In 2007, the U.S. Postal Service introduced the Continuous Improvement Program to produce organizational process improvements. The program includes Lean Six Sigma (LSS) and Kaizen processes. The Continuous Improvement Office provides a 2-week LSS training course for all Kaizen project leads.
Kaizen (Japanese for “improvement”) is an incremental process. The Postal Service’s Kaizen process uses a “Plan-Do-Check- Act” method to analyze operational deficiencies and identify root causes. A project charter defines the goals, scope, and team member roles for the 3- to 5-day event. At the conclusion of a project, the team prepares a summary report.
Between January and April 2016, the West Valley Processing and Distribution Center (P&DC), Phoenix, AZ, conducted a Kaizen project to eliminate about 26,000 annual workhours in its Scan Where You Band (SWYB) operation for an annual savings of over $1 million. Employees use the SWYB system to assign air or surface transportation to mail that is in trays, tubs, sacks, and packages.
Our objective was to determine whether the Postal Service complied with the Kaizen process for the SWYB project and met its workhour reduction goal.
What the OIG Found
West Valley P&DC management did not comply with the Kaizen process or meet its workhour reduction goal of about 26,000 annual workhours for SWYB.
Specifically, the Kaizen team never met and the acting P&DC manager who was leading the project did not notify three of the six team members that they were part of the team. He stated that he talked with the team members individually, but did not hold formal meetings or obtain all of their input for preparing documents because they did not all work on the same tour.
One manager was among those who were not notified even though the summary report identified him as responsible for monitoring workhour reductions after the Kaizen project ended.
In addition, the project lead and the two team members responsible for calculating the 26,000 annual workhour reduction goal, or about 500 weekly workhours, did not document this effort. An acting manager, who was also a Kaizen project member, stated that the 500 weekly workhours reduction goal also included workhour reductions from a concurrent, unrelated Kaizen project. He said the calculations were no longer available because he discarded his notes. The Kaizen process requires that documentation be retained for support and validation.
The Kaizen project was not independently supervised. The project lead was also the independent project champion and stated that he did not consider having multiple roles to be an issue. In addition, the Phoenix District LSS coordinator was also the benefit validator for the project. The Western Area LSS coordinator said that project participants having multiple roles was not ideal, but did not consider it an issue.
After SWYB process improvements were made, a Kaizen team member recalculated the projected 500 weekly workhour reduction to be 383 weekly workhours. We found this projection was overstated by 192 workhours and the weekly workhour reduction was about 191 hours. The projection was overstated because it was based on the preceding period instead of the same period last year.
We calculated that, as of November 25, 2016, the West Valley P&DC eliminated, on average, about 160 SWYB workhours a week over 34 weeks compared to the same period last year. However, there is no way to validate a direct correlation between this reduction and the Kaizen project because the Kaizen process was not followed, the required documentation was not maintained, and a concurrent, unrelated Kaizen project was involved.
We identified opportunities to save about $12,000 in salaries, training, and travel costs for the project team.
We made a referral concerning the West Valley P&DC’s lack of compliance with the Kaizen process to our Office of Investigations.
What the OIG Recommended
We recommended management ensure Kaizen project documentation is reviewed and retained as required; project goals, projections, and sustained benefits are independently reviewed; responsibility for sustaining project benefits is transitioned to the process owner; and Kaizen team roles are properly established to ensure separation of duties.