Governor Hunt had a plan. Having already served two full terms as Governor of North Carolina, James B. Hunt, Jr. approached his third term with a clear agenda for the state, hailed as Project 2000. This ambitious and impressive 10-point plan included many important initiatives, familiar hallmarks of the Hunt administration past and pending. The tenth of ten points on that plan called for the Reduction of Wasteful Spending. Little did anyone know that this key element would evolve to include a spectacular mail event: the consolidation of nearly all of the state mail operations into a single high-efficiency fully-automated center. This article outlines the tortuous three-year path to success, chronicles the elimination of fierce opposition, provides helpful design specifications, and summarizes the lessons learned.
Initial Conditions – State Mail Operations
Prior to the consolidation, each agency within the North Carolina state government was responsible for their own mail. Typically, an agency would have an independent mail center, frequently located on the lower floor of an agency building. In some instances, as in the Albemarle Building, multiple duplicative mail centers were located in the same facility, yet serving separate agencies. USPS incoming was either delivered by the Postal Service as ordinary route mail destined for the street address, or it was picked up by the agency at the Capital Station in downtown Raleigh. Outbound USPS was metered at full rate, except for a few large agencies (e.g., Department of Transportation, Department of Revenue, and the Division of Motor Vehicles) which used a local presort service bureau and achieved partial automation discounts. Altogether, there were 39 mail centers, each staffed with state employees. Some agency mail centers were very busy. Most of them were lightly loaded, with two peak periods of activity: early morning and mid-afternoon. Turnover among agency mail center personnel was high.
Courier Service – The Secret Weapon
Mail traveling from agency to agency within Wake County (the capital county) and from Raleigh to/from state agencies throughout the state was carried by the Courier Service, a Department of Administration, Motor Fleet Management operation. The Courier Service was founded in 1972, grew consistently over the years, and provided high quality agency-to-agency mail services at substantial savings. The savings to the state, and therefore to the citizenry, was carefully documented through the use of a unique metering arrangement. Each agency was equipped with at least two mailing machines and two meters: one for USPS and the second one for Courier. Outbound Courier mail, that which would be destined for a state facility in any of the other 99 counties within North Carolina would be weighed and metered using the custom-designed Ascom Hasler or Pitney Bowes meters. Courier mail returning from a remote agency would carry a pre-printed bar coded agency identifier, affixed by the sender to the mailpiece, which would then be weighed and scanned at the Courier Service prior to local delivery. At the end of the month, Courier meter readings were reported and used to charge the agency, at a significantly discounted rate. In 1998, the discount was 50% of the metered amount, based on the Courier Service operating performance in the prior year.
In the march toward consolidation, the merits of having an existing courier operation became increasingly clear.
Failed Attempts at Consolidating
As North Carolina grew, so also did the need for expanded and improved state operations. The new and vibrant citizenry translated into the need for more agency services, additional buildings within the state capital complex, and therefore a steadily growing number of independent mail operations. All along, there were strong efforts to consolidate the mail operations. However each of the consolidation initiatives ultimately yielded to one of three powerful forces: the independence of each agency, a natural desire to control their own mailed communications; or the lack of a facility large enough to accommodate a consolidated operation, or the lack of a holistic and practical plan.
Feasibility Study Recommendations
Governor Hunt's Project 2000 was an enormous undertaking. Driven by the voters mandate and fueled by many previous successes, the entire administration was committed to achieving each of several dozen major initiatives. In addition to the highly publicized public programs (e.g., Fast Start), the search was on to Reduce Wasteful Spending. Since the notion of consolidating mail operations had been rumbling around the capital for years, the obvious question then became: would mail service consolidation contribute to achieving a significant cost reduction? The timing was critical. If mail service consolidation was ever going to be accomplished, then the time had come for serious consideration.
