Chapter 4 Our Operations
Ten contracts, valued at over $260 million, were awarded for new and/or expanded facilities to support deployment of the Flat Sequencing System.
The Postal Service awarded contracts under the GSA SmartPay 2® program for national credit card services covering fleet, travel and purchase card programs for up to 10 years. The contracts are effective November 30, 2008. GSA SmartPay 2® provides numerous benefits, including enhanced services, improved systems and data security, and an improved ability to capture and analyze data using bank and/or card issuer electronic reporting systems. Managing this effort also improved the card program’s rebate structure.
Optimize Asset Management
The Postal Service awarded a pilot contract for a commercial off-the-shelf Enterprise Resource Planning solution. The pilot provides supply chain planning for retail packaging products and inventory management, vehicle service management, and vehicle spare parts fulfillment. Full system development and deployment is scheduled by 2010.
In 2008, the Strategic Stocking Location (SSL) network became fully operational. The fifteen facility SSL network focuses on inventory consolidation and cost reduction for high-value, critical spare parts. These parts are essential to ensure rapid repair response and maintenance of mail processing equipment.
Standardize, Streamline and Automate Processes
This year the Postal Service completed its implementation of its Supplier Order Management System (SOMS) as part of its effort to reduce unnecessary paperwork and use technology to streamline processes. SOMS provides an automated, paperless, Web-based invoicing and payment system for vehicle parts and services. In the first two months of the system’s operation, the two participating suppliers generated 2,800 electronic invoices.
The Air Tracking System was implemented to support peak season air transportation management. The system provides prompt and accurate supplier payments, improved control of aircraft and container mail volume data, paperless reconciliation of fuel usage, and improved supplier communications. The system increased accounting accuracy for jet fuel usage, and helped the Postal Service avoid potential overtime charges for ground handling services.
Focus on Sustainability
The Postal Service expanded its focus on sustainability by developing a Green Purchasing Plan, revising the Supplying Principles and Practices to support green purchasing, and by adding a Supplier Sustainability Excellence category to its supplier performance awards. It also incorporated green metrics as part of its supply chain relationship management system, and added sustainability requirements to over 90 existing commodity sourcing strategy plans.
A contract was awarded to a small business for refurbishing outdoor mail collection equipment. The supplier uses a proprietary environmentally responsible process for removing paint and decals from outdoor mail collection equipment. The cost avoidance analysis projects approximately $60 million over the full 10-year contract period.
In 2008, the Postal Service purchased 2 million upgraded corrugated fiberboard MM trays, which include a new water-resistant paper and a self-locking design for longer service life. These trays are 100 percent recyclable and represent an annual cost savings of $2.6 million when compared with the cost of plastic trays.
Develop, Retain, and Empower Supply Management Employees
The Postal Service implemented new programs to overcome supply management’s internal recruitment and retention challenges, and to support workforce professional development. These programs include a new Supply Management Competency Model and an associated professional development process. The Supply Chain Academy debuted in June and offers online access to over 300 courses and a best-in-class supply chain library. Supply Management also delivered improved Web-based training covering the Supplying Principles & Practices, an orientation to Supply Management, Contracting Officer’s Representative training, and updated Purchase Card training. In addition, the organization implemented the Supply Management Intern Program and created an internal Rotational Assignment Program.
Improve Supplier Relationships
To continue to improve the performance of key suppliers, the Postal Service expanded use of its Supply Chain Relationship Management System (SCRMS) in 2008. SCRMS is an automated system that promotes collaboration with partners and suppliers. Development and testing was successfully completed and implementation started on the supplier performance management scorecard module, with its set of goals, metrics, and a 7-step workflow that includes a series of concurrences among managers, internal partners, and suppliers.
Supplier Diversity
The Postal Service continues to act on longstanding commitments to supplier diversity. Annualized contract values with small businesses exceeded $3.1 billion; contracts with minority-owned businesses were nearly $319 million; and, contracts with women-owned businesses reached $681 million. Delivering against the Supplier Diversity Corporate Plan (2007- 2010), the Postal Service continued with the implementation of new features in SCRMS.