Beyond Lean Six Sigma: "The First Choice Way - The Common Management Approach For The Largest Logistics Company"

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BEYOND

LEAN SIX SIGMA


“The First Choice Way – The Common Management Approach for The Largest Logistics Company”

LEAN Six Sigma & Performance Management Summit ASIA 2014


September 17-18th, 2014

Alex Tan | Regional First Choice Senior Advisor, Asia Pacific


1 Background

2 Concept

3 Implementation

4 Exemplar

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 2
The Company

Deutsche Post DHL is a true Global Player with EUR 55 bn of revenues


and around 470,000 employees worldwide (FY 2013)

Corporate Center

“Die Post für Deutschland” “The logistics provider for the world”

Forwarding, Supply Chain


PeP* Express Freight
Revenue EUR 14bn Revenue EUR 13bn Revenue EUR 15bn Revenue EUR 13bn Global
Employees 145,000 Employees 85,000 Employees 43,000 Employees 133,000 Business
Services

Customer Solutions and Innovation IT Services

* Postal, eCommerce, Parcel

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 3
The Bottom Lines

Customers, Employees and Investors expect a culture of continuous


improvement from Deutsche Post DHL as a key strategic objective.

Provider Our
of Choice message
We are
… centered on our customers.
… convinced about openness and teamwork.
… focused on our financial success.
… committed to a better world.

Investment Employer
of Choice of Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 4
The Begin of “First Choice”

Since 2006, DPDHL rolled-out “First Choice” Program globally to improve


customer satisfaction by leveraging industrial proven methodologies

LEAN Six Sigma

LEAN & Six Sigma as the main method of “classical” First Choice provides structure and specific tools in every phase of
process improvement

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 5
The Recognition

First Choice Wins The Best Process Improvement


Program Award 2010

Holger Winklbauer, the Executive Vice President - First Choice


Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 6
The Results
As of Dec. 2013

High levels of engagement & penetration in all divisions and regions

First Choice certified employees in


Global almost every single country unit1):
presence •~24,000 certified Master Bronze3)
•~1,000 certified Advisors2) 3)
•~400 certified Senior Advisors 3)

• ~20,000 Process Excellence Activities


Global executed since 2008
Progress • Numerous additional non-process focused
activity, e.g. Performance Dialogs executed
in 46+ countries
• ~600 Assessments with Management
Teams

• Customer satisfaction scores steadily


Global improving

Impact • Employee Opinion Survey results on First


Choice improving, from 51% (2009) to 67%
(2013)4)
• Revenue and cost impact significant and
growing - in total >915 M€ cost savings
reported5) since 2009

Source: Corporate First Choice; 1) Data as of January 2014; 2) Process Improvement Advisor and Advisor; 3) Master Bronze, Advisor and Senior Advisor figures are mutually exclusive ,
also they are certified figures while number of trained senior advisors and advisors are higher; 4) % favorable EOS score for DPDHL for Living First Choice; 5) As of Dec 2013 (for DGF,
MAIl & GBS), as of June 2013 (for CSI, DSC & FRT), EXP & GM figures not reported)

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 7
The Left Open Questions…

First Choice succeeded in generating impact on all three bottom


lines but it left open questions to the organization

How do we make improvements more


sustainable?

How can we engage everyone to continuously


strive for improvements?
• Employee’s knowledge and
awareness for process
improvement
How can we ensure a more comprehensive
approach to improvements as levers are not
• Increased Customer only related to processes?
satisfaction

• Financial impact
How can we engage management and trigger
improvements more proactively?

Source: Corporate First Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 8
The Answer

A common management approach and philosophy that institutionalizes


the culture of continuous improvement into every part of the organization

Photo: Dr. Frank Appel, the CEO of Deutsche Post DHL


Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 9
Agenda

1 Background

2 Concept

3 Implementation

4 Exemplar

Source: Corporate First Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 10
The Evolvement

Organization’s demand led to a more holistic approach; extending the


framework to principle-based THE FIRST CHOICE WAY was logical

2006 - 2008 2009 - 2011 2012 & beyond

LEAN & Six Sigma Expanding Scope THE FIRST CHOICE WAY

Define
Processes Performance
Management
Control Measure
LEAN
Performance
THE FIRST
DMAIC Manage-
ment
House CHOICE WAY
Improve Organization
Organization
& Skills
Mindset &
Analyze & Skills Behaviors

DMAIC + DMADV Initiatives (PEA1)

ACT Change Management, Lean House, Performance Dialogs, Gemba, 5S, NPA

A Common Management Philosophy

Source: Corporate First Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 11
The First Choice Way

THE FIRST CHOICE WAY is the approach to implement Continuous


Improvement culture within our company

THE FIRST CHOICE WAY provides a framework for Continuous Improvement

• DPDHL‘s joint management approach to improve holistically along all dimensions


• The Self-Assessment starts the engagement on all levels
• The principles give guidance on how to continuously strive towards excellence
• The comprehensive toolbox helps to foster the engagement and the necessary behaviors on a daily basis

