• on Oct 15th, 2012 in Finances: Cost & Revenue | 1 comment
    The U.S. Postal Service spent $12.3 billion on supplies and services in FY 2011, which made up about 17 percent of its total operating expenses. Suppliers to the Postal Service range from large integrators, such as FedEx and UPS, to individuals responsible for cleaning offices and transporting mail between postal locations. With thousands of suppliers, the Postal Service needs a procurement process that is agile, yet transparent and secure. When the Postal Reorganization Act created a self-supporting Postal Service, it exempted it from many federal purchasing laws, including the Federal Acquisition Regulation, which most other federal agencies must follow. Since then, the Postal Service’s purchasing policies have gone through many changes and iterations in an effort to follow the procurement developments of the private sector, streamline its acquisition process, and reduce purchasing costs. In 2005, the Postal Service implemented the Supplying Principles and Practices, which are not legally binding and allow it to make purchasing decisions based on best value rather than rigid factors. Postal contracting officials have much greater discretion than their counterparts at other federal agencies. The streamlined process was designed to create a more efficient businesslike approach, but it has also opened the door for potential problems, especially in the area of non-competitive contract awards. A 2010 audit by the Office of Inspector General on the Postal Service’s noncompetitive contracts said the Postal Service needed to put in additional controls to make sure its interests are protected. Among the suggestions were to strengthen oversight of noncompetitive contracting, maximize competition, and avoid any potential conflicts of interest. The streamlining of purchasing procedures also created a new process for resolving supplier disagreements. Previously, suppliers filed disagreements with the Postal Service’s general counsel and decisions could be appealed to a federal court. Under the new process, suppliers file disagreements with a Postal Service manager, designated as the supplier disagreement resolution official, whose decisions are final and cannot be appealed by the supplier. Do you think streamlining of the purchasing procedures has positively or negatively affected the Postal Service? What is working particularly well in the current procurement process? What could be improved? Should the Postal Service follow procurement developments of the private sector, or should it be required to follow more federal procurement rules? Share your thoughts below.
  • on Oct 8th, 2012 in Delivery & Collection | 10 comments
    The digital revolution has changed communications, and with it, the operations and finances of the U.S. Postal Service. It also has brought deep changes in the way we design networks and analyze systems. Many organizations rely on mathematical modeling to test ideas before they become operational, conserving money and time. The Postal Service, facing limited capital and resources, has also adopted this practice. It is discovering how important these tools are for assessing strategies for designing the future mail network. The Office of Inspector General has explored some of the main components of the postal supply chain - retail, mail processing and transportation, and delivery – using a systems modeling approach. This approach has allowed the OIG to use objective methods to determine how the network could be redesigned to meet current needs and future demands. This research also helps us to understand some of the challenges in developing information-based decision models for the Postal Service. A primary challenge in any modeling effort is collecting the necessary information. Without this data, the model cannot fully assess the efficiency of the operations it is modeling, and develop an optimal network solution. Postal information systems can be a complex array of the hundreds of highly varied and specialized information systems that are often developed and maintained under separate contracts. Simplifying this landscape also could enable more insightful analyses to better guide decision makers. As the Postal Service considers how it can best serve the public through its products and services, modeling efforts can help it to evaluate different proposals for change. As we develop better efficiency standards with more rich data sources, we can not only better evaluate the efficiency of operations and system design, but we can better explore how operations may be changed to meet the needs of new environments.
  • on Oct 1st, 2012 in Post Offices & Retail Network | 29 comments
    The U.S. Postal Service has made improving the customer experience a priority. Postal officials see a positive customer experience as a key to revenue generation because customers are more likely to return if their experience was good. As Deputy PMG Ron Stroman noted to a gathering of postal officials in August, “Our customers have choices, they don’t have to come to us. How people are treated makes all the difference in the world.” Customer service strategies could include something as simple as a menu of services and prices on display in each Post Office. Or, a quick resolution of a customer complaint can turn a negative experience into a positive one. Other efforts might require more substantial changes, such as reconfiguring the retail space or offering extended hours in some locations. In some cases, the Postal Service’s goal of rightsizing its retail network might run counter to the customer experience, at least initially. For commercial customers, a positive customer experience might be entirely different from the retail customer. A simplified or more automated mail acceptance process may appeal to bulk mailers. Changes in service standards might not please all commercial customers, while others may be able to adapt to the changes more readily. New dropship points for mail entry and the changes these can cause to internal processes might stress some mailers. For other mailers, fewer mail entry points might help them gain efficiencies. Given the different needs and expectations of customers, the first step to a successful customer experience would be to know your customers. “One size fits all” might work for the Snuggie®, but not for the Postal Service. Commercial mailers, in particular, have urged the Postal Service to get to know their businesses and operations better. The Postal Service has worked hard over the past few years to reach out to customers and engage them in discussions on improving operations. How can the Postal Service build strong relationships with its customers and encourage customer loyalty? Would consumer and business mailer online rating systems, similar to Yelp, be a useful tool for gleaning information about customer experiences?

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