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Effectiveness of the New Regional Processing and Distribution Center in Richmond, VA

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    Effectiveness of the New Regional Processing and Distribution Center in Richmond, VA
Mar
28
2024
Report Number:
23-161-R24
Report Type:
Audit Reports
Category: Service Performance, Delivery / Mail Processing

Effectiveness of the New Regional Processing and Distribution Center in Richmond, VA

Background

The U.S. Postal Service is redesigning its processing network with the goal of creating a best-in-class mail and package processing network as part of its 10-year strategic Delivering for America plan. The Postal Service plans to create a modernized network based around Regional Processing and Distribution Centers (RP&DC), local processing centers, and sorting and delivery centers. The Richmond Processing and Distribution Center became the first RP&DC, in July 2023, consolidating operations from nearby facilities. According to the Postal Service, the effectiveness of these new facilities is critical to the success of its strategic initiatives.

What We Did

Our objective was to assess the operational impacts related to the launch of the RP&DC and identify successes, lessons learned, and opportunities.

What We Found

While the Postal Service had successes when implementing its first RP&DC, it also faced many challenges and identified many lessons learned. The challenges caused the Postal Service to incur additional labor and transportation costs, totaling over $8 million in questioned costs over the first four months of operations. The challenges also contributed to a decrease in service performance for the Richmond region that continued four months after launch.

We identified the following opportunities for the Postal Service to improve performance in the region and during implementation of future RP&DCs: reviewing facilities for pre-existing issues that could impact a successful rollout; including service performance as a measure of success; ensuring transportation schedules are aligned to operations and facilities adhere to the operating plans; and communicating more effectively with local management.

Recommendations

We made 10 recommendations to management that include: continuing to identify and address issues post launch; developing procedures to mitigate challenges before launch; coordinating the training for local managers to understand roles and responsibilities, engagement, leadership, and adequate supervision of operations; adopting a service performance measure of success; aligning and validating transportation schedules; recovering overpayments; establishing a process to communicate and solicit feedback from all local managers in the RP&DC region; updating its Mail Processing Facility Review policy; and communicating impacts to communities when moving processing operations for an entire 3-digit ZIP Code to another facility.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

Continue to document the issues identified and actions taken to address issues in post implementation reviews of Regional Processing and Distribution Center (RP&DC) conversions, and use the cumulative lessons learned when activating future RP&DCs.

Open $0 Agree
2

Develop procedures to identify and mitigate challenges at facilities scheduled to become a Regional Processing and Distribution Center before launch.

Open $0 Agree
3

Coordinate the training of Richmond Regional Processing and Distribution Center (RP&DC) management on how to engage and lead team members and provide adequate supervision of operations, and deploy management training at future RP&DC sites prior to launch.

Open $5,021,051 Agree
4

Develop a scorecard to track service performance and include it as a measure of success at both the Richmond Regional Processing and Distribution Center (RP&DC) and when implementing future RP&DCs.

Closed $0 Agree
5

Align transportation schedules to operations and validate with local management before launching Regional Processing and Distribution Centers.

Open $2,948,034 Agree
6

Direct personnel to record omitted trips in the data systems and pursue recovery of payments for cancelled trips at the Richmond Regional Processing and Distribution Center.

Open $115,690 Agree
7

Train all management personnel in the Richmond region to understand and perform their roles and responsibilities as stated in the Richmond Regional Processing and Distribution Center integrated operating plan.

Open $0 Agree
8

Implement a process to communicate with and solicit feedback from affected managers when developing plans for and implementing future Regional Processing and Distribution Centers.

Open $0 Agree
9

Update Handbook PO-408 to include the definition of service area, and clearly define when Mail Processing Facility Reviews are required.

Open $0 Agree
10

Communicate any impacts to customers when permanently moving processing operations of a three-digit ZIP Code to another processing facility.

Open $0 Disagree