Mindset & Behavior Performance Management


The way we think, feel and The way we define our
act both individually and metrics and targets and
collectively use them to manage the
business
The First
Choice Way
The way we hire, train, The way we define the
develop and retain our processes and standards
people to continuously improve
our businesses
Organization & Skills Processes

Source: Corporate First Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 12
The First Choice Way – Consistent Routines

THE FIRST CHOICE WAY empowers all levels to live THE FIRST
CHOICE WAY principles by using the comprehensive toolbox

Various tools create consistent routines to


Our joint THE FIRST
embed the principles of THE FIRST CHOICE
management CHOICE WAY
WAY
approach
• The Self-Assessment identifies specific
improvement potential regarding principles
Comprehensive • The tools help create consistent routines
toolbox Control
Define

Measure
regarding the principles of THE FIRST
Improve Analyze
CHOICE WAY
DGF Country
Alignment Program • Living up to the principles leads to a
culture of Continuous Improvement

To sustainably implement these tools,


the right culture for Continuous
Improvement is necessary

Source: Corporate First Choice

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 13
Agenda

1 Background

2 Concept

3 Implementation

4 Exemplar

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 14
The Doors

Many doors open up to continuous improvement

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 15
Unlock The Door: Self-Assessment

To foster a real change towards an attitude of continuous improvement


a continuous Self-Assessment and Follow-Up is necessary

Engage Management by
• Creating a common understanding of gaps between As-Is vs. To-Be state
• Identifying how to further improve the business

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 16
Unlock The Door: GEMBA Walk

Managers on all levels strive to get first hand impressions, not only
relying on reports or other people’s opinions

• The real place, the real thing, the real people


 the area around the frontline where all the value is generated

• Structured ‘visit’ from managers to analyze the as-is situation as a routine

• Observing and asking people involved in the process leads to identification of


improvement opportunities and actions

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 17
Unlock The Door: Performance Dialog Cascade

Regularly discuss performance across organizational hierarchies and


create a visual control platform for continuous improvement

Underlying • Gain a clear understanding of performance & potentials


mindset • Live continuous improvement and focus on problem solving
• Be able to increase employee engagement & motivation

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 18
The Fundamental to Sustainability

Mindsets, knowledge and capabilities drive behaviors and


therefore drive individual actions and performance

Fostering understanding and Reinforcing with formal


conviction mechanisms
“… I know why I need to change – I “… the structures, processes, and
agree with it, and it is meaningful to me” systems support the desired change”

“I will change my behavior if …”

Developing talent and skills Role-modeling


“… I have the skills and capabilities to “… I see my leaders, peers, and
behave in the new way” reports behaving in the new way”

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 19
Agenda

1 Background

2 Concept

3 Implementation

4 Exemplar

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 20
The DPDHL’s “IT Services”

IT Services offers the Business Units in DP DHL with industrialized IT RUN


and specialized IT BUILD services
Bonn Darmstadt Country IT Europe Prague
359 employees 359 employees 199 employees ~ 1200 employees

27 Countries
80 Nationalities
3,400 Employees

USA, 126 employees


• Mechanicsburg, Pennsylvania
• Scottsdale/Tempe, Arizona
• Westerville, Ohio
• Atlanta, Georgia
• Houston, Texas
• Livonia, Michigan
• Ashburn, Virginia (co-location)

San Jose, Costa Rica Mexico City Louveira, Brazil Cyberjaya


35 employees 23 employees 31 employees ~ 1100 employees

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 21
The Exemplar

How IT Services implemented The First Choice Way – Fusing Operational


Excellence and Organizational Culture

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 22
Reaping The Benefits

After 31 months1), The First Choice Way journey benefits seen in our
People, Quality and Flexibility performance

Engaged People Great Quality Maximized Flexibility

 Emp. Engagement:  BU Partner Satisfaction:  Overhead:


+11 pts (63% to 74%) +8 pts (56% to 64%) -6.8 pts (23% to 16.2%)
 Leadership:  Service Quality (Run):  RUN Service Pricing:
+11 pts (70 to 81%) 50% less incidents +33 pts (36% to 69%)
 Turnover: No employee  Service Quality (Build):
job losses Performance transparency

66% adoption Rate2) of The First Choice Way

Continuous Improvement

1) Jul YTD 2014


2) Touched by TFCW Cultural Transformation Initiatives or White Board Sessions

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 23
To Know More…

Keep Calm, See You Tomorrow!

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 24
Closing Summary… Beyond Lean Six Sigma

Why? Clear Purpose &


Value Proposition

How? A Common
Management Approach

What? Sustainable Bottom-


Up Cultural Change

Beyond Lean Six Sigma | LSS Summit Asia 2014 Deutsche Post DHL | Page 25

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