Maintaining postal service levels and delivering efficiency improvements
Declining volume growth rates, changing product mix, third party access and the increasing need to integrate physical and electronic services present real challenges for postal operators in both the design and operation of their networks. Maintaining service levels and delivering efficiency improvements is becoming increasingly difficult – not just in the mail operation but also in parcels and retail networks.
While the attributes of the operational networks in postal businesses can be very different, designing the solution requires some common building blocks, as follows.
Optimizing infrastructure
The operational networks of each element of a postal business are built around a fixed infrastructure of buildings, vehicles, and people. To optimize these networks requires operators to consider the location, size, and ownership of each element of this infrastructure.
Maintaining/increasing volumes to sustain/improve fixed cost absorption
For the majority of postal operators, a significant proportion of their costs are fixed, making volume a key consideration in maintaining profitability. This has driven many operators into new market areas, and has seen some launching niche products and acting as agents for third parties. Designing the optimal operational solution for the delivery of these new products is key to their success – both in meeting customer requirements and in ensuring their profitability.
Increasing the variable element of cost base
Where possible, postal businesses should look for operational improvements that increase the variable element of their cost base. This might involve outsourcing parts of the operation, centralizing functions or changes to sourcing arrangements
Establishing effective performance measurements
To ensure that all of the above elements are achieved requires a hierarchy of supporting performance measurements. It is essential that the operational goal is well defined so that people can understand how they contribute to and support its achievement. For the performance metrics to be effective, they should combine cost and service attributes – with the interconnection between the two being clearly defined.
Case studies
To find more about how PA can help your business, see these case studies:
An independent quality of service review for a European national post company
Performance improvement at a Scandinavian postal operator
