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Chapter 4 Annual Performance Report and 2007 Annual Performance Plan
Introduction
This chapter describes the Postal Service’s goals, objectives, and performance targets, along with relevant indicators, measurement systems, and recent performance trends. Performance targets for 2007 and preliminary targets for 2008 are provided. Strategies to achieve these targets are described in detail in The Strategic Transformation Plan 2006–2010, which outlined the 5-year strategic plan, and The Strategic Transformation Plan 2006–2010 Annual Progress Report.
The Government Performance and Results Act of 1993 requires that all federal agencies:
• Establish strategic goals and objectives.
• Describe strategies to achieve targets.
• Set performance targets.
• Develop reliable, verifiable performance indicators and measurement systems.
• Provide performance results.
A. Strategic Goals and Objectives
The process by which the Postal Service accomplishes this is based on Malcolm Baldrige National Quality Award principles. Postal management establishes strategic goals and objectives after assessing stakeholder requirements. Specific objectives are adjusted based on organizational resources. Performance is tracked using reliable, verifiable measurement systems, which are themselves subject to ongoing review and refinement.
During the last 5 years, the Postal Service made significant progress against its strategic goals. It achieved record service performance and customer satisfaction, reduced costs by more than $5 billion, and made great strides in safety and employee attitudes while meeting the financial requirements to support growth of the universal service network.
B. Strategies to Achieve Targets
The Strategic Transformation Plan 2006–2010 published in September 2005 describes the Postal Service’s strategic objectives and goals in detail. A summary of the strategic objectives and goals is outlined below.
1. Generate Revenue
The Postal Service is a self-sufficient agency deriving its revenues almost entirely from postage and fees paid by mailers. Prices are set to provide enough revenue to cover costs. Postal operations are not supported by tax dollars. Revenue must cover the costs of operations, including the growth of the universal delivery network, investments in future improvements, and other public service requirements. Postal products and services are
provided in competitive environments, and face different market and customer demands.
A. MAIN REVENUE GENERATION STRATEGIES
• Create customer value with products and services.
• Customize and simplify pricing.
• Enhance access and ease of use.
• Aggressive sales, promotion, and outreach.
2. Reduce Costs
Along with providing reliable service, maintaining affordability is the most important measure of success for postal customers. Postal prices are driven by operating costs and reasonable postage rates are the ultimate result of sound fiscal management. The Postal Service’s cost savings achievements and the past legislated changes in the Postal Service’s contribution to the Civil Service Retirement System have helped hold postage rates at or near the rate of inflation.
A. MAIN COST REDUCTION STRATEGIES
• Use automation to remove processing costs.
• Expand standardization to capture savings.
• Rationalize facility networks and create flexibility in transportation.
• Partner with commercial mailers to reduce the total cost of mail.
• Streamline internal business processes.
3. Improve Service
The Postal Service has improved service even as it has reduced operational costs. Compared with 2002 when the strategic transformation process began, customers now have more consistent and reliable mail service, easier access to products and information, and many more options for using the mail to maintain business and personal relationships.
A. MAIN SERVICE IMPROVEMENT STRATEGIES
• Provide timely, reliable end-to-end service.
• Improve customer service across all contact points.
• Continue to implement corporate responsibility initiatives.
• Maintain security and trust.