PDF

Driving Improvements at

Canada Post

Ensuring Lean Six Sigma Efforts align with Business Objectives

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Agenda

•About Canada Post

•Organization for CI

•Business objectives

•Example project

•Question and Answer

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About Canada Post

•Became a Crown Corporation in 1981

•Employ almost 72,000 people

•Support an additional 45,200 jobs

•Approximately 70% of our cost is in labour

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About Canada Post

•Our brand is the most trusted of all Canadian Federal Institutions

•Rated as one of Canada’s top 100 employers

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About Canada Post

•Over 14,000,000 points of call

•Increasing by 240,000 per year

•Largest area of all Postal Organizations

•Profitable for 14 years consecutively

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About Canada Post

•4 different Unions or Associations

•5 different Collective Bargaining Agreements

•No lay-off clause

•33% of work force to retire in the next 4 years.

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About Canada Post

20032001199919971995

IntroductionOf

Lean

Process Management &

VisualDepot

PlantEquipmentAlignment

IntroductionOf SixSigma

2005 2007 20091993

Use ofJIT

Principles

VSSOrganization

Deployed

VisualDepot &

ROIProcessCouncil

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Regional

E&CI

Director

Plant

Director

Shift

Manager

1 2 3VSS

Parcels

VSS

Transaction Mail

VSS

Direct Mail

Supervisors and staff

GM E&CI

ParcelsTransaction MailDirect Mail

Induct Sort Transport Deliver

“Regional Lead and

National Champion”

IE’s

Continuous Improvement

and Projects

Lines of Business

Parcels

Transaction Mail

Direct Mail

Requirements

Lean Sigma

Center

RE&T

IE Skills & Process Changes

Specifications

Impro

vem

ents

(A

3)

Operations GoalsCost

Quality & ServiceEmployeeRequirements

End to End Design

“Local Process Owners”

Cycle of CI

Organization for CI – Roles in E&CI

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VSS

Lines of Business

Operations

Requirements

Lean Sigma

Center

Process Specifications(Process Management System)

•Process requirements•Outcome metrics•Process metrics•Process map•Hand-offs•Gap analysis checklist•Audit plan•Assess best practices

Process Specifications(Process Management System)

•Process requirements•Outcome metrics•Process metrics•Process map•Hand-offs•Gap analysis checklist•Audit plan•Assess best practices

Process

Engineer

Process Owner

(strategy &

management)

•Conduct Gap analysis

•Implement Process Specs

•Understand performance trends & opportunities

•Continuous improvement

•Coach/guide standard work & pace on floor (e.g play-book, RTO)

•Control Process Changes

Impro

vem

ents (A

3)

ParcelsTransaction

MailDirect Mail

National PE Directors

CustInduct Sort Transport DeliverCust

•Product changes

•National projects

“Minimum Standard Baseline”CI Engineers (IE)

+

Cycle of CI

Project Engineers (IE)

2009 Scorecard:$500K per VSS

Replication A3 s

Organization for CI – Process Management

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2009 Performance ScorecardValue Stream Specialist

Expenses: 50

1. Deliver $500K ( approx 13,500 equivalent worked hours) in value stream improvement savings documented through A3 project/ initiative reports (50)

4. Achieve plant cut-off times for assigned value streams (15 )

5. Service results to own value stream: (10)

Service and Delivery Quality: 25

Employee Engagement: 15

5. Employee Involvement(i) Employee involvement in every continuous improvement project & standard work update ( 5) (ii) Visible and active leadership ( 5 ) (iii) YOY improvement in EE survey score in assigned plant ( 5 )

Health and Safety Culture: 10

2. Number of accidents - plant results ( 5 )

3. Number of accidents – direct value stream actions ( 5 )

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The VSS improvements will be directly attributable to your bottom line. This is not a separate cost savings target from yours.

