The Postal Service achieved over $877 million in cost benefits through supply chain management initiatives to improve contracting processes, integrate asset management, leverage supplier relationships, and expand supplier outreach and diversity.
The asset management function was restructured to improve integration of logistics policies, metrics, and asset management technology across the enterprise. Asset management is now organized in four functions: planning, retail fulfillment and logistics, operating asset management fulfillment, and performance and accountability.
By June, realignment of stamp distribution operations was finalized, consolidating two stamp service centers, 72 field stamp distribution offices, and accountable paper depositories into six stamp distribution centers. These consolidations will save $12.6 million annually. Postal Money Order fulfillment was also consolidated from 72 distribution points into one distribution center.
Two significant organizational changes were completed in support of ongoing efforts to fully integrate supply chain management. Consolidation of 11 field transportation contracting offices into five Transportation Category Management Teams with one satellite branch was completed. This effort resulted in a 20 percent authorized staffing reduction, with estimated cost savings exceeding $12 million by 2013.
The consolidation of field purchasing specialists into two Purchasing Shared Services Centers (PSSCs) was also accomplished, with a 25 percent reduction in authorized staffing. The estimated cost savings will reach $12.8 million by 2013. The PSSCs offer sourcing guidance through phone, e-mail, tips of the week, and hosted online training sessions.
The Postal Service continues to strengthen the oversight and management approvals of noncompetitive purchases through new requirements for contracting officer evaluation and ethics-related certifications.
Online purchasing was improved with the deployment of eBuy2 to over 55,000 users. The system and process changes improve financial controls, reduce costs through side-by-side comparisons, provide better search and reporting capabilities, and expand use of Energy Star and other green indicators. eBuy2 processed over 800,000 requisitions between March to September.
New eSourcing technology provides both optimization and reverse auction sourcing capabilities, and a portal for centralized supplier registration. More than 3,200 suppliers were registered, 255 users trained, and 603 sourcing events were executed.
Sourcing efforts continue to keep sustainability at the forefront, from commodity strategy planning to contract management. Collaborating with suppliers and other business partners is helping to reduce costs and identify opportunities to create new business, and promote sustainability.
One example is the enhanced recycling program, which has been expanded to 5,000 sites. With back-haul programs that leverage recycling tonnage from small pick-up sites, this program has grown to an estimated 15,000 pick-ups per month with more than 150,000 tons of material sent for recycling. This resulted in supply chain savings, cost reductions, and revenue generation in excess of $20 million.
To increase the number of eBuy2 environmentally preferred products (currently over 11,000 products), efforts were launched with the Postal Supplier Council (PSC) to address EPP improvement opportunities, and to implement standard supplier contract sustainability clauses and reporting.
Continuing to act on a strong commitment to supplier diversity, annualized contract values with small businesses were nearly $3 billion; contracts with minority-owned businesses exceeded $358 million; and, contracts with women-owned businesses surpassed $561 million.
The Postal Service actively participates in supplier outreach events for small, minority and woman-owned businesses. These events draw thousands of participants, and typically include one-on-one discussions with high-potential customers.
This year the Postal Service was recognized by the U.S. Hispanic Chamber of Commerce as a business leader that actively promotes the economic growth and development of Hispanic entrepreneurs and Hispanic business enterprises in the United States. An additional award, from the U.S. Pan Asian American Chamber of Commerce, was received for being a “stalwart supporter and partner.”
Once again, the Postal Service was selected as one of “America’s Top Organizations for Multicultural Business Opportunities for 2010” by DiversityBusiness.com, the nation’s leading multicultural B2B Web site. This recognition marks the 10th consecutive year the organization was named to this “top 10 list,” which honors American enterprises that provide exceptional multicultural business opportunities. Over 600,000 women and minority owned businesses had the opportunity to vote in the online election. Fortune 500 companies and government agencies were selected for the awards based on business opportunities they provide to diversity owned businesses.
