Distribution Process of Indian Postal Services

Founded in 1764, and headquartered in New Delhi India. It is the most widely distributed postal system in the world where China is next with 57, 000 post offices. The large numbers are a result of a long tradition of many disparate postal systems which were unified in the Indian Union post-Independence. Owing to this far-flung reach and its presence in remote areas, the Indian postal service is also involved in other services such as small savings banking and financial services.

The Indian postal department is by far the largest in the world, with about 1,55,000 post-offices, the second largest being China with about 66,000 (Source: Universal Postal Union study), and 89 per cent of them are spread across rural India. Today, India Post, with a work-force of about 5,20,000 employees, is reeling under a huge budgetary deficit of Rs 1,209.9 crore (Source: Annual Report, 2006)

The Railway Minister, Mr Lalu Prasad, helped along by an economy growing at over 8 per cent, has already turned around the Railways. It is now turnaround time for the postal department. The Minister for Communications has stated that the Department must move in the next few years to ensure that the deficits in revenues and expenditure is wiped out in the non-Universal Service Obligation (USO) segments.

The Government has roped in global consultant KPMG to prepare a report on restructuring the postal network in the country. The mandate given to KPMG includes identifying new areas of business. Going the banking way is one of the sound options suggested.

Governance and Organization

The postal service comes under the Department of Posts which is a part of the Ministry of Communications and Information Technology under the Government of India. The apex body of the department is the Postal Service Board. The board consists of a chairman and three members. The three members hold the portfolios of Operations & Marketing, Infrastructure & Financial Services, and Personnel. The Joint Secretary and Financial Advisor to the Board is also a permanent invitee to the Board.

India has been divided into 22 postal circles. Each circle is headed by a Chief Postmaster General. Each Circle is further divided into Regions comprising field units, called Divisions, headed by a Postmaster General. Other functional units like Circle Stamp Depots, Postal Stores Depots and Mail Motor Service may exist in the Circles and Regions.

Besides the 22 circles, there is a special Circle called the Base Circle to cater to the postal services of the Armed Forces of India. The Base Circle is headed by an Additional Director General, Army Postal Service holding the rank of a Major General.

Services Provided by Indian Post

Indian Postal services provides two major kinds of services to their customers in various fields, these services are as follows:

Postal Services

Ordinary Post

Speed Post


Logistics Post


Business Post

Media Post

Direct Post

Postal Life Insurance

Instant Money Order Service

International Money Transfer

Non-Postal Services

Public Provident Fund

National Savings Certificate

Kisan Vikas Patra

Savings Bank Account

Monthly Income Scheme

Recurring Deposit Account

Post Office Time Deposit

Post Boxes for Mail Receipt

Address Proofs Cards

Speed Post

The high speed express service for letters and documents. Speed Post links more than 1200 towns in India, with 290 Speed Post Centres in the national network and around 1000 Speed Post Centres in the state network. For regular users, Speed Post provides delivery ‘anywhere in India’ under contractual service. Speed Post offers a money-back guarantee, under which the Speed Post fee will be refunded if the consignment is not delivered within the published delivery norms.


The most convenient way to pay your bills under one roof. With its tremendous reach and expertise India Post specializes in acceptance of payments across the counter and their consolidation. E-Payment is a ‘Many to One’ service through which bills (telephone, electricity, etc.) paid by customers in post offices is electronically consolidated.

Logistics Post

Logistics Post Air is an Express service under the brand, ‘Logistics Post’ providing time bound delivery of large consignments by air. Logistics Post Air is aimed at fast and secured transportation of consignments in India using transmission by India Post Aircraft.

Currently Logistics Post Air is operational utilizing the India Post aircrafts linking Delhi, Mumbai, Kolkata, Chennai, Bangalore, Nagpur, Guwahati, Imphal and Agartala stations Logistics Post Air provides express service to the customers who want fast and time-bound delivery of their consignments. With Nagpur as its hub, India Post is operating overnight flights thereby providing overnight services for the customers.

Airport to Airport Service:Under this service, the customer will deposit the consignments at the postal facility available at the airport premises and the delivery will be effected to the customer at the Post office facility at the destination airport.

City-to-City Service:   On payment of City-to-City charges, the consignment will be booked at the specified Logistics Post Booking centres in the Origin city and the delivery will be effected at the Logistics Post Delivery Centres in the Destination.

