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Postal Service uses software to manage labor pool- 4/19/04

posted June 9, 2003


Graphical screen and editing featureIntro: Labor Force Schedule Optimizer System (SOS) -The Board of Governors approved funding to deploy labor scheduler software tool to USPS mail processing sites. The tool helps managers determine optimum staffing for a processing facility. The software considers operating plans, equipment, workload, mail flow and labor agreement scheduling requirements therefore, provide a roadmap for repositioning employees to obtain maximum efficiencies. --USPS

"The software application, known as the Labor Force Schedule Optimizer System received initial funding last year, when the Governors approved $13.4 million for development and deployment. Today, the board approved additional funding of $1.2 million to expand the program to a total of 90 facilities nationwide. Paul Vogel, Vice President, Network Operations Management. Vogel said the application considers each plant's operating plan, network responsibilities, mail processing equipment and specific mail flows. It incorporates all scheduling requirements of postal employee labor agreements."

What is SOS?| How does SOS work? | SOS success| Optimizing the decision making| Cutting costs

What is SOS?

Labor Force Schedule Optimizer System (SOS) is a powerful management support tool for service delivery organizations. It provides significant cost-saving options through optimized labor scheduling. It applies special value to 24/7 operations with potential of flexibility in shifts, days off, break periods, etc. It can minimize one of many elements such as cost and idle time. SOS encapsulates advanced mathematical optimization technology in an easy to use software package. It has been applied successfully at eight large (in excess of 50,000 square meters) mail sorting centers. SOS develops a flexible and cost optimal labor schedule to satisfy the demand for labor created by the operating plan of equipment or other work-defined requirements. SOS is web-enabled, so management can access and use it from anywhere in the world.

SOS can be used to generate cost optimal scenarios, and examine tradeoffs among different scenarios that are acceptable to the work force and management. With SOS, organizations can be fully prepared to negotiate fairly with labor unions - whether to establish new timing for schedules or to propose substituting labor types. SOS provides a fact-based approach to redefining labor-management agreements.


How does SOS work?
SOS works in five simple steps! The user selects the data from an historical week to run the model. An external algorithm optimizes this selection. Relevant data is then inputted. This can include an increased number of shift start-times that management allows, equipment/operating schedules and wage rates.

The user then defines the parameters related to labor agreements, i.e. full or part-time headcount ratios; which shifts must be given days off consecutively; how much variation in starting times to require from one day of the week to the next, and in what windows to allow placement of the lunch period.

The optimization technology then processes the input data and parameters and generates schedules that achieve minimum cost. The user then varies any of the parameters to examine the cost impact of these variations and the practicality of the resulting schedules


With most postal and courier services entering a new era of consolidation and increased global competition, the industry finds itself dealing with a labor force configuration that does not match current and evolving requirements for long term success. The labor force size, skill mix, and the inflexibility of fixed schedule shifts result in costs and inefficiencies no longer accepted by the marketplace. The challenge of scheduling a 24-hour, multi-shift operation to match varying workload demands over a day, a week, or for months, is nearly impossible to meet without a powerful decision support system.

SOS success
The United States Postal Service (USPS) has conducted feasibility tests of SOS at a large and a medium-sized mail-sorting center. Subsequently, the USPS signed a license agreement to conduct further pilot testing of SOS at additional sorting centers. This advanced pilot is underway at some of the largest USPS sorting centers. This phase of testing means additional refinements will be made and cost-capture procedures firmly established.

Optimizing the decision making
Postal and courier service executives have had limited access to the mathematical optimization technology that can substantially improve planning and decision making. The reasons are twofold.

Professionally designed schedule optimizers have not yet been built for the postal industry. Schedulers developed internally by postal employees have not benefited from precision solutions generated through the expert use of mixed integer linear optimization. In general, internally developed systems have not gained wide acceptance because of deficiencies in capability, usability, or both. Internally developed schedule optimizers have lacked the budgets needed to develop and deploy this sophisticated technology.

Another reason is that attempts to use modified personnel optimizers from other industries have not succeeded. This approach has not provided the flexibility and versatility needed to address the complex work, management and union cultures of the postal industry.

Cutting costs
Full-time, permanent postal employees have enjoyed long-term jobs with set benefit packages and steady work hours. The extent to which temporary and part-time workers are used is limited by labor agreements. Temporary and part-time workers may have lower benefit ratios, offer more flexible work schedules, or both.

Without a comprehensive decision support tool, management tends to significantly overstaff in order to guarantee service resulting in lost opportunities to minimize costs. Organizations are also unable to fully use the available labor force flexibility effectively without a decision tool. The results are excessive expenditures and frequent idle times for employees. There are no tools that exactly match staffing decisions with the demands placed by the equipment or facility operating plans. In the current competitive environment, service levels are of paramount importance so the natural tendency in the absence of a proper planning tool has been to have high availability of excess labor just in case the schedules developed by less sophisticated methods were inaccurate.

SOS allows postal organizations to use flexibility in scheduling while maintaining service levels, and to have convincing facts to present to the workforce. Most large postal organizations have had the flexibility within their labor agreements to: Start shifts at multiple times; vary reporting times over the working week for any individual employee; limit or eliminate consecutive days; switch idle workers to other work areas, and use a percentage of part-time, flexible workers.

Few of these flexibilities have been consistently used to reduce operating costs and become more competitive.  SOS allows postal managers to use every one of these in an understandable fashion.

Cost-cutting scheduling prescriptions of SOS or any other resource management system must be accepted as being manageable by facility managers and perceived to be fair by the workforce. SOS has features that allow:

Abiding strictly by the allowable ratios of part-time workers to fulltime workers, and staying strictly within the limits set by labor contracts and quality of life criteria for start time variations, days-off rules, and lunch period allocations;

Management to restrict the variety of shift start times initially prescribed by SOS so that schedules are more manageable by floor supervisors;

Reporting on percentage of idle time and number of cross-area switches during the work days of each worker so that all stakeholders understand that the schedules are reasonable.

In summary, the SOS system allows organizations to cut costs, reduce idle time, and enhance efficiency by:

Creating schedules that better match demand with a wider variety of start times for full-time workers and varying shift lengths and start times for part-time workers;

Giving management the ability to understand the impacts of options regarding consecutive days off;

Allowing an easy way to vary the schedules over the days of the week;

Allowing workers to switch among areas to lower idle times with minimal inconvenience to the worker.

The initial application of SOS at a large sorting center of the USPS revealed that it is possible to achieve significant savings. The reduction ratios proved to be greater than what most postal organizations can achieve in one or two years by attrition and other avenues permitted by labor agreements or other limitations.

source:- Labor Force Schedule Optimizer System (SOS)