Expenses: 20%

Operations Director Scorecard

Health & Safety: 30%

Service & Delivery Quality: 25%

Employee Engagement: 25%

Contributed by VSS

Value Stream Specialist Scorecard

Expenses ($500K) 60%

Health & Safety: 10%Service & Delivery Quality: 15%Employee Engagement: 15%

(50%)

(25)

Organization for CI – VSS Scorecard

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Tony Kloosterman Manon Grise

Alison Hillis, VSS Transaction Mail

Steve Withers

Project 1: BCS Improvement $1 M per yearProject 2: O/S Breakdown Improvement $198K per year plus 61% reduction in lead time

VSS success depends on excellent support from several directions:

Bob Watson (Bryan Epp)

Lean Sigma Center

Process Owner

E&CI DirectorOperations Director

•Coaching•Training•Tools•Process

•PO Specs•Measurement•Best Practices•ID Opportunities•Evaluate A3s

•Help prioritize•Mentoring•Validate analysis•Team alignment

•Coaching•Mentoring•Eliminate barriers•IE Support

A3

EngagedFront Line

Team

•“Local Process Owner”•Improvement specialist•Lean Black Belt

Dialogue

•Role clarity•Prioritizing

Organization for CI – Doing it right!

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“The true value of standard work is to serve as a basis for experimentation.  Standards are set - as bases of comparison - and are used as baselines for improvement.  As long as current standards are as they are, there should be no deviation.  However, if someone has a better idea for how to perform his or her own work, that idea is proposed, approved (via VSS - my words), tried, evaluated against the current standard and rewarded.”

John Shook, Managing To Learn

Organization for CI – Why Standardize?

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Business Objectives

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Business Objectives

Business Objective

Reduce accidents

Improve Service

Lower cost

Activities

Lean Six Sigma leads to business results

Remove hazardous or wasteful activities

Reduce lead time

Reduce lead time and wasteful activities

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About Canada Post

•Who is our customer?

•What processes add value?

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•P.F.M Current State VSM Future State Map

48 hours!

Example Project

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Example Project

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Example Project

Do NOT brainstorm a future state!

8 Questions

1. Takt time?

2. Finished good supermarket or direct?

3. Where can we flow?

4. Where is pull needed?

5. Where is the pacemaker?

6. Production mix at the pacemaker?

7. Production volume at the pacemaker?

8. What other improvement are needed?

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Example Project

Objective decision making

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18000 hrs

International Mail (5000 hrs)

Registered Mail (5000 hrs)

Consolidate Vista (8000 hrs)

I nternational

20000 hrs

VES Coding (2000 hrs)

Turn Around Breakdown (4000 hrs)

Manual Case Tie Out (10000 hrs)

MLOCR Feed Rate (4000 hrs)

Lettermail

15000 hrs

New Packet Sorter (5000 hrs)

VSM Opportunities (??? hrs)

SPBS Automated Induction (10000 hrs)

Expedited & Regular

5000 hrsQ4

99000 hrs20000 hrs26000 hrs2009

30000 hrsManual Case Sort (6000 hrs)

Diverter Removal (5000 hrs)

Q2

16000 hrsNew Container Sorter (6000 hrs)

PO5 Route Structuring (5000 hrs)

Q3

SPBS Productivity (16000 hrs)

XP & PC

48000 hrsODC (8000 hrs)

Q1

TotalPub & Ad

18000 hrs

International Mail (5000 hrs)

Registered Mail (5000 hrs)

Consolidate Vista (8000 hrs)

I nternational

20000 hrs

VES Coding (2000 hrs)

Turn Around Breakdown (4000 hrs)

Manual Case Tie Out (10000 hrs)

MLOCR Feed Rate (4000 hrs)

Lettermail

15000 hrs

New Packet Sorter (5000 hrs)

VSM Opportunities (??? hrs)

SPBS Automated Induction (10000 hrs)

Expedited & Regular

5000 hrsQ4

99000 hrs20000 hrs26000 hrs2009

30000 hrsManual Case Sort (6000 hrs)

Diverter Removal (5000 hrs)

Q2

16000 hrsNew Container Sorter (6000 hrs)

PO5 Route Structuring (5000 hrs)

Q3

SPBS Productivity (16000 hrs)

XP & PC

48000 hrsODC (8000 hrs)

Q1

TotalPub & Ad

Example Project

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Example Project

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Example Project

Single Stack

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Work Per Tray

Tim

e [

seco

nd

s]

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Example Project

Paper Kaizen

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Work Per Tray Paper Kaizen

Seco

nd

s p

er

Tra

y

10% improvement

Makes waste more visible

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Example Project

Did the change improve as much as we hypothesized?

If so: ~22,000 hours work or $814,000

700

600

500

400

300

200

100

Date 2

Individual V

alue

_X=486.4

UCL=618.8 UCL=647.0

LCL=325.8

Before After

_X=450.2

LCL=281.6

1

S/ L Outward Manual Sort PPH