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Mail Network Optimisation Project

Mail Network Optimisation Project. Introduction of the project to the Unions. July 15, 2010. Explaining the Project details: Strategy, Work plan, Process re-design, expected outcome. 2. 11:30 - 12:15. Suggestions and view points of the staff side on the project and its status. 3.

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Mail Network Optimisation Project

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  1. Mail Network Optimisation Project Introduction of the project to the Unions July 15, 2010

  2. Explaining the Project details: Strategy, Work plan, Process re-design, expected outcome 2 11:30 - 12:15 Suggestions and view points of the staff side on the project and its status 3 12:15 - 13:00 Lunch 13:00 – 14:00 Agenda for today's meeting Background of the Mail Network Optimisation Project 1 11:00 - 11:30 1

  3. % India Post: Mail Traffic 1 Mail volume (unregd. and regd.) Crores -5% p.a. 863.53 736.03 670.06 667.71 654.00 639.00 Constant decline in ordinary mail traffic, while Speed Post has witnessed positive growth 2003 - 04 04 - 05 05 - 06 06 - 07 07 - 08 2008 - 09 Speed Post Traffic Crores +20% p.a. 21.00 17.70 12.86 10.86 9.59 8.27 2003 - 04 04 - 05 05 - 06 06 - 07 07 - 08 2008 - 09 SOURCE: India Post 2 2 2

  4. Need for Network Review as a basis for significant increase in volumes, revenues, and market share 1 Impact • Inconsistent quality of service • High operational costs • Eroding customer base External Drivers Internal Drivers • Declining mail volumes • Competition from Domestic and Inter-national players • Absence of regulation • Change in mail profile • Customer Demands(e.g. Track & Trace) • Difficulties of existing mail network vis-à-vis changed mail profile • Low level of IT induction in mail processing • Low productivity • Delivery inconsistencies and visibility • Lack of customer focus SOURCE: India Post 3 3 3

  5. Recent Initiatives in Mail Operations 1 Plan Projects • Setting up of Automated Mail processing Systems • Induction of freighter aircraft for carriage of mail for NE • Setting up of Mail Business Centres • National Address database management system • Popularization of PIN Codes • RFID in Mail Processing • GPS tracking in MMS vehicles • Mechanization of Delivery Mail Network Optimization • Part of Plan Scheme for Setting up of MBCs • Seeks to undertake restructuring of the existing mail network • McKinsey & Co. appointed as the Project Consultant • 36 month long project SOURCE: India Post 4 4 4

  6. Why do we need a Consultant on board? Why a consultant • Give focused attention to Mail Operations with a fully dedicated team in project mode • Have external and objective perspective • Learn from best practices in postal services world-wide 1 SOURCE: India Post 5 5

  7. Deliverables & Time lines contained in the RFP 1 2 6 1 5 4 3 Completion target month no. Sl. No. Description of deliverables Completion of the analysis of current network structure, products and performance, review of customer requirements 0 - 3 Finalization of the optimal scenario, optimization objectives, evaluation and prioritization of design options and definition of the target network, implementation planning 0 - 6 Identification of appropriate technology, costing exercise for the preferred technology options, assistance in selection of technology service provider, migration planning 3 - 9 Finalization of process specification and blue print, definition of Key Performance Indicators (KPIs) and measurement systems, description of roles and responsibilities along the mail business managerial set up, development of training modules, sequencing of implementation of defined processes, systems and structures 0 - 12 Roll out / implementation, pilots 12 - 18 Full implementation 18 - 36 SOURCE: RfP issued by India Post 6 6

  8. 1 Objectives of the Project: getting the core right and improving look and feel of mail offices "Get the core right" • End-to-end network optimisation: Optimise India Post's mail network from collection to delivery • Significant quality improvement: Standardise and improve processes and reduce network complexity • Rigorous performance management: Establish an effective performance management structure using KPIs and regular reviews SCOPE "Modernise the look and feel" • Customers: Improve India Post's appearance to make it more trustworthy and reliable for customers • Employees: Improve working conditions to make staff proud of being associated with India Post • Management:Significantly improve the management's ability to steer a huge organisation SOURCE: Mail Network Optimisation Project 7

