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USPS Packaging Products Supply Chain Improvement Initiative

Solicitation Number: 2D-12-A-0016
Agency: United States Postal Service
Office: Supplies and Services Purchasing
Location: Travel, Retail, & Temporary Services CMC
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2D-12-A-0016
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Sources Sought
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Added: Oct 28, 2011 6:35 pm

Introduction


The Prequalification of Suppliers for the USPS Packaging Products Request for Proposals (RFP) is scheduled for completion by early December 2011 and the RFP is scheduled for release before the end of December 2011. The information below provides a general description of the requirements that will be set forth in the RFP's Statements of Work (SOWs). More detailed draft SOWs will be attached to the Prequalification package and the final Statements of Work will be part of the RFP issued to pre-qualified suppliers. The Prequalification of Suppliers as well as the RFP source selection process will be conducted using the USPS eSourcing system, Emptoris eRFx module.


Emptoris is an eSourcing solution that automates, standardizes, and streamlines the sourcing of supplies, services, equipment, transportation, and facilities. All suppliers interested in doing business with the U.S. Postal Service must register in Emptoris. Suppliers can access the eRFx registration module at https://uspsesourcing.emptoris.com. Simply click on the "Register Supplier Organization" hyperlink, and follow the instructions and prompts to complete the registration process. You will need a DUNS (Dun & Bradstreet) number and NAICS (North American Industry Classification System) code to register in the USPS sourcing system.


If you are interested in participating in the Packaging Products Prequalification of Suppliers, please send an email message to karen.e.davis@usps.gov with the Subject Line: "Packaging Products Sources Sought Notice." Please include the following information in your email message: (1) Company Name (US Companies Only); (2) Complete Mailing Address; (3) Point of Contact (POC); (4) Title of POC; (5) Telephone Number of POC; (6) email address of POC; and (7) Confirmation that you have registered in Emptoris. All expressions of interest and inquiries must be submitted by email.


Background


The Packaging Products RFP will potentially combine two programs, ReadyPost® packaging products and Expedited Packaging Services (EPS) products.


ReadyPost® is a retail packaging product that generates its own revenue. The USPS has created a standardized selection of generic and decorative packaging and mailing supplies imprinted with the USPS and ReadyPost ® logos. ReadyPost® products are distributed directly to individual USPS retail locations, including Contract Postal Units (CPUs).

EPS products are part of the USPS Expedited Services program. EPS products include three product categories: standardized, customized (co-branded or not, dimensions of envelope or box varies based on customer request), and specialized. Unlike ReadyPost® products, the EPS packaging products do not generate a separate source of revenue. Revenue is generated when customers use the EPS packaging products to mail or ship via Priority Mail, Express Mail Service or Global Expedited Services. Standardized EPS products are available at USPS retail locations, including Contract Postal Units (CPUs), and USPS.com. Approximately 20 percent of EPS standardized products are distributed directly to major mailers from the fulfillment and distribution centers, with the balance distributed to individual Postal retail units. Customized and specialized EPS products are shipped to small businesses and major mailers directly from the manufacturers


Program Statistics


The table below presents key program statistics for ReadyPost® and EPS packaging products. The purpose of providing these figures is to assist potential suppliers in sizing the business opportunity relative to their existing core business competencies, capabilities and capacities. The figures are approximate. Additional details will be provided during the prequalification and source selection processes. 

 





























 


PROGRAM



Average Annual Spend for the Past (3) Years



Total Packaging Units Shipped (2011)



Total Average Annual Inventory (Pallets)


 



Total Average Annual Outbound Trips



Average  Annual Inbound/ Outbound Call Volume



ReadyPost®



$42M



88,281,178



10,088



2,500



80,000



EPS



$151M



1,092,525,946



105,336



6,564



463,000





Strategy

The key objectives of this solicitation are to reduce costs and increase efficiencies across both programs, when appropriate, by leveraging supply chain synergies while preserving the unique management and operational characteristics of each program that have made them distinctly successful. Specifically, opportunities exist for supply chain consolidation in production (including inbound transportation); warehousing, fulfillment, and call center operations; and distribution (including outbound transportation). Supply chain operations and activities will be consolidated, where it makes good business sense; for instance, rationalizing the product lines (both in terms of design and specifications), leveraging production scales of economy, reducing the number of shipments, standardizing and enhancing customer service, combining warehousing operations (and potentially moving them upstream in the supply chain), streamlining fulfillment and distribution services, and realigning outbound transportation.

