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Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
Achieving transformational change - the Royal Mail experience
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Achieving transformational change - the Royal Mail experience

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This presentation was given by Ian Jones at a recent APM event

This presentation was given by Ian Jones at a recent APM event

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  • 1. Achievingtransformationalchange - theRoyal MailexperienceIan JonesOperations ProgrammeDirector10th January 2013
  • 2. Agenda …..• Why is this transformation important?• What are we trying to achieve?• What are the challenges?• How are we governing this?• What have we delivered?• What have we learnt?But first, some context……
  • 3. After 400 years of existence, Royal Mail continues to have a major presence across the UK and Europe…... Our letters and Our pan-European Our growing UK parcels business - parcels business based express covering the ‘one- employing over parcels business, price-goes-anywhere’ 14,500 employees delivering around UK universal service across 42 countries 150,000 parcels a day3
  • 4. The UK mail operation currently delivers 54mletters and 4m parcels to 29m addresses daily!• We collect from 115,300 post boxes, 10,700 post offices and 79,700 business customers six- days-a-week• We operate 24 hours a day using a network of 40,500 vehicles, 56 flights and 11 trains• Today, we employ 137,400 people, operating out of 50 mail sortation centres, 8 regional distribution centres and 1,356 delivery offices4
  • 5. Overall postal volumes have been in decline astechnology and competition take effect… m ITEMS 21,000 20,000 19,000 20%DECLINE IN 5 YEARS 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 2007 2008 2009 2010 20115
  • 6. In addition, several other factors converged inrecent years to create a challenging situation…. Intrusive Market regulatory liberalisation price and before conduct modernising Artificial sortation controls competition Limited Legacy access to pension capital to deficit modernise6
  • 7. By March 2010, the prospects for the companylooked pretty bleak….. 2 Group revenues were in decline, £120m less than 2009, due to £ % the recession and the structural decline in our core volumes 0 The cost response was too slow, with the company unable to £ % reduce costs at the same pace as revenues were falling. Unsustainable operating losses were the result Cash was flowing out, not in! £ £213m The network continued to lag behind other postal operators in terms of automation and efficiency. This required significant financial investment to address changing mix and falling volumes The IT network and capability represented a huge risk to business continuity Our pension deficit had ballooned to over £9bn, with the pension £ £9bn trustee threatening tough action7
  • 8. By March 2010, the prospects for the companylooked pretty bleak….. 2 Group revenues were in decline, £120m less than 2009, due to £ % the recession and the structural decline in our core volumes 0 The cost response was too slow, with the company unable to £ % reduce costs at the same pace as revenues were falling. Unsustainable operating losses were the result Cash was flowing out, not in! £ £213m The network continued to lag behind other postal operators in terms of automation and efficiency. This required significant financial investment to address changing mix and falling volumes The IT network and capability represented a huge risk to business continuity Our pension deficit had ballooned to over £9bn, with the pension £ £9bn trustee threatening tough action8
  • 9. The Postal Services Act 2011 provided a levelplaying field….. New regulator andPrivate investment regulationHistoric pension Post Office indeficit to public or mutualGovernment ownership ®9
  • 10. The modernisation portfolio is extensive andcovers every aspect of the operational pipeline,e.g.... COLLECTIONS PROCESSING DELIVERY LOGISTICS & TECHNOLOGY • Network• Trays not Bags • Optimise Plant • Use of Optimisation Capacity Automation• Collections • Optimised Optimisation • State of the Art • New Delivery Automation Methods Vehicle• Digital • Digital Service centre handheld • Enhanced Address handheld Network devices on all collection Interpretation devices on all • SAP HR – routes Infrastructure delivery routes PSP • Convenient delivery • Track & Trace10
  • 11. We have invested £0.5 billion in proventechnology supporting a high quality operation INTEGRATED MAIL PROCESSOR xCULLER FACER CANCELLER x 74 LARGE LETTER SORTERS x 27 138 INTEGRATED MAIL PROCESSOR x 138i LETTER SORTING MACHINES x 69 COMPACT SEQUENCE SORTER x 574
