New Zealand Post: Operational Issues, Challenges & Business Climate

This paper examines the operational challenges faced by postal service organizations in New Zealand, focusing on technology, human resources, the dynamic business environment, and supply chain management. It analyzes how the digital age has impacted traditional postal services and presents a case study of New Zealand Post, detailing the operational issues and challenges it faces in areas such as technology adoption, human resource management, adapting to a dynamic business environment, and optimizing its supply chain. The study compares New Zealand Post's experiences with those of other postal service industries in New Zealand, highlighting both shared challenges and unique strategies. The document concludes by discussing operational management principles, practices, and internal/external compliance requirements for New Zealand Post, and it recommends an operations management plan to address these challenges.

Running Head: BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE
ORGANIZATIONS 1
BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS
Student’s Name
Institutional Affiliation
Date

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 1
Contents
Executive Summary
Introduction......................................................................................................................................0
Body.................................................................................................................................................0
Operational Challenges faced by Postal Services Organizations in New Zealand......................0
Technology...............................................................................................................................0
Human Resources.....................................................................................................................0
Dynamic Business Environment..............................................................................................0
Supply Chain Management......................................................................................................0
Operational Issues and Challenges faced by New Zealand Post.................................................0
Technology...............................................................................................................................0
Human Resources.....................................................................................................................0
Dynamic Business Environment..............................................................................................0
Supply Chain Management......................................................................................................0
Comparison..................................................................................................................................0
Technology...............................................................................................................................0
Human Resource......................................................................................................................0
Dynamic Business Environment..............................................................................................0
Supply Chain Management......................................................................................................0
Conclusion.......................................................................................................................................0
Introduction......................................................................................................................................0
Body.................................................................................................................................................0
Operational Management Principles............................................................................................0
Reality......................................................................................................................................0

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 2
Organization.............................................................................................................................0
Success.....................................................................................................................................0
Accountability..........................................................................................................................0
Change......................................................................................................................................0
Operational Management Practices.............................................................................................0
Core Practices...........................................................................................................................0
Facilitating Practices................................................................................................................0
Operational Techniques............................................................................................................0
Internal and External Compliance requirements for New Zealand Post......................................0
Internal Compliance.................................................................................................................0
External Compliance................................................................................................................0
Conclusions......................................................................................................................................0
Recommendation of an operations management plan.....................................................................0
References........................................................................................................................................0

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 3
Executive Summary
This paper focuses on the examination of operational challenges faced by the Postal Services
Organizations in New Zealand. The main challenges faced by the postal organizations resonates
around technology, human resources, dynamic business environment and supply chain
management. With an environment that has changed a lot, the postal Services have had problems
with transition to meet the growing demands of the digital age. To better understand the
operational challenges in perspective, the paper analyzed the operational challenges faced by the
New Zealand Post under the topic areas of human resources, technology, supply chain
management and the dynamic business environment.

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 4
Introduction
New Zealand Postal Services came to full effect in the market competition in the year
1998. The postal market of New Zealand is responsible for regulations and laws that relate to
postal services. The main role of the postal market’s postal policy is to ensure that the regulatory
environment that includes postal services competition is supportive of an efficient New Zealand
postal market.
The New Zealand Post Office was initially a government department up to the year 1987.
It was founded in the year 1881 and headquartered in Wellington, New Zealand. The New
Zealand Post did well at the beginning of the 20th century as a government department bearing
more than 1700 branches. The department rapidly grew serving a big role as telephone exchange,
post office and savings bank, cementing its place in the society of New Zealand. Some of the
landmark events that cemented the future of New Zealand Post include; private telephone’s
growth in people’s homes and the international and internal airmail services.
Steps were taken in the 1960s and 1970s for the betterment of management of the rising
international and national mail volumes. However, there was the abolishment of the department
under the Postal Services Act 1987. It was later replaced by the following state-owned
enterprises; New Zealand Post Limited, Post Office Bank Limited and the Telecom New Zealand
Limited. The research aims at discussing operational challenges and issues that New Zealand
Post faces.
Body
Operational Challenges faced by Postal Services Organizations in New Zealand
Technology