  9. Customers • India Post as trustworthy organisation with high-qualityreliable service • Value for money 1 Employees • Improved working conditions as key benefit • Pride in being part of an efficient and widely respected organization Unions • Improved working conditions leading to greater employee confidence • Constructive role in decision making Management • Improved ability to steer a huge organisation and pride in being a part of a successful organization • Usage of state-of the art management principles and tools (e.g., Key Performance Indicators) Getting everybody on board SOURCE: Mail Network Optimisation Project 8

  10. 1 Project Strategy Start with a few productsfor big cities 1 • Early andbroad involvementof Circles and Staff side • Constant Monitoring by the Directorate Add more products for the same cities 2 PROJECT APPROACH Expand to all products across India 3 SOURCE: Mail Network Optimisation Project 9

  11. 3 2 1 1 The Project Roadmap for mail operations revamp All India 2012 Roll-out 2011 Geographical reach Prioritycities "Wave 1" 2010 Scenario-based designand pilots Scenario-based design Speed Post and International mail Ist class IInd class Product range Approach particularly reflects strong need for immediate tangible impact SOURCE: Mail Network Optimisation Project

  12. 1 Why begin with Speed Post and International Mail ? • Attractive market • Speed Post grows 20% every year • Quality is very important for SpeedPost customers • Important for India Post revenue and volume • ~10% of total volume • ~20% of postal revenue • Easiest product for monitoring success • SpeedNet has very helpful data for the project • Track & trace is the much needed customer demand • International Mail is India Post's face to the world • Very important to meet international service standards • Payments increasingly linked to service standards SOURCE: Mail Network Optimisation Project 11 11

  13. 1 The approach to "get the core right" "Get the core right" • End-to-end network optimisation: Optimise India Post's mail network from collection to delivery • Significant quality improvement: Standardise and improve processes and reduce network complexity • Rigorous performance management: Establish an effective performance management structure using KPIs and regular reviews Focus now SCOPE "Modernise the look and feel" • Customers: Improve India Post's appearance to make it more trustworthy and reliable for customers • Employees:Improve working conditions to make staff proud of being associated with India Post • Management:Significantly improve the management's ability to steer a huge organisation SOURCE: Mail Network Optimisation Project 12

  14. City 3 SPC City 1 1 PO 1 SPC 2 PO 2 PO 3 SPC 1 TMO City 2 TMO SPC PO 3 PO 2 PO 1 Work Plan for Revamp of Speed Post operations (collection to delivery): Wave 1 Proof of concept • What is the right network design? • How should the optimal network of sorting hubs look like to ensure maximum D+1 quality? 1 • What are the right processeswithin the facility? • How to ensure standardisation? • How to maximise throughput and quality? 2 • What is the right network schedule? – Which cut-off timesand processing windowsper processing step across the value chain allow the best possible next-day delivery? 3 • How to measure India Post's performance? • What is the share of next day delivery (D+1)? • Track & trace: Are 100% scans ensured across the network? • Which are supporting KPIs to ensure people do not seek workarounds/shortcuts? 4 Optimisation of delivery in wave 2 (1st class mail) as SpeedPost only accounts for ~10% of delivery volume SOURCE: Mail Network Optimisation Project 13

  15. 1 The Project assigns high importance to the "look and feel" aspect as well "Get the core right" • End-to-end network optimisation: Optimise India Post's mail network from collection to delivery • Significant quality improvement: Standardise and improve processes and reduce network complexity • Rigorous performance management: Establish an effective performance management structure using KPIs and regular reviews SCOPE "Modernise the look and feel" • Customers: Improve India Post's appearance to make it more trustworthy & reliable for customers • Employees:Improve working conditions to make staff proud of being associated with India Post • Management:Significantly improve the management's ability to steer a huge organisation Focus now SOURCE: Mail Network Optimisation Project 14

