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
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