Transformation Plan

 
             

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Executive Order: President's Commission on USPS- The mission of the Commission shall be to examine the state of the United States Postal Service, and to prepare and submit to the President a report articulating a proposed vision for the future of the United States Postal Service and recommending the legislative and administrative reforms needed to ensure the viability of postal services. --whitehouse.gov



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United States Postal Service Transformation Plan

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"The plan lays a foundation for changes in the Postal Service that may adversely affect APWU represented employees, but no specific initiatives have been proposed for immediate implementation. In fact, PMG Potter wrote to the union, “there are no national plans for implementing/consolidations of processing centers in the near future.” The USPS areas and districts are expected to continue efforts to reduce costs and streamline operations. The union at the national and regional level will monitor the implementation any changes and require the strict enforcement of our collective bargaining agreement".--Excerpt APWU News Bulletin 4/8/02
"The Postal Service has informed us that the plant consolidation plan has not been finalized and is not available for distribution, as required by the Excessing Memorandum. Management acknowledges that the December 2002 notification date has been violated, and we are discussing an appropriate remedy. Specific terms of the remedy will be announced in my next update. I have been informed that management intends to first close all postal annexes throughout the country. This will be followed by the consolidation of facilities which have not yet been identified."    APWU National President William Burrus Update: 1/13/03

 

Quick Jump: Substrategy 1: Area mail processing consolidation
                     Transformation Plan Outline
 

REMARKS (excerpts)
USPS POSTMASTER GENERAL JOHN E. POTTER
NATIONAL PRESS CLUB
WASHINGTON, D.C.
April 5, 2002


First, I am announcing today that we are lifting the moratorium that management put in place four years ago on closing small post offices.

Does that mean there will be wholesale closings? No. It does mean we will restart the process to close those offices that have been “suspended” or effectively closed, in some cases for ten years or more. In most of those places we have provided alternative services that have actually improved customer access to postal products.
 

I told our postmaster association leaders about lifting the moratorium. I also told them that I am committed to increasing customer access in cities and towns that for years have been underserved.


Second, we will evaluate our existing processing network.

With our automated environment and changes in our mail mix, we no longer need some of the 400 processing centers we have nationwide.
 

There are opportunities for consolidations, for cost savings. These consolidations will be made to strengthen the network – and strengthen service performance.

Third, we are going to get even more aggressive in purchasing.
We have already leveraged our buying ability to lower our costs for office supplies, equipment, and fuel.There are other huge opportunities which we intend to pursue.


Fourth, we will improve our dispute resolution processes.
We will find a way to reduce the $300 million a year we spend on labor management disagreements. By reducing workplace disputes, we can focus better on serving our customers more efficiently.


Fifth, we will move to modernize the rate process under the existing
regulatory framework.
Can it be done? Just ask George Omas, the chairman of the Postal Rate Commission. He not only said yes, but he showed us that change can occur. Under George’s leadership, all the parties in the recent rate case came together to reach a settlement and avoid protracted, costly litigation. That was a significant breakthrough and one I believe signals a new era of cooperation for all parties.
Industry leaders have committed to us that they recognize we need transformation and they pledged this week to continue to work with us. I want to build on what has occurred.


In recent days, Chairman Omas and I agreed to conduct a joint summit of all the stakeholders – from large direct marketers, to publishers of small magazines, to individual consumers – to share with us what they believe our industry needs to advance and modernize ratemaking. Our staffs will start working on that immediately, and we will keep industry leaders informed.

 
USPS Transformation Plan excerpts

The national trends in Function 4 workhours show a downward trend in response to migration of manually distributed mail into the automated mailstream. This includes a reduction of mail distribution workhours in the back room of post offices.

Current reviews show there are opportunities for additional savings in locations that have not yet reevaluated the full impacts of deploying delivery barcode sorters (DBCS) and Carrier Sequence Barcode Sorter (CSBCS) machines as well as the NATIONAL LDC 17 SALARY AND BENEFITS

Benefits
Improvements in the efficiency of LDC 17 operations and work centers are expected. Standardized processes will reduce the variability in current operations and provide plants with stable operations that are based on best practices.
Low cost, high return material handling projects identified by LDC 17 review teams along with recommended improvements in management processes will provide the foundation for LDC 17 workhour reductions.

Review teams will provide local plant management with an LDC 17 review report that highlights expected savings and full-time equivalent employees so that savings can be captured.