Door to Door Service:In case the customer desires to have the consignment picked up from the premises or delivered at the premises of the consignee, collection charges/ door-to-door delivery charges of Rs 1 per kg, subject to a minimum of Rs 100 per consignment will be levied in addition to Logistics Post Air charges.


Documents and greetings sent online but delivered by mail.

Business Post

Total pre-mailing solutions including collection/printing, inserting, and addressing.

Media Post

Reach millions through advertisements on Post cards, Letters walls of post offices ,letter boxes, post cards and stationary.

Direct Post

Distributing advertising materials directly to prospective customers

Postal Life Insurance

Postal Life Insurance was started in 1884 as a welfare measure for the employees of Posts & Telegraphs Department under Government of India dispatch No. 299 dated 18-10-1882 to the Secretary of State. Due to popularity of its schemes, various departments of Central and State Governments were extended its benefits. Now Postal Life Insurance is open for employees of all central and state government departments, nationalized banks, public sector undertakings, financial institutions, local municipalities and Zila Parisads an Educational Institution aided by the Government.

Instant Money Order Service (iMO)

The instant domestic money is available in 717 post offices. However no International Money Order facility is available.

International Money Transfer

As a result of the collaboration of the Department of Posts with the Western Union Financial Services, state of the art international money transfer service is now available through post offices in India. This enables instantaneous remittance of money from 185 countries to India. The recipients can in fact collect the money in minutes after the sender has made the remittance. The service is targeted to particularly fulfill the needs of NRI dependent families in India, visiting International tourists and foreign students studying in India.

Other than these basic services Indian postal Services are very active in providing savings accounts in post offices and various financial and savings and investment schemes. Post offices have served as a traditional financial institution for rural areas.

SWOT Analysis:

The SWOT analysis on Indian Postal Services and on its working process is as follows:


Strong Network

Cost Effective

Security / Safety with respect to deposits

Efficient Manpower


Unchanged working culture

Lack of feedback in communication process

No Job Rotation

Job Stress among employees

Lower rate of interest on deposits as compare to competitors


Increasing number of customer

Inflationary market

Technological Advancement


Customer Dissatisfaction

Increasing market share of competitors

Market Competitors

There are so many of local, national and international competitors for Indian Post that day by day it is getting very hard for the organization to survive in this though market. Indian post had almost a monopoly in the Indian market since 1999, after the launch and widespread use of mobile network and internet services market has been flooded with much cheap and easy to use services and communication methods. Other than that local scale courier services, national scale couriers and international courier services are taking u over Indian market and Indian Post’s share. The major competitors of Indian Post are:



First Flight


Blue Dart


Telecom Networks

Due to such increasing rate of competition and competitors Indian Post has started facing losses and deficit problem. In the past years 2006-2007 Indian Post recorded the annual deficit of Rs.1209.9 crores. Inspite of the fact that Indian post hold the longest and the most widespread distributed network which can prove a cutting edge over their competitors, Indian Post has various benefits of its network, huge capital base, huge human resources, government support and subsidies, far enough than compared to their local and national competitors but still they are continuously performing low. Indian Post although is taking initiative to improve their output by providing various non postal financial services but anyhow it is all not up to the mark.

Indian Post was established in 1764 in order to provide quick postal deliveries for the EAST INDIA COMPANY in India, afterwards it as opened for common public too, therefore it can be concluded that Indian Post’s basic core process is to provide with the quick service of delivering posts and parcels around the country and globe. It is also noticeable that Indian Postal services are not doing much good specially after the launch of telecom services and internet in India therefore we can conclude that at various places BPR initiatives can be applicable.

Core Business Processes

Delivery of post (logistics)

Availability of stamps

Sorting of post and parcels

In the above mentioned processes BPR initiatives can be taken and applied.

Why competitors are gaining a larger share in the market?

It is also noticeable that competitors of Indian Post are less but still they are gaining more and more per year than compared to Indian Posts market share. There are some basic reasons which are boon to local business and curse for Indian Post. They are as follows:

More widely distributed system in each city: local scale couriers such as First flight and DTDC has a more outreached and easily available point of business in cities, we can easily find these organisation’s franchisee in local stationary shop, general stores everywhere it is easily available in your nearest down street. Whereas if we look for post offices and even for post boxes we can analyze that they been distributed on a very wide range of area. Every big block has one post office and even post boxes are very far away from each point thus people avoid or feel lazy about using postal services even if they have to pay more in local private services.

