1. Introduce Cost Management by Class

To separate financial tracking for mailing and shipping services, the Postal Service will transition to reporting and managing cost on a more real-time basis at the class level. This class-specific approach will be established across the organization from an operational, financial, and marketing perspective. Existing postal systems provide some of the necessary data on an annual basis. The Postal Service is now identifying the best way to manage costs by class at the operational level along with optimizing cost in the entire system. Expanding use of the IM barcode promises to increase the visibility of costs at ever finer levels.

In the longer term more detailed and timely cost information will uncover new opportunities to increase efficiency and margins. The level of capital investment in new equipment and systems will be driven by expected impact on product profitability as well as return on investment. Richer data flows, especially from expanded use of Intelligent Mail, will help drive improvements in process, network design, and customer mail preparation requirements.

2. Expand Standardization

Reduce Manual Handling

Great strides have been made to replace less efficient manual operations by expanding automation and standardization. However, opportunities remain to further reduce manual processes. Previous transformation targets for reducing manual handling — 10 percent of letters and 45 percent of flats — have already been achieved. New targets have been set to build on this success.

Optimizing delivery point sequencing (DPS) for letters remains a top priority. Currently, 86 percent of letters are in DPS. The Postal Service‘s target is to be at 95 percent by 2010. A number of tools are in use to expand standardization. They include value stream mapping to maximize the amount of mail processed by automation, and integrated operating plans to reduce variability between tours and among plants. Data available from the mail history tracking system and IM barcode help target problems in areas such as mailing address, mail preparation, and equipment performance.

Increase Deliveries per Route

As automation has reduced manual work, delivery managers have reduced costs by matching workload to workhours, adjusting routes accordingly, and following a rigorous standardization of best practices. Delivery routes are established to provide optimal customer service based on average mail volumes. A new delivery staffing model is helping managers adjust resources to match workload to ensure efficient and consistent service. Future efforts will center on further integrating workload data to increase the model‘s effectiveness in projecting resource needs.

The use of two additional management tools will also be expanded. Carrier Optimal Routing configures delivery routes in efficient and contiguous patterns, eliminating unnecessary drive-time and cost. The Growth Management Tool helps managers design more efficient and appropriate delivery solutions when planning for the addition of new homes or other developments.

Optimize Retail Resources

Standards are established for retail operations to provide a consistent level of quality and customer service at all Post Offices. The Postal Service uses a variety of tools to accomplish this. Retail service plans are developed for each postal district, using the Automated Workload Planning System to identify workload and the resources necessary. Increasingly, to optimize resources, managers are aided by robust new scheduling tools, including the Customer Service Variance report and Customer Service Staffing Opportunity model. Both were deployed in 2007 to help managers align staffing to changes in customer demand.