The Integrated Data System (IDS) continuously collects data from all mail processing equipment in a facility. The system allows Postal Service managers to better match equipment and staffing to workloads, which improves productivity and reduces operating costs. The data collected also provide more accurate information on mail volumes and equipment utilization. More accurate information by destination and availability for dispatch make it possible to reduce transportation costs. Equipment data also provide the basis for activity-based costing models to better control operating costs within the Postal Service. The 300 existing IDSs were upgraded in 2002. In 2003, the Postal Service awarded a contract to purchase and install new IDSs at all 21 BMCs.

     PARS automates the handling of undeliverable- as-addressed (UAA) letter mail more efficiently than today's process. The UAA mail is intercepted earlier in the distribution process, resulting in reduced handlings and processing costs and improved service. The system notifies mailers of customers' address changes electronically for mailers that subscribe to this service, and provides hard copy notification for mailers who do not. Both services generate revenue for the Postal Service. The system also automates processing of change-of-address forms.

     During 2003, the Postal Service completed Phase I in-plant testing and started first article installation at the Lake Mary, FL, plant. Phase I will include 53 processing plants and 86 Computerized Forwarding System sites which process nearly one-fourth of all forwarded letters. PARS Phase I deployment is expected to begin in January 2004 and end in September 2004. The Postal Service expects to complete Phase II, which covers deployment to the remaining sites and which will address flats, by the fall of 2006.

     The Advanced Facer Canceller System (AFCS) is the primary letter canceling machine used at Postal Service processing and distribution centers. The AFCS Video Facing Modification Kit enables the AFCS to process mail that does not have phosphorescence or fluorescence in the stamp, indicia, or meter mark. This modification allows mail that is rejected by the AFCS to avoid the expensive manual handling previously required to face and cancel. The program upgraded at least one AFCS at each major processing facility. Deployment began in November 2002 and was completed in April 2003.

     The Postal Service has automated the labor-intensive process of evaluating bulk mailing eligibility for work-sharing discounts. The Mailing Evaluation Readability and Lookup Instrument (MERLIN) verifies nearly all mail preparation requirements for both letters and flats. It produces all reports necessary for mailing acceptance and provides the mailer with images of preparation problems to support process improvement. Deployment of 1,203 systems is underway with completion scheduled for early 2004. Additional details are available in Chapter 2, Section I, Item 4, Marketing Technology.

     Material handling continues to be a significant target of opportunity for technology investments to reduce operating costs and improve productivity and efficiency. Development and production activities during 2003 included equipment for flats, receipt, dispatch, and material transport operations within processing plants.

     During 2003, the Postal Service completed acceptance testing of the Universal Transport System (UTS) in Fort Myers, FL. This system expands the processing of product lines beyond that of traditional