2010 Comprehensive Statement on Postal Operations - USPS.com

Appendix: Strategic Initiatives
Strategic goals supported by Expanded Access:
■■ Service is improved by making postal products and services
available where customers already are doing business, whether
online or in person. These locations often have longer hours,
better parking, and/or higher foot-traffic.
■■ Financial Performance is impacted on both the revenue and
expense sides. Expanded access drives revenue growth by
making postal products more accessible and easier to use.
Alternative forms of retail access are also less expensive than
the postal retail counter.
Optimize Network. Adapt physical networks to changes in mail
volume, mail mix, and customer behavior. This allows the Postal
Service to take advantage of technology and improved processes to
reduce excess capacity in plants, Post Offices, and delivery units.
The 2011 target is to reduce total interior facility space by 2.8 million
square feet.
Strategic goals supported by an Optimized Network:
■■ Service is improved by gaining economies of scale and scope
when operations are consolidated. Fewer trays, trips, and
handlings are required, which expedites processing and delivery,
and minimizes errors.
■■ Financial Performance improves by reducing the number of
owned and leased buildings. Savings include fixed costs such as
maintenance and administrative overhead. This also supports the
Reduce Energy Use strategic initiative. There is also a revenue
benefit when buildings are sold.
Flexible Workforce. Labor remains the largest cost component. In
addition to reducing work hours, the strategy is to take full advantage
of contractual flexibility to reduce the cost of work hours used. The
indicator for this initiative is the average hourly rate for bargaining
and casual employees, including existing contractual wage
increases. It excludes payments for retiree health benefits (current
and pre-funding amounts) which are not within management’s
control. The 2011 target is to beat the $41.69 average cost per work
hour contained in the Fiscal Year 2011 Integrated Financial Plan.
Strategic goals supported by a more Flexible Workforce:
■■ Service is improved by having the right employee, at the right
place, at the right time for all operations.
■■ Employee Engagement. Employees realize that workforce
changes are necessary for future viability. Flexibility
must increase as career attrition continues without
compromising service.
■■ Financial Performance is improved by reducing the wage and
benefit costs per work hour used.
52 | <strong>2010</strong> <strong>Comprehensive</strong> <strong>Statement</strong> on Postal Operations
Reduce Energy Use. Energy is a major component of cost,
primarily transportation fuel and utilities. The target for 2011 is
continued progress toward 2015 energy reduction goals as laid out
in the Strategic Sustainability Performance Plan at usps.com/green.
Strategic goal supported by Reduced Energy Use:
■■ Financial Performance is improved by reducing expenses in
energy sources that often have volatile prices. Customers
and employees are often influenced in their purchases by the
sustainable actions of an organization, which also improves
revenue and employee engagement.
Reduce Delivery Fixed Costs. Delivery is the largest cost center
and carries the greatest share of fixed costs. For example, a carrier
must go down the street regardless of the number of customers
who receive mail on a given day. There is also a fixed cost of going
to the mailbox whether an address receives one piece of mail or 10.
Reducing fixed delivery costs is critical given declining volume and
revenue per delivery point. The indicator of success is the increase
in the average number of deliveries per route for city and rural routes
combined. The 2011 target is 589 by the end of the year.
Strategic goal supported by Reduce Delivery Fixed Costs:
■■ Financial Performance is improved by reducing the number
of routes and vehicles used to meet service objectives. While
Congressional approval to change to five-day delivery would
obviously have a large impact, the focus here is on actions within
management’s control.
Expand Products, Services, and Features. Profitable revenue
is key to the future of the Postal Service. The best approach is to
provide customers with new mailing and shipping products, services,
and features consistent with their changing needs. The indicator is to
create 15 new products, services, and features this year.
Strategic goals supported by Expanded Products, Services,
and Features:
■■ Service is improved by enhancing and expanding product
offerings based on customer input. Many features will improve
ease of use for customers, from households to large businesses.
■■ Employee Engagement. Adding features and services allows
employees to respond more fully to the needs of their customers.
By virtue of their daily interaction with customers, employees
are often the source of ideas and insights that lead to product
improvement and innovation.
■■ Financial Performance will be improved by being responsive to
changing market needs. In most cases this is about increasing
revenue, while in some cases it will reduce expenses for
customers and the Postal Service.