Corrupt, traditional and bureaucratic way of work: bureaucracy and corruption seems to be a part of government organizations, Indian Post is such a example of organization where we can still find traditional way of work style no matter how much they are technologically advanced. In Indian Post employees know that they have a permanent income no matter if they work efficiently or not, so they just loosely concentrate on their work which has brought down the image of Indian Post like other government organisations. On the other side private companies focus upon customer relationship and values that they follow in their work. They know that more effectively and efficiently they work the more they will earn rewards thus no corruption or bureaucracy follows here. They have much effective working culture that helps employees to be more productive.

Time Effectiveness: Indian Post work on a large scale and which is barely properly integrated thus loosing the benefit of time effectiveness in their work which is the major key in postal services. Timely delivery of posts and parcels brings customer satisfaction and company’s goodwill but here Indian Post most of the times fails to do so their work on time (i.e. failing in making timely deliveries). Whereas private postal and courier services work as fast as they can using all means of transport they can arrange for therefore they are more popular among the local customers and other business organisations.

Interconnection among small companies: For example a courier company with limited network, makes a tie-up with another company and drops the mails to the desired destination. Indian post work as an independent body thus sometimes it becomes the root cause and a limitation for the organisation in deliveries delays and non performance. Whereas private courier services have tie ups with other companies which gave them a edge to compete effectively with Indian Post.

Provides higher rate of interest on deposits: Indian Post also provides the service of a financial institution in urban and rural areas, providing a good amount of interest on the investment made. Whereas private bankers and private lenders in order to compete and be ahead in the market provide much more higher rate of interest to the public which attracts and pulls from Post offices to them.

About Business Process Reengineering (B.P.R.)

It is essential to have a brief outlook about the process or method that we are going to apply in our report, thus here is something valuable about B.P.R.

Business Reengineering is probably the most widely embraced approach to business improvement in recent decades. Business reengineering has been describes as “not a voyage of guided discovery but more like a walk in the fog”. B.P.R., sometimes called business reengineering or simply reengineering, is radical way of enhancing the capabilities of a business improving its performance and allowing it to achieve sustainable competitive advantage.

Going in brief, B.P.R. consists of two basic but major set of models i.e.

As-If model and,

To-Be model

As-If model defines the whole business process model or a particular set of business process, analyzing the working of the present model whatever as it is before us. It defines that presently how does the business model is working and recognizes the faults that are hampering the output of the organisation.

To-Be model defines the whole or partial business process that had been identified that has to be changed and a all new model is to be presented. This to-be model is very much new and free from any faults and shortcomings. It is the model that is presented to give maximum output and desired result.

Initiatives Taken By Indian Posts

It is not the state that Indian Post is not taking any step to revive their state and performance in the market, for example Indian Post has declared a Request for Proposal (R.F.P.) for hiring of I.T. consultants. In which the following candidates were short listed:

Accenture Services Pvt. Ltd.

Emst and Young Pvt. Ltd.


McKinsey and Company


Technological Division Initiatives

Funds of Rs. 628.66 crores earmarked for 2008-2009 and 2009-2010 and approval of CCEA obtained.

Funds of Rs. 125.88 crores allotted to the Technology Division for supply of hardware/software’s/equipments/peripherals to the circles.

Committee on IC technology for rural post offices

Committee constituted on 29/01/2009

Objectives: Rural Connectivity, Rural Devices & Public, Private

Partnership Models

Experts include Faculty from, IIIT Hyderabad, IIM Bangalore & Experts also include from Industry like TCS, Intel, Infosys.

Reengineering Initiative for Indian Posts’ Core Processes

Problem 1 (As-If Model)

Misplacement/loss of posts in huge bundles and during sorting or transportation. Use of traditional paper based stamps which are for single use. They increase cost as they are to be produced on regular basis. Also customer needs to write all the information on the envelope which makes it a boring task. And if same address is required for bulk post then it becomes more hectic work.

Solution 1 (To-Be Model)

The above mentioned problem can be solved by using low frequency Radio Frequency Identification Tags (RDIF) it is a very widespread technology across the globe commonly known as Radio Tag Technology or Printed Smart RDIF labels.

Such radio tag chips are extremely small and are available in the size of grain of a dust. Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal.