Milestones
* Identify requirements and develop plans for LDC 17 standardization (Quarter III 2002).
* Complete LDC 17 reviews in seven Processing and Distribution Centers with the greatest opportunities for LDC 17 workhour reductions. Begin field testing of standardization approach towards selected LDC 17 work centers (Quarter IV
2002).
* National roll out of standardization and certification of selected LDC 17 work centers (Quarter I 2003).
Metrics
* Reductions in LDC 17 workhours nationally
* Reductions in LDC 17 costs nationally

 
Substrategy 4: Implement complement planning, tracking and management (CPTM)
Description

To help achieve operational objectives, national standard procedures and work instructions have been developed for complement planning, tracking, and management. By using these processes, field management will determine appropriate complement plans by installation and function. Once these plans have been converted to authorized staffing levels by unit, the local CPTM process will monitor and adjust the complement to meet these plans. Enhanced planning and tracking tools are included in this standardization effort to aid in the management decision making process of the local complement committees.
Tools used in the Process
Business Management Guide (BMG) determines complement or workhours based on planned budget. It has the capability of using the improvement opportunities identified by the Plant Performance Achievement System (F1 PAS) to plan complement in a facility impacted by changes in volume, product mix, and automation or productivity improvements. BMG is the complement tool used to manage costs by planning complement based on budget requirements, the first step in the complement process. However, BMG is also used throughout the process to monitor and adjust complement plans.

Job Information Monitoring System (JIMS) is used to monitor and to determine adjustments to work assignments in plants, post offices, and larger associate offices. Initially, JIMS is used to identify vacant job positions and to verify current jobs with employees. In later phases of the process, JIMS is used as an ongoing monitoring tool.
Complement Information System (COINS) is designed to provide local management with timely and accurate complement information to support the management of this critical resource. COINS tracks on-rolls complement against authorized complement levels or targets. At start up, COINS helps to identify the gap between on-rolls and authorized complement, thus giving management a starting point in managing the complement. As the process advances, COINS continues to help managers identify areas requiring greater attention.
Complement Accounting System (CAS) is the Human Resources system that will provide current information on the status of all hiring and losses in process. This application is still under development at this time.

Machine Scheduler is a simple-to-use spreadsheet model: the daily scheduler can be used for any operation that has an expected throughput rate or work rate, end time, and quantifiable resources (number of machines, cases, etc.). Limitations are that the scheduler only does one operation for one day at a time. Multiple equipment types or operations cannot be scheduled using a single model.

Employee Scheduler 2.8 takes a similar approach to that of the machine scheduler. It too is a relatively simple spreadsheet model that uses volume data, productivity rates and clearance times to plan weekly employee schedules. Differentiating this model from the machine scheduler is the ability to schedule up to six complementary operations. The Employee Scheduler can be used in the plant (F1) and post office
Automated Flat Sorting Machine (AFSM) 100.
Benefits
The combination of these activities to improve productivity will result in the savings of approximately 19,000 full time equivalent employees.
Milestones
* Continued automation of back office
* Implementation of Automation for the forwarding of mail beginning in 2004
* Ongoing Operational reviews and implementation of standard operating procedures
Metrics
Change in full-time equivalent employees and operating budgets
Substrategy 2: Facility design changes
Description
Design new facilities and retrofit current facilities with twenty-four hours a day, seven days a week access to critical products and service, where feasable.
Benefits
* Increased customer convenience
* Reduce construction costs
Metrics
CSM scores
Strategy 8: Improving performance management
In addition to capital investment to drive down operating costs and network modeling to ensure an optimal distribution and transportation structure, the Postal Service will continue its focus on improving productivity by standardizing and monitoring performance.
Best practices have been identified and operations are being standardized around these best practices. Numerous tools have been developed to assist the field operations managers in monitoring their performance, planning their complement, and properly scheduling their people.

Substrategy 1: Area mail processing consolidation
Description
Headquarters is conducting extensive reviews and will be implementing Area Mail Processing (AMP) consolidations. The Postal Service is currently undertaking an effort to consolidate Mail Processing activities and centralize or relocate these
activities within and among clusters.
Trends / Supporting Data
This effort was initiated based on an expectation of complement reductions.
Benefits
The projected savings from AMP consolidations (23 in phase one) are projected to average slightly less than $1 million each.
Milestones
Overall program in review at this time.
Metrics
* Projected first year savings of each proposal
* Service performance of First-Class Mail and Priority Mail remains at same level or better

Substrategy 2: Other direct labor reviews and standardization
Description

Other direct processing operations—Labor Distribution Code 17—is currently one of the segments with the highest cost. Standardizing processes will ensure the consistent workhour recording of all LDC 17 activities at mail processing facilities.
Standardized processes will enable the organization to more precisely stratify and develop specific measures of performance and national targets for each activity with LDC 17. It is the objective of this project to:
* Identify and realign operations within LDC 17 and establish standardized work centers;
* Develop workload measures for each operation; and
* Establish performance targets and indicators for work centers.