  16. 1 Look and feel Branding Infrastructure Technology Recognition and training The "look and feel" Component Ensure uniform branding as well as consistency across locations Develop standardised and consistent interiors and exteriors of buildings and give clean and supportive infrastructure to the line team Identify new tools and technologies and also upgrade exiting ones to ensure faster, better services Develop scheme for recognising star circles/performers Ensure 100% trained staff on field SOURCE: Mail Network Optimisation Project 15

  17. Impact of the Project Pilot Delhi 1 1 1 1 1 1 1 00 00 00 00 00 00 Mumbai Kolkata Chennai Bangalore Hyderabad We have worked together in the 6 metros (mainly SPCs) over the last months ` SOURCE: Mail Network Optimisation Project 16

  18. 1 Kolkata Airport Kolkata Airport Mumbai New Delhi Chennai Hyderabad Mumbai New Delhi Chennai Bangalore Hyderabad Bangalore 2.9 3.7 3.5 5.0 3.1 3.0 3.4 2.8 3.5 4.1 3.4 3.1 3.5 3.1 2.9 3.1 2.2 2.1 3.5 4.1 4.1 2.6 3.6 4.2 4.3 3.8 3.2 3.6 2.3 3.0 3.9 4.6 5.0 4.9 3.5 2.8 2.7 4.1 2.5 2.9 2.5 2.5 2.6 2.2 2.6 2.4 2.8 2.4 2.0 3.1 2.2 2.0 2.5 1.9 2.4 4.1 2.7 2.1 3.2 2.2 2.3 3.8 1.7 2.1 2.1 2.2 2.2 3.5 2.4 2.0 2.5 1.9 The project has brought some significant improvements over the last months Days (average delivery time) Before project - December During project – June 7 - 12 . . . to . . . to From . . . From . . . Mumbai New Delhi Chennai Kolkata Airport Bangalore Hyderabad Mumbai New Delhi Chennai Kolkata Airport Bangalore Hyderabad SOURCE: Postal Tech Centre NSPC SpeedNet data, Mail Network Optimization Project

  19. 1 Bangalore SPC example: Throughput doubled by standardization Items handled by shiftItems per manhour Set 1 (Day) Set 3 (Night) Average (Day & Night) 26-Apr-2010 10-May-2010 24-May-2010 07-Jun-2010 21-Jun-2010 Date SOURCE: Bangalore SPC, Mail Network Optimization Project

  20. The project team seeks involvement of all levels in the Circle Visits by leadership Consultative approach Very high focus and involvement of leadership … … as well as regular interaction with staff side – Chennai example • Secretary, CGM visit to Kolkata SPC • Member (O) visit to Bangalore SPC • Regular visits by Director (Mail &SP) & CPMGs to SPCs Attendance of ~50 group C & D staff across shifts 1, 2, 3A, 3B Circle director and SPC manager answered questions and clarified doubts Layout map handed to all; new role cards discussed and distributed • Regular meetings to understand & resolve ground team concerns (staff and unions) • Joint work and discussion of changes on ground (staff and unions) SOURCE: Mail Network Optimisation Project 19

  21. Background of the Mail Network Optimisation Project 1 11:00 - 11:30 Explaining the Project details: Strategy, Work plan, Process re-design, expected outcome 2 11:30 - 12:15 Suggestions and view points of the staff side on the project and its status 3 12:15 - 13:00 Lunch 13:00 – 14:00 Agenda for today's meeting 20

  22. Initial Impact of the Project in terms of Operational Improvement Easier sorting – Ensure minimum multiple handling 1A 1 Less workload – reduce no. of bags & missorts between different locations 1B Better equipment – Ease of working for staff at SPCs with new equipments 2A 2 Higher throughput – Ensure higher processing with improved process design 2B Streamlined workflow – by having optimised inflow of mails in the processing centers 3A 3 Prioritized processing – Ensure processing prioritisation based on the time of the day for maximum connectivity 3B Keep everyone informed –Regular interaction and display of SPC's daily performance, suggestions and feedback encouraged 4A 4 Training & Incentives – Incentivise high performers and help all staff with newly developed trainings 4B SOURCE: Mail Network Optimisation Project