As a result, in February 1997, Secretary of Administration Katie Dorsett asked the Office of State Budget and Management, Management and Productivity Section (OSBM) to assist in the preparation of a Feasibility Study concerning the consolidation of several mail centers located in the state government complex. It was believed that some degree of consolidation would produce cost savings and delivery of the mail in a faster and more reliable manner.
After a tedious period of discovery and analysis, supported by a cross-functional work team consisting of several agency mail service supervisors and managers, OSBM concluded that a partial consolidation among departments and agencies that constitute the Governor's cabinet would likely yield an annual savings of $1.42 million. The major contributors to this cost reduction would include the following elements:
- More productive use of mail personnel time
- Automation of incoming sortation
- Reduction in the number of agency vehicles
- Reduction in the number of mailing machines & meters
Assembling a Management Team
The Feasibility Study stressed the importance of selecting a strong management team, capable of developing an agency-independent yet highly customer-centric professional mail operation. Many good and eager candidates were available from among within the existing agency organizations. Following a rigorous process, Mr. Gene Benfield was selected as the probable director of the proposed organization. Benfield had served as the Mail Services Manager at the Department of Corrections and was currently the Manager of Courier Services. Previous to his nine years of state service, Benfield worked for the USPS in Raleigh.
To assist Benfield in this obviously uncharted task, the Department of Administration sought the services of an outside independent professional production mail planner, who was also selected following a rigorous bidding process.
Secretary Dorsett's Charge
Within the Department of Administration, oversight responsibility was assigned to Mr. C. Carlton Myrick, Deputy Secretary of Administration. Myrick brought a unique dimension to the consolidation team, having served over thirty years in state government, for many administrations, including several years in the State Construction office. In a large complex state government administration, certain individuals possess the ability to get things done, in spite of day-to-day obstacles. Myrick had that ability, which came into play on numerous occasions.
Mr. Carl Byrd, an original proponent of mail services consolidation, and the principal architect of the Feasibility Study, also supported the consolidation team. Byrd's contribution focused on process issues and the effective use of budgetary control over agency expenditures.
Early in the planning stage, Secretary Dorsett provided stern direction concerning what would become the most difficult aspect of the entire project. Her words to Benfield and the planner were unequivocal: you must communicate clearly and frequently with the affected agencies, and, as the plan unfolds, the mail services at the agency level must be as good or better than it was before consolidation took place. Thus, the equivalence of mail services became the goal; frequent communications became the strategy to achieve that goal.
Secretary Dorsett's directions were faithfully executed, resulting in nearly one hundred face-to-face meetings with each of over thirty agency heads, many conducted several times with and without staff in attendance. To cement the agency buy-in and foster actionable communications, the consolidation-planning group formed a Liaison Committee, consisting of one person from each of the affected agencies. Liaison meeting were held frequently to keep the agencies abreast, and to elicit their input on matters of mutual concern.
New Site Selection – 20 Years of Archive Storage
The Feasibility Study identified the old School Book Warehouse on Reedy Creek Road as a proposed site for the consolidated operation. Currently filled with over twenty years of dusty inactive archive storage, this 12,000 square foot space could be made available, provided that it was deemed acceptable for mail operations by the planner. Serious problems associated with the lack of air conditioning, inappropriate dock height, and access control were identified by the planner and quickly solved by Mr. Kenny Hunt, the project engineer from the State Construction office assigned to the team. Myrick achieved the impossible by evicting the tenants without a whimper. Based on the planner's projections for automated machinery and the need for a secure document processing area, the allotted space was expanded to the next firewall, resulting in the final 28,000 SF configuration.
Five Digit Unique ZIP – 27699
Right from the beginning, North Carolina enjoyed the support and cooperation of Mr. Larry Allen, the USPS National Account Representative. Allen volunteered to serve as an unofficial member of the original feasibility team. He understood the significance of consolidating the states mail, and worked tirelessly to help accomplish that objective. His most significant single contribution was the identification of 27699 as a unique 5-digit ZIP, already assigned to the state. While the 5-digit ZIP was in active use by the originally assigned agency, the full potential of the ZIP+4 was not. By 1998, the USPS had ceased to assign unique 5-digit ZIPs, making Allen's find and subsequent lobbying efforts particularly significant.
