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Thursday, 31 May, 2001, 10:26 GMT 11:26 UK
Consignia considers outsourcing deal
Consignia website
Consignia wants to become more efficient
Consignia, formerly The Post Office, is reported to be considering outsourcing sorting and delivery services to the German IT firm, Siemens.

A report in The Guardian newspaper said Consignia aimed to boost productivity by outsourcing to Siemens or another commercial company.

Posting a letter
Recent strikes by postal workers have attracted attention to Consignia's problems
Consignia's postal operations have been under review since last September when the consultancy KPMG was called in to scrutinise efficiency.

Royal Mail, one of Consignia's branded units, has recently suffered a series of debilitating strikes at post offices in England and Wales.

Although postal workers eventually returned to work last Friday, the industrial action has highlighted the problems Consignia faces.

Efficiency drive

KPMG's mission is to cut costs and improve flexibility. The consultancy is also looking at outsourcing some services, including IT and sorting.

Nothing would change as far as the public is concerned, except that the postman's uniform may bear a Siemens logo

Consignia source quoted in Computer Weekly
Parts of the study have been leaked to Computer Weekly magazine, which reports that several meetings with Siemens have already taken place.

"Nothing would change as far as the public is concerned, except that the postman's uniform may bear a Siemens logo," one senior executive working on the review was quoted as saying.

Consignia has declined to comment on the reports.

"We are constantly looking at ways to improve performance and we are considering a range of options to meet the commercial challenge," Consignia told The Guardian.

A new mail centre

The UK newspaper also said that Consignia might hand over a new mail centre in east London to Siemens, or which ever other private contractor was appointed.

The idea is that a new workforce at a new site would reduce the risk of a strike.

Siemens already has a relationship with Consignia through its supply of sorting machines to Royal Mail.

It also took over operations in 1999 at National Savings, a business partner of Consignia.

Going corporate

Without an overhaul of its operations, Consignia could lose market share to competitors.

The public company has already attracted criticism from Postwatch, the consumer watchdog, which has alleged that Royal Mail loses a million letters a week.

In March, the Royal Mail lost its monopoly on handling mail costing more than 1, but kept it for cheaper letters.

As part of an overall shake-up at the same time, The Post Office was officially turned into a state-owned limited company, giving its management more control over key commercial decisions.

Earlier in the year, The Post Office had already announced that it would be changing its name to Consignia to reflect its more commercial and international approach to business.

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See also:

25 May 01 | Wales
Postal workers call off strike
24 May 01 | Business
Q&A: Why Royal Mail is in trouble
31 Jan 01 | Business
Alcatel, Siemens warn of slower 2001
10 May 01 | Business
Siemens cuts more jobs
26 Mar 01 | Business
Q&A: Letter delivery free-for-all
22 Dec 00 | Business
Price cut 'threatens post offices'
09 Jan 01 | Business
UK Post Office name change
20 Jul 00 | UK Politics
Post Office 'pressured' by change
28 Jan 00 | UK Politics
Post Office to become plc
28 Jan 00 | e-cyclopedia
Renaming: Sleight of brand?
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