When USPS previously explored opportunities to combine these two programs, actionable strategies were limited by technology constraints, as suppliers were using their own proprietary systems for supply and demand planning, production management, warehouse management, distribution and fulfillment, etc. However, the USPS is now in the process of phasing in its own technology solution for both programs, the Solution for Enterprise Asset Management (SEAM). SEAM is an Oracle web-based application designed to improve inventory tracking and visibility; implement forecasting and automatic replenishment capabilities; and standardize asset tracking. SEAM is currently in Phase 1, which includes three sub-phases. ReadyPost products are currently being tested in Phase 1A, and the anticipated implementation date is mid-January 2012. EPS products are scheduled for testing in Phase 1C, with an anticipated implementation date of September 30, 2012.

Total Cost of Ownership

Although USPS always considers the Total Cost of Ownership (TCO) when evaluating supplier proposals, the weight of TCO will be a more predominant aspect of the overall best value determination for this purchase, in addition to technical merit and supplier pricing (external costs). As such, the Postal Service envisions that supplier pricing will need to be adjusted to account for internal management, operational, and administrative costs, and these adjustments, in turn, may impact the Postal Service's overall value assessment of the proposed solutions for both program component and bundled offers. Generally, a supplier might propose a technical solution that drives down outsourced or external costs while actually increasing the total cost of ownership to the USPS. More specifically, and as an example, if USPS elects to furnish the outbound transportation, the location of a supplier's proposed warehouse and fulfillment locations/facilities may actually increase the total cost input to the product lines, which may, in the final analysis, result in more than offsetting the cost benefit of a lower supplier price. USPS is in the process of establishing a current state TCO baseline for purposes of assessing the total product cost impacts of various supplier-proposed supply chain solutions, in whole or in part.

General Pre-Qualification and Solicitation Information


The USPS anticipates the Packaging Products RFP will be comprised of three individual program components as follows:


• Finished Packaging Products
• Creative/Marketing/Retail Execution (CMR)
• Warehousing, Fulfillment, Distribution, Transportation (USPS- or supplier-furnished options), and Inbound/Outbound Call Center Operations


The Postal Service further anticipates allowing pre-qualified suppliers to propose on individual program components (for both ReadyPost® and EPS programs - separately or combined) or on bundled combinations of program components. Subcontracting and partnering is encouraged, especially for bundled offers, particularly since an integrated solution is expected to yield a positive TCO impact for certain bundled combinations.


The separation of program components, even when considering bundled contract award scenarios, is necessary to evaluate the technical and economic benefits of the proposed solutions relative to both our supply chain strategy and TCO. Our application of combinatorial optimization analysis through our eSourcing application will make it possible to consider various scenarios from a TCO perspective and, ultimately, to allocate the business through one or multiple contract awards. For example, a single supplier may be awarded a contract for the entire ReadyPost® program and another supplier may be awarded a contract for the entire EPS program. Alternatively, multiple suppliers may be awarded contracts for a single component or bundled components for one or both programs, or one supplier could conceivably receive the award for all components related to both programs. Furthermore, the USPS is not obligated to award contracts for all components of the solicitation. The USPS may award some or all of the business depending on the expected benefits and overall best value to be achieved. For instance, we may choose to award everything except production if we determine that our current supply chain solution for production continues to offer the USPS the best value. We may also choose to award some or all components during Phase 1, but elect not to award Phase 2 components in the same manner. The program phase-in process is described in more detail in the following section.


