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Conduct Material Planning Activities

Material refers to all supplies, equipment, and repair parts owned by the Postal Service. Material planning encompasses and incorporates the arrangements and preparations essential to logistics and the processes associated with logistics. These activities span from receipt of the material until disposal.

Conducting material planning accomplishes the Postal Service objective of providing quality material responsively and cost-effectively. The information garnered during material planning activities feeds into the Develop, Finalize, and Implement Inventory Control Plan and the Implement Life Cycle Support Plan topics of the Manage Demand task of Process Step 5: Measure and Manage Supply.

The Item Manager is responsible for conducting material planning activities, with the support of the Client, Contracting Officer, and Supplier. Conducting material planning activities involves:

Characterizing the material

Material logistics

Characterizing the Material

The Item Manager and Client must ensure that the material type is appropriately classified. The material type plays a role in activities from processing to authorizations. Material types include:

Capital - has a service life of more than one year, is identified as a stand-alone item of property throughout its useful life, has a unit cost of $3,000 or more, and depreciates in value

Expendable - items that cost less than $3,000; repair parts and replacement components (e.g., batteries, motors), regardless of cost; and, for the most part, mail transport equipment (MTE), neighborhood delivery and collection box units (NDCBUs), workroom furniture, and similar items

Sensitive - materials considered especially vulnerable to theft or loss (e.g., computers, cameras, valuable portable equipment)

The Supplier and Client communicate the material's factors to the Item Manager. These must be defined because they influence the receipt, storage, distribution, and recovery of the material. Material factors include:

Nature of the material (e.g., shelf life)

Size, weight, and shape



The following areas will be incorporated into planning activities, if applicable to the material:

Schedule - key delivery dates of the material (leads to appropriately allocating and positioning inventory and assets; the schedule information will be supplied by the Client and Supplier)

Technology - the current systems for tracking, handling, distributing, and managing the material (e.g., manual and automated systems such as the electronic Maintenance Activity and Reporting System(eMARS) and the Vehicle Maintenance Accounting System (VMAS)

Environmental/Hazardous Waste - all applicable regulations regarding safety, control, and disposal of hazardous materials (e.g., the storage/disposal of hazardous/regulated materials needs to be organized and controlled)

Security/Sensitivity Issues - will affect receipt, storage, and distribution of materials, if not resolved

Other material planning activities (e.g., forecasting demand to bring supply and demand into convergence, adjusting for peak demand periods, and continually examining usage and quality trends of materials)

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Material Logistics

Material Logistics are directly influenced by the characteristics of the material. Once these characteristics are identified, the logistics of the material can be planned. Relative characteristics include:

Receiving - incoming material packaging or transportation requirements can be defined (additional information can be found in the Receipt and Inspection topic of the Complete Delivery task of Process Step 4: Deliver and Receive Requirements)

Custody/safeguarding - custody is the immediate charge and control exercised by a person over Postal Service material; all Postal Service employees are responsible for safeguarding materials in their custody

Material storage - for example, stocking and replenishment decisions (Develop, Finalize, and Implement Inventory Control Plan topic of the Manage Demand task of Process Step 5: Measure and Manage Supply), positioning stock, or issuing stock

Administration - record keeping (e.g., Expendable Property Transaction files, Pending Verification files, and subcustody records) and reporting (e.g., reporting excess material that is identified as over and above the foreseeable needs of the Postal Service facility or organization accountable for them and is serviceable and readily available for redistribution)

Distribution - process by which material is processed, handled, and moved within the Supply Management Operations system to clients (e.g., the mode of transportation needed to ship material from a warehouse)

Investment recovery - the effective end-of-life decision is addressed by the following methods: recycle, reallocate, resell, remarket, return, remanufacture, and remove (Develop Preliminary Investment Recovery Plan topic of the Develop Sourcing Strategy task of Process Step 2: Evaluate Sources; Finalize Investment Recovery Plan topic of the Plan for Contract Management task of Process Step 3: Select Suppliers; Implement Investment Recovery Plan topic of the Manage Demand task of Process Step 5: Measure and Manage Supply)

Disposal - the final removal of the product and the finalizing action of end of life (Dispose topic of the Implement Investment Recovery Plan task of Process Step 6: End of Life)

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Quadrant Approach

A quadrant approach classifies Postal Service purchases into four categories, depending on their impact on the Postal Service core competencies (noncore versus core) and complexities (standard versus custom). Depending on the quadrant, material planning activities will focus on different areas of unique planning activities and material logistics, as illustrated in Figure 5.4.

Figure 5.4

Quadrant Approach

Figure 5.4 drawing showing four quadrants

Quadrant I: Custom/Noncore Purchase

There are few options, one or restricted supplier sources, and supply continuity is imperative for materials. Planning activities surrounding the materials schedule, such as key delivery dates and close contact with suppliers, will need to be conducted for materials in this quadrant.

Quadrant II: Custom/Core Purchase

Materials are vital to operations, are of high value, and there are few sources. The logistical areas of custody/safeguarding and material storage are of great importance and must be addressed by the material planning activities.

Quadrant III: Standard/Noncore Purchase

Many options and sources for materials, coupled with minimal brand preference, can lead to reduced purchase efforts and associated costs. Actions that can be taken are automation and reducing administrative costs (i.e., reporting and recording).

Quadrant IV: Standard/Core Purchase

Materials have many alternatives, many sources, and are readily available in the marketplace. Particular attention should be given to recovery because surplus in this quadrant is addressed as bringing in the highest dollar value, being greatest in inventory quantity, and offering easy logistics.

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Other Topics Considered

Develop Preliminary Investment Recovery Plan topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Finalize Investment Recovery Plan topic, Plan for Contract Management task, Process Step 3: Select Suppliers

Receipt and Inspection topic, Complete Delivery task, Process Step 4: Deliver and Receive Requirements

Develop, Finalize, and Implement Inventory Control Plan topic, Manage Demand task, Process Step 5: Measure and Manage Supply

Implement Investment Recovery Plan topic, Manage Demand task, Process Step 5: Measure and Manage Supply

Dispose topic, Investment Recovery task, Process Step 6: End of Life

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