Following a thorough analysis of several unique addressing schemes, the ZIP+4 assignments were made based on budget codes within agency. Thus, each agency would have a range of ZIP+4 codes for assignment within their agency, which closely matched the budget codes within that agency.
Each of the assigned ZIP+4s was accommodated by a lockable box within a bank of boxes, strategically located in a lower hallway of each building. The newly constructed banks of lockable boxes required far less room than the former mail centers, resulting in a significant release of valuable space.
Strategic Plan: Intercept & Divert
The transition from individual agency to a centralized outbound operation was accomplished over a six-month period. This carefully orchestrated stepwise process tended to minimize the turmoil at the agency level, and permitted the consolidated operation to deal with a controlled growth in outbound mail volume. As meters and mailing machines were withdrawn from the agencies, some were retired; others were refurbished and moved to the consolidated center. With the departure of the mailing equipment, the mail-related workload at the agency was systematically reduced.
Decertified Meters Lead the Way
In an odd way, the Postal Service actually accelerated the transition from planning into execution by their dictated decommissioning of all mechanical postage meters. As 1998 drew to a close, several state agencies faced the uncomfortable possibility of having to acquire new meters and some associated equipment, since their old mechanical meters were about to be become extinct. New meters for those few agencies needing them would be an obvious waste of funds, especially since the consolidation process would result in an abundance of meters and mailing machines. Seizing on this as a prudent $49,000 opportunity, the consolidation-planning group called for the initiation of Wave 1 of Phase 1, two months early. With only a single exception, no new postage meters were procured, in spite of persistent efforts on the part of the vendors.
Dealing With Existing Vendors & New Bidders
The decertified meter experience turned out to be a precursor of other difficulties yet to come. Consolidation was a reality for those involved with the planning process. For others, that reality had not been accepted. The Postal Service and the supporting mailing equipment and service providers tended lag behind in their thinking. They were remembering the failed attempts of years past. In the end, everyone came to accept the inevitable.
Automating the Incoming USPS
The single largest challenge was planning for the arrival of all the states mail in one place, as opposed to having it delivered or picked up by each agency. The Postal Service committed to provide all the states mail at the Raleigh P&DC, which was close to the Mail Service Center, the new name for the consolidated operation. The shear enormity of this anticipated influx was difficult to imagine, especially since all the state's incoming mail had never been in one place, at one time, in at least 25 years. To meet this enormous demand for sortation, a triple-track incoming mail sortation scheme was devised consisting of the following elements:
- Manual sortation, using the existing Courier Service sort bins, augmented by several sets of agency bins relocated to the center. This was the default mechanism, if all else failed.
- Automated sortation using a multi-line optical character reader (MLOCR), equipped with special incoming sortation software, programmed to read and sort the Postnet bar coded 27699-xxxx mail. This was the preferred alternative, assumed to represent a small portion at the outset, but it would grow over time.
- Semi-automatic encoding of loose mixed mail or outsorts from the MLOCR using two new encoder stations. This was the bridging mechanism, designed to affix a correct Postnet barcode onto a piece of incoming mail bearing the old street address.
Staff Planning
Staff planning was the most delicate of tasks. It was accomplished over a one-year period with no forced reductions. Everyone who wanted a position at the Mail Service Center was provided an opportunity to transfer. By consolidating and automating, the staff requirements at the center were significantly less than the sum total of the mail service personnel throughout the state complex. However, natural attrition, retirements, and internal agency transfers occurring during the transition year actually resulted in a shortfall in staff. By the time the center commenced full operations, there were over 20 open positions being advertised.
Timetable: Plan, Execute, Full Operations
The entire transition from agency distributed to full consolidated operations took 2.5 years to complete, with the key events as follows:
