Situation

decision analysis partners was asked by a client to analyze the impacts of different U.S. mail processing network topologies on service performance in supportof regulatory proceedings before the Postal Regulatory Commission of the United States.   The question was how far could the U.S. Postal Service rationalize its network and reduce operating costs before jeopardizing service performance.  We simulated a precise representation of network distribution, using detailed data provided to us through the Postal Regulatory Commission’ testimonial process, and building on our network modeling tools developed through ourwork for the USPS Office of Inspector General.  Our primary challenge was to mine vast amounts of operational data in order to build a credible operational model that reflected with fidelity current operating conditions at the U.S. Postal Service.  This included the management of many data sources, data scrubbing, and aggregation to support the study’s business objectives.

Simulation Model

Once the network simulation model was developed, we conducted an exhaustive model calibration to establish a foundation for the scenario-based analysis that would follow.  We compared modeled mail volumes run through each simulation model processing operation at each processing center with the corresponding actual USPS-provided operational data.   We then simulated a number of network topology scenarios by selectively removing low productivity plants and reassigning mail to the nearest productive facility. For each scenario tested, we measured service performance and cost for each type of mail and service standard.

In order to provide additional insights on the operational impacts of selective plant closures, and the resulting reassignment of mail, our simulation model also generated the following results:

• Work-in process inventories per mail processing operation
• Machine utilization
• Queue sizes at operation clear times
• Transportation demand, measured in truck-miles for ground transport, or lb-miles for air lifts
• Conversion from ground to surface to meet service commitments.

The results were presented to the Postal Regulatory Commission as part of Docket N2012-1, USPS Mail Processing Network Rationalization Service Changes, 2012 and brought compelling and factual evidence to help the Commission form a balanced opinion.