5 Lessons Service Companies can Take from The US Postal Service
Author: Lauren Mead, Marketing Director
The challenges faced by the U.S. Postal Service are not unlike the challenges faced by leaders in the service industry. It goes back to the fundamentals we all learned in business school; supply and demand, balancing service levels with operations costs, and the need for companies to adapt their business models with environmental changes. As more and more Americans are moving to electronic communications over “snail mail,” the decision made to discontinue deliveries on Saturdays is a perfectly logical business decision, so what is all the fuss about? Ironically, it is probably that pesky junk mail we all complain about that is keeping the US Postal Service from even further financial ruin. The USPC expects removing Saturday delivery will lead to around $2 billion a year in savings, a small dent in the $15.9 billion loss they experienced in 2012. As we prepare to say goodbye to Saturday mail delivery, let’s take a moment to look at what we can learn from the world’s largest vehicle fleet operator.
- Great service means reliable service – While the New England region braces for “The Blizzard of 2013,” many business and service companies are shutting down operations and bracing themselves for what is expected to be a record breaking amount of snow, there are no snow days for USPS workers. The inscription on the New York City post office reads, “Neither snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.”
- Balancing service levels operational cost – For field service businesses it is the inherent conflict between sending the most cost-effective resource and sending the most qualified one. Service operations must also take into account a number of other factors when dispatching field resources including geography, parts required, breaks, unforeseen emergencies, service levels, and other constraints. It is virtually impossible to effectively balance all of the simultaneous calculations and decisions required to ensure happy customers at the lowest possible cost, without the assistance of scheduling and mobile technology.
- Location, location, location – One major cost center for the USPC is branch operations and delivery services in rural areas. Some service operations attempt to reduce unnecessary travel by dividing their territories into zones. Although this is a step in the right direction, it can also lead to inefficiencies for customers near the zone borders. While another resource may be nearby, he or she will not be assigned to that customer because it is over the line or boundary. Travel-based optimization can minimize these inefficiencies by reducing travel time and mileage to service the same number of customers and increase workload capacity from the existing field workforce.
- Knowing your destination is only half the battle – Some scheduling applications now consider travel time using the linear distance between service calls, based on postal codes or pre-defined travel times between service areas. However, this is a more granular method of defining territories, and suffers the same inefficiencies for customers near postal code boundaries. Additionally, postal codes may cover a metro area that requires 15 minutes to cross, or a rural area covering 100 square miles. While this approach works well in principal, linear distance solutions are not able to take into account important details that have a large impact on arrival times. Advanced service optimization solutions prevent these kinds of routing mistakes from happening. They include street-level routing features that incorporate detailed GIS data. They take into account obstacles such as bodies of water, bridges, one-way streets, parks, campuses, and posted speed. In addition to reducing travel time this method of optimization ensures that customers are given commitments you can keep.
- Get with the times! – “The arrogance of success is to think that what we did yesterday is good enough for tomorrow.”– William Pollard. Like the USPS who experienced a fundamental business shift when communications shifted from print to digital, change happens everywhere but the key is how you adapt. Leading service businesses are continually thinking about how to accommodate changes in scheduling policies and/or market conditions in the quickest and most cost-effective way possible. This requires technology that gives you visibility into all areas of your business to drive intelligent and informed business decisions. In the real world, no matter how much planning is done in advance, there will always be changes. Technology like ClickSoftware provides real-time visibility to any event that will affect the service and schedule. By reacting to business changes in real-time, the delay between the event and the action of the service is minimal. This leads to additional business gains by notifying customers of expected time of arrival, better handling of emergencies, greater compliance with service level agreements, and overall higher productivity.
What takeaways do you see from the USPS that service companies can apply to their business or vice versa? Share your ideas with us in the comments below!
Increasing customer service levels while reducing operational costs is an inherent challenge of service optimization. To read more about ClickSoftware’s unique approach to facing this challenge of increasing customer service levels while reducing operational costs, download our free whitepaper: The Service Optimization Challenge.