KPI set to boost postal service

THERE are constant complaints of delays in the postal service, resulting in people losing jobs, missing opportunities to enrol into university and suffering other forms of inconvenience. 

The implementation of key performance indicators (KPIs) may have given a ray of hope that the country's postal service will improve in the future. 

The Ministry of Finance's guidelines on KPIs stated that KPIs should be balanced and holistic, reflecting priorities in key dimensions including financial, customer, organisation and operations. 

Postal service is currently provided by Pos Malaysia Bhd, a subsidiary of Pos Malaysia Services Holdings Bhd (PSH). 

The introduction of KPIs, which is expected to start by year-end, will put the managements of government-linked corporations (GLCs) under pressure to perform.  

Improving operational efficiency and quality service are currently the buzzwords when one talks about revamping the GLCs. 

Besides achieving better efficiency, the top management of Pos Malaysia is also facing an even more challenging task ahead in coping with the drastic change in the landscape of the postal industry worldwide.  

Many people, particularly IT savvy individuals, find that postal service – the main income source for Pos Malaysia – is becoming obsolete because they could send message via e-mail and SMS. 

This is a compelling reason for Pos Malaysia managing director Datuk lkmal Hijaz Hashim to review the existing business model in order to cope with the fast changing information technology. 

Pos Malaysia is not alone; other postal service providers confront the same fate, too.  

In view of possible fall in bulk mail volume, certain postal authorities have diversified into courier services by owning stakes in those express service providers.  

For example, Deutsche Post has acquired DHL and they work hand in hand to provide full-fledged delivery services that cater to different needs. Another postal organisation that has taken the same move is the Dutch Postal Authority, which has acquired TNT Express. 

Pos Malaysia is not far behind the industry trend in terms of diversifying income sources. 

The group already has a courier service division - Pos Laju - which accounts for about 18% of its revenue. It is believed that Pos Laju commands about 30% share of the domestic courier service market. 

However, Pos Laju's presence is pretty much confined domestically. Analysts said the management should look beyond Malaysian shores.  

“But it is not easy to do that given the stiff competition among the existing big players, namely DHL, UPS (United Parcel Services), Fedex and TNT,'' said an analyst.  

Industry observers noted that one way to go about could be by working with the competitors, instead of fighting against them. 

In fact, the group's 30% equity interest in Transmile Air Services Sdn Bhd could be a trump card for it to tap on in the logistics market.  

PSH is looking into share swap scheme to exchange Transmile Group Bhd shares with its stake in Transmile Air. 

The group announced to Bursa Malaysia last month that it was undergoing normal internal business review, which might involve disposing of its non-core businesses, such as its 30% equity interest in a subsidiary/investment in exchange for shares in Transmile Group. 

Share of profit from associated companies contributed RM17.7mil, or about 19%, of PSH's pre-tax profit last year, of which a large portion was derived from its equity interest in Transmile Air. 

Industry observers commented that the prospect for Transmile was promising, especially after the emergence of Robert Kuok as a major shareholder, and the appointment of former Transport Minister Datuk Seri Dr Ling Liong Sik as chairman. 

Pos Malaysia has more than 600 branches nationwide. Some analysts see the need to rationalise its large branch network to improve efficiency and reduce operating cost. 

Others argued that the extensive branch network would be the jewel in the crown if the management fully capitalised on it. “Post offices may be turned into kiosks where one could do more than just posting letters or paying bills,'' said an analyst. 

Analysts said the revamp of GLCs such as Pos Malaysia was not merely about increasing efficiency. The top management need to strike a balance between profitability and social obligations. 

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