  • 12. We are almost two thirds of the way through aninvestment programme worth £0.75 billion tomodernise our Mail Centre sortation network…Key design principles:Safety: Safe ways of working with common standardsQuality: Optimal locations meeting quality of service requirements and delivering standardised performanceEfficiency Highly efficient, standardised layoutsand cost: with modern automation equipment Reduced logistics and Mail Centre networksPeople: Right tools for the job and an enhanced working environment Enabling £0.2 billion of annual recurring benefits and property disposal proceeds in excess of £0.3 billion12
  • 13. Modernising the Mail Centres…. ….our journey is well advanced 69 68 64 59 CLOSE 57 CLOSE Paddington Reading CLOSE 48 CLOSE Oxford Farnborough 40 Watford Oldham Stockport Liverpool Crewe Stevenage CLOSE 38 37 Bolton Hemel Maidstone Coventry Southend CLOSE Northampton Tonbridge CLOSE CLOSE Dartford Darlington Milton Keynes OPEN Canterbury Bradford Doncaster Portsmouth Teeside Hull Ipswich Home – OPEN Counties York Leicester London East Derby Warrington North London South Shrewsbury South - Medway Worcester Gloucester Midlands Mount Cambridge Pleasant 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Key: Completed Final Decision Authorised for consultation13
  • 14. We are half-way through a £0.5 billion investmentprogramme in our delivery operation…. • Safety1  Reduce unsafe acts and conditions • Quality of Service and Customer Satisfaction2  Maintain regulatory Quality of Service and to provide leading customer service to a changing market • Methods for a Changing Mail Mix3  New equipment enabling staff to carry increased volumes and complete a ‘single journey down the garden path’ to complete delivery of letters and packets • Productivity Increases and Cost Reduction4  Enabling a cost reduction of £0.2 billion p.a. from the introduction of sequenced mail, outdoor walk planning and new delivery methods •People and World Class Mail5  Involvement through engagement and training programmes in new methods and expansion of World Class Mail continuous improvement to all units
  • 15. And achieving a visible change in the way wedeliver mail, creating capacity and capability forparcels growth…..15
  • 16. Our single biggest challenge to date…. ...delivering seamless change on this scale, whilst maintaining a high quality ‘business-as-usual’ service to the UK public every day
  • 17. Supporting the transformation through skilledresource and robust governance….• Projects aligned to programmes• Reporting into a centralised PMO with satellites• Working to a standard governance model• Supported by a strong leadership and engagement focus• Enabled by a peak of over 1,000 internal programme, project and change leadership professionals plus multiple suppliers17
  • 18. Our modernisation activity is at an advanced stage with programmes tracking to time, cost 2008 2009 and2011 2012 2013 2014 2015 2010 qualityCOLLECTIONS Reduce delivery & PDAs on Collections collection costs Collections Traying Re-engineering Collections Activity Georoute EnabledPROCESSING Large Letters CFC upgrade and rationalise Safety Automating Automation•Automation mail processing Walk Sequencing National Deployment LSM Replacement & Single Pass Sorting•Sorting Address Interpretation Mail Centre efficiency Parcels Sortation Simplification Parcels Automation Deliver• Materials what we promise Handling/Traying Traying– Retail & Wholesale Mail Centre reduction 69 to 37• MC Rationalisation Annual Network Review Optimise Improving LOGISTICS customer networks and logistics 3 Service Centre Estate Review interaction Regional Distribution Centre Rationalisation Delivery Office RevisionsDELIVERY New delivery methods Industrial Delivery Methods Deployment relations Reduce delivery & PDAs for Tracked PDAs for All collection costs Plus Delivery Office Estate ReviewWORLD World Mail Centres & RDCsCLASS MAIL Class Mail Delivery and all of rest of Collection/Logistics People engagemen tSYSTEMS (OPS) People Systems Programme Visibility & Upgrade our IT Corporate RFID Install to DOs RFID to All CSS sites Responsibility Tracking estate and Sustainability Dec 2012
  • 19. Evidenced by our journey over the past 4 years… Mar 2008 Today   Lost Time Accidents per 100,000 hours 4.11 1.29 Collections Trayed to MC’s 29% 69% Machines – new, refurbished or upgraded 40 992 Mail Centres closures 0 24 Mail Centres opened 0 5 % Outward Mail Automated 72 94 % Mail Sequenced to Delivery Point 1 78 Delivery Offices Fully Modernised 0 693 Number of PDA Devices 0 48,015 People Employed (000s) 158.9 137.4 Cost of operation £5.4bn £5.0bn Real savings (including inflation) £0.9bn 1c Quality of Service 85.2% 92.5%19
  • 20. Plus external recognition for the Programmecontinues to grow….