Business rules at work in postal and logistic services
The extent of government regulation of postal services in the US is relatively – some would say, astonishingly – high. The United States Postal Service (USPS) has a monopoly on the last mile, in other words, the actual delivery to the recipient. Other logistics providers compete to provide preparatory postal services, such as bundling and sorting mailings and delivery to USPS.
For major customers, these service providers generally offer fixed rates, which means that they can only improve their own profit margins when they can exhaust the best possible USPS discounts. At the same time, they face the risk of offering a rate structure that is too advantageous, at least for them. Discounts that are wrongly taken lead inexorably to significant fines from USPS and negatively impact profit margins.
A major player in the American market decided to implement the discount system prescribed by USPS using a business rules management system. The USPS discount system alone is reason enough to turn to business rules – it comprises a huge number of rules and complex dependencies and is frequently revised.
This largely automated process of determining discounts is executed in three steps:
In the first step, up to one million individual pieces of mail are sorted using business rules to determine which discount applies to them.
- Calculating postage
In the next step, postage is calculated and transport papers are generated, printed and electronically stored using another set of rules.
- Control reports
Control reports on mailings handled must be submitted to USPS on a daily basis, and USPS scrupulously reviews compliance with rules governing discount levels. Using business rules, these reports comprise excerpts from the rule documentation that is generated automatically in any case.
What are the practical advantages offered by this approach?
USPS discount rules are implemented in a legible model, making them highly transparent, and the rules are continuously maintained with the involvement of the businesspeople themselves.
When USPS changes its discount or pricing models, or when customer structures change and result in logistic infrastructure changes for these specialized service providers, these changes can be reflected quickly and directly in BRMS by the employees involved, without calling in the software programmers.
These rule models, standardized to that extent, help to correctly calculate fees every time, which reduces almost to zero the risk of incorrectly setting prices while simultaneously optimizing profit margins.
If you are interested in this particular customer story, please find further information on our company website.
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