The Power to Transform Business Lean in the Service Sector. Sharlene Goobie, Controller, PF Collins International Trade Solutions

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1 The Power to Transform Business Lean in the Service Sector Sharlene Goobie, Controller, PF Collins International Trade Solutions

2 First name associated with professional customs brokerage and logistics services in Newfoundland and Labrador 90 years in business (2011) Offices in St. John's, Halifax and Calgary Service clients from every economic sector Offers a specialist focus in confronting the challenges of offshore energy projects.

3 PF Collins service offerings include: customs brokerage and consulting freight forwarding warehousing, crating & distribution marine agency immigration consulting

4 ISO 9001:2008 registered company Logistics provider of choice for every large scale offshore project in Atlantic Canada PF Collins has a reputation for excellence. Our people are highly conversant with international trade and logistics requirements Help bring the world to your business and your business to the world

6 Why did we start our lean journey? Clients increasingly demand very fast response time, greater flexibility and excellent quality of service Commencing the lean journey was imperative to focus on: reducing costs while maintaining quality and delivery expectations of our customers Ensure we are providing our customers with superior service in a competitive industry

7 Two kaizens to date: Import and Freight Dept Held first Kaizen Event in September 2011 Focus on Import department and processing time of a particular type of import entry Low Value Shipments (LVS) Value for duty < $1,600 The LVS entries are required to be transmitted to customs by the 24 th of each month

8 Focus on processing time from date goods released by customs to date invoice generated for client Data compiled from May - August 2011 Sample size of 40 days Combined average processing time of 25.1

9 LVS Entry Processing Time # Days # Files Total Processing Time

10 Selected participants based on the knowledge of the import process Cross functional team selected Group included two import raters, import supervisor, LVS desk coordinator, accounts receivable administrator and CI manager The group was presented with the stats on the first day

11 The kaizen kicked off with the team completing a spaghetti diagram of the document flow for an LVS entry A single document : handled 32 times Travelled 1425 feet

11 16 15 18 14 17 31 26 23 27 19 20 22 25 21 24 12 1 5 6 3

12 CPC handles, 1425 feet

13 The group then broke up into separate groups to identify the types of waste evident in the current process Transportation was identified as the major waste The group then went on to complete a fish bone diagram

14 Fish Bone Diagram

15 The fish bone diagram analyzed factors preventing the import raters from processing LVS Entries Each participant given 6 stickers (same color) Could assign all dots to same issue The results of the fish bone diagram were plotted in a value graph

17 The Kaizen focused on the quick fixes to ensure we could implement a plan on the final day Quick fixes implemented include: - Desk Layout - Relocation of A/R (billing) - Daily Target - Production Board

19 PF Collins International Trade Solutions

21 The items not implemented from the kaizen were documented in an action plan for follow up The action plan identified: Individual responsible for action Start date Date for completion Status Comments

23 Approx 400 files processed the first week Random sample of data analyzed monthly Average processing time is 4 days Results reported at monthly departmental meetings Discuss opportunities for improvement in other areas within department

24 Second Kaizen held in January 2012 with freight department Data compiled from July - October 2011 Sample size of 100 Processing time calculated from delivery date to invoicing date Average processing time 18 Days Standard is 5 days

25 Invoice Processing Time Delivery Date to Invoice Date Processing Time - Days # Days # Files

26 Mapped progression of a freight shipment using post-it notes to capture each step. This progression was based on a best case and a worst case entry. The time line calculated confirmed the results shown by statistics compiled from our software. Approximately 18 days to process We also walked the process and completed a spaghetti diagram.

28 Floor Plan Before(spaghetti diagram) 44 handles, 1642 feet

29 Transportation identified as major waste No quick fixes identified from kaizen Ideas generated: Centralized to distribute by supervisor Printer at each desk Action plan item The group then decided to calculate takt time

31 Takt time reasonable to meet daily quota Group continued to brain storm issues that prevent the invoicing from being completed One of the main issues identified was waiting on third party charges

32 The group then created a fishbone diagram to identify potential causes of why it takes 4-5 days to receive confirmation of third party charges The results of the fishbone diagram were discussed amongst the group to identify opportunities for improvement.

33 The major issues identified from the fish bone: Workload (No time to complete draft invoice) SOP No daily targets The group discussed work load as the main source of backlog for the department in terms of invoice processing time Invoicing would be left until had to be done i.e month end resulted in batching, overtime, stress, etc

34 Quick fixes implemented from the kaizen : Daily quota 31 shipments per day (based on average for 2011) Relocation of delivered files for invoicing SOP for revised invoicing procedure Production Board (visual management) Equal participation of forwarders to meet daily quota

35 Analyzed data month later and the invoice processing time reduced to 4 days Workload issue didn t improve as daily quotas not met by forwarders (batching, OT, Stress) PDCA Currently two step process: Forwarder produce a draft invoice Accounting to issue final and send to client

36 Held lunch and learn to address issues Possible solution: Accounting issue invoice Eliminate a step from forwarders to free up time to work on live shipments Standard worksheet prepared for all files Delivered files sent to central location First in first out file system for invoicing Data captured to ensure we meet daily targets

37 Stats reviewed monthly and reported to department Beginning stages Overall process is flowing much smoother Daily progress reports captured Re-evaluate process and address other changes as necessary (PDCA)

39 Possible topics for sharing Important to have a cross functional team Data Well defined problem Set Ground Rules Employees engaged Visual Management: accountability Resistance to change Follow up

40 Most importantly:

41 TO HAVE FUN

42 THANK YOU

43 PF Collins Customs Brokers Limited Questions & Answers Maximum: 10 minutes

44 PF Collins Customs Brokers Limited Sharlene Goobie Lean Beyond Manufacturing Please return your completed session evaluation form to the room host

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