MONDAY, OCTOBER 22, 2018
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Implementation Case Studies Process Excellence: Battling Inefficiencies at Canada Post

Process Excellence: Battling Inefficiencies at Canada Post

In October 2003, a small group of employees began Black Belt training to give new impetus to Canada Post’s process excellence movement. Since then, they and a second cadre of process experts, Green Belts, have, with their many project teams, netted the company more than $7 million in savings and revenues. By the end of 2005, such benefits are expected to top $10 million.

Canada Post, an independent government corporation and the 40th largest Canadian business in terms of consolidated revenue, has focused considerable effort during the last few years on understanding its customers’ requirements and making significant process changes. The results so far have been gratifying, according to Louis O’Brien, vice president of business transformation and sourcing management. “It’s an unequalled savings and performance engine that ultimately delivers measurable value to the customer,” he said of Six Sigma. “By the end of 2004, we had invested $3 million in the program, and realized hard savings of $4 million.”

Boot Camp: The Process Excellence Program

Each project at Canada Post is sponsored by a process owner and tied to a national and/or regional business priority. A local project Champion helps the Black Belt or Green Belt build a team of employees who analyze the business problem, identify the problem’s root causes, then implement a solution that employees will support.

“The whole initiative is built on employee engagement,” said Jean Shaw, advisor for process leadership development. “A project can only be successful and sustainable when employees are involved in, commit to and take ownership of the solution.” Shaw has seen various projects in which postal clerks, sorters and other frontline employees were successfully engaged, thus becoming a formal part of the change process.

Table 1: Lean and Six Sigma Project Paying Off
YearNumber of ProjectsBenefits
200416 Six Sigma/Lean Projects

$3,630,000

2005 (to July)10 Six Sigma/Lean Green Belt Projects

$3,570,000

Total Program Benefits to Date

$7,200,000

Average Benefit for Each Project

$276,000

Numbers tell only part of the story. Every project also contributes benefits in service, quality, employee and customer satisfaction. Many projects also have the potential to be replicated, so benefits (both financial and process-related) can be duplicated across the country.

For example, as team a member, Frank Chirichella, Toronto’s manager of order acceptance, process design and continuous improvement, was able to ensured that several employee communities became part of the solution in a Six Sigma project. “CubiScan equipment improves revenues if the machines run at optimum performance,” he said. “We explained the impact on the bottom line of keeping these machines well maintained.” Similarly, Chirichella engaged engineers to help ensure peak machine performance, and enlisted service personnel to work with customers to solve processing problems arising from incorrect shipping information.

Tim Robinson, director of process leadership development, noted, “Many of the tools have been readily available for decades. The success of any organization depends on the will of business executives to commit the organization to learn, adapt and use those tools throughout the business.”

In the Trenches: Process Excellence in Motion

Canada Post’s project teams have found inefficient processes throughout the company that can be transformed within a short time, resulting in dramatic improvements. “For example, in an area where changing over from one machine to another may have taken employees five hours, a Lean project can shave the time down to under an hour,” Robinson said.

Frank Sullivan, superintendent of the Dartmouth, Nova Scotia, Letter Carrier Depot, reports that his involvement in a Six Sigma project to reduce admail returns was an eye-opener. “Six Sigma tools are superior to anything I’ve seen in the past,” he declared. “As the bar continues to rise in our competitive environment, they will allow us to compete with anyone. And if Canada Post is to remain relevant in this new world, embracing process excellence is no longer an option.”

As a participant in Six Sigma discussions and brainstorming sessions, Sullivan was impressed by the “reasoned problem-solving approach” and use of statistics to determine defects. He also enjoyed being part of a cross-functional team of half-a-dozen people that included one of his supervisors.

Canada Post’s Lean Six Sigma Critical Success Factors

  • Senior management committing to process management as the foundation for managing and improving Canada Post’s business processes.
  • Linking all Lean Six Sigma initiatives and improvements to the process management system.
  • Ensuring integration of Lean Six Sigma projects with national and regional business plans.
  • Training process owners and managers to identify and break down business problems into manageable Lean Six Sigma projects based on process data.
  • Providing roles for Black Belts and Green Belts that enable them to continue using their skills for process improvement.

Coordinating various Lean and Six Sigma projects and integrating them across all business units are regional advisors for process excellence, including Montreal-based Louise Lefebvre. One of her responsibilities is leading the regional project council, which ensures that the entire range of projects in the region are completed.

“Regional advisors review project ideas based on national and regional business priorities, then present them to their general managers’ and directors’ committee,” reported Lefebvre. “We also advise the committee on selecting Black and Green Belt projects and candidates to ensure they are in line with business priorities.”

Projects completed to date underline the value of Lean and Six Sigma Belts and point to limitless possibilities. For example, a project led by Black Belt Bryan Epp is expected to generate additional revenues of some $1 million annually. Epp and his team identified process defects in comparing the actual weight and dimensions of packages with customer-reported shipping data.

Another project, led by Black Belt Sean McInerney, saved the company $660,000 annually by trimming the volume of letter mail sent by air from Toronto to southwestern Ontario. Black Belt Bruce Chikowski saved $265,000 annually in customer service by reducing the time that representatives were unavailable to answer calls. And in London, Ontario, Green Belt Robert Hatchard decreased duplication in the priority courier value stream, generating initial savings of $113,000.

Six Sigma Black Belt Paul Choquette, manager of process integration in human resources, sees such results as just the tip of the iceberg. “We have set the foundation for process excellence and can now apply the methodologies to any of our business units as we did in human resources,” he said.

New Target Zones: The Future of Process Excellence

“Black Belts are like surgeons: they find and fix a problem, then return a better patient to process owners to nurture,” Canada Post vice president Louis O’Brien said. He sees process excellence as the “biggest single savings and performance improvement engine that can be applied to any business unit and any operation.” As Canada Post’s strategic direction evolves, Lean Six Sigma methodologies will not change or go away; rather, they will become “essential underpinnings of a new strategic management culture,” he said.

Today’s small force of Black Belts and Green Belts will multiply, eventually providing Canada Post with hundreds of experts trained in all aspects of process excellence. “This is also good personal development for employees that can make their jobs more interesting and provide them with an essential understanding of the company from end to end,” O’Brien said.

“Process excellence is not about pushing people to work harder,” O’Brien concluded. “It is a disciplined, repeatable methodology for working smarter.” And that translates into better customer service and greater competitiveness.

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Comments

michal plachy

How did you evalueted the savings? Black Belt Bruce Chikowski saved $265,000 annually in customer service by reducing the time that representatives were unavailable to answer calls? how did you calculate the costs of unanswered call.

thank you

Reply


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