There are generally two types of RFID tags: active RFID tags, which contain a battery and can transmit signals autonomously, and passive RFID tags, which have no battery and require an external source to provoke signal transmission.

Due to technological advancement we have the benefit of polymer and paper electronics in which we can stitch or bind such radio tags which are widely used to track, monitor and identify using radio waves any person or thing we desire. These chips can hold 38 digits of number and 128 bit of memory which can be beneficial as a radio tagged stamps for posts.

These chips are widely and heavily used in many fields across the globe, such as they are used in:

Race timing


Transportation Payments

Currency notes

Product Tracking

Transportation and logistics

lap scoring

animal identification

Inventory systems

Human Implants


Schools and universities


Social Retailing

In Indian Posts they can be used for:

Unique Identification of posts and parcels, preventing from misplacement and loss: these chips are so minute that they can be in built in new stamps, which can be reprogrammed as many times as possible but only through authentic code and signatures. By using such radio tagged stamps the organisations can give every post or parcel a unique identification which can be easily traced and monitored by using radio waves no matter where ever in which ever bundle or place they are in. they can be also useful in sorting process in post office which is explained later.

No need for writing any thing on the envelope except sticking the e-stamp: by using the e-stamp or radio tagged stamps the customer should not have to write anything on their own on the envelope, they can just go to the Indian Posts business point where they can buy e-stamps by just telling the recipients name and address with optionally their own name and address if necessary. The employee on the system can feed the information and on a press of a button generate an e-stamp which holds the customer specified address and name with a unique in built ID no. with an additional small slip with adhesive on which recipients’ name and address is mentioned for postman’s reference.

Reduces cost of stamp production: due to the efficiency and reusability of e-stamps it can be very cost effective and profitable for Indian Posts. As these e-stamps when ordered on bulk can cost merely in some paise, also they can be reused, irrespective they can be reprogrammed and re stick on new envelope.

Reduces the use of fake stamps: due to its unique radio tag system no one can easily replicate the stamps therefore it can provide safety to Indian Post regarding loss due to forgery etc.

Hitachi is one of the pioneer and leading company in the field of manufacturing and providing RDIF chips.

Problem 2 (As-If Model)

There is a major difference of availability of stamps and postal services on a wider basis. Post offices are only one in huge areas whereas same is with the post boxes. Now a days due to technology major portion of people are very time saving and don’t like to search for post boxes or post offices easily on first preference. On the other hand one can very easily find business point of local courier services on one or another shop across the road. This provides quick and easy access to the services.

Solution 2 (To-Be Model)

The following problem can be solved in two aspects:

constructing a whole new post office and operating them can be an extremely costly and non performing process, therefore Indian Post can make small Business Point Junctions like ATMS with sitting arrangements for one or two employees equipped with all necessary equipments where the customers can contact for e-stamps, submission of mails, parcels etc. also post office provides money transfer on local and international basis and provides with account and money deposit facility. All these financial services can also be carried out in these Business Points. Here the customer can deal and transact with any kind of postal or non postal services. These junctions can be set after each 5 kilometers. These junctions can monitor the status of their areas’ post boxes coming under 5 kilometers, monitoring that which box is empty or full. Thus saving more time of the delivery van, they can tell the van where to go first and where to not, as it may happen that they can go to useless spot too.

Secondly, post boxes should be redesigned in square shape with a transparent lid on the top to have a peek inside the box, it can give a insight to the customer that his post or parcel is safe inside, and RDIF tag chips much powerful than e-stamps. These boxes should be placed after every 1 or 2 kilometers of radius. The delivery van can get radio signals from these boxes denoting about the status of the box and whether to empty the box or not. It can also tell through radio waves in about 50-100 meters of radius that whether the box is empty or does hold any matter in it without going very close to it. It will save time of the delivery employees as they don’t have to stop and check each and every box, they have to stop only at that box that tells them any useful information, therefore saving time and increasing efficiency in terms of time and employee performance. For Example it takes 15 minutes for a delivery van to stop at post box, open and check and emptying the box if so. But by using RDIF enabled boxes the time can be reduced to merely less than 5 minutes, where only they have to stop and collect the mails and parcels.

On the other hand if legally signed, contracted or authorized then Indian Posts can allow other courier services to use their Business Point Junctions and RDIF enabled post boxes

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