Deyvisson Oliveira ( ) Tuyana Khassanova ( ) Xiao Hui Wang ( ) Ying xin Sun ( ) Ming Fan ( ) Date: April 14th, 2011

Course Number: INSE6210 (Winter 2011) Instructor: Dr. Nizar Bouguila Date: April 14th, 2011

3  Introduction  Define Phase  Measure Phase  Analysis Phase  Improve Phase  Control Phase  Conclusion

4 Delivrex Express is a Canadian delivery and logistics services company 500,000 daily deliveries in Canada 2,100 and 3,645 offices inside and outside For Delivrex Express, customer's satisfaction is critical and applying Six Sigma is very important to improve the quality of services.

5 Critical to Quality Characteristics (CTQs): On-time delivery Package state on delivery Responsiveness of Customer Support Center Package traceability Flexibility

6 Problem 0.5%(CTQ) of delivery failure of 500,000 parcels=2,500 every day The total cost will be average $15 for the redelivery for each item =2,500 x $15=$37,500 each day each year the redelivery costs is $37,500 x 365=$13,687,500. Opportunities Six Sigma processes and tools is the improvement of customer satisfaction with cost reduction The Six-Sigma team is targeting a process sigma from level 4.07 to 5.04.

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8 Benchmarking Table shows Delivrex Express has low levels of quality satisfaction in comparison with our main competitors..

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10 Voice of customer Similarly to many other service companies - “customer satisfaction in our business is imperative”. Quantity of Complaints

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12 Why so many complaints about late deliveries?

13 These numbers lead us to focus the data extraction on the process from the recipient’s local facility to the recipient’s signature and the best way to accomplish this task is to collect information related to delivery exceptions.

14 DPMO of , delivery failure rate of 0.51%,4 Sigma level.

15 Process Capability and Control Chart deliveries attempts are selected randomly in a day and the total number of nonconforming (delivery exceptions) is calculated.

16 Process Capability and Control Chart.

17 Applying the out-of-control rules and patterns to the Control Chart we conclude that it doesn’t contain any out-of- control point and that the process is in statistical control. With that in mind, any improvement to the process should be obtained through changes to the process. The current Process Capability is 1.33 and the recommended minimum process capability for an existing process is

18 Delivery Exceptions versus DPMO

19 Cause and effect diagram

20 Identified Root Causes RC01. Availability in personal addresses doesn’t match Delivrex Express delivery hours RC02. Recipient has no idea on when the parcel will be delivered RC03. Recipient doesn’t have the option to schedule initial delivery RC04. Driver in a hurry, just fills the Delivery Notice and erroneously raises a “Recipient Not At Home” delivery exception RC05. Delivery info lacks additional information for delivery RC06. Even if delivery info includes the recipient’s phone number, drivers are not equipped with phone devices

21 Improvement Plan S01. Implement weekend delivery hours S02. Implement delivery alert system S03. Implement initial delivery scheduling S04. Change employee performance index and implement education program S05. Develop an extension to our tracking web application to allow customers to enter additional information about the delivery using the tracking number S06. Equip drivers with phone devices

22 Improvement results Delivery Exceptions data we were able to calculate a DPMO of for the process and a delivery failure rate of 0.04%. These values show that we obtained a high improvement in the delivery process and that we reached our objectives moving the process to a 4.86 Sigma level. The stability of the process will be discussed in the next section, Control Phase.

23 Control phase is the last step of the six sigma DMAIC process, and is the activity of ensuring that project improvements will be sustained by tracking key performance measures and CTQs.

24 In control phase, the following procedures are required to ensure that the improvement is implemented properly:  Ensure the project is executed following by the project schedule.  To monitor performance of the project and take corrective action when needed.  Continuing improvement during the project’s life cycle if the results do not meet the requirements.

25 Control Chart We use np-chart as Control Chart because number of delivery exceptions is an attribute data and presenting number of delivery exceptions instead of percentage of delivery exceptions makes the chart more readable.

26 Project Schedule This project is from 3 rd, January,2011 to 14 th,April, Financial Analysis A financial analysis conducted in the Control Phase shows annual savings of $13 millions attesting the success of the Sig Sigma project.

27 The development of this Sig Sigma project brought improvements to Delivrex Express delivery process. Reduce the DPMO from to , move the process Sigma level from 4 to 4.86and the process capability was also improved from 1.33 to By reducing the number of delivery attempts we were able to speed up delivery, reduce package deterioration due to numerous trips, simplify tracking information, and reduce inventory and stocking costs, just to name a few improvements. The company will save $13 millions annually and new reports on deliveries attest the increase of the company’s market share.

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