Making the USPS Irrelevant One Disastrous Decision at a Time!

The viral post office | Viral post, Post office, Postal policeBy now, it is apparent that the USPS has utterly failed in its primary job of delivering the mail.  That the US PS has been failing for my entire life is a topic the politicians do not want to discuss.  That the business model the USPS is based upon has never been a profitable one, the overhead is disastrously expensive, and the labor costs beyond exorbitant are also not topics the politicians ever want to discuss.  They prefer smoke and mirrors, purple squirrels, and Hollywood celebrity scandals to actually doing their jobs.  But, I digress; last week, the USPS announced that postal service would revert to the slowest it has been since the 1970s, and the cost for that dismal service is going to increase dramatically.

All weekend the reasons for the USPS being in this fix have been stewing in my mind, and I would like your insight as I discuss the main reasons why the USPS is in such bad shape.  Feel free to disagree.  Feel free to comment.  Feel free to ask questions and research further.  To my mind, the most damning problems to the USPS come from the following areas, too much overhead, labor union expenses, business model, and no clear political place in government.Save the US Postal Service! By a zillion dollars comics | Politics Cartoon | TOONPOOL

Labor Union Expenses

Let’s get something clear, the labor unions in government are living high on the hog of taxpayer forced taxation and mandated union dues.  Consider the following comment from Representative Dennis Ross.

“UPS (Union) – about 66% of their total operating costs are labor. FedEx (non-union) – about 45% of their total operating costs are labor. USPS – 80-82%.”

Here’s the rub in comparing UPS, FedEx, and USPS; they are not apples and apples; it’s more like apples to rocks.  Why?  Because UPS and FedEx must show a profit to shareholders at the end of the year; thus, anytime USPS runs into an unprofitable situation, they rely upon USPS to fill the gap.  FedEx operates slightly differently based on its business model. From observation from living in extreme rural areas, it does not appear to rely upon USPS as often to cover the gaps in service.

However, the labor costs at USPS continue to run extremely high, and the excuses for these labor costs continue to run thinner and thinner every year.  Looking at six specific USPS explicit labor union-negotiated labor costs:

      1. Compensation levels – What each employee under the collective bargaining agreement is paid.
      2. Work rules – How often an employee works, who they report to, uniforms, and a host of other processes and procedures, which can and do increase business operating costs.
      3. Contracting – Includes independent contractors, contracts for retail locations, pickup locations, and much more.
      4. Network differences – Differences in the network affect the labor involved in delivery, sortation, transportation, and retail portions of an end-to-end movement.
      5. Capital intensity – Differences in capital requirements affecting the amount of non-labor costs needed to provide services offered.
      6. Congressional requirements – Congressional requirements focus on the aspects of the Postal Service that add more labor costs influencing capital spending.

Hence, if we take Rep. Ross’s statement as accurate, Congress is to blame for some of the added expenses the USPS incurs and the hidden taxes the taxpayer pays to interact with the USPS.  This is why the place in government is such an influential portion of this discussion.  Congress has been pushing the costs of regulating the USPS onto the taxpayer as a hidden tax since the USPS was started. This is unacceptable, especially since the taxpayers did not have a voice in allowing the USPS to become unionized, tripling labor costs year-over-year.P.S.E Context of PA: SWOT Analysis of the United States Postal Service

Please note, when discussing labor costs tripling, we are not just discussing wage earners’ take-home pay.  Labor costs, as shown above, include those six items, plus a host of labor union contracted benefits, plus retirement benefits, plus administrative staff to handle these benefit packages, the regulatory burdens, the reporting burdens, and much more.  Thus, while comparing UPS, FedEx, and USPS is unfair and illogical, the labor costs are pretty close to accurate even though they cannot be compared due to business model, Congressional reporting, and quasi-governmental meddling by politicians.  Any company with 80-82% labor costs will be struggling with labor problems and turning a profit.  Labor costs, fed by a labor union, are a reality that needs rectification and addressing.USPS 2011

Outdated Business Model

2009 the USPS paid a lot of money to have their business model reviewed, and the result was an excellently written document that outlined two potential steps for the USPS to take.  Where is the USPS in adopting either of these actions in 2021; nowhere!  Why has the USPS not taken any action on this document since 2009; Congress!  Item number six in labor costs continues to rear its ugly and monstrous head, and the problem is not so much on USPS; although they indeed share the blame, Congress continues to drag its feet and refuses to scrutinize the government appropriately.Several logos, mottos have represented USPS through the years | PostalReporter.com

When discussing the USPS business model, the industry is discussing “optimizing the last mile” in the supply chain.  That last mile is where the USPS has traditionally filled in the gap and made the final customer delivery.  However, USPS is inefficient, costly, and labor-intensive.  Yet, until science fiction realizes a Star Trek-like replicator in every home, optimizing the last mile is the discussion we need to be having, and solutions are available!