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The emergence of new technology has completely transformed the nature and landscape
of communication. The advances and diffusion of information technologies have changed the
way people communicate, undertake the transportation of products and goods and how they carry
out the transactions of finances. Internet dominance in undertaking the transactions above have
played a big role in reducing the role of the postal services in New Zealand. In that case, the
postal services companies in New Zealand are bracing for changes in the manner in which they
conduct business (Binsfeld, Whalley & Pugalis, 2016). Many postal services companies in New
Zealand use the technology of Snail Mail. However, this has a disadvantage over the new
technologies like e-mail. For one, the speed of delivery of snail mail as compared to email is
very slow, in addition to bearing a much higher cost of delivery over that of e-mail. The access
cost of snail mail is also very low but has an advantage of high security. Considering the
comparison of the capabilities of the snail mail and the e-mail, it is evident that e-mail
technology will continue to have high dominance in New Zealand. The postal industry in New
Zealand also continues to hold on to the traditional means of sending letters, utilizing the small
market that still lingers. The problem, however, is that the market for physical letters and parcels
continues to decline and therefore, postal companies in New Zealand should restructure its core
business function to meet the technological needs of consumers (Duggan, 2017).
Human Resources
Due to the new restructuring processes of moving the digital age compliance, the postal
service industries in New Zealand have cut down on the number of employees. The business of
communication was booming back then when the inception of the internet had not sufficed.
Communication, transportation, and financial transactions were the hotbed of postal services
companies in New Zealand. At that time, many people were employed by postal services
organizations.

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However, after the digital age, many consumers relied mostly on the use of the internet to
undertake the businesses that postal industries would be the beneficiaries. Thus, the postal
services industries started to realize a massive decrease in profitability. The human resources in
New Zealand postal services faced new challenges. First, there was a need to restructured its
employees to meet the current situation (Rasmussen, Foster & Farr, 2016). Another problem was
that there was a need for undertaking retrenchment exercise to curb the wage bill that could no
longer be supported by the meager returns. There was also a need to train employees on the new
ways of transacting business. Because of the infusion of technology, there was a need to shift
from the traditional modes of operation thus requiring new job description and training (Khazabi,
2017). The staff was also given the opportunity to access career support initiatives. All the
changes that needed to be made needed additional cost at the time the postal services in New
Zealand were struggling to stay afloat.
Dynamic Business Environment
For a long time, postal services industries enjoyed a monopoly in the transportation,
communication, and financial transaction sector. Later, electronic mail dominated the market in
New Zealand. E-mail, fax and instant messaging technologies like WhatsApp completely
replaced the huge market of communication that the postal service industries enjoyed. The
financial transaction sector has also been greatly affected by the ever-changing technological
world (Crew & Brennan, 2016). In the past, the postal services companies did the work of
transporting money from one point to another. That has been replaced by electronic money
transfer technologies. The banking sector with the use of ATMs affected the need to send money
through postal services companies. People could visit the ATM machines with their cards and
withdraw money at any particular time they thought. After the ATM, came the credit card
technologies where the money would be transferred at the click of a button. Other technologies
like PayPal made it even easier to send and receive money electronically (Erturk &Fail, 2015).
The recent technology of bit coins shows that the postal service’s industry's role in money
transfer continues to diminish.

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Supply Chain Management
The New Zealand Postal Services industry faces a lot of challenges in its supply chain
management. One of the challenges it faces is lack of goods to distribute. One of the segments of
supply chain management is the strategic sourcing of raw materials (Alexander & Merkert,
2018). Many consumers have substituted the use of postal services to the use of other means like
the internet. Therefore, the postal services in New Zealand have run short of raw materials which
are in the form of transportation products (Mann, 2017). With the inadequacy of raw materials,
the whole process of supply chain management is affected.
Operational Issues and Challenges faced by New Zealand Post
Technology
With the disruption of the physical mail business which was the cornerstone of the
company, by the electronic communication and methods of payment, New Zealand Post had to
employ other strategies to stay afloat. One of the strategies of the group was to shift from the
product-oriented kind of business to a service-oriented business model which gives more
attention to its customers. Another strategy was to grow the logistics and parcels business. Since
the disruption of the electronic means, there was a need for using innovative ways to popularize
the parcel and logistics business. Another means was to leverage on technology to boost the
interaction of New Zealand Post with its consumers. The strategies employed by New Zealand
Post faces a risk of failing because the transition in technology cannot go back however much
effort is put. The aim of popularizing the parcel and logistics business means that consumers
would have to abandon the use of electronic means which is a pipe dream for the company.
Human Resources

