Last year was certainly a unique year where traditional playbooks may have fallen short. Although everyone left last year with an air of uncertainty, one concern remains. How are Posts reducing costs in 2021 to stay profitable and continue to grow?
There are many outdated systems and processes still in use today that may seem necessary but are costing Posts a lot of money. Other newer technologies and methods could provide practical changes for the postal network to remain successful and thrive.
To better understand how Posts are reducing costs as well as discuss other trends shaping the postal industry, we recently held a series of global online workshops. During these discussions, we have identified three primary areas many Posts around the world are targeting to improve the efficiency of their operations and reduce costs.
In the past, many Posts only had the option of operating with a fixed-cost business model. Fixed expenses, such as building costs, staffing, and transportation were simply an accepted cost of business. But as the logistic-heavy parcel delivery business has eclipsed mail service, there’s been an increasing focus on managing expenses.
Many regions have already discovered the need to transition away from fixed costs and have made this a priority. To convert to a variable-cost structure, the Post must capitalize on its flexibility as well. The lack of current automation demands physical labor, keeping costs higher.
The reason why much of the Post’s operations aren’t automated yet is labor concerns. Many people still seem fearful of newer technologies eliminating jobs despite other necessary roles.
In addition to manual labor, many Posts also are not capitalizing on collected data. Improved analytics could easily offer better insight and more informed decisions for Posts.
Finally, the need for outsourcing can no longer get overlooked but embraced and many Posts are also embracing this, where it’s possible.
While we typically think of automation as large-scale improvements, smaller-scale operations may benefit Posts more. Because one of the Post’s biggest competitive edges is flexibility, Posts can surpass larger systems effortlessly.
Postal locations often have lots of back-of-house operations consumers don’t see. Focusing on these tasks for automation frees up lots of human resources to focus on more complex, higher-value tasks.
Companies spend a fortune on collecting and analyzing data of their consumers. The Post, on the other hand, receives tons of information and has the opportunity to greatly improve not just operations efficiency but also customer service, revenue potential and more.
As Posts continue to collect and use data more effectively, operational expenses will likely decline.
As stated before, the Post has a great number of administrative tasks using human labor. By introducing both automation and outsourcing, Posts can achieve greater efficiencies.
While the pandemic has strained operations, many of these suggestions aren’t new. However, thanks to forced changes from COVID-19, now these solutions may take root. Doing so may finally allow the Post to move away from heavy, fixed-cost structures and embrace a way to make operations more efficient. While the need to reduce costs is constant, now is the time for practical improvements.