Monday, March 1, 2010

Previewing the Postal Service's Proposal

The Washington Post has a preview of the Postal Service's proposal for changes in its business model that it is announcing tomorrow.   According to the Post, the Postal Service spent $4.8 million with three high end consulting firms, Accenture, Boston Consulting Group and McKinsey and Company.  These companies reviewed the Postal Service's finances and developed 50 ideas for cuts and new services. 

The article suggests that these consultants will confirm, the severity of the Postal Service's financial problems and detail how those financial challenges limit the Postal Service's options.  Basted on the Post's reporting we know that the consultants concluded:
  • The Postal Service's culture, business processes, finances and other characteristics of its business model are so dysfunctional that privatizing the business is untenable. 
  • The Postal Service does not have the financial wherewithal to handle the start up-costs and initial losses that would be incurred if it were to expand its retail offerings to include banking, insurance, cell phone services at its corporate owned retail centers.
The first conclusion argues that even if privatization is the preferred option for the postal business, it cannot be considered until the Postal Service's finances, business processes and corporate culture improve significantly.  The second conclusion suggests that most ideas that postal commentators, stakeholders, and policymakers have had for expanding retail services to save corporate post offices are not financially viable. 

Armed with these reports, the the Post reports that the Postal Service will propose:

  • Eliminating Saturday delivery;
  • Introducing hybrid-mail products that include e-mail delivery;
  • Modifying union agreements for greater work-rule flexibility and reduced levels of USPS contributions for health insurance;
  • Requesting Congress to reverse the requirement that it prepay retiree health care liability; and
  • Replacing corporate retail outlets with franchises and contract stations in office supply stores, supermarkets, and retail outlets.
If these five points are the highlights of the changes that the Postal Service wants to implement, then it is clear that there are few viable options to turn the enterprise around other than changes that modify the nature of postal services as they now exist.  

10 comments:

Anonymous said...

Banking and insurance? How about tobacco and liquor? High demand. Limited start-up cost. Immediate profit.

And a "postal lotto" isn't a bad idea, either. If people are going to blow their money anyway, why not have them give it to you rather than someone else?

Anonymous said...

NO ONE KNOWS BETTER HOW TO RUN THE POST OFFICE THAN THE HARDWORKING EMPLOYEES, CLERKS, MAIL HANDLERS, CARRIERS AND ALL OTHER CRAFTS. IF THE POSTAL SERVICE DOWNSIZE THEIR MANAGEMENT SUCH AS SUPERVISORS AND MANAGERS, THEY WILL FIND A WEALTH OF IDLE MONEY. THESE MANAGERS MICRO MANAGE US TO THE EXTREME. ALSO, THE WAY THEY TREAT EMPLOYEE'S IS DISGRACEFUL, CAUSING A LOT OF GRIEVANCES AND EEO COMPLAINTS. IN THE EARLY OUT THAT WAS JUST OFFERED TO THE CLERKS, OVER 18000 CLERKS WENT INTO RETIREMENT, HOWEVER THE USPS DID NOT DOWNSIZE THEIR SUPERVISORS. SO WHERE IS THE MONEY GOING TO? DONT CHANGE THE POSTAGE RATES...DOWNSIZE AND ELIMINATE SUPERVISORS AND IDLE MANAGERS WHO SIT ON THEIR ??? AND GET PAID FOR DOING NOTHING !!!!!!

Oldmailman said...

Amen to reducing management. The Postal Service is too top heavy, way too many managers producing bullshit policies to justify their jobs. They ignore the labor contract and spend millions of dollars because of stupid contract violations.

Anonymous said...

Top-heavy says it all. Trying to run a service as a corporation has resulted in alot of wasted money on "experts" that use a business model as a base. The postal SERVICE was and is meant to provide a safe,secure, Service to the American people. We got away from that when we started removeing drop boxes, shortening hours of operation of our offices,etc. Also, I remember a time when Group Leaders were used instead of FSLA-exempt supervisors, which saved money, and provided the much needed knowledge of postal operations without the training required for new Supervisors. I'm retired now, but I'm sure that the people that do the actual work know thier jobs better than their Supervisors, and still do a better job when left to there own devices.

Anonymous said...

You all are right!It's public knowledge these managers are making big bucks & yet are not delivering the first piece of mail! They are making as much & mostly more than the people who are out there in the rain, sleet, snow & more!There's no incentive for us to sale products .Yet, managers get incentives & bonuses!We get employees cut but not them! Why?

Anonymous said...

The Postal service is bloated with managers and middle management. They've let go thousands of workers, but no managers. And have they ever asked their workers how they can save money? NO.
PM Potter should be fired and someone with the best interests of the USPS should be appointed. The current top management has shown NO creativity in solving problems, and now they've hired high priced consultants to do what they should have done.

Anonymous said...

Our facility had the pleasure of being reviewed by the McKinsey consulting group as part of the USPS's "Breakthrough Productivity Initiatiave" (BPI) in early 2000.

The USPS paid the Group over $1 million and the only suggestions they gave were changing idea submissions to a "story" and placing tape outlines on the workfloor showing where the garbage cans should be.

Anonymous said...

Break the unions and create a flexible workplace. The rigidly military environment of the USPS has been created because of having to comply with byzantine work rules. Get rid of the root cause, and cultural reform is possible. No other way to drive out costs.

Danny said...

I have a few suggestions.....

1. Force retire all the lazy clerks/carriers! Im a PTR clerk restricted to working 6 days a week for no more/no less than 30 hours a week and i work circles around "regulars" The difference... Im glad I have a job, and they seem entitled to a position.

2. Raise rates. Get rid of media mail and parcel post, Offset it by including delivery confirmation on all packages that would be priority mail. Stop Pimping express....customers know if they want this service coming in the door, they dont want me begging them to pay 18 dollars to send the .44 cent letter. If raising rates send them to ups... be my guest, we beat their prices easily by far.

3. Cut janitor services. We pay our guy 45,000 a year to sweep and take the trash out. seriously contract this stuff out!

4. Stop signing 100 yr leases! My office is across from a Hardees... Hardly worth 17,000 a month for a hundred yr lease. YES i have seen the paperwork... and that's just that one location. There are thousands of post offices.


Just my two cents...

Anonymous said...

The USPS is the only place where the response to losing customers is to CUT services.