• 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 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.
  • 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.

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