REMARKS (excerpts)
USPS POSTMASTER GENERAL JOHN E. POTTER
NATIONAL PRESS CLUB
WASHINGTON, D.C.
April 5, 2002

First, I am announcing today that we are lifting the moratorium that management put in place four years ago on closing small post offices.

Does that mean there will be wholesale closings? No. It does mean we will restart the process to close those offices that have been “suspended” or effectively closed, in some cases for ten years or more. In most of those places we have provided alternative services that have actually improved customer access to postal products.
 

I told our postmaster association leaders about lifting the moratorium. I also told them that I am committed to increasing customer access in cities and towns that for years have been underserved.

Second, we will evaluate our existing processing network.

With our automated environment and changes in our mail mix, we no longer need some of the 400 processing centers we have nationwide.
 

There are opportunities for consolidations, for cost savings. These consolidations will be made to strengthen the network – and strengthen service performance.

Third, we are going to get even more aggressive in purchasing.
We have already leveraged our buying ability to lower our costs for office supplies, equipment, and fuel.There are other huge opportunities which we intend to pursue.

Fourth, we will improve our dispute resolution processes.
We will find a way to reduce the $300 million a year we spend on labor management disagreements. By reducing workplace disputes, we can focus better on serving our customers more efficiently.

Fifth, we will move to modernize the rate process under the existing
regulatory framework.
Can it be done? Just ask George Omas, the chairman of the Postal Rate Commission. He not only said yes, but he showed us that change can occur. Under George’s leadership, all the parties in the recent rate case came together to reach a settlement and avoid protracted, costly litigation. That was a significant breakthrough and one I believe signals a new era of cooperation for all parties.
Industry leaders have committed to us that they recognize we need transformation and they pledged this week to continue to work with us. I want to build on what has occurred.

In recent days, Chairman Omas and I agreed to conduct a joint summit of all the stakeholders – from large direct marketers, to publishers of small magazines, to individual consumers – to share with us what they believe our industry needs to advance and modernize ratemaking. Our staffs will start working on that immediately, and we will keep industry leaders informed.

Current reviews show there are opportunities for additional savings in locations that have not yet reevaluated the full impacts of deploying delivery barcode sorters (DBCS) and Carrier Sequence Barcode Sorter (CSBCS) machines as well as the NATIONAL LDC 17 SALARY AND BENEFITS

Benefits
Improvements in the efficiency of LDC 17 operations and work centers are expected. Standardized processes will reduce the variability in current operations and provide plants with stable operations that are based on best practices.
Low cost, high return material handling projects identified by LDC 17 review teams along with recommended improvements in management processes will provide the foundation for LDC 17 workhour reductions.

Review teams will provide local plant management with an LDC 17 review report that highlights expected savings and full-time equivalent employees so that savings can be captured.

Milestones
* Identify requirements and develop plans for LDC 17 standardization (Quarter III 2002).
* Complete LDC 17 reviews in seven Processing and Distribution Centers with the greatest opportunities for LDC 17 workhour reductions. Begin field testing of standardization approach towards selected LDC 17 work centers (Quarter IV
2002).
* National roll out of standardization and certification of selected LDC 17 work centers (Quarter I 2003).
Metrics
* Reductions in LDC 17 workhours nationally
* Reductions in LDC 17 costs nationally

Job Information Monitoring System (JIMS) is used to monitor and to determine adjustments to work assignments in plants, post offices, and larger associate offices. Initially, JIMS is used to identify vacant job positions and to verify current jobs with employees. In later phases of the process, JIMS is used as an ongoing monitoring tool.
Complement Information System (COINS) is designed to provide local management with timely and accurate complement information to support the management of this critical resource. COINS tracks on-rolls complement against authorized complement levels or targets. At start up, COINS helps to identify the gap between on-rolls and authorized complement, thus giving management a starting point in managing the complement. As the process advances, COINS continues to help managers identify areas requiring greater attention.
Complement Accounting System (CAS) is the Human Resources system that will provide current information on the status of all hiring and losses in process. This application is still under development at this time.

Machine Scheduler is a simple-to-use spreadsheet model: the daily scheduler can be used for any operation that has an expected throughput rate or work rate, end time, and quantifiable resources (number of machines, cases, etc.). Limitations are that the scheduler only does one operation for one day at a time. Multiple equipment types or operations cannot be scheduled using a single model.

Employee Scheduler 2.8 takes a similar approach to that of the machine scheduler. It too is a relatively simple spreadsheet model that uses volume data, productivity rates and clearance times to plan weekly employee schedules. Differentiating this model from the machine scheduler is the ability to schedule up to six complementary operations. The Employee Scheduler can be used in the plant (F1) and post office
Automated Flat Sorting Machine (AFSM) 100.
Benefits
The combination of these activities to improve productivity will result in the savings of approximately 19,000 full time equivalent employees.
Milestones
* Continued automation of back office
* Implementation of Automation for the forwarding of mail beginning in 2004
* Ongoing Operational reviews and implementation of standard operating procedures
Metrics
Change in full-time equivalent employees and operating budgets
Substrategy 2: Facility design changes
Description
Design new facilities and retrofit current facilities with twenty-four hours a day, seven days a week access to critical products and service, where feasable.
Benefits
* Increased customer convenience
* Reduce construction costs
Metrics
CSM scores
Strategy 8: Improving performance management
In addition to capital investment to drive down operating costs and network modeling to ensure an optimal distribution and transportation structure, the Postal Service will continue its focus on improving productivity by standardizing and monitoring performance.
Best practices have been identified and operations are being standardized around these best practices. Numerous tools have been developed to assist the field operations managers in monitoring their performance, planning their complement, and properly scheduling their people.

Substrategy 1: Area mail processing consolidation
Description
Headquarters is conducting extensive reviews and will be implementing Area Mail Processing (AMP) consolidations. The Postal Service is currently undertaking an effort to consolidate Mail Processing activities and centralize or relocate these
activities within and among clusters.
Trends / Supporting Data
This effort was initiated based on an expectation of complement reductions.
Benefits
The projected savings from AMP consolidations (23 in phase one) are projected to average slightly less than $1 million each.
Milestones
Overall program in review at this time.
Metrics
* Projected first year savings of each proposal
* Service performance of First-Class Mail and Priority Mail remains at same level or better

Substrategy 2: Other direct labor reviews and standardization
Description
Other direct processing operations—Labor Distribution Code 17—is currently one of the segments with the highest cost. Standardizing processes will ensure the consistent workhour recording of all LDC 17 activities at mail processing facilities.
Standardized processes will enable the organization to more precisely stratify and develop specific measures of performance and national targets for each activity with LDC 17. It is the objective of this project to:
* Identify and realign operations within LDC 17 and establish standardized work centers;
* Develop workload measures for each operation; and
* Establish performance targets and indicators for work centers.

Trends / Supporting Data
In 2001, the cost of LDC 17 workhours reached $3.6 billion. LDC 17 workhours increased approximately $113 million over 2001. In fact, LDC 17 is the largest and fastest growing mail processing work center.