• on Mar 3rd, 2010 in Strategy & Public Policy | 21 comments
    On March 2, Postmaster General John E. Potter presented a 10-year “action plan” to meet the challenges faced by the Postal Service as it encounters declining mail volumes combined with increasing overhead costs. The plan comes as a product of a yearlong study by the Postal Service and a number of leading consultants to identify and analyze over 50 different actions that could help counter the changing marketplace. The Postmaster General warned that if the Postal Service continues to operate as it is, it will run a cumulative debt of $238 billion over the next 10 years. Even if the Postal Service institutes every conceivable control within management control – product and service actions, productivity improvements, workforce flexibility improvements and purchasing savings – it can only shrink the debt to $115 billion.

    In order for the Postal Service to continue its primary mission of affordable and reliable delivery, it will need the kind of flexibility that only legislative changes can provide. The Postmaster General outlined key areas:

    • 1.Retiree Health Benefits Prefunding – The Postal Service currently would shift from prepaying its fund to paying premiums as they are billed, as other government agencies and private companies operate. 2.Delivery Frequency – The Postal Service would consider 5-day delivery and other adjustments that would allow it to operate more efficiently. 3.Expand Access – The retail network would be examined in order to close unproductive outlets and expand the postal presence in other retail channels, including online. 4. Workforce – In order to have greater workforce flexibility, the Postal Service would need to shift workers and better utilize part-time employees in the workforce. 5.Pricing – The prices for postal products need to reflect demand and market-dominant products should be limited by a single price cap. 6.Expand Postal Products and Services – Given the evolving needs coming from technological and consumer change, the Postal Service is looking to streamline the process involved with rolling out new products and services. 7.Oversight – The current oversight model has encumbered the Postal Service with a number of agencies and commission as with authority as well as Congress. The roles and processes of oversight need to be clarified to allow for efficient operations.

    What do you think? Are the actions mentioned above enough for the Postal Service to remain viable in the future? Would you suggest further steps? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

  • on Feb 8th, 2010 in Strategy & Public Policy | 23 comments
    Courtesy of Apple

    Last August, Pushing the Envelope ran a topic on e-readers — devices designed for portable book reading. Two weeks ago, Apple unveiled the iPad. The iPad offers multiple functionality including the ability to read books, surf the Internet, and use computer applications. Unlike most e-readers, the iPad does not have virtual ink technology, which is intended to mimic paper and make reading more pleasant, but it has one key difference from other widely-used e readers — a color display.

    Newspapers and magazines have particularly expressed interest in a portable device that would electronically display their content in color. They hope to sell electronic versions of their traditional product — stories and advertisements that are easy to read anywhere. Is the iPad the answer? Will magazines and newspapers migrate to color devices like the iPad? What about catalogs? If people can easily read, view, and order items from a computer tablet on their couch, will retailers start sending digital catalogs? Or is the immediacy of receiving a physical paper catalog irreplaceable? What do you think? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

  • on Nov 23rd, 2009 in Strategy & Public Policy | 14 comments
    We all know the Postal Service is going through rough times right now. Sometimes, when a situation is difficult, it’s useful to look to the past for perspective. Forty years ago today, there was no Postal Service (and no Office of Inspector General). The Post Office Department was 5 months away from an unprecedented strike, and 15 percent of the Postal Service’s FY 1969 revenues came from appropriations. Mail volume was 82 billion pieces. There were 739,002 employees and 43,220 post offices (including stations and branches).

    Three years earlier, mail operations at the Chicago Post Office had broken down for three weeks leading to a backlog of 10 million pieces. Sixteen months earlier, the President’s Commission on Postal Operations, known as the Kappel Commission, had released its report (Click here for the first part of the report). The first line read “The United States Post Office faces a crisis.” The report described several problems:

    • Customers were dissatisfied with inconsistent mail service following a period of rapid volume growth. Moreover, the Post Office Department had little knowledge of what products its customers wanted.
    • Employees experienced antiquated personnel practices, poor working conditions in many facilities, and limited opportunities for training or advancement. More than 80 percent of employees started and ended their careers at the same grade level. Some opportunities required political connections. historical carrier
    • The system of supervision was inadequate with supervisors isolated from management decisions, and relations between labor and management were poor.
    • The Post Office operated at substantial deficits financed by the government, and there was a chronic shortage of funds for capital investment.
    • Productivity was low as “[in] most offices men and women lift[ed], haul[ed] and push[ed] mail sacks and boxes with little more mechanical assistance than the handcart available centuries ago.”
    • Pricing was based on inaccurate cost systems, and the rates were set by Congress.
    historical workers

    The Kappel Commission diagnosed all of these problems as manifestations of a single root trouble: Management had no authority to manage. Their proposed solution was a government corporation.

    The Postal Reorganization Act of 1970 (PRA) became law the August following the strike. The PRA did not include all the Kappel Commission’s recommendations, but they were highly influential. The Post Office emerged as a new, much more independent Postal Service.

     

    historical mailroom

    Are there any lessons for today in the problems of 40 years ago? Postal operations were losing more money in 1969, but volume was growing. Are prospects better or worse today? What will future commentators say about the Postal Service 40 years from now?

    This topic is hosted by the OIG's Risk Analysis Research Center (RARC)

Pages