  23. % Reduce sorter distress by ensuring minimum multiple handling 1A … to From … Example – Hyderabad Minimum multiple handling Number of handlings per item Large multiple handling 2.00 • Pre-sorting for all items before final sorting • All sorting done with the same priority • Ensure maximum sorting with only one handling • TD/NTD mails to come separately to enable prioritised sorting 1.16 From … … to SOURCE: Mail Network Optimisation Project

  24. 7 1B Reduce number of bags and missorts between different locations within 1 city … to streamlined operations From sorting complexity… • We are trying to reduce sorting complexity in the city through streamlining of operations subject to other constraints like distance, connectivity etc. • This should lead to less confusion, less missorts and less bag closing • Volume throughput and productivity at Mumbai SPC increased after merging of GPO volumes into SPC Mumbai GPO, Speed Post section in Feb 2010 Feb 04, 20101 Overallarticles 3,605 (100%) GPO 283 (10%) 250 (12%) Around GPO 3,072 (78%) Other areas  Volumes now get processed at SPC 1 Analysis down for several days with same results SOURCE: Mail Network Optimisation Project

  25. 2A Ease staff work by giving better equipments Economic sorting cages and chairs allow for productive and yet relaxed working Economic sorting cages and chairs allow for productive and yet relaxed working Roller trays ease movement of heavy trays and allow for back-friendly work Bag cutters instead of razor knifes prevent from injuries SOURCE: Mail Network Optimisation Project

  26. 2B Dispatch scan Close bag Receipt scan Sorting 1st level 2nd level From … Scanning desk Scanning desk All people doing all tasks together Open bag Lack of role clarity can lead to lack of ownership and can cause confusion Ensure faster and higher processing in improved process design … to Assembly line like processes where one task is given to a person Key features • Ensure 100% scan compliance, both for receipt and delivery • No article can enter or leave sorting area unless scanned • Ensure improved sorting productivity by • Optimizing sorting cages • Reducing multi-level sorting • Revising sorting logic (where necessary) • Ensure 100% scan compliance, both for receipt and delivery • No article can enter or leave sorting area unless scanned Clearly defined job de-scription helps in faster and higher processing SOURCE: Mail Network Optimisation Project

  27. 2B Layout Some pictures of Bangalore SPC where this process has been put in place successfully Mumbai Delhi Chennai Hyderabad Bangalore Kolkata Category Activities Completed 1 What is the right network topology? • Implementation of assembly line layout in the SPC hall • Training of staff in every shift on the revised processes 2 What are the right processes within the facility? 3 What is the right network schedule? 4 How to measure India Post's performance? Neat and Tidy SPC hall – before SPC hall – now SOURCE: Mail network optimisation project

  28. 3A Reduce work pressure by having optimised inflow of mails in processing centers … to … to From … Remaining volume collec-ted at 7 p.m. • All mail coming to the SPC late evening • Sudden mail volume to be processed in very short time window… • …resulting in bag transfer despite maximum efforts Good share of daily volume collected at 2 p.m. • Uniform volume inflow leads to • Less pressure for staff on ground • Better connectivity and therefore better quality SOURCE: Mail Network Optimisation Project

  29. 3B Ensure processing prioritisation based on the time of the day for maximum connectivity … to Demarcated shift (set) planning to optimize D+X quality Receiptfrom P.O.s Cut-off to ensureflight connectivity Receipt of itemsfrom other cities Cut-offfor P.O.s From … TD, NTD all being processed at the same time TD sorting (from rest of India) Non-TD1 sorting TD sorting(from own P.O.s) Sort rest of India volumes before outgoing flight Sort TD from own P.O.s while "waiting" for flight receipts Sort TD from rest of India after receipt from incoming flight Rationale Same amount of effort will lead to better quality and speed for next day delivery SOURCE: Mail Network Optimisation Project

