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A Techno-Economic Evaluation and Optimization Framework for Postal Consolidations

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2013, Master of Science in Industrial Engineering, University of Toledo, College of Engineering.
Change is the only constant and as Winston Churchill put it “To improve is to change; to be perfect is to change often.” Society is witness to how often this age old adage has proven itself true in every sphere of human life. We have seen a sea change in the way businesses are organized and how the businesses act according to the need of the hour. Currently, the USPS is in the midst of a financial crisis and it need to act fast and wise to stay afloat. The United States Postal Service is the second largest civilian employer in the United States. It has over 700,000 employees, affects an economy that employs over 9 million people and represents 8% of the United States gross domestic product in a $900 billion mailing industry (United States Postal Service [USPS], 2002). While much of the focus of recent consolidation efforts has been to downsize maintenance and staff requirements, the after impacts of consolidation have often been neglected and a proper justification for the selection of facilities for consolidation has not been provided. What has made feasibility assessments even more of a necessity in postal sector is the possible rise in costs associated with transportation, quality of operations and service levels due to unsuccessful consolidations. It is important to define a strategy for the road to consolidation by identifying important factors and likely outcomes. As such any postal organization in any part of the world can be faced with tough times as those of the USPS since there is an ever increasing competition from electronic and social media in communication field. Hence there arises a need for extensive research in this field to aid postal services in tackling the consolidation needs and reforms during unfavorable market conditions. The purpose of this research is to define an analytical framework by the application of Six Sigma principles for the Consolidation Feasibility Assessment (CFA) of postal facility consolidations. Six Sigma approach has not been used in the postal service field to the extent that it has been applied in manufacturing and in other sectors [39]. Included in this study is a case study of a feasibility assessment of the proposed consolidation of a medium sized Processing and Distribution Center at Toledo, Ohio. The goal of this research was to investigate the applications and benefits of conducting CFAs for cost savings, costs incurred and service standards. The hypothesis for this research involved investigating the effects of changes in manpower, transportation, maintenance and other important factors on the consolidation efforts. The scope of this study involved (1) developing a CFA methodology and framework; (2) applying the methodology to a case study; and (3) analyzing the results. The results of the study indicated that the CFA methodology gives a comprehensive view of the pre and pro consolidation scenarios and there was a clear breakdown of costs saved or incurred in various factors of consolidation. Results also indicated that though labor cost savings would be considerable, they might be offset by other miscellaneous costs and also consolidation can cause a considerable degradation of service standards. Such an outcome of CFA will be immensely helpful for the management to understand the implications of consolidation and to assess the effects of consolidation on the general user community and study the scope of operations from a regional to national level.
Matthew Franchetti (Committee Chair)
P.S. Sundararaghavan (Committee Member)
Timothy Stansfield (Committee Member)
157 p.

Recommended Citations

Citations

  • Shaik, S. (2013). A Techno-Economic Evaluation and Optimization Framework for Postal Consolidations [Master's thesis, University of Toledo]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=toledo1384531011

    APA Style (7th edition)

  • Shaik, Salma. A Techno-Economic Evaluation and Optimization Framework for Postal Consolidations. 2013. University of Toledo, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=toledo1384531011.

    MLA Style (8th edition)

  • Shaik, Salma. "A Techno-Economic Evaluation and Optimization Framework for Postal Consolidations." Master's thesis, University of Toledo, 2013. http://rave.ohiolink.edu/etdc/view?acc_num=toledo1384531011

    Chicago Manual of Style (17th edition)