this does not need to be the case. Typical regeneration creates delays as the damaged mailpieces await collection and key entry. File-based processing provides this information with near real-time availability and greater integrity. Typically reprinted mailpieces are treated as a separate mailing processed the next day. File-based processing reconciles the reprinted pieces with the original data providing one record of a mailing. Typically regenerated pieces lose postal discounts. An automated regeneration process can actually operate quickly enough to allow the reprints to catch up and be placed into their original mail trays.

The two processes of reconciliation and regeneration work in conjunction to reduce the "impact of failure". Improperly prepared mailpieces are kept out of the mailstream. Mailpieces in the mailstream are identified and accounted for through reconciliation. Mailpieces are regenerated to assure 100% delivery, and customer satisfaction is not lowered. So blow out the match and put the £10 note back in your pocket or, better yet, put it on your company's bottom line.

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