delivery operations
DESCRIPTION
Delivery Operations. Joint Area Vice Presidents; Managers, Operations Support; Area Marketing Managers Meeting September 11, 2008. Reduce Route Structure. 12.7. $530. Fall / Spring Adjustments. Continuous Improvement. Collection Standardization. 8.1. $300. - PowerPoint PPT PresentationTRANSCRIPT
Joint Area Vice Presidents; Managers, Operations Support; Area Marketing Managers MeetingSeptember 11, 2008
2009 F-2 Challenge2009 F-2 Challenge
Total SavingsTotal Savings $1,000 $1,000 26.2 26.2
FUNCTION 2 CLOSING THE GAP STRATEGIESFUNCTION 2 CLOSING THE GAP STRATEGIES
Workhours Dollars (millions)
Function 2B 21.5 $855
Rural Mail Count Annualization $115 3.7
Rural DPS at 85% $30 1.0
Function 2A 4.7 $145
Maintain Hours per Rt $300 8.1Continuous Improvement
Reduce Route Structure $530 12.7Fall / Spring Adjustments
Collection Standardization $25 0.7Reduce Dedicated Coll Rts
2009 F-2 Budget2009 F-2 Budget
Strategies/Tactics – Qtr 1 FY 2009Strategies/Tactics – Qtr 1 FY 2009
Strategy / TacticsStrategy / Tactics
Result - Maintain Current Hours per Route Performance in Qtr 1 - $300 millionResult - Maintain Current Hours per Route Performance in Qtr 1 - $300 million
Drive Major Delivery Efficiency ComponentsDrive Major Delivery Efficiency Components
Continuous ImprovementContinuous Improvement
FY 2009 CDPOM Productivity ExpectationsFY 2009 CDPOM Productivity Expectations
% Standard at Demonstrated Performance% Standard at Demonstrated Performance
% Adjusted Street Base at 98%% Adjusted Street Base at 98%
DPS at 90%DPS at 90%
Fall Mailing Season (Sep thru Nov) OpportunityFall Mailing Season (Sep thru Nov) Opportunity
December (Christmas) OpportunityDecember (Christmas) Opportunity
Eliminate Two Costly ParadigmsEliminate Two Costly Paradigms
Standardized, Proactive Scheduling/Staffing Tool has Helped to Drive Continuous Improvement In Delivery Efficiency
Standardized, Proactive Scheduling/Staffing Tool has Helped to Drive Continuous Improvement In Delivery Efficiency
CDPOM Productivity Expectations:CDPOM Productivity Expectations:
FY 2007 Qtr 3 . . .Office
Street
DPS %
100% Standard
100% Street Base
85%
FY 2008 Qtr 1 . . .Office
Street
DPS %
97% Standard
100% Street Base
89%
FY 2009 Qtr 1 . . .Office
Street
DPS %
90% Standard
98% Street Base
90%
FY 2008 Qtr 4 . . .Office
Street
DPS %
97% Standard
98% Street Base
89%
Continuous ImprovementContinuous Improvement
90% Standard – Current Nat’l Demonstrated Performance in DOIS90% Standard – Current Nat’l Demonstrated Performance in DOIS
Aligns CDPOM with DOIS Daily ProjectionsAligns CDPOM with DOIS Daily Projections
98% Adjusted Street Base – 5 Areas Achieving in Qtr 4 98% Adjusted Street Base – 5 Areas Achieving in Qtr 4
90% DPS – FY 2009 Budget Target90% DPS – FY 2009 Budget Target4 of 9 Areas Currently Achieving4 of 9 Areas Currently Achieving
FY 2009 Qtr 1 . . .Office
Street
DPS %
90% Standard
98% Street Base
90%
Area Distribution BasedOn Current ExpectationsArea Distribution BasedOn Current Expectations
Area Distribution BasedOn Revised ExpectationsArea Distribution Based
On Revised Expectations
National
PivotOpportunity %
Achieved
PivotOpportunity %
Achieved
Week 48 Gap179K Workhours
Week 48 Gap179K Workhours
Week 48 CDPOM Efficiency at FY 2009 Performance ExpectationsWeek 48 CDPOM Efficiency at FY 2009 Performance Expectations
Week 48 Gap96K WorkhoursWeek 48 Gap
96K Workhours
Week 48 CDPOM Efficiency at Current Performance ExpectationsWeek 48 CDPOM Efficiency at Current Performance Expectations
Continuous ImprovementContinuous Improvement
400,000
500,000
600,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
700,000
800,000
30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 02 03 04 05 06 07 08 09 10