The 2009 business model review offered franchisee options as a business model — what a novel idea.  Imagine getting your mail on your commute route, no more having it delivered to an apartment box, packages waiting on a doorstep for thieves, stop by a convenient place on your regular commute route, and get all your mail.  Why not have your mail delivered to your office?  Then your office mailroom becomes an arm of the post office; it can sell stamps, handling packages, and then you do not have an extra stop at all.  Talk about an employer-based incentive!  Better still, for a fee turning over retail establishments to non-profit groups for work programs.  Guess what; that has the benefit of increasing public outreach and building communities.  Yet, the USPS languishes because Congress refuses to take up serious topics, and our tax dollars are squandered!

Place in Government

Engineering Professor Calculates How Fast The Eagle In The USPS Logo is GoingRead the US Constitution, the US Bill of Rights, other founding documents, wherein is a postal service discussed?  Find me the article claiming we need a Federal Postal Service.  Name me the reason why the Postal Service is required.  Selling stamps, that can be done using a myriad of different methods.  Sending packages, mailing letters, again, many other options are available.  Passports, hundreds of other options are available; why not put that into DMV’s across the US?  Why not simplify the Passport process entirely?

What is the reason for the USPS?  Give me the why and justify the existence for the next 20-years for the USPS.  My entire life, I have been asking why the USPS is needed, and I have been asking this since before email, fax machines, and other technological leaps.

Overhead

USPS TESSWhen was the last time the USPS had personnel layoffs to balance their accounts?  1970, under President Richard Nixon, USPS had a strike, got a unionized workforce, and, as they call it, “a living wage.”  From 1970 to 2021, there has been nothing but problems in the USPS; from retirement benefits costing too much, to labor expenses, to Congressional expenses increasing year-over-year, the overhead does nothing but balloon.  I was recently in a flagship USPS for Phoenix, AZ.  The building is a disgrace, the parking lot is neglected, the lobby is dark and missing half the materials, no forms, no boxes, everything is behind the barred and locked counter, and the retail associates are criminally negligent in their duties.  What’s worse, this was a good USPS office to visit in Phoenix, AZ.

Take an honest appraisal of your local USPS and ask yourself, are your taxpayer dollars represented in your USPS in a manner acceptable to you?  I visited a USPS in Las Cruces, NM.  The design of the building lends a bright feeling to the building atmosphere; the retail area is small and naturally illuminated.  Same problem with retail associates, but not as noticeable.  However, this was also before the latest changes from Washington, where the employees were told it was okay to work slower and charge more.More is Less at the USPS | Freeport Press

It is my personal opinion that the USPS has outlived its usefulness, and it is time for the USPS to be eliminated from quasi-government offices of the United States.  Nothing fruitful can be gained from continuing the charade of the USPS.  Congress needs to return to the states the ability to issue addresses and organize their communities and end the USPS debacle!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

Bottle-Necks and Push-Back – Problems in Production Goal Attainment

Knowledge Check!Let me begin with an affirmation when you believe that a problem is insurmountable, you are 100% correct, and nothing will ever change.  If you tell me a problem is insurmountable, I will say to you BULL!  Every time!  Why; because if people built it, people can disassemble it.  We might have to push at it, swear at it, sweat at it, and kick at it some, but people can disassemble it!  When we believe no problem is insurmountable, we are more than ½-way to solving the problem!

At work right now, a colleague has a problem; trainers do not want to come in early and train new hires.  Because new hires cannot be trained in off-hours, his team is slipping in production goal attainment.  When he drops far enough, his regional bosses will decide more resources need to be spent, and public shaming begins to occur because public notice accompanies greater resource allocation.  The bottle-neck is training; the push-back comes from trainers.

Fishbone DiagramThe trainers are pushing back because they are already double and triple tasked to training new hires in two other more “important” departments.  Except, because those other departments are considered “more important,” production goals for the entire facility will never be met.  A core philosophy is missed; when quality fails, nobody meets production goals.  The vicious cycles keep going around; training cannot spare people to train quality, quality fails to meet goals, and production goals are missed due to training.

