The US Postal Service (USPS) faced escalating labor costs, with senior executives recognizing that the workforce was excessively large and work shifts were outdated. Despite spending hundreds of millions on automation, there was little impact on reducing labor costs. For years, a team led by a professor from MIT attempted to address the issue using a computer model, but their approach proved ineffective as it was not suited to labor scheduling and lacked optimization.

Care Systems’ parent company, Planmatics, had strong ties with the University of Texas, leading them to collaborate with Professor Jon Bard to tackle the problem. Under his guidance, PhD students developed and programmed a labor optimization model, with Mr. Ahmad Jarrah of Care Systems helping to shape it into a PhD dissertation topic. Within a year, the team completed a labor optimization system.

A few years later, this system was implemented in a portable format, catching the attention of the Senior Vice President of Labor at USPS, Mr. Jack Potter. As he ascended to the role of Deputy Postmaster General, Potter championed the piloting of this system alongside another proposed by Accenture, each for a modest fee of $500,000. Planmatics won the technical evaluation, leading both companies to bid for a 9-center implementation.

Despite intense negotiations where Accenture consistently lowered its bid, Planmatics secured the contract. A subsequent contract was awarded for an additional 12 centers. The labor savings at these 21 sites exceeded what could be negotiated with USPS unions. The implementation, covering over 50,000 workers across the largest sorting centers, was completed in 12 months, resulting in a 15% reduction in labor requirements. However, due to existing labor contracts, not all of this reduction could be realized.

The success of Planmatics’ system lay not only in reducing headcount but also in demonstrating that outdated shift structures were misallocating labor. By aligning the right amount of labor with the right locations through optimized shift structures, the system prevented further inefficiencies.

Today, the USPS labor force stands at approximately 600,000, down from 800,000 at the time of implementation. The drive to reduce labor was largely influenced by the strategic direction provided by Planmatics’ staff level setting and staff scheduling systems. In regions like the Middle East and Far East, where labor contracts may not impose the same restrictions, the potential for such labor optimizations could be even more significant.