How To Run Posten Meddelande

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1 Productivity Measurement in Mail Distribution, Posten Sweden Posten Meddelande a Business Unit within Posten Norden

2 Posten Norden a merger between the post offices in Sweden and Denmark BOARD INTERN REVISION CEO FINANCE BIS COMMUNICATION HR PRODUCTION DEVELOPMENT BUSINESS DEVELOPMENT LEGAL BREVE DANMARK MEDDELANDE SVERIGE LOGISTIK INFORMATIONS- LOGISTIK Intern Posten Sid 2

3 Posten Meddelande the Mail Distributor in Sweden CEO Communicaton Sales Marketing & Retail Production IT HR Product Dev. Finance Process Network & Transports HR Production Development Controlling Umeå Örebro Sunds- vall Upp- sala Stockholm North Stockholm South Jön- köping Gothen- burg Växjö Malmö Intern Posten Sid 3

4 Posten Meddelande in figures The largest unit within Posten Norden Number of staff: (2008), FTE in Production Turnover: 16,6 billion SEK (2008) Number of distributed items per day: 20 million Intern Posten Sid 4

5 Our reality and challenges Declining letter volumes First class declines more than 2nd class, bulky items grow The USO dimensions the production Time frame is essential for efficiency and capacity High share of fixed costs Structural changes important for productivity growth Aged machines Large need for investments Environmental impact New demands to gain and keep business Personell Structure Age and competence obstacles to overcome Intern Posten Sid 5

6 Geographical challenges Europé s 3d largest country with only 9 million inhabitants Each day our mail men drives km, practically 9 tours around the globe We spend 40 million per year on flights in order to upkeep the USO overnight delivery. In the north we even fly interregionally Additionally we transport on trains for 15 million per year and by truck for 80 millions. 80 % of the population lives in the southern part of Sweden Full competition from other postal operators in 50 % of Sweden Only household do not recieve overnight delivery We deliver overnight to a quality rate of 95.8 % the last year Intern Posten Sid 6

7 Financial Objectives and activities to realise them Inlämning P T Uppsamlings- Transport Hl P B Uppsamlings- Riks- Spridnings- sorteringp transport Spridnings- transport F Utdelning Rl SB SE SE SE Metodspår Fll Vl LAB l A Interna intäkter PRE Övrigt SAB Butiksarbete, Förs. P Översyn företagscenter Intern Posten Sid 7

8 Balanced Scorecard Meddelande Production, Sep 2009 SE ll Al Tl FTE ll Al L S l Financial result Lönsamhet - Medarbetare Employees Customers Kunder Processer Processes C S ll Al Rll C C C Tillförll Intern Posten Sid 8 ll Al SE SE P Fl ll l Sl SE

9 Example of total t result Production, September 2009 Intern Posten Sid 9

10 The Production Process IN-Process OUT-Process Collection Prepare Sorting Outbound Sorting Inbound Sorting Delivery Preparation Delivery Each region is responsible for the whole process in its geographical area. Intern Posten Sid 10

11 Steering must derive from your cost structure - more than half of the total cost will be found in distribution MSEK inlämning ing Uppsamlingstranspor ort Uppsamlingssortering Rikstranspor ort Spridningssortering ing Spridningstranspo ort Förarbete utdelning Utdelning Intern Posten Sid 11

12 Productivity as is Productivity in its essence can t be measured for Production in itself, since we lack income to compare with costs per step Thus we use produced volumes as the most important variable when calculating reduction of costs needed to meet new demands. Key figures (wanted values) are used as a tool to break down productivity to different units and/or regions Some units/regions face new competition and faster declining volumes which demands larger cost savings to adapt to the new situation Example of key figures used in steering (based on produced volumes/prod hours) Manual sequencing per hour Machine sorting per hour Manual sorting per hour Prepared ODR (unadressed d layer) per hour Intern Posten Sid 12

13 Steering model Production - Resultatstyrning av regionerna Jämförelse utfall mot budget Ta emot Förbereda sortering Volym a-pris Volym a-pris kostnader kostnader Resultat Resultat Uppsamlingssortera Volym a-pris kostnader Resultat Rikstransport Volym a-pris kostnader Resultat Spridningssortera Volym a-pris kostnader Resultat Förbereda ODR Volym a-pris kostnader Resultat Förbereda utlämning Volym a-pris kostnader Resultat Lämna ut Volym a-pris kostnader Resultat Ers. Närservice mm Volym a-pris kostnader Resultat S:A intäkter S:A kostnader Resultat Kostnader kan även ll A tool for measuring and valuing performance Measures Total effectiveness ( result ) of the Process as well as different Process Steps Income is created through a performance price multiplied with production volumes. The performance price per piece is created from cost structure for each region (large cities vs rural areas), wanted process efficiency and adjusted for calculated effects for rationalizations and investments. Performance price thus becomes a measurement of how much a certain process step is allowed to cost. Comparison to budget/previous year shows where in the process improvements have been gained Intern Posten Sid 13

14 Steering model Production - Koppling resultaträkning och styckkostnad Recieve Prepare sortation Outbound sorting Transport Inbound sorting Unaddressed prep Delivery ypreparationp Delivery Budget Planned cost per piece and process step reflects planned cost level. Cost p p development can be followed over the years Cost p p for each process step derives from Cost structure per region (difference in transports, delivery forms, formats etc are valued) Demands on process efficiency built into each process step (eg coding shares, sequence sorting speed etc) Effects from activities and investments decides where in the process effect shall be gained Can be summoned to Production Total. Result Real costs compared with production volumes give real cost p p for each process step Deviation from planned cost pp can depend on price or volume deviation Volume deviation = lack in adjusting to volume fluctuations Deviation can also depend on lack in process effectiveness Analysis of deviation can be done against key figures for the process in order to take the right actions Can be summoned to Production Total Intern Posten Sid 14

15 Productivity, Regions in Posten Meddelande Accumulated Sep 2009 TOTAL MALMÖ VÄXJÖ GOTH BURG JÖNKÖP ÖREBRO STHLM S STHLM N UPPSALA SUNDS VALL UMEÅ Manual sequencing Distributed letters towns Distributed letters rural Distributed letters in box Mechanical outbound sorting Manual outbound sorting Mechanical inbound sorting Manual inboundssorting Mechanical processing Mechanical leaf tion of ODR Intern Posten Sid 15

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