Cas
ed V
olu
me
(000
)
May June July August September October November
Avg May-Aug957,285,386
1,140,294,866
Avg Sep - Nov
Avg May-Aug848,028,815
976,834,805
Avg Sep - Nov
Avg May-Aug
697,219,161
750,334,448
Avg Sep - Nov
Eliminate Costly ParadigmsEliminate Costly Paradigms
FY 2006-07 FY 2007-08 FY 2008-09
Fall Mailing Season Impact on Average Cased VolumesFall Mailing Season Impact on Average Cased Volumes
Summer Fall
2006 - 2007Summer Fall
2006 - 2007Summer Fall
2007 - 2008Summer Fall
2007 - 2008Summer Fall
2008 – 2009Summer Fall
2008 – 2009**
* Projected
Average Weekly Rate of Change – May-Aug vs Sep-Nov Average Weekly Rate of Change – May-Aug vs Sep-Nov
* Projected
IMPACT OF FALL MAILING SEASON IMPACT OF FALL MAILING SEASON
20
40
60
80
100
120
140
160
180
200
Cas
ed V
olu
me
(mil
lio
ns
)
*2008-2009
8%
53 M
Average DailyImpact Per Rt
6 Min
Average DailyImpact Per Rt
6 Min
2007-2008
15%
129 M
Average DailyImpact Per Rt
16 Min
Average DailyImpact Per Rt
16 Min
2006-2007
19%
183 M
Average DailyImpact Per Rt
22 Min
Average DailyImpact Per Rt
22 Min
Rate of Change
Amount of Change
Result: Maintain Current Route Coverage in Qtr 1Result: Maintain Current Route Coverage in Qtr 1
Hours per RouteHours per Route
Tactic: Maintain Current Route Coverage in Qtr 1 (LDC 23/27)Tactic: Maintain Current Route Coverage in Qtr 1 (LDC 23/27)
Hours per RouteHours per Route
Tactic: Manage to Actual Workload During DecemberTactic: Manage to Actual Workload During December
Eliminate Costly ParadigmsEliminate Costly Paradigms
Tactic: Manage to Actual Workload During Dec (LDC 23/27)Tactic: Manage to Actual Workload During Dec (LDC 23/27)
Eliminate Costly ParadigmsEliminate Costly Paradigms
Savings SummarySavings Summary
QTR 1 OPPORTUNITY – MAINTAIN CURRENT HRS per RTQTR 1 OPPORTUNITY – MAINTAIN CURRENT HRS per RT
DELIVERY ROUTES OCT-NOV 4,858,251 $179,755,299
LDC 23/27 OCT-NOV 224,632 $8,311,369
DELIVERY ROUTES DECEMBER 2,543,895 $94,124,130
LDC 23/27 DECEMBER 504,406 $18,663,014
TOTAL SAVINGS POTENTIAL TOTAL SAVINGS POTENTIAL 8,131,1848,131,184 $300,853,812$300,853,812
WORKHOUR SAVINGS
DOLLARS SAVINGSQtr 1, FY 2009Qtr 1, FY 2009
2009 Rt Structure 2009 Rt Structure
2009 Rt Structure 2009 Rt Structure
Plan Supported Routes – FY 2008 vs FY 2009Plan Supported Routes – FY 2008 vs FY 2009
* Assumes that Routes are Eliminated Day 1, FY 2009* Assumes that Routes are Eliminated Day 1, FY 2009
Strategies/Tactics - FY 2009 Route StructureStrategies/Tactics - FY 2009 Route Structure
Strategy / TacticsStrategy / Tactics
Aggressive Spring Route Inspection / MRAsAggressive Spring Route Inspection / MRAs
Casers and Deliverers ConceptCasers and Deliverers Concept
Conduct Fall Route Inspections / Minor Rt AdjustmentsConduct Fall Route Inspections / Minor Rt Adjustments
MRA Where Current Rt Inspection Data Exists – Using CORMRA Where Current Rt Inspection Data Exists – Using COR
Full RCI Focus on Inner City Low Volume UnitsFull RCI Focus on Inner City Low Volume Units
Continuous Vacant/Opportunity Route ReviewsContinuous Vacant/Opportunity Route Reviews
Negotiated MinorsNegotiated Minors
Execute the Strategy:Execute the Strategy:
District Manager Route Reduction TargetsDistrict Manager Route Reduction Targets
Fall ReadinessFall Readiness
Fall Targeted Route Inspection Tracking Report
DM TargetsDM Targets
FALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITSFALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITS
ESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETSESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETS
DM TargetsDM Targets
FALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITSFALL RT ADJUSTMENT SAVINGS POTENTIAL AT 1 ROUTE IN 20+ ROUTE UNITS
ESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETSESTABLISH DISTRICT MANAGER ROUTE REDUCTION TARGETS
QTR 1 QTR 2 QTR 3 QTR 4
2009 Rt Adjustments2009 Rt Adjustments
CAPTURE SAVINGSCAPTURE SAVINGS
Fall Adjustments
CONDUCTCONDUCT
2009 Route Adjustment Timeline
OCTOCT NOVNOV DECDEC JANJAN FEBFEB MARMAR APRAPR MAYMAY JUNJUN JULJUL AUGAUG SEPSEP
Fall 2009 Savings Potential Based on 3,750 DM Target
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP FY 2009
0 0 0 750 720 780 780 780 750 750 780 780 6.8 millFall
Strategies/Tactics - FY 2009 Route StructureStrategies/Tactics - FY 2009 Route Structure
Strategy / TacticsStrategy / Tactics
Spring Route Inspection / MRAsSpring Route Inspection / MRAs
Traditional Processes – Execute the StrategyTraditional Processes – Execute the StrategyMRA Where Current Rt Inspection Data Exists – Using CORMRA Where Current Rt Inspection Data Exists – Using COR
Targeted Full Route Count & InspectionsTargeted Full Route Count & Inspections
Continuous Vacant/Opportunity Route ReviewsContinuous Vacant/Opportunity Route Reviews
Negotiated MinorsNegotiated Minors
AggressiveAggressive
Potential Article 19 Eliminating the Requirement for:Current Route Inspection DataSame Carrier on Route
Potential Article 19 Eliminating the Requirement for:Current Route Inspection DataSame Carrier on Route
Allows Across the Board Minor Adjustments for VolumeReductions Plus COR UsageAllows Across the Board Minor Adjustments for VolumeReductions Plus COR Usage
Pursue Nat’l Union Negotiations (from a position of strength)Pursue Nat’l Union Negotiations (from a position of strength)
QTR 1 QTR 2 QTR 3 QTR 4
2009 Rt Adjustments2009 Rt Adjustments
Spring Adjustments
CAPTURE SAVINGSCAPTURE SAVINGSCONDUCTCONDUCT
CAPTURE SAVINGSCAPTURE SAVINGS
Fall Adjustments
CONDUCTCONDUCT
2009 Route Adjustment Timeline
OCTOCT NOVNOV DECDEC JANJAN FEBFEB MARMAR APRAPR MAYMAY JUNJUN JULJUL AUGAUG SEPSEP
Spring 2009 Savings Potential Based on 6,300 Required Target
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP FY 2009
0 0 0 750 720 780 780 780 750 750 780 780 6.8 millFall
0 0 0 0 0 0 0 0 1,446 1,446 1,504 1,504 5.9 millSpring
0 0 0 750 720 780 780 780 2,196 2,196 2,284 2,284 12.7 millTotal
2009 Rt Adjustments2009 Rt Adjustments
Casers / DeliverersCasers / Deliverers
Distribution of Cased Workload by UnitAverage Daily Cased Volume - May 2008
181
1,3411,417
1,554
2,474
2,782
0
500
1,000
1,500
2,000
2,500
3,000
2 Feet orLess
2-3 Feet 3-4 Feet 4-5 Feet 5-6 Feet 6 Feet orMore
Avg Cased Volume per Route
# U
nit
s
Recorded Volumes Discounted by 20% to Account for Inflation
Casers / DeliverersCasers / Deliverers
Significant Number (16%) of Units Average Less Than 3ft Cased Volume a Day (Based on May 2008)
Average FOT costs have increased to 39.33 minutes nationally
Current Annualized Cost of FOT - $1.2 billion
Carriers expand office time to justify leaving time
Result - Inefficient route structure and vehicle utilization
Current SituationCurrent Situation
Low, incremental volumes cause waiting time impacts felton every route
Casers / DeliverersCasers / Deliverers
Many inner city, low volume units earn more in Fixed Office Time than the value of their cased workload
Example:
30 route office casing an average of 2.5 ft of mail daily and achieving 100% Standard
Value ofCased Workload
Value ofFixed Office Time
20.0 hours 19.7 hours
Total Earned Daily Office Time 39.7 hours
Due to :(a) Expansion of office time
(b) Carrier waiting time / mail flow Issues
Actual % Standard performance degradesto avg of 150% standard in low volume units
Total Actual Daily Office Time 60.0 hours
Result: Traditional 2 hours in the office and 6 on the street!Result: Traditional 2 hours in the office and 6 on the street!
