Performance Excellence: U.S. Postal Service (USPS)
Performance Excellence: U.S. Postal Service (USPS)
Performance Excellence: U.S. Postal Service (USPS)
A majority of organizations have undertaken critical steps aimed ay reducing costs , enhancing customer service and satisfaction and at the same time retaining strategic objectives and goals of growth and profitability. For U.S. Postal Service (USPS), the growth in operational costs and high incidences of operational inefficiencies in processes such as sorting, collection, and distribution of customer mail. In addition, the growth of competition from alternative private carriers impeded achievement of set out strategic goals and objectives. In addition, it is also noted that this was attributable to incidences of low employee morale in the workplace, leading to poor productivity and errors within the various organizational functions and processes (U.S. Postal Service Office of Operations Planning, 2001).
The postal service has been faced with a variety of challenges. The growth in operational costs and the dormancy in customer satisfaction levels at less than 80% were all attributed to the widespread inefficiencies in the organization. In order to address these personnel, operation and competitive issues in a comprehensive and systematic manner, the entity had to undertake total quality management practices such as “customer perfect” aimed at enhancing customer experiences and subsequent levels of satisfaction.
Lean Six Sigma
Lean Six Sigma provides organizations with effective avenues for enhancing service delivery by utilization of disciplined, project based strategies. It provides numerous advantages to organizations when implemented appropriately, but also poses risks of being regarded as another management trend. Both Lean and Six Sigma management techniques have gradually evolved into overly comprehensive management techniques and systems (Watson, 2007). They seek to improve customer service that leads to achievement of sustainable organizational success and supporting an appropriate organizational culture.
Managers in service organizations such as U.S. Postal Service (USPS), who may attempt to apply Lean Six Sigma, meet challenges because of two mitigating factors. First, the terminology and techniques provided in Lean Six Sigma were primarily intended for the manufacturing industry, rather than the service industry. Secondly, the services industry has distinctive characteristics such as the critical nature of information or business intelligence and the overwhelming nature of cross-functional process flows. On the other hand, there is a large number of government organizations which have incrementally applied Lean Six Sigma in their operations (U.S. Postal Service Office of Operations Planning, 2001).
A majority of the potential barriers to appropriate implementation of Lean Six Sigma in governmental organizations includes issues such as inconsistencies in leadership motivation, job security concerns, union policies and regulations, and high incidence of undocumented organizational processes. In addition, other distinctive traits in the public sector are understood to be impediments towards utilization of this management approach such as skepticism about government processes and organizations, competing special interests, excessive bureaucracies and legislative controls, term limits and election cycles (Watson, 2007). A number of governmental organizations have managed to sustain successfully comprehensive process improvement programs for several years. These organizations have common features namely:
- Continuous and constancy in purpose derived from consistent methodology
- The key leadership positions have been in place for long periods
- They provide guarantees to their employees on job security
- The success rate is determined in terms of years rather than months or weeks
Lean Six Sigma focuses on four primary goals namely:
- Deployment of an overly consistent, sound, and robust methodology
- Development of trust through elimination of fear of change
- Initiation of long-term cultural changes in the organization
- Communication of the intentions, visions, objectives, and goals to stakeholders
The implementation of such demands the need for adequate and effective levels of leadership commitment as a means of driving the desired change in an organization. The entity has a strategic need to ensure that it attracts the necessary committed and adaptable employees who will enable the entity achieve its strategic goals and objectives. Research by the United States Office of Inspector General notes that enhanced flexibility in workplace policies provided the United States Postal Service with an avenue for adapting to an evolving environment because of technological changes (International Post Corporation, 2009).
Policies that provide the employees with an opportunity and capacity to achieve and sustain work-life balance are effective in attracting talented and committed employees and improve incidences of retention. In addition, these policies are associated with outcomes such as lower incidences of stress and depression amongst the employees, enhanced and efficient delivery of customer services and increased levels of productivity. The Postal Service has been primarily focused on workforce flexibility by utilization of low wage employees to supplement the existing career workforce.
