To improve profits from our retail and philatelic products, we introduced a state-of-the-art inventory management system this year. Following a successful trial, the Demand Chain Management (DCM) system has now been rolled out to all of our 838 corporate PostShops.

This has enabled us to reduce our stock on hand by almost 40 per cent. We will continue to focus on supply chain productivity improvements with suppliers through a vendor alliance strategy.

We have also been able to analyse the transactions associated with the entire retail offer and use that to segment our retail network to better suit the needs of our customers – both consumer and business. Individual stores will now start to stock products that closely match the buying behaviour of their local customers – for example, a PostShop that has mainly business customers will stock more bulk and office products than a store that primarily serves consumers. It will also allow us to identify those outlets that are predominantly service oriented and to look at aligning their format to suit that offer.

This year, cutting the costs of our supply chain, keeping less stock on hand and in storage, speeding up stock turnover, and stocking the products that our customers want to buy all contributed to an improved profit performance for retail products.

An added benefit of a streamlined product range will be better visibility of our retail products. We have embarked upon a new program of in-store visual merchandising that will provide optimum display conditions for each store’s individual product range.