The case deals with the current situation of the U.S postal Service (USPS), which is the largest civilian employer in the United States with around 760,000 employees. It describes the basic process that USPS follows for processing its mails and focuses on productivity with reference to its competition and current market conditions. It also deals with the strategies and tactics that have been adopted by USPS in order to be more competitive than its rivals such as FedEx and UPS.
- Why is it important for UPS to have a high volume of mail to process?
The U.S. Postal Service (USPS) is the biggest postal service organization in the world. It handles a high volume of mails that amounts to approximately 630 million pieces a day. The volume of mail that it processes is equal to about 41% of the world’s total mail volume (William, 2011). It is imperative that UPS handles high volume of mail for processing because it needs to retain its leadership in the business. Being the country’s top civilian employer, USPS needs to ensure that it stays ahead of the competition from private players like UPS and FedEx. In order to stay ahead of the competition, it must ensure that it keeps on improving its productivity and execute new strategies in order to attract newer customers.
- What has caused productivity to increase?
It is important for USPS to retain and increase its productivity as it has experienced an ever-increasing volume of mails. The following factors have resulted in the increase of productivity.
Automation: In earlier days, the processing of mails was entirely done on a manual basis. However, mail processing underwent a major change during 1950’s and 1960’s (William, 2011), which resulted in the decrease of manual work and increase in productivity. Currently, USPS uses automated equipments in order to sort its first class mails. Sorting is one of the most critical parts of mail processing. Automated systems include advanced facer cancelling system, multiline optical character readers and bar code readers. These automated systems have tremendously improved the overall productivity of USPS
Introduction of Zip Codes: In 1978, an expanded zip code was introduced which was later followed by a four- digit zip code in 1983 (William, 2013). The introduction and up gradation of these zip codes led to the development of automated processing equipments along with the use of bar codes and optical readers. These developments and changes increased the productivity.
- What impact did competitive pressures have on the USPS?
In spite of improvements in mail processing and automation, USPS started facing increased competitive pressures in the late 1980’s. During the same time, the organization experienced a slowdown in the volume of mails that it received and processed. Private delivery giants such as UPS and FedEx, along with other private companies such as DHL, started offering speedy delivery and package tracking services. Also, customers began to look at other alternative ways of communications such as fax machines, electronic communications, television and cable TV.
However, these developments had a positive impact on USPS, as it started taking measures in order to increase its competitiveness over its rivals.
- What measures did the USPS adopt to increase competitiveness?
In order into increase its competitiveness, USPS formulated and developed several strategies. The strategies included re-organizing, continuing to seek ways to keep costs down, increasing productivity, and improved customer service (William, 2011).
Customer focus and convenience: USPS started collaborating with its customers by understanding their needs and increasing their convenience by providing additional services such as stamps on consignments. The use of automation in order to improve productivity and flexibility: USPS also formed customer advisory councils with an aim to improve community interest.
Reduction of bureaucracy: USPS eliminated unnecessary layers of management and excess divisions were replaced by 10 areas, each with a manager for customer service and manager for processing and distribution (Williams, 2011).
- What results were achieved by USPS’s changes?
As a result of the sweeping changes made by USPS in order to increase its competitiveness, there were several positive results that were achieved by the company. The new organization structure of having 10 areas allowed the postal managers to be focused, improve communications and empower employees to meet the needs of its customers (William, 2011). Also, the new organization structure implemented progressive changes in mail processing and delivery system at major postal facilities, along with expanding of retail hours and developing a more user friendly domestic mail manual. USPS also started developing new services to meet customer needs and simplify its rate structure. Looking at the overall results, the changes introduced by USPS got rid of unnecessary programs, reduced unwanted costs and attracted new customers along with reducing the company’s projected deficit.
- What effect does the increased use of e-mail have on postal productivity?
Enhanced use of e-mails does have some negative effect on the overall productivity of the postal system. Messages and communications that are generally short, specific and instantaneous can be easily transmitted by e-mails. Moreover, e-mails are free of cost and only require an internet connection along with a valid e-mail account. However, there are some aspects related to e-mails, such as security, spamming, bounce-backs and size constraints that make postal service a more secure option. Also, it is impossible to send physical goods via e-mail!
- How does the use of standard shipping containers and flat-rate mailers help competitiveness?
With standard shipping containers and flat rate mailers, the customers need to pay one rate regardless of the weight of the consignment and place of delivery. Apart from this, extra services such as free delivery, free boxes and envelops provides more value to customers. The enhanced value increases the overall productivity and competitiveness of USPS.
USPS has developed a unique competitive advantage in the market. The strategies and tactics of USPS have really worked well.
Stevenson, William J. (2011). Operations Management (11th Ed.). McGraw-Hill/Irwin; 11 editions. Print.