The entity should focus on workplace flexibility policies that seek to optimize work-life balance for its employees for achievement of the identified outcomes. Such can be achieved through the development of strategic partnership between the workforce and management through levels and functions of the organization towards achievement of an optimal workplace flexibility culture. Through feedback from employees, experimentation and enhanced workload information as well as other critical management tools, the organization can be able to optimize on the use of workplace flexibility policies.
It is important to note that the Postal Service customers usually expect and desire reliable and prompt delivery of mail. Incidences of dissatisfaction with the traditional mail services have driven a large number of customers to explore alternatives such as electronic mail from different service providers. According to USPS, the existing customer satisfaction levels renders more than 40% of the residential customer market exposed to competition from new players. USPS is in a unique position of function as a business entity while at the same time possessing the numerous advantages of government entities.
Its responsibilities and duties as a public service provider and threats from competition of numerous players demand that the entity undertakes continuous measurement and improvement of service quality to ensure optimal levels of sustainability, profitability, and survival in an increasingly volatile market. The entity embarked on its current measurement of residential customer satisfaction levels in the year 1991 and business mailing services in 1993. The Postal Service also undertakes the measurement of performance of on-time delivery of First-Class mail, with projections used as a basis for decision-making.
Management executives are tasked with oversight of an estimated 85 “performance clusters,” which denotes geographical areas and customer service districts. Such oversight is critical as it provides real-time collection of information and decision-making in relation to serve ice delivery affecting customers at specific locations. The employees and managers within their respective regions are expected to utilize customer satisfaction information and a variety of other measures to undertake continuous improvement and in the process achieve optimal quality of service levels. The Postal Service has renewed is focus on customer service during its restructuring in the year 1992. This resulted in subsequent development of new regulations, policies, standards, and systems aimed at enhancing attention on customer service and subsequent levels of satisfaction (Watson, 2007).
With continued developments in electronic commerce, the need to utilize this as a platform for enhancing competitive advantage provides the entity with a means of enhancing its market presence. This has brought about decline in letter mail volumes around the world, necessitating the need for new operational models for both digital and physical services. Operational improvements have been necessary and effective in enabling cost reduction, despite the unsustainable nature of the organization’s financial position. The entity continues to experience significant negative effects because of growth towards electronic commerce, the presence of a weak market and numerous funding obligations (Watson, 2007).
The need to shift its business models has faced numerous challenges especially from lawmakers who are required to approve the adoption of a new model to enhance competitiveness of the organization. The presence of a complex network of numerous stakeholders with competing interest has been an impediment towards organizational success. There is need for Congress to focus on ensuring equilibrium and balance between the interests of the existing stakeholders and ensuring the shift towards a sustainable business model as a result of technological advancements. The deterioration of the organization’s financial position is illustrative of the need for reforms and restructuring of the organization to meet current obligations and improve competitiveness in the organization. A number of factors have been noted as causes of the financial woes in the organization. These challenges include changes in volume of services, universal obligation, pricing strategies, and excessive labor costs. They are regarded as primary concerns, which are currently responsible for the financial problems, and are anticipated to continue pressurizing the organization’s financial position.
The entity intends to restructure as a means of achieving cost leadership, enhancing efficiency, differentiation, improving profitability and delivery of customer services. These continuity efforts are provided as:
- Preservation and enhancement of the entity’s capability to deliver and finance reliable, secure, efficient and affordable universal postal delivery services
- Improve commerce and optimize economic growth
- Institute and implement effective and comprehensive transformation in the long-term for a sustainable financial position in the near future
- Provide protection to the united states taxpayers through financial reforms to avoid Federal appropriations and funding
- Enhance and sustain fairness and motivation for its employees
A variety of operation issues have contributed towards the decline in profitability and financial status of the entity. First, the pricing used on services are all subject to restrictions, which result in pricing “floors” for the various competitive products. In addition, the price “ceilings: used on the non-competitive products are ineffective and lack appeal (Watson, 2007). Secondly, the Postal service has been able to achieve high levels of automation to give rise to overly complex fixed-cost network system. As a result, the increase in volumes of transactions can be handled with minimal increase in operational costs, whereas costs are sustained despite decline in sales volumes. The structural fixed costs are also limited by requirements for delivery within six days. It is also noted that the mail revenue and volumes have reduced significantly because of the economic recession, shifts in financial transactions, bill payments and presentment as well as communications messaging alternatives being preferred by consumers over U.S. Mail (Watson, 2007). The competition from electronic mail is anticipated to continue with technological advancements and growing preference amongst consumers for this platform to communicate.
