The US Postal Service has made significant changes in their internal operations with a goal of increasing the efficiency and effectiveness of their large workforce to provide better service. Some of these changes should be of great interest to managers of shipping and receiving departments because the USPS is providing us with a great example of using metrics to improve operations. In this article we'll look at some lessons that internal logistics professionals can take from an increasingly innovative Postal Service.

The USPS has put a great deal of thought into planning and making fundamental operational changes to meet the demands of a rapidly evolving market. They have making significant investments in process improvements, additional training for their staff, new and innovative equipment, and new information technology, including both software and hardware. The USPS is now providing higher levels of service with a smaller workforce.

Some of these changes are of particular interest to larger mailers. Perhaps you've read about the Intelligent Mail and POSTNET barcodes. These will help organizations that send out a lot of mail. On the other hand there are other changes that the USPS is making that are not well publicized that are great models of how to improve internal operations.

"If you can't measure it, you can't improve it"
The new Postal Service is emphasizing metrics. Metrics are key indicators of performance used to measure operations before and after changes have been made. Metrics are the yardstick that tells you whether the changes you've made improve performance, reduce labor, reduce costs or not.

Perhaps you've noticed the barcode labels on mailboxes and near the doors of some buildings. These labels are placed on what the USPS calls Managed Service Points. The purpose of these MSP barcodes and for the mobile computers that mail carriers use every day is to collect vast amounts of information about the movements of individual mail pieces and the processes for handling them. This data is then analyzed to help the USPS improve their operations.

The lessons to be learned from the USPS are the basic principles that they're using rather than the details of how they process the data internally. Let's look at three metrics that the USPS uses internally and see how they can be applied to the internal operations of non-production receiving of accountable mail (registered and certified mail) and packages.

Measuring traffic volumes
The most basic metrics for any shipping/receiving department or mail center is the volume of materials sent and received. Measuring the quantity of items received and sent via each carrier and level of service is relatively easy to do, especially if you have an internal tracking system. Most tracking systems provide reports with this information as a standard feature.
Perhaps a permanent or temporary increase in staff is needed to meet anticipated surges in volumes. Perhaps there's an increase in larger or heavier packages that require special handling because they cannot be handled by the regular couriers.

Making these measurements regularly will give you insight into what's happening over time. In turn this enables you to plan staffing levels to meet the anticipated changes in volumes rather than reacting to changes at the last minute.
Tracking volume by carrier also gives you information that can be useful during rate negotiations with your carriers. Your company directly controls which carrier(s) and service levels are used for your outbound shipments. Don't forget that your company also has some control over which carrier(s) and service levels are used for your inbound shipments too. Many inbound shipments come from your vendors and, to a certain extent, you can exert some control over how they are shipped.

Measuring route times
You may have noticed barcodes appearing on your favorite mailbox or on the building you work in. There is a barcode for each Managed Service Point, as the USPS calls them. Most mail carriers now use a mobile computer with an integrated barcode scanner and as they walk their routes, they scan the MSP barcodes. The data generated from these scans is analyzed, along with traffic volumes, to understand how to redesign routes and assignments to provide better service.

This technique can be adopted for internal deliveries as well. By putting a barcode label near the door of each mail center and near each set of mailboxes throughout your company, your can collect time information about when couriers reach important locations on their routes.

The route and time information can be analyzed to help resolve a variety of problems. For example, knowing exactly when a courier swept each mailbox during at the end of the business day makes it possible to answer the question "Why didn't you get my package out yesterday?" If your courier made his rounds on time then he would have collected the package. Advanced internal tracking systems often have a route checking capability.

This information can also be used to evaluate couriers. Some couriers may need additional training or coaching to do their part in meeting your service requirements. Switching couriers between routes and then monitoring the timing information can help identify ways to change routes or make other improvements in assignments.

Service levels
The USPS has service levels for different classes of mail, including overnight shipments. All of the metrics mentioned so far in this article are inputs to analyzing the service levels actually delivered in practice. These metrics and analysis are used to understand what service levels are achievable in practice, what changes can be made to achieve better service levels, and what changes to staffing and routing can be made to achieve better performance.

Your organization also has service levels for inbound packages and accountable mail. Measuring how the service levels that each site and each courier deliver in practice is a key aspect of managing service levels - and customer satisfaction.
Measuring the service levels as delivered requires a calculation of how long it took to deliver each package. Once these calculations have been done, it's possible to calculate the average time for each site and courier. Check with your internal tracking system vendor to see if service level monitoring is available.

Knowledge about what service levels are rendered in practice enables you to make better decisions. You will have a much better understanding of what service levels are achievable in practice, as well as ideas about how to maintain or improve them. For example, you may have to make changes in routes, the timing of routes, and staffing in order to achieve particular service levels. If your organization has outsourced shipping and receiving then monitoring performance levels can help you manage this key relationship.

The Postal Service of today has made huge changes to their processes and information systems in order to improve service, become more efficient and to reduce staff. In order to do this the postal service started collecting much more data. These metrics are analyzed to identify problems and to look for bottlenecks in performance. You can apply some of these same techniques used by the USPS to your organization, leading to improved performance, reduce labor and a higher level of service too!

Anthony Meadow is a founder and President of Bear River Associates. He is an expert on internal tracking and the application of new technologies to improve business processes. Mr. Meadow speaks at industry events including Parcel Forum and NPF and writes books and articles in his copious spare time. Bear River is a software company that offers two internal tracking solutions - BearTracks and Star Receiver.