The USPS’ Radical Plan
Yes, the postal service is ripe for restructuring and cost reductions. In theory, the plan would keep the postal service solvent. But in reality, the proposal is overly optimistic regarding what the agency can achieve in a relatively short time.
Consider this cautionary statement from none other than Quad/Graphics in its latest quarterly earnings report, which refers to "decreased labor productivity associated with integration and restructuring activities related to hiring and training additional employees to prepare certain plants to receive transferred volumes from manufacturing facilities that were closed as part of the World Color Press integration."
Radical restructuring can reduce costs, but it's a messy process that causes temporary setbacks and reduced productivity—even for a company like Quad that had an extensive integration plan and is used to ratcheting up productivity. The lesson is doubly true for a generally dysfunctional organization like the postal service, which only in recent years has become religious about being more efficient.
Quad and the other surviving publication printers didn't improve productivity by slashing head counts. They did it through investment—in larger presses, computer-to-plate technology, automated workflows, employee training, and a host of new methods and processes. Head-count reductions didn't cause productivity gains, but instead were made possible by such gains.
Likewise, our industry's paper suppliers have spent money to save money—by upgrading machines (and closing those that were no longer efficient), reducing energy consumption, using less-expensive materials, reducing waste and improving productivity. Otherwise, they would not have been able to survive, considering that the prices they charge are nearly identical to what they were a decade ago, even though input costs continue rising.
Implementing digital technologies and workflows required magazine publishers to make some investments up front, tolerate transition pain, and change organizational structures before the investments paid off.