Hiccups in Consolidation

Recently, the USPS-OIG issued a report on the consolidation of Lima Ohio processing into the Dayton Ohio plant.  The USPS-OIG conducted the investigation at the request of Congressman Jim Jordan (R-OH).   The audit showed that the transition did no go smoothly

The result of the audit resulted in critical comments from Congressman Jordan but he did not call for processing to return to Lima Ohio.   In fact, his comments, and a careful reading of the USPS-OIG report clearly indicates that the problems in delayed mail that has occurred between December 2010 and March 20111 are solvable through better management of labor and capital assets and hiring additional staff in Toledo, Ohio.  

The problems that occurred in Toledo reminded me of a similar USPS-OIG report in 2009 reporting on delayed mail in the Philadelphia Customer Service District following the movement of the main processing facility in the district to a new facility.   Philadelphia then was on the top of mailers complaints about service as time sensitive periodicals, advertising and transaction mail was facing delays that did not exist when the old facility was working.    However,  March 2011 audit of the the Philadelphia plant conducted by the USPS-OIG between November 2010 and February 2010, showed that most of the problems that existed shortly after the new plant opened have been resolved and productivity at the new plant was significantly higher than what existed previously.   Management felt that the problems that remained with color coding of mail and delayed small parcels could be resolved within two months of the report's publication.

Both Philadelphia and Toledo provide illustrations that moving operations involves good planning, strong communications with employees, and flexibility during the first few months of transition to ensure that service problems are solved quickly.  The Postal Service reviews of consolidations in Manasota, Lakeland, and South Florida, and Daytona Beach FL, and Watertown, and Binghamton, NY show that consolidations can produce EXFC scores equal to or above that what existed when two facilities operated within a quarter or two of consolidation.    Once the initial problems identified in Toledo are solved, Congressman Jordan and his constituants can expect results similar to what has happened in Florida and New York.   When that occurs,  Lima Ohio will have the mail serivce that the residents and businesses they expect.

One of the problems in Northwestern Ohio requires an additional comment.  This consolidation illustrates the challenge of staffing the receiving facility when consolidations involve facilities that are more than 40 miles apart.   Toledo and Lima Ohio are 78.8 miles apart according to Google Maps.   So it is not surprising that only 31 of the 41 craft employees made the transfer.   The others retired, were on leave that the Toledo facility did not know about or found jobs elsewhere in the Postal Service.   To solve the problem, the Postal Service and the local union signed an agreement that allowed for an increase in the number of casual employees and 8 employees were brought in who formerly worked in Detroit. (60.5 miles away) 

The new contract with the APWU gives Postal Service management significantly more flexibility to dealing with short term staffing problems like what occured in Toledo.   The new Postal Support Employees classification provide the Postal Service with an ability to hire staff quickly when forecasting errors that underestimate expected volumes or changes in the number of expected transfers of existing employees reduces the numnber of existing Postal Service employees that the facility now handling mail processing has available to work.

The addition of individuals from Detroit in Toledo, also suggests that plants going through consolidations that are more than 50 miles from the originating plant need to have access to a broader list of potential employees than just those from the facility losing mail processing to ensure full staffing.   If the Postal Service does not have a system in place already one needs to be developed as plants going through consolidation could be helped by having information on employees that are available.   In addition, the Postal Service might want to follow a practice used in other industries going through major operational changes and create a list of experienced postal clerks and mailhandlers who would be willing to accept a one or two month assignment in a new facility during a transition period in order to ensure that sufficient fully-trained staff is available.   This may require some additional travel expenses but creates opportunities for senior clerks and mailhandlers to gain experience in the transition process that could prove valuable to local managers needed extra hands to fill in where needed.

Why Capital and Flexibility Matters

http://www.gwinnettdailypost.com/localnews/headlines/Post_office_gets_80K__in_penalties_112641144.htmlNews stories about service or safety failures seem to pop up nearly weekly.   Two stories today illustrate the need why the financial problem may be even greater than the Postal Service's inability to pay its bills at the end of the year.

• The Lima News reports of the problem the Postal Service is having in getting mail delivered on time in west central Ohio.  The story describes  mail arriving for delivery late from the processing plant in Toledo which caused carriers to be paid waiting for its its arrival and then forcing delivery well into the evening.   The story also describes a number of instances in which advertising mail is delivered well after the in-home date.   Most telling is this quote from a retired Lima letter carrier Michael Wright, “In Toledo, they don’t have room. It’s chaotic.”
  
  How could this be fixed?   One option would be to expand the plant in Toledo and its automation capabilities to handle the increased volume.   This would require capital expense that the Psotal Service does not have.  A second option would be a better early warning system that allows senior management at the Chief Operating Officer level to know when a plant is receiving more volume than it can handle so that appropriate changes in sort plans and distribution schemes are made so that mail is delivered on time.    A third option would be flexibility that would allow shifting mail from a plant that has back-ups to one that has more capacity on an ad-hoc basis or permanent basis.  There are three plants near Lima that could take some or all of the mail that Toledo (i.e. Columbus, Cincinnati or Fort Wayne) appears to have difficulty handling.  Finally, management needs greater flexibility for part-time and temporary employees to allow local managers to bring in extra staff on short notice during peak months, or days of the month.
  
  As the proportion of mail that is advertising increases, the importance of timely delivery increases.   Mail demand shifts from an "as soon as promised" delivery standard of First Class mail to a "specific in-home date" requirement of advertising, periodical, and parcel mail.  Having sufficient operating capacity for peak periods and flexibility to handle variable levels of volume requires both increased capital and flexibility in labor agreements and management thinking.
  
• Occupational Health and Safety News reported that the Postal Service faces $238,000 in fines for safety violations in Central Massachusetts Processing and Distribution Center in Shrewsbury, Mass.  Just five days earlier, The Gwinnett Daily Post reported that the Postal Service recieved $80,000 in fines for similar safety violations in the Dultuth Georgia facility.
  
  These are just the latest of a set of fines the Postal Service has received for electrical safety and training issues in facilities across the country.   Fixing the problems required requires cash to make necessary repairs, provide proper safety equipment, and provide proper training to ensure that all safety procedures are followed and safety equipment is used.   Again, the shortage of cash most likely causes the Postal Service from spending the funds that would be necessary to prevent these fines. 
  
  The OSHA safety fines raise another question, that is particularly important given how much of the mail is sorted on automated equipment all of which requires electrical power.   Could the problems that cause safety violations be the canary in the coal mine in regards to equipment downtime that could affect service quality and the competitiveness of the Postal Service as a means to handle financial transactions and deliver advertising?