Trends / Supporting Data
In 2001, the cost of LDC 17 workhours reached $3.6 billion. LDC 17 workhours increased approximately $113 million over 2001. In fact, LDC 17 is the largest and fastest growing mail processing work center.
 

 

 

Postal Service Needs Radical Changes To Survive-David Rupert is the vice president of the Wyoming League of Postmasters

 

 

 

 

 

 

US Postal Service Delivers Transformation Plan (video archive-Real Player req'd)



( source for links below: USPS website)

Executive Summary - in PDF

 

Transformation Plan: Outline for Discussion - in PDF

 

Transformation Plan: Outline for Discussion - in text

 

Download Adobe Acrobat PDF Reader

Table of Contents (all pdf files )

Transmittal Letter and United States Postal Service Leadership Teams
Executive Summary
Section 1 - The Need for Transformation
Section 2 - Meeting the Challenge
Section 3 - Preparing for the Future
Section 4 - Conclusion

Appendices

A. Charts, Graphs, and Tables
B. Executive Summary of Outline for Discussion
C. Overview of the Mailing Industry
D. Escalating Retirement Costs
E. Electronic Diversion of Mail Volumes
F. Fixed Versus Variable Costs
G. Global Postal Competitors in the United States
H. Postal Transformation - The International Experience
I. Overview of the Universal Postal Union
J. Stakeholder Outreach - Process and Results
K. Growth- and Value-Based Strategies
L. Transforming Pricing in the U.S. Postal Service
M. Efficiency-Based Strategies
N. Procedures for Closing Postal Facilities
O. Performance-Based Strategies
P. Federal Employees' Compensation Act Overview (recommendation for changing portions of compensation for injured employees)
Q. Enabling Strategies

R. Postal Regulation
S. Privatization - Process and Financing Issues
T. Overview of Selected Government Entities
U. Universal Service Obligation and the Postal Monopoly
V. Alternative Collective Bargaining Models (recommendation of using Railway Labor Act model)
W. Glossary
( acronyms for postal terms-a must read)


April 5, 2002 - 2:00pm

PMG unveils USPS Transformation Plan
at the National Press Club

 

 

Postmaster General Jack Potter today unveiled the long-awaited USPS Transformation Plan at the National Press Club in Washington, DC.

The plan provides a blueprint for the future. It outlines strategies USPS can follow under current law, examines moderate legislative reform in key areas such as pricing flexibility and presents long-term options to maintain universal service.

"We are proud of the Postal Service's 225-year tradition of serving America," Potter told the National Press Club. "We have been a valuable asset to this great nation. And, we can and will be an asset for decades to come."

But to do that "we need to go through a transformation - perhaps one of the most important in our history," he said. "It's a transformation that will help us secure the future of universal mail service at affordable rates and give us the tools to protect regular mail and ensure a sound national system well into the future."

"If transformation is not accomplished now," the PMG said, "the universal mail service we now rely on could be in jeopardy."

"If we continue to operate like the post office that we grew up with, the only post offices our children will know will be the ones they'll see in museums," Potter said. "We are at a point in our history when it's time for the next phase in postal evolution. And this time we need help."

The Transformation Plan outlines three alternative business models: government agency, privatized corporation or commercial government enterprise. Each would require structural legislative reform.

Potter said USPS has not found much support for a privatized corporation that would reduce universal service. He said delivery standards and prices might be dictated by where a person lives or where a business is located. "People speak of a digital divide. We don't need a delivery divide."

The second alternative - a governmental agency - would take USPS back to the days of federal subsidies and taxpayer support.

The PMG said USPS believes a commercial government agency would best allow integration of the postal system into the modern economy. At the same time, it would preserve the ability of the Postal Service to fulfill its mission of universal service.

The Transformation Plan outlines steps that can be taken now to reduce USPS costs by roughly $5 billion over the next five years. Most immediately, USPS would lift the moratorium on post office closings. "This doesn't mean there will be wholesale closings," said Potter. "We will restart the process to close post offices that have been suspended."

Other immediate actions include an evaluation of the Postal Service's existing processing network, more aggressive purchasing strategies that leverage our buying ability to lower our costs, improvements in the dispute resolution process to reduce the $500 million a year currently spent on labor-management disagreements, and moving to modernize the rate process under the existing regulatory framework.

Potter said he will "continue our strong performance focus, make the changes that are possible within the framework of the existing legislation and work with the Administration and Congress to bring about legislative reform to achieve this transformation."


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