• on Sep 26th, 2011 in Ideas Worth Exploring | 9 comments
    The Postal Service has “coupled” its retail and delivery operations, both managerially and physically, since delivery services were first established almost 150 years ago. Historical patterns, or the needs for delivery service efficiencies, primarily determined the location of physical facilities, which typically house both delivery and retail operations. Demands for postal retail services are changing both geographically and demographically as consumers age and population centers shift. Our Risk Analysis Research Center studied the strategic concept of “decoupling” the Postal Service’s delivery and retail operations, examining both the physical and managerial functions. The results appear in the recently released whitepaper titled Retail and Delivery: Decoupling Could Improve Service and Lower Costs. The white paper draws upon the insights of key stakeholders, private sector delivery companies within the United States, foreign postal operators, and expert business consultants. The study found that selective decoupling of retail and delivery operations, mostly outside of rural areas, could result in lower costs, increased revenue, and better service that is more responsive to changing market conditions and diverse customer needs. The paper’s key findings include:
    • A decoupling strategy affords the Postal Service more flexibility to respond to changing customer needs for retail service.
    • The Postal Service too often ignores retail functions, which receive secondary managerial attention when competing with delivery for resources and clerk time.
    • Decoupling could help transform both retail and delivery into separate best-practices driven, strategic business units.
    • Major private-sector delivery companies in the United States as well as foreign posts previously separated their retail and delivery functions with each having its own distinct skills, training, and performance measures.
    Tell us your thoughts in the comment section below. This blog is hosted by the OIG’s Risk Analysis Research Center.
  • on Sep 21st, 2011 in Finances: Cost & Revenue | 3 comments
    In a time when the Postal Service has suffered declines in volume and revenue across many categories, it has turned to the international market. For example, it has seized opportunities, including with China, to increase its overall market share in package and express business. But the Postal Service has to maintain an “international” infrastructure in order to efficiently receive and dispatch this mail flow. International Service Centers (ISCs) in Chicago, Los Angeles, Miami, New York, and San Francisco distribute and dispatch international mail. International Airmail Records Units are located within the ISCs which are part of the International Network Operation. These units validate mail records before transmitting information to the International Accounting Branch in St. Louis for billing foreign postal administrations. Currently, the records units are located in Chicago, Los Angeles, New York, New Jersey and Honolulu. In recent years, workload in Miami and Chicago were redistributed to other locations. Our office previously reported the records units operated in an obsolete, inefficient, and manual work environment resulting in the use of unnecessary work hours. Specifically, we found that these units supported more than 2 million hard copy records. Since then, the Postal Service has improved efficiency by implementing Lean Six Sigma methodologies to streamline processes and continues efforts to transition to a paperless environment. What additional opportunities exist to strengthen operations at International Service Centers and International Airmail Records Units to improve efficiencies and protect international revenues? For example, are there additional opportunities for consolidation? Are there additional steps the Postal Service can take to automate its processes and fully transition to a paperless environment? This blog is hosted by the OIG's Financial Reporting Directorate.
  • on Sep 19th, 2011 in Finances: Cost & Revenue | 12 comments
    Let’s take a simplistic view of the Postal Service by dividing it into two groups: Operations and Finance. Operations’ main concern is to make sure mail is delivered and other services are rendered to satisfy customers’ needs. On the other hand, Finance’s responsibility is to ensure that all the information stemming from the Operations side is captured for billing/payment and financial statement reporting purposes. After all, the Postal Service needs to be paid for their good work, doesn’t it? Based on audits of prior years’ financial statements, it seems Operations personnel were not always aware what financial impact their action or inaction had on the Postal Service when it came to the big picture. For example, Operations personnel might process the mail and deliver it to the customers’ satisfaction. However, internal supporting documentation and data might not have been updated in a timely manner. When personnel do not process documentation for services rendered according to Postal Service policy, the Postal Service risks losing money. Over the years, management has taken steps to provide Operations and Finance personnel with the bigger picture. They have advised the Operations side of their impact on the Postal Service’s financials and the repercussions of not completing processes correctly. The question is do you believe this endeavor has been successful? Let us know what you think in the comments section below. This blog is hosted by the OIG's Financial Reporting Directorate.

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