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To improve its human resource management, New Zealand Post employed the use of
front line leadership which was meant to have a direct role in the recruitment, motivation,
retention, and development of the workforce. However, the strategy of placement of front line
leaders seemed futile. The results of the performance of fort line leadership were inconsistent.
This was followed by a string of problems; the implementation of new initiatives was difficult to
implement, there was a consistent recurrence of employment-related issues because of the fact
that issues were not dealt with on time. Also, their confidence was lacking on the frontline
leaders by the senior management on the ability to handle changes that would emerge in the near
future.
Dynamic Business Environment
The 1998 deregulation of the New Zealand Post presented more challenges. For one, it
greatly reduced the monopoly of the New Zealand Post to a $1.75 limit and 500 grams. Shortly
after that, came the effect of the internet which changed the landscape of communication and
financial transactions. Hardly had the New Zealand Post recovered from the effect of the Postal
Service Act 1987 than the electronic means of communication and financial transactions
presented as new challenges. The original purpose of the New Zealand Post was the distribution
of physical parcels. However much it tries to salvage the tradition of physical parcel transfer, the
dynamic business environment moves in the direction of the digital age placing the New Zealand
Post company in a dilemma.
Supply Chain Management
New Zealand Post has faced a lot of challenges in its supply chain management. For one,
there was an increment in the delivery of items that were purchased through the web. That was
also accompanied by direct marketing growth. Therefore, the number of items that were
processed annually remains at a high level. The problem with that was that the volumes of items
sent declined as items became bulkier, heavier and more diverse. That made the process of
delivery of goods more expensive. Another issue that arose was the delivery point’s increment
that resulted in social and demographic changes and subsequently increasing pressures on cost
and productivity.

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 9
Comparison
Technology
Both the New Zealand Post and the postal services industries in New Zealand faced the
impact of the internet. Since both relied on communication, transport and money transfer, they
all lost the dominance in those areas. E-mail, electronic money transfer technologies are faster,
cheaper and convenient thus luring the consumers of postal services industries. However, New
Zealand Post contrast with the other postal services industries in that due to its popularity and
dominance, it was able to enter into partnership with renowned companies like KFC for the
delivery of products to consumers. Therefore, it remained relevant in the digital world.
Human Resource
In terms of human resource, the postal services industries and the New Zealand Post
faced the problem of restructuring its workforce as a result of low workload and reduced
profitability (Luan, 2016). The New Zealand Post distinguished itself from other companies by
putting its employees into training programs to equip them for the changing needs of the market.
Dynamic Business Environment
The ever changing nature of transacting business through financial transaction,
communication and transportation was a universal problem that was common to the postal
services industries (Kool et al., 2017). However, because of massive infrastructure and
investments it had accumulated over the years, New Zealand Post had enough resources to match
the changing climate of business transactions and invest in infrastructure that was needed for the
same (Hopkins & McCarthy, 2016).
Supply Chain Management
The problems of facing the changed nature of products for transmission were common to
New Zealand Post and other postal service companies in New Zealand. Most of the goods to be
sent were no longer as light as letters but were heavier and bulkier because they were goods
bought from online shops (Lovelock & Patterson, 2015). With the investment of requisite
infrastructure, New Zealand Post was able to distinguish itself from the other industries.

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 10
Conclusion
The New Zealand Postal Services industry faces a lot of challenges but two of them are
outstanding. For one, maintaining relevance in the ever-changing digital world is quite a hurdle
for the postal services industry. Since the industry was originally designed to send physical
parcels, transforming them to handle the digital needs requires a lot of resources and
infrastructure. It is also worthy to understand that digital space has been dominated by other
companies. Therefore, the Postal Service industry hangs in the balance. Another crucial
challenge is the infrastructural transition. A lot of resources is required to transform the postal
service industry to meet the needs of transportation of bulky products. The reduced income as a
result of technology makes it even harder for these industries to purchase new infrastructure. The
New Zealand Post challenge of managing its human resources in the wake of its restructuring
process distinguishes it from the rest. The strategy of frontline leadership was meant to improve
the workforce in the transition process but ended up creating more problems. The frontline
leaders were found to lack the capacity to manage the workforce and new strategic goals and
objectives. That dilemma put the company in a difficult position because the human resource
was crucial in the transition process. Another challenge was that New Zealand Post face is
leveraging on technology to remain relevant. So far, the group has found solace in partnering
with technological companies but that is inadequate.

BUSINESS CLIMATE OF NEW ZEALAND POSTAL SERVICE ORGANIZATIONS 11
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