Enhance Digital Capabilities
- Develop multi-sensory experiences for consumers as a means of enhancing access and use to enable achievement of optimal levels of satisfaction amongst customers
- Provide customers with mobile on mail, which provides avenues for interactions with customers to understand problems, needs, wants and preferences and more so to respond to market changes and trends.
- Provide mail that is enabled with visual and audio features for optimal customer experiences
- Develop a website with friendly user interfaces that provide interactive capabilities for engagement with customers
- Utilization of social media as a marketing and interaction platform for delivery of efficient and real-time customer service
- Provide electronic commerce platforms that enable the users to undertake real-time purchases of services and track their purchases until delivery to their preferred recipients
- Extending and adopting new technology would enable data collection and security in ways that would subsequently enhance the public and further progress in the mailing industry.
- Eliminate competitive gaps within the organization for enabling development of capabilities and competitive advantage
- Utilize competitive pricing strategies to leverage the access of services by customers and enable development of competitive advantage
- Develop new priority mail features such as insurance and day certain options and capabilities
- Build on new capabilities and competitive advantages by focusing on development of new solutions using electronic commerce
- Adopt new fleet and techniques for delivery of rapid, efficient and reliable services for customers
- Enhancing access provides consumers using USPS services with security and safety necessary for development of customer loyalty and satisfaction
It is important to note that no single market or product solution that can meet the diverse needs and assure the entity of a viable future. In addition, multiple solutions can be effective and undertake forms such as new service or product development and utilization of market initiatives that are utilized best to meet the evolving challenges exacerbated by new technologies (Postal Accountability and Enhancement Act, 2006). In addition, retention of the traditional business model and enhancing the operationalisation of this approach would not guarantee a sustainable future in the wake of new entrants and technological advancements driving customers away from the use of postal services.
The continuous developments in electronic commerce because of technological advancements affirm the need to shift the business model as a means for enhancing competitive advantage provides the entity with a means of enhancing its market presence. This has brought about decline in letter mail volumes around the world, necessitating the need for new operational models for both digital and physical services (Watson, 2007). Operational improvements have been necessary and effective in enabling cost reduction, despite the unsustainable nature of the organization’s financial position. The entity continues to experience significant negative effects because of growth towards electronic commerce, the presence of a weak market and numerous funding obligations.
A variety of models can be adopted to achieve optimal levels of customer service and related satisfaction and loyalty levels. These business models and approaches include:
- The market intensification model, which provides for intensification of activities such as marketing and capital investments in projects aimed at reducing cost and achievement of efficiency
- Application of the market-leveraging model, which provides for leveraging of domestic market through of new products and services
- The Global expansion model which provides for generation of revenue through provision of mailing services and products in the non-domestic markets with a focus on differentiation and cost leadership as well as leading through innovation
- Open market model which provides for exploration of the domestic postal linkages and networks with the aim of enabling non-postal service providers to utilize their supply, retail and delivery platforms
It is critical to note that U.S. Postal Service (USPS) is an exemplary depiction of regular governmental organizations, which are marked by issues such as inconsistencies in leadership motivation, job security concerns, union policies and regulations, and high incidence of undocumented organizational processes. In addition, other distinctive traits in the public sector are understood to be impediments towards utilization of this management approach such as skepticism about government processes and organizations, competing special interests, excessive bureaucracies and legislative controls, term limits and election cycles.
International Post Corporation. (2009). On Regulation: Meeting Consumer Needs in an Electronic World. New York: IPC Strategic Perspectives.
Postal Accountability and Enhancement Act. (2006). Assessment of Future Business Model of the Postal Service. Public Law Section 710: 109-435.
U.S. Postal Service Office of Operations Planning. (2001). Operations Strategy: 2001-2005. Washington: U.S. Postal Service Office of Operations Planning.
Watson, G. H. (2007). Change Management: How Important Is it for Six Sigma? ASQ Six Sigma Forum Magazine, 6(4):39-40.
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