Service investigations resulted in $152 million in long-term cost avoidance and $10.3 million in front-end cost savings.

     During 2003, the Postal Service continued to focus on its core business. As part of this process, it began to reshape and reposition its field organization and workforce to help meet its future staffing requirements. Some of the major initiatives undertaken during 2003 were:

     A redesign of the Distribution Networks Operations (DNO) network staff was implemented to update the function and prepare for the future. The business expectations for meeting higher-level competencies in logistics theory, data and statistical analysis, and network optimization are more important today for employees within the DNO offices. Employee Resource Management (ERM), in partnership with operations developed the implementation plan and provided essential assistance in establishing core competencies for the function. The implementation was completed in early fall 2003.

     With the decrease in the career-on-rolls complement, from 787,000 to 729,000 over the past three years, it became necessary to reassess the resources needed for administrative staffing. On July 26, 2003, five district offices were closed. Their territories and workloads were absorbed by 11 continuing districts. ERM was instrumental in providing a smooth transition with the development of placement guidelines, early retirement options, and the overall implementation plan. By the closing date of November 14, 2003, 94.6 percent of the affected employees found an appropriate voluntary resolution.

     The plan to merge these two mission critical field functions is well on its way. The plan calls for a rolling implementation. Facility Services has piloted and deployed reshaping strategies in one area and plans to continue these efforts nationally in 2004. ERM will provide the necessary tools to get employees in the right job at the right time.

     The Postal Service's future success as an organization will be influenced significantly by its ability to use workhours efficiently and to maintain stability in staffing relative to workload. To support this goal, the Integrated Resource Management (IRM) program has been successfully deployed to 95 sites, covering more than 621,000 employees in August 2003. This success was built on the 19 pilot sites implemented in 2000 and expanded to 102 sites in 2002. IRM entails a comprehensive process that combines two major components: leadership and technology.

     Under the leadership component, a prerequisite to deployment of the technology, is the Coaching for Performance and Accountability (CFPA) training. Through this training, supervisors learn to meet with each of their employees and explain what is expected of them, not only in terms of attendance, but everyday work performance as well. As part of this process, recognition for both good and poor performance is addressed. So far, at the sites that have implemented the CFPA training, productivity is higher than at non-IRM sites, and processing costs are lower.

     Under the technology component of the IRM initiative is the enterprise Resource Management System (eRMS), an automated system used to assist supervisors and managers in plants and Post Offices to record, track, and manage the leave administration process. During 2003, sites implementing eRMS have reduced sick leave