Current SituationCurrent Situation
Casers / DeliverersCasers / Deliverers
Suggested Unit Criteria for ImplementationSuggested Unit Criteria for Implementation
3 Feet or Less Cased Volume per Route
Current Vacant Routes or Potential Vacant Routes
Current Street Times Greater than 6:30
Poor Percent to Standard
Consistent Mail Flow from Processing
Mail Arrival (to meet 3 hour casing window, 9:30 AM leave time)
Casers / DeliverersCasers / Deliverers
SAMPLE CANDIDATE OFFICESSAMPLE CANDIDATE OFFICES
Casers / DeliverersCasers / Deliverers
Evaluate Routes and make Adjustments by RemovingCasing / Office Duties from as Many Routes as PossibleCreating Separate Caser and Deliverer Assignments
Solution – Decouple Office / Street DutiesSolution – Decouple Office / Street Duties
Street Routes – 100% Street Delivery
Caser Routes– Office and Street Delivery
Proposed StrategyProposed Strategy
Existing RC&I or Minor Adjustment Process
141.19 requires reasonably current data and same carrier
Local agreed upon process
Casers / DeliverersCasers / Deliverers
Solution – Decouple Office / Street DutiesSolution – Decouple Office / Street Duties
Proposed Strategy – Creation of 100% Street RoutesProposed Strategy – Creation of 100% Street Routes
Add street time to the route approximately equal to amount of office time removed (as near to 8 hours as possible)
Carrier collects mail prepared and staged for street delivery, collects accountables, clocks to the street, loads vehicle and proceeds to the first delivery point
Expectation that carrier street time will be about 7:40 hours for deliverers
Remove all office time except clocking in, sign for keys, accountables, obtain scanner, receive instruction/service talks, vehicle safety check.
Casers / DeliverersCasers / Deliverers
Suggested ImplementationSuggested Implementation
Perform a Route Inspection on the Unit
Using Unit Office Time determine the number of casers required (Total office time / 2:45)
Determine the Street Time value for the Unit
Determine the Office Time value for the Unit
Determine the Street Time required to make the Casers 8 hours (Total street time - Casers * 4:30)
With Remaining Street Time determine how many Deliverers are needed (Remaining street time / 7:40)
Create New Assignments in COR
Casers / DeliverersCasers / Deliverers
Benefits Over Current Traditional Rt StructureBenefits Over Current Traditional Rt Structure
Reduction of required unit level Fixed Office Time
Reduction of idle waiting time due to low incremental volumes on multiple trips
Less contention over the value of the workload with individual carriers
More consistent delivery times
GPS/GISGPS/GIS
Delivery Point Coverage Daily ReportDelivery Point Coverage Daily Report
Street Management ToolsStreet Management Tools
8:00-
7:30-
7:00-
6:30-
6:00-
5:30-
5:00-
4:30-
4:00-
3:30
3:00-
2:30
2:00-
1:30
1:00-
0:30
0:00-
Cu
rre
nt
Ave
rag
e R
ou
te
Today’s Average RouteToday’s Average Route
8.2%8.2%
20.0%20.0%
71.8%71.8%
Street BaseStreet Base
(National)
8:00-
7:30-
7:00-
6:30-
6:00-
5:30-
5:00-
4:30-
4:00-
3:30
3:00-
2:30
2:00-
1:30
1:00-
0:30
0:00-
Cu
rre
nt
Ave
rag
e R
ou
te
Today’s Average RouteToday’s Average Route
8.2%8.2%
20.0%20.0%
71.8%71.8%
Street BaseStreet Base
(National)
Global Positioning System/Global Information SystemGlobal Positioning System/Global Information System
Currently installed in 500 vehicles with passive GPS/GIS system in Chicago Requires no interaction with carrier
GPS makes it possible to easily locate and account for USPS delivery vehicles
Simply records information Miles traveled Deviations from route Idle time
With engine on and with engine off
Number of stops and park points Deviation from route structure (hop and stop vs. park and loop) Provides breadcrumb trail of vehicle activity
Street Management ToolsStreet Management Tools
Street Management ToolsStreet Management Tools
Street Management ToolsStreet Management Tools
Street Management ToolsStreet Management Tools
Cost Breakdown: Unit cost = $252 ea 500 $126,000
Installation = $50 ea 500 $25,000
Training $2,000
Monthly Service $22.95 ea 500 $11,475
Total Annual Cost $138,000
Cost Breakdown: Unit cost = $252 ea 500 $126,000
Installation = $50 ea 500 $25,000
Training $2,000
Monthly Service $22.95 ea 500 $11,475
Total Annual Cost $138,000
Annual CostAnnual Cost
Breakeven Point - 1.4 minutes per route per day!Breakeven Point - 1.4 minutes per route per day!
Street Management ToolsStreet Management Tools
COST OF CURRENT SYSTEM UTILIZED IN CHICAGOCOST OF CURRENT SYSTEM UTILIZED IN CHICAGO
Objective:Identify Estimated Daily Delivery Point Coverage through
Automation Equipment
Compare Against a Route’s Base Delivery Coverage
Generate a Daily Report for AM Supervisor to Review and Consider When Determining Street Expectations
Next Steps:Currently Completing Initial Coding Requirements
Pilot Site Testing to Begin Over the Next Several Weeks
National Deployment Qtr 2 FY09
Daily Delivery Coverage Daily Delivery Coverage
Street Management ToolsStreet Management Tools
Daily Delivery Point Coverage Report Daily Delivery Point Coverage Report
Street Management ToolsStreet Management Tools
0 – 65% Coverage 65 – 85% Coverage > Than 85% Coverage
Daily Delivery Point Coverage Report Daily Delivery Point Coverage Report
Street Management ToolsStreet Management Tools
Area Rollup
* Non Validated Data
SummarySummary
We Face an Unprecedented Budget Challenge in FY 2009with 6,300 Unfunded Routes on Day 1We Face an Unprecedented Budget Challenge in FY 2009with 6,300 Unfunded Routes on Day 1
Every Day we Wait in Reducing Routes Adds to the 2009 ReductionRequirement. Execute the Strategy with:Every Day we Wait in Reducing Routes Adds to the 2009 ReductionRequirement. Execute the Strategy with:
Aggressive Fall/Spring Inspection/MRA PlansAggressive Fall/Spring Inspection/MRA Plans
Accountability – District Manager Route Reduction TargetsAccountability – District Manager Route Reduction Targets
While We Won’t Realize Substantial Savings from RouteReductions in Qtr 1, we Have a Huge Opportunity inMaintaining our Current Hours per Route Through December
While We Won’t Realize Substantial Savings from RouteReductions in Qtr 1, we Have a Huge Opportunity inMaintaining our Current Hours per Route Through December
Eliminate the Paradigms and Manage to Actual WorkloadEliminate the Paradigms and Manage to Actual WorkloadFall Mailing Season OpportunityFall Mailing Season Opportunity
Christmas OpportunityChristmas Opportunity
To the Extent we are Unsuccessful in Reducing the # Routes Needed to Achieve Budget, We Will Need to Close the Gap By:To the Extent we are Unsuccessful in Reducing the # Routes Needed to Achieve Budget, We Will Need to Close the Gap By:
Continued and Deeper Levels of Pivoting Through:Continued and Deeper Levels of Pivoting Through:Effective Use of Scheduling / Staffing ToolsEffective Use of Scheduling / Staffing Tools
Achievement of Continuous Improvement TargetsAchievement of Continuous Improvement Targets