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Pushing the Envelope: Achieving High Performance in a Competitive Postal Environment
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Postal Project Volume I: May 2004 Pushing the Envelope is a thought leadership initiative that helps postal systems achieve high performance in today's competitive business environment. Montgomery Research and Accenture produced this book and its companion Web site as a decision-support tool for postal administrators facing the challenges of high customer expectations, emerging technologies, and aggressive competition The volume of business and personal mail is dropping quickly as more communications shift from the physical to digital media. Less mail is going to more addresses. Regulators are lowering the barriers to private competitors. And consumers expect better services at traditionally low prices. Pushing the Envelope answers these challenges with the proven strategies of professionals who've implemented innovative programs around the globe while finding new ways to enhance cost-effectiveness, employee morale, and customer satisfaction. “Pushing the Envelope highlights proven strategies of professionals who've implemented innovative programs around the globe while finding new ways to enhance cost-effectiveness, employee morale, and customer satisfaction.” Added Nick Smith, Publisher of Pushing the Envelope. One such example is that of the United States Postal Service (USPS), which implemented a transformation plan that enabled it to increase revenue, improve operational efficiency, promote a performance-based culture and streamline existing functions. The book describes how the USPS is able to use the “power of mail” to attract and keep customers, how it is using technology to stay ahead of its competition, and how it managed to develop strategic partnerships with other mass mailers and private companies that capitalize of the strengths of all parties involved. The story of the USPS is told through the eyes of some of its most experienced executives, including its chief operating officer, chief technology officer and vice president of strategic marketing. The book also provides insight into the transformation from government bureaucracies to privatized entities that a number of postal organizations have undergone, featuring commentaries from the experts responsible for the transition. The book also features interviews with key industry leaders and practitioners on successful transformation and solution offerings from major postal suppliers and partners. These topics are addressed through white papers and case studies based on the experiences of national postal organizations from Australia, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, the United Kingdom and the United States. Volume 1 includes more than four dozen essays, case studies, interviews, and solution provider profiles aimed at understanding today's operating environment, boosting workforce performance, building stronger customer relationships, reinventing products, optimizing the supply chain, and improving back office performance. Contributors include leaders of many of the world's most respected postal operations and leaders of the Accenture Global Postal Practice. Others who contributed their expertise to this effort : Michael S. Coughlin, (former USPS CFO) Accenture, Philip Dobbenberg, Corporate Director, TPG; John (Jack) Potter, PMG/CEO, USPS; Johnny Thijs, CEO, Belgian Post; John Allen, CEO, New Zealand Post; William (Bill) Henderson, former PMG/CEO, USPS; Tony Vegliante, VP, Labor Relations, USPS; and Elmar Toime, Executive Deputy Chairman, Royal Mail Group. Below are excerpts of essays from The Postal Project |
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Worksharing: The Essence of Liberalization By Dr. Gene Del Polito, President, Association for Postal Commerce
While no post is perfect, the US Postal Service (USPS) has benefited from a historical accident that more closely links marketplace interests with the development of postal products and services. It’s called worksharing. Simply put, worksharing is nothing more than the substitution of lower-cost, private sector resources for more expensive resources that would be provided by a post. Some call it outsourcing, but either way, it’s the same. Find someone who can do the job for less, and compensate him for his labors with a share of the avoided costs. In a sense, worksharing can be thought of as nothing more than affording customers competitive postal network access. Since many posts now (or soon will) have to contemplate giving their competitors network access, logic would dictate they’re asking why they shouldn’t provide customers with a similar opportunity. A Successful CatalystWorksharing within the American postal market has been a phenomenal success. It has provided businesses with a method for diminishing the impact of postal rate increases. It has created incentives for mail-using businesses to prepare and present mail that is more efficient for the US Postal Service to handle. And it has also provided the kind of economic stimulus that has fostered a direct-mail marketing sector that is the envy of posts around the world. Indeed, without worksharing, the USPS that exists today would have fiscally collapsed long ago under the burden of an infrastructure that is one of the world’s most labor-intensive and costly. more
Managing Union Relations