Program Phase-in Approach


Based on the current expiration dates of the existing contracts and the separate program timelines established for SEAM implementation, the USPS has decided a flexible phased-in approach is the most suitable model for transitioning ReadyPost®) and EPS to a new supply chain solution. The current ReadyPost®) contract expires June 30, 2012, and the primary logistics contract for EPS expires January 31, 2013. Therefore, the USPS anticipates the ReadyPost®) contract award and implementation will occur in an initial phase and EPS implementation will occur in a second or subsequent phase. The phase-in periods also need to be aligned with SEAM implementation, which will require extensive supplier flexibility and adaptability without unduly driving up external and internal implementation costs. Moreover, and as previously stated, it is possible that the USPS may consider separate component or bundled awards for both phases.


Phase 1- ReadyPost®


The USPS intends to partner with one or more suppliers to provide a standardized range of USPS generic and decorative branded packaging and mailing products under the USPS registered trademark ReadyPost®, utilizing SEAM.


Products


ReadyPost® offers customers a complete line of standard generic and decorative shipping supplies under the USPS ReadyPost® trademark. The generic product line consists of a selection of standard mailing cartons, specialty boxes, tubes, envelopes, and a variety of mailing tapes and labels. The decorative product line consists of mailing cartons, bubble mailers, bubble wrap, and mailing labels and licensed image products (e.g., Toy Story, Peanuts, etc.).


Creative, Marketing, and Retail Execution


Core Team with ad hoc rate card services and option for in-store merchandising.


Services required or as-needed:


• Creative: brand identity, print/design, graphic identity/design, copywriting, environmental design, new product/services innovation/development, packaging design, print publication, sales materials, planogram design/development, in-store displays/signage, sales promo kits/messaging.


• Marketing: category management and analytics - business intelligence, competitive/market analysis, consumer/shopper insights, promotion analysis, business plan development, product assortment/placement/promotion/pricing, strategic planning, advertising support, market share growth, building brand value.


• Retail Execution: business execution coordination, retail associate training, space management, in-store displays, stock corrections/adjustments, merchandising support.


Warehousing, Fulfillment, Distribution, Transportation and Call Center Operations


The supplier must have the capability to provide customer service for USPS retail channels by providing volume-tiered inbound/outbound call center support services.


USPS intends to consider various in-network and out-of-network outbound transportation solutions, with the supplier providing more or less of the transportation mixed with USPS-furnished transportation. Depending on the transportation model selected for contract award, the supplier must have the capability to provide transportation of USPS ReadyPost® products to approximately 32,000 postal locations or designated delivery points, following the Postal Service's transportation scheme or the supplier's own transportation scheme, or both.


The supplier must demonstrate world-class production, warehouse, fulfillment, loading dock and yard operations (for full and empty trailers), comprehensive state-of-the-art technology and information systems, data collection and reporting, and established just-in-time inventory system capabilities. The supplier must also demonstrate a commitment to quality and the existence of established processes substantiating efficient and economical methodologies to maintain inventoried items at optimal levels in the designated warehouse, maximizing warehouse space and delivering products on-time to ensure availability for purchase in all USPS retail channels.


Phase 2- EPS Products


The USPS intends to partner with one or more suppliers to implement an EPS solution, utilizing SEAM, in addition to other future packaging requirements/programs.


Products


The EPS packaging products are offered to customers at no additional charge for use with USPS premier mailing services-Express Mail, Priority Mail, and the USPS suite of global delivery services. The Postal Service offers customers a series of unique packaging solutions ranging from corrugated boxes and envelopes, to a range of pressure sensitive tape, labels, and decals.


Creative, Marketing, and Retail Execution


The current EPS program does not currently use Creative/Marketing/Retail Execution (CMR) services. Whereas the components for ReadyPost® may require offering prices for core creative, marketing and retail execution services, EPS may only require rate card prices for CMR, to be used on an ad hoc basis. Additionally, the rate card may require offers for optional CMR services, such as in-store merchandising services.


Ad hoc rate card services and option for in-store merchandising.


Services required or as-needed (same as ReadyPost®).

Warehousing, Fulfillment, Distribution, Transportation and Call Center Operations


Essentially the same as ReadyPost®, recognizing, as previously stated, the potential differences in the fulfillment, distribution and transportation schemes.


