• 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 12th, 2011 in Ideas Worth Exploring | 12 comments
    Despite financial challenges resulting from declining mail volumes and current economic conditions, the Postal Service is continually driving efficiency by making better use of space, staffing, equipment, and transportation in processing mail. One key element of improving efficiency is consolidating mail processing operations, which is an ongoing effort. Since fiscal year 2009, the Postal Service has completed 47 consolidations and has an additional 107 consolidations in progress for proposed savings of approximately $255 million. How can further efficiencies be gained in mail processing? One idea may be to redesign workroom floor layouts to improve mail flow and eliminate redundancy or inefficient mail flow routes. This effort could also lead to work hour savings and efficiencies in staffing, staging, and dispatching the mail. Another idea may be to standardize mail processing equipment based on the volume of mail processed at each plant. Are these viable options for further improving mail processing efficiencies? What are some other ways the Postal Service can standardize mail processing operations to improve efficiency and improve the bottom line? This blog is hosted by the OIG’s Network Processing team.
  • on Aug 8th, 2011 in Post Offices & Retail Network | 26 comments
    The U.S. Postal Service recently announced that it would study approximately 3,700 postal retail facilities which are candidates for consolidation. Many policymakers and Postal Service customers have expressed concern over the effect these potential consolidations will have on access to postal services and as well as the social life of rural communities where the local post office acted as a gathering point for the community. In an attempt to address some of these concerns, the Postal Service revealed plans to offer its services through authorized third party vendors, including drug stores, grocery stores, and office supply stores. These Village Post Offices (VPO) would be operated by the vendor and sell popular products and services such as stamps and flat-rate packaging. The Postal Service’s primary benefit would be lower labor and facilities maintenance costs from replacing traditional, free-standing post offices with Village Post Offices. There are also potential benefits to consumers. First, postal services could be more conveniently accessed by customers who already patronize the third party vendors. Second, the co-location may actually help to strengthen community ties. Third, the VPOs may be open longer hours. However, there may also be drawbacks to switching from traditional post offices to VPOs. First, the quality and level of service may vary between communities as VPOs would be managed by many different private vendors. In addition, as with any effort involving public-private partnerships, oversight issues may arise. Finally, because VPOs will be operated by private vendors, the role of the post office as a public space may be lost. Are Village Post Offices a viable substitute for tradition postal retail facilities? Can service standards be maintained? Which type of vendors do you believe would be most suitable as a host for a VPO?

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