Union relations can make or break a postal transformation effort. As posts in developed countries face such pressures as automation, globalization, rising costs, competition, and privatization, they are confronting inevitable change. Because postal organizations are large, dispersed, and tradition-bound entities, the challenges of managing enterprise-wide change should not be underestimated. Labor-related costs comprise the largest expense for posts, and the need to reduce them is urgent. Union relations play a pivotal role in making this change happen. To understand how postal organizations are managing these relationships in the face of relatively dramatic change, we spoke with senior postal executives in several countries about union relations, the challenges associated with them, and how they are handling them. Communicate, Communicate, CommunicateA new emphasis on communications is at the core of each strategy for building and strengthening relations with postal unions, including speed, frequency, and contents. Openness and honesty are cornerstones: “Tell the truth – do not surprise them.” In order to instill a commitment to change programs, it is important to “communicate at multiple levels.” During the anthrax scares in the US, postal leadership held daily briefings with union representatives. Easy access to management and continuous communication are the goals senior leaders are striving for. One manager schedules regular lunch meetings with union counterparts with no set agenda. Another stated that union leaders “know they can call me anytime.” “Postal leaders should not assume that union members understand management motives”; they need to explain that “controlling costs is for the benefit of all, not just management John R. Wargo, United States Postal Service, Ken Ceglowski, United States Postal Service Posts can help their business customers see the value of using the mail channel as a key component of their own customer relationship management strategy. Achieving High Performance in A Competitive Postal Environment Sylvain Bacon, Accenture, Michael S. Coughlin, (former USPS CFO) Accenture As the forces of liberalization, competition, and technological substitution continue their inevitable march across the landscape of the postal marketplace, postal organizations around the world have found themselves under enormous pressure to change the way they do business. CONFIRM Service: Intelligent Mail Technology 24/7 Anita J. Bizzotto, United States Postal Service, Charles E. Bravo, United States Postal Service
This case study explores using Intelligent Mail technology
to retain customers, improve operating efficiency, and enhance service
performance. Robert Otto, United States Postal Service, Larry K. Wills, United States Postal Service
The ACE program provides multiple
benefits for the US Postal Service.
ACE eliminates inefficiencies in
technology, integration, deployment,
and support by using best-in-class
supply chain management; applying
industry best practices that speed
up development and implementation;
utilizing mainstream technology and
allowing for an evolutionary
technology management process; and
driving operational costs lower
through productivity improvement.
Savings of $150 million to $200
million are expected over the next
five years. Current ACE deployment
efforts toward achieving the
projected benefits are ahead of
schedule. Very quickly it has become
apparent that ACE is helping the
USPS do more with less. Optimizing Delivery at The US Postal Service
Patrick Donahoe,
United States Postal Service Labor costs are the most significant portion of the Postal Service operating budget, and delivery operations made up 42 percent of all Postal Service labor hours in fiscal year 2003. Therefore, one of the major challenges for the Postal Service is the effective management of these work hours while maintaining high-quality delivery and customer satisfaction. The US Postal Service believes that the key to success in this delivery environment is a skilled front-line supervisory team with technology tools that provide actionable data for daily management decisions. To provide that data, the US Postal Service implemented the Delivery Operations Information System (DOIS) in 2001 as the cornerstone application to support delivery operations supervisors. In 1997, as a result of the assessments and studies, DOIS was defined as a mechanism for developing a baseline infrastructure for re-platforming the DUC applications. The DOIS project was not going to be just another software deployment, but an overall business solution. Deployment management, training, readiness assessments, and site activations would all be strategically implemented. Office management and route management were identified as the highest-priority areas requiring attention. As mentioned above, delivery operations made up 42 percent of all Postal Service labor hours in fiscal year 2003. From these hours, over 70 percent of delivery hours were in the city carrier labor category. By having readily available, accurate volume data, coupled with the carriers’ demonstrated ability, delivery unit supervisors could make improved decisions and have a positive impact in both capturing under-time and reducing overtime. Nationally, the potential results in achieving savings, increasing productivity, and improving service would be significant.
Partnering to Drive Transformation
Robert Otto,
United States Postal Service, Keith
Strange, United States Postal Service USPS-FedEx Agreement Delivers First-Class Service Paul Vogel, United States Postal Service The agreement also proved critical after Sept. 11, 2001, allowing the USPS to keep the mail moving while commercial airlines redefined security measures. In the early months of the agreement, approximately 50 percent of the priority mail that traveled via air was being transported by commercial passenger carriers. After Sept. 11, all of this mail was shifted to FedEx as the Federal Aviation Administration ruled that no mail weighing more than a specified weight could be carried on a commercial passenger flight. Without the FedEx agreement, the USPS would have faced an insurmountable logistics problem.
The ability of the USPS-FedEx agreement to improve
first-class performance scores and streamline the air transportation network has
no doubt influenced subsequent transportation contracts to be more innovative in
establishing win-win arrangements. Contracts with the commercial air carriers
now carry incentives to deliver mail to the USPS on time or early in exchange
for increased mail volume. Thus, the agreement with FedEx has improved the
entire USPS air transportation network and allows for a continual improvement
process that will provide benefits for years to come.
The Postal Project Volume 1, May 15, 2004
Chapter 1:
Today's Postal Business Environment |
