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Postal Service Annual Performance Plan Goal:
Generate financial performance that ensures commercial viability of the Postal Service as a service provider in a changing, competitive market place; and generate cash flow to finance high-yield investments for the future while providing competitively-priced products and services.
Performance Subgoal 1
- Improve overall business performance.
As stated in the plan, 2001 indicators and target for this subgoal were:
- Improve Area Productivity over a “hurdle” rate.
- Improve Performance Cluster Productivity above the Threshold.
- Achieve a capital commitment budget of $2.6 billion.
In 2001, the Postal Service:
- Achieved Productivity at the Areas over the hurdle.
- Achieved Productivity at the Performance Cluster (PC) level in 68 of 85 PCs.
- Did not achieve the amended goal of $2.6 billion in Capital Commitments. To control costs, we instituted a capital commitments freeze, resulting in a $1.2 billion commitment for the year.
Performance Subgoal 2
- Control costs by achieving productivity gains.
As stated in the plan, the 2001 indicator and target for this subgoal was:
- Achieve a Total Factor Productivity (a measure of total resource usage efficiency, including capital) gain of 0.7 percent.
In 2001, the Postal Service:
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Exceeded the target for Total Factor Productivity (TFP) Growth, achieving TFP growth of 1.3 percent, nearly double the target of 0.7 percent. This achievement is equivalent to almost $900 million in expense reductions and is the second highest TFP growth achieved by the Postal Service since 1993. The growth of TFP in 2001 was brought about by managed restraint on resource usage. Work hours declined by 2.3%, materials use was reduced by 3.6 percent, and total resources use was reduced by 1.9 percent. The TFP target is an outgrowth of the productivity gain implicit in our budget and must be determined through calculations based on actual figures.
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Did not achieve the USPS Output per Workhour goal of 2.7 percent. Actual Output per Workhour was 1.7 percent. When mail volumes were lower than anticipated in 2001, management reduced all resource usage, including the labor use component of TFP, as indicated above. This ameliorated the impact of lower volume growth rates on the Output per Workhour factor.
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