Requirements Applicable to Both Programs


The Request for Proposals (RFP) will only be issued to pre-qualified suppliers and only proposals submitted by pre-qualified suppliers will be accepted for consideration.


The following are the basic criteria, among other criteria, the USPS will consider in pre-qualifying potential suppliers.


1) National Capability:


The supplier must have the ability to support a national network of retail locations. The supplier must demonstrate an ability to support all USPS retail channels, which include, but not limited to: 1) approximately 32,000 Post Offices located throughout the country, the U.S. territories, and military installations, 2) on-line customers from the Postal Store at USPS.com, 3) select CPU locations, and 4) for EPS shipments, the supplier must have the ability to ship directly to major mailers nation-wide.


2) Additional Capabilities:


• The supplier must have the resources to perform the work.


• The supplier must have the ability to meet contract start dates and phase-in (implementation) and delivery timelines.


• The supplier must use a documented and acceptable quality management system to monitor and measure its performance against contract requirements.


• The supplier must have a demonstrated record of forecasting accuracy, continuous improvement, innovation, containing/reducing costs, and a customer-centric focus.


3) Supplier Required USPS Systems Capabilities:


Enterprise Data Interchange (EDI). The supplier must have EDI capabilities when submitting a proposal for the Packaging Products solicitation. The USPS provides an AFT site for business partners to PUT/deposit and GET/pick-up files. Files transmitted via this method must be encrypted with PGP.EDI. EDI is a set of standards that set a common set of formats for information in order to be exchanged electronically between two organizations doing business together (called "trading partners"). By following common standards, any organization can communicate electronically with any other because they essentially speak the same language.


eBuy2 is the USPS Enterprise Tool for ordering goods and services. It is an intranet-based system for the creation and approval of on-catalog requisitions. The Supplier must have eBuy2 capabilities when submitting a proposal for the Packaging Products solicitation (or be able to become capable prior to the commencement of the contract). eBuy2 is the mandatory purchase vehicle for all USPS installations with intranet access, excluding all USPS Point of Sale (POS) sites. Each ordering office must reconcile the Billing Summary Report against the orders received during a specified month. The system:


1) Provides a process for creation of new on-catalog requisitions
2) Routes on-catalog requisitions to the Supplier
3) Posts payments for requisitions


Additionally, the Supplier must have system capabilities to integrate with the USPS programs listed below and may be required to integrate with additional postal programs:
Facility Access and Shipment Tracking (FAST) has replaced the Drop Shipment Appointment System (DSAS). FAST enhances the drop shipment process for packaging product haulers at Postal facilities by improving the efficiency and effectiveness of appointment creation and management capabilities for the Supplier, the haulers and the USPS.
Enterprise Data Warehouse (EDW) captures transactional and audit data related to products and services for ReadyPost® and EPS products down to the unit level.


Solution Enterprise Asset Management (SEAM) is the USPS Enterprise system for auto-replenishment and planning of Retail inventories. SEAM will send orders, receive Advanced Shipping Notices and Invoices, match orders, receipts, and invoices to authorize payment for auto-replenished inventories via standard EDI interfaces.


• Maintains agreement information for purpose of sourcing/authorizing orders
• Routes orders to supplier
• Validates invoices for payment
• Confirms and validates receipts via delivery transactions on Product Tracking System or via manual receipts in Post Offices.


The Supplier will receive orders for automatic replenishment of selected offices on the Point of Sale (POS) system via an EDI file.


The Supplier will be required to use Electronic Delivery Confirmation manifesting on all packaging product shipments.


 

:
3300 S Parker Rd Ste 400
Aurora, Colorado 80014-3500
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In up to 32,000 Post Offices and Contract Postal Units and selected delivery points nationwide

United States
:
Karen E. Davis,
Purchasing & SM Specialist
Phone: 3037431203
Fax: 3037431219
:
Julie A. Wishard,
Purchasing & Supply Mgmt Specialist
Phone: 3037431212
Fax: 3037431219