A quadrant approach classifies all Postal Service purchases into four categories, depending on their impact on the Postal Service core competencies (noncore versus core) and complexities (standard versus custom). Some levers are not quadrant specific, such as reduction of lead time and cycle time. Other cost reduction options may be dependent on the quadrant into which the need falls, as illustrated in Figure 1.5:
Figure 1.5
Quadrant Approach
Possible levers will focus on examining other marketplace alternatives and securing the lowest total cost. A lever may include outsourcing or using the organization’s own resources.
Possible levers will focus on continual improvements and innovations. Partnering with suppliers may be a lever.
Possible levers will focus on attaining the lowest total cost and the simplest access and usage process. Vendor-managed inventory, which reduces inventory and the chance an item will run out of stock, may be a lever.
Possible levers will focus on achieving innovations and cost reductions. A lever may be optimizing order quantity.
