on Feb 22nd, 2010
in Mail Processing & Transportation
| 18 comments
The Postal Service uses forklifts and tow motors to move mail in its mail processing facilities. To improve efficiency and cut the costs associated with using this equipment, the U.S. Postal Service purchased a Radio Frequency Identification (RFID)-based tracking system called the Powered Industrial Vehicle Management System (PIVMS). Features of the system that help productivity include weight sensing, real-time location of vehicles, two-way messaging, driver authentication and maintenance scheduling. Features that increase safety include impact accountability, facilitating Occupational Safety and Health Administration (OSHA) compliance as well as speed and impact sensing. The Postal Service has deployed the PIVMS in 114 facilities at a cost of more than $35 million to • Reduce work hours used to transport mail and equipment throughout the plant. • Reduce work hours needed to maintain the fleet of Powered Industrial Vehicles (PIVs). • Eliminate unauthorized use of PIVs. • Reduce injuries from unsafe operation of PIVs. • Reduce damage to mail and equipment from unsafe operation of PIVs. • Reduce the number of pieces of equipment needed to perform this work. Pushing the Envelope is interested in hearing from those experienced in using the PIVMS. Has the PIVMS lived up to its expectations? How do its benefits compare to its costs? What do you think about PIVMS?This topic is hosted by the OIG's Network Processing directorate.
on Feb 1st, 2010
in Mail Processing & Transportation
| 21 comments
To remain financially viable, the Postal Service must effectively streamline its mail processing and transportation networks and optimize its workforce. Between fiscal years (FYs) 2005 and 2009, the Postal Service made progress in these efforts; however, management was unable to adjust resources quickly enough to fully offset declines in mail volume, resulting in a deteriorating financial condition. In FY 2009, the Postal Service experienced the largest 1-year decline in total mail volume since the Postal Reorganization Act of 1970 — a drop of more than 25 billion pieces. Streamlining the network, while complying with its Universal Service Obligation, presents the Postal Service with many challenges in planning, developing, and implementing network rationalization initiatives. The economic downturn and resulting mail volume declines continue to complicate this difficult financial situation. Consolidating mail processing operations and closing unneeded plants is controversial. With pressures from Postal Service stakeholders to maintain the status quo, the Postal Service has been limited in its ability to implement much-needed streamlining initiatives. Where should the Postal Service look to gain greater efficiencies in its network?This topic is hosted by the OIG's Network Optimization directorate
on Dec 28th, 2009
in Mail Processing & Transportation
| 14 comments
When people try to discover whether the Postal Service is operating more efficiently or not, they often talk about TFP. What is TFP? TFP stands for Total Factor Productivity. It measures the ratio of the Postal Service’s outputs to its inputs, in other words, how much output the Postal Service produces with the inputs it uses.
The useful thing about TFP is that it measures only the quantity of items produced and used — not their price. Why is this important in a productivity measure? It measures solely how efficiently the output is produced. As an example, consider a painting business. If the price of the paint the company must buy falls, the business will be more profitable, but its total factor productivity has not changed. If the business finds a new painting method that only uses half as much paint, it also becomes more profitable. However, in this instance, it is also producing the same output with fewer inputs, and its TFP has increased.
For the Postal Service, inputs are labor, materials, and capital. Outputs include mail volume and special services. Since the Postal Service is a network industry, the total number of delivery points is included in the final workload measure.
The table below shows the Postal Service’s input, workload, TFP growth rates, and net income from 2000 to 2009. TFP increases do not always result in positive net income, because profitability is affected by other items like the price of inputs. Although TFP increased from 2000 to 2007, TFP declined in 2008 and 2009. As the table shows, the Postal Service cut inputs significantly in 2008 and 2009, but it was not able to cut them enough to offset the declines in workload.
If the decline in mail volume moderates, will the Postal Service be able to return to TFP growth? Also, what is your opinion of the TFP measure? Business Mailers Review recently reported that there are discussions at the Postal Service about whether to move away from TFP and use another productivity measure such as deliveries per hour. What do you think? Are there other productivity measures that you believe would be more appropriate for the Postal Service?
This topic is hosted by the OIG's Risk Analysis Research Center (RARC).
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