USPS leverages technology to save $57m

USPS has earned the R. Gene Richter Award for “Leadership and Innovation” for optimising the use of bidding software that resulted in savings of more than $57m from 2005 to 2008.

USPS has earned the R. Gene Richter Award for “Leadership and Innovation” for optimising the use of bidding software that resulted in savings of more than $57m from 2005 to 2008.

Called “optimisation-enabled sourcing,” the technology allows suppliers to submit multiple bids on a proposed contract based on different bundling options that best meet their capabilities. The Postal Service’s Supply Management organisation and its internal clients can then examine and evaluate the bids in many ways to get the best possible deal — in cost and in service — for the Postal Service.

Without the technology solution, the collection and evaluation of multiple bid combinations is a manual process that can be time consuming. The optimisation tool enables multifaceted analysis on hundreds of business requirements to occur in minutes, and sourcing events can be completed in days.

Susan Brownell, vice president, Supply Management, said the Postal Service first implemented optimisation in 2005, primarily for transportation sourcing:
“When we realised the need for a resource that could perform more robust analyses of complex requirements and allow more collaboration with suppliers, we decided to fully leverage the optimisation tool,” she said.

“It gives suppliers flexibility in submitting their bids and provides them an opportunity to give proposals that really hit their sweet spot.”

Brownell said the decision to expand the use of optimisation outside the transportation spend category has resulted in greater flexibility for suppliers and an annual cost.