  30. 4A • Opportunity to identify 'STARS' • Opportunity for knowledge sharing across sets/SPCs Providing information to each employee at SPC on how their center is performing … to Web based performance mapping both for speed and quality D+X KPI for Speed Mis-Sort KPI for quality From … No visibility of individual, set, SPC per-formance SOURCE: Mail Network Optimisation Project

  31. 4A What does it do? KPI 3a 4e 3b 4h 1a 4g 1b 4f 3c 1d 4d 2a 4c 2b 4a 2c 4b 1c Overall, we have developed a set of 18 KPIs to create transparency Transit analysis within city Measures speed and reliability of processing of Speed Post articles from booking to delivery Transit analysis across city 1 D+X reports Time per leg of transit within city Time per leg of transit across city Scans compliance in the entire network Measures for each processing step whether articles got scanned as prescribed Scan com-pliance reports 2 Scan analysis per leg of transit within city Scan analysis per leg of transit across city Measures for international inbound article the efficiency of movement at every step before merger with Speed Post Percent of F-scans in SpeedNet vs. F-scans in IPS1 Inter-national reports 3 Percent of F-scans in IPS vs. D-scans in IPS Share of SpeedNet Delivery scans vs. IPS F-scans (TBD) Articles processed per hour per FTE Supports achieving better D+x and scan performance Staff absenteeism Share of bags without bag labels 4 Share of articles not processed in SpeedNet Support-ing KPIs Share of articles closed after cut-off time Share of missorted articles Share of articles with missing pin codes Share of articles not dispatched same set SOURCE: Mail Network Optimisation Team

  32. Proposed Incentive for good performers and motivate less performing staff through training 4B Recognition of star performers Opportunity for them to teach/motivate others Find out need for training Train people to help them to also become star performers … to Recognition From … No clear and fully objective performance monitoring and training SOURCE: Mail Network Optimisation Project 31

  33. Overview of some trainings currently being developed by Training division 4B 8 6 2 7 1 9 5 4 3 IT Role 10 Training Content Introductory training for new recruits Ensure that everybody understands India Post and its procedures not just one's own job Train the Trainer Training General Basic procedures and operations explanation KPI and quality Training "Basic" Computer Training Support staff in com-puter-related tasks “Enhanced" Computer Training Speednet Training Help people to become even more successful in their roles – includ-ing awareness of role and soft skills System administration Training Supervisor Training Customer Service Training SOURCE: Mail Network Optimisation Project 32

  34. 2010 How does the project proceed? Activities Jun 15 Jul 15 Aug 15 Sep 15 Speed Post Top 6 cities Next 15 cities1 – led by 8 directors (Mail & SpeedPost) Monitoring First class mail Project team to start working on 1st class mail • Team has already worked on ground in the 6 metros • Now we are developing a SpeedPost manual for further rollout • 8 directors will then lead implementation in the next 15 cities 1 Next cities in scope are Noida, Gurgaon, Chandigarh, Pune, Goa, Mysore, Ahmedabad, Howrah, Patna, Nagpur, Bhopal, Trivandrum, Kochi, Lucknow, Vashi (preliminary selection subject to change) SOURCE: Mail Network Optimisation Project

  35. Background of the Mail Network Optimisation Project 1 11:00 - 11:30 Explaining the Project details: Strategy, Work plan, Process re-design, expected outcome 2 11:30 - 12:15 Suggestions and view points of the staff side on the project and its status 3 12:15 - 13:00 Lunch 13:00 – 14:00 Agenda for today's meeting 34

  36. Any questions, comments or suggestions from your side?

  37. Background of the Mail Network Optimisation Project 1 11:00 - 11:30 Explaining the Project details: Strategy, Work plan, Process re-design, expected outcome 2 11:30 - 12:15 Suggestions and view points of the staff side on the project and its status 3 12:15 - 13:00 Lunch 13:00 – 14:00 Agenda for today's meeting 36

  38. THANK YOU

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