Exclamation MarkThere are times I have wished this was an isolated example; however, this repeats so often I should have cards made.  Breaking the training bottle-neck requires thinking outside the standard paradigm, or in more basic vernacular, get out of the box and start thinking anew!  While the following solutions are explicitly geared to fixing the training bottle-neck, the pattern for thinking is helpful as a conversation starter.  Start the conversation rolling!

Here’s some ideas:

  1. Off-hours shift training. Look at your operational schedules.  Do you have times when equipment is not operating, when the production floor is down, and when people can be trained?  Use that time!
        • I worked at a manufacturing facility where after the first three days of new-hire orientation, all manufacturing and warehouse employees worked the third shift for their first four months. Why?  Training could operate the floors and equipment and work around maintenance without crimping operational schedules or hindering production.  Then, new hires went onto the day shift where two extra managers could offer management-by-walk around for additional OJT.
        • I have observed warehouses where new hires work a split shift; they come in for 4-hours of training when nobody else is around but trainers, and then 4-hours when the rest of the warehouse is around—giving new hire equipment operators experience in operating in both a quiet environment and a busy environment.
        • The idea is to find times when you can safely train without hindering operation tempo. Use the calendar, use a shift rotation, be honest with people and be upfront on expectations and the reality of business needs.  Guess what, when you are honest, people respond!
  2. Appreciative Inquiry – Believe it or not, when you have a problem, a pressing business need, or an urgent issue, your people will pleasantly surprise you with solutions if you listen and act. Too often, I have been stunned ever to forget this lesson; people have brains and ideas, use them, give them credit, and watch them blossom into your best problem solvers!
  3. It should go without saying, treat people as the professionals you hired.
        • My first boss in supply chain quality control did not teach me basic stuff, e.g., this is a part, how you count the pieces, a SKU, etc. The boss presumed I knew or would ask questions, which saved both of us time and resources.  More to the point, by treating me as a professional, I grew into being a supply quality control officer and loved the job.  I have witnessed the opposite too often to know my experience is not the norm in supply chains, which is detestable.
        • You hired a professional; treat them as a professional. Set standards, show them, explain, train them, and build them into greater professionals, primarily by getting out of their way!
        • Encourage people never to stop learning through example!
  4. Who is your customer? Who are your vendors?  Who are your stakeholders?  Why is this information important?
        • Customer service is dead; however, if you do not know your customer, vendors, and stakeholders are, so is your business model!
        • Customer helping is alive and well; however, your business model is dead if you do not know your customer, vendors, and stakeholders!
        • Managers, let me give you a hint, your customer is your employees. When was the last time you got to know your customers?  When was the last time you helped your customers?  Why did you last help your customers?

LookWhen it comes to bottle-necks and push-back, knowing your customer is the first step in solving the bottle-neck and charting a positive path through push-back.  Consider my colleague, his customer are his employees needing training, his vendor is the training department, and the stakeholders are the rest of the business, those setting production goals, those relying upon his team meeting production goals, and ultimately the paying external customer.  Yet, my colleague, cannot see who his customer is, does not think of training as a vendor, and the rest of the business as a stakeholder, for this is not how he was trained.  Worse, his business unit refuses to accept this method of thinking to improve production goal attainment.

  1. Leadership must lead by first embracing new thinking and possibilities.

Previously in my career, it was a pleasure and adventure to be on a project where the leadership wanted a solution to their problem.  However, the leaders did not want to change, at all.  They wanted a solution, but refused to change in any shape, form, or method.  Worse, the leaders did not admit they did not want to change because they themselves had not considered that a solution would require change.  Thus, when the solution was delivered, it looked like a great idea, on paper.  But, the second it was implemented, reality bit, change was coming, and this scared the leadership team into panic mode.  Add in the coming economic downturn that had already started to hurt the company, and panic turned into a full-on disaster.

?u=http3.bp.blogspot.com-CIl2VSm-mmgTZ0wMvH5UGIAAAAAAAAB20QA9_IiyVhYss1600showme_board3.jpg&f=1&nofb=1Leaders, it is imperative that you lead first by example personally, then by actions professionally, then only if necessary by words.  When you observe new thinking on an old idea, embrace that and see where it goes.  Even if the new idea fails, build people!  Production goals are about human efforts distilled into statistical symbols.  Never forget about the human element.  Build people, and you meet production goals.  Build quality into every single transaction, and you meet production goals.  Fail people, and you will never meet production goals!  Fail quality, and you will fail to meet production goals.

I cannot make this any simpler!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.