Chapter 2: Postal Operations
P. Financial Management
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The Postal Service has undertaken financial management initiatives that enhance our ability to control expenses, reduce administrative and program costs, and create greater transparency in our reporting to our stakeholders and the public. Most of these initiatives are long-term efforts and require restructuring and re-engineering of long-established practices to enable the transition to more efficient and informative financial management systems. The key initiatives now underway are reported here.


Activity-based costing (ABC) is a methodology designed to assist managers in reducing expenses by assigning both direct and overhead costs to an organizational unitís activities and the outputs it produces. The Postal Service currently is piloting an ABC model that contains activity and product costs for 311 processing facilities and uses information from existing Postal Service financial and operational systems. We anticipate adding the approximately 90 customer service processing facilities to the existing model by the end of 2003. During this period, we will also be preparing for a new bulk mail center model. Metrics are generated each accounting period using commercial off-the-shelf software.

In 2002, the team built the ABC model, procured the software reporting tool, and developed a training package.

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Chapter 2 Table of Contents

A.  Public Perceptions, Customer
     Outreach and Mailer Liaison

B.  Product Development

C.  International Mail

D.  Mail Volume and Service

E.  Mail Distribution

F.  Delivery Unit Operations

G.  Stamp Services

H.  Licensing Program

I.  Commercial Sales

J.  Retail Programs:
     Building the Core

K.  Pricing and Classification

L.  Marketing Technology and
     Channel Management

M. The Internet:
     Transforming the Way We Connect
      with Our Customers

N.  Technology

O.  Operations Planning

P.  Financial Management