Postal Service searches for savings via IT
- By Florence Olsen
- Jan 12, 2004
A few $1.5 million ideas here and there all added up to $480 million in savings for the U.S. Postal Service last year.
But Craig Partridge, the Postal Service's chief supply-chain thinker and strategist, said $480 million is not enough. In a speech today to a business audience in Falls Church, Va., Partridge said his goal for the postal Service is continuous cost reduction.
Although $1.5 million of the $480 million saved last year came from automating a manual accounting process, Partridge said, a good portion of savings culled from supply-chain strategies comes only indirectly from the use of information technology.
Equally important is the practice of awarding bigger contracts to fewer suppliers to get lower prices, Partridge said. But even in contracting, Postal Service officials are looking for new ways to use information stored in accounting systems to get the best deals on supplies, equipment and services. The Postal Service spends $3.6 billion a year for supplies, equipment and services, a category of spending which, for any agency, the greatest opportunities are for savings, Partridge said.
The quasiprivate agency, with 730,000 employees, reported revenues of nearly $70 billion last year.
Under Partridge, the Postal Service is applying supply-chain principles to more and more projects each year. Last year, the agency managed 106 supply-chain projects, he said. The agency approved 184 supply-chain projects today.
Partridge said his goal of continuous cost reduction for the Postal Service will become more difficult as the use of supply-chain strategies reaches a point of diminishing returns. But with additional IT spending, Partridge said, he hopes to push that point further into the future.
For now, he said, the agency's focus will be on creating a suppliers' portal, a single point of access on the Web for conducting electronic commerce with the Postal Service.
The agency also wants to expand what Partridge referred to as business intelligence. This would occur, he said, primarily through the use of consultants who are willing to share their knowledge and help the agency build expertise and specialized knowledge bases, or databases, in areas which the Postal Service has lacked experience.
Companies that have suggestions about specific IT that they think could save the Postal Service money should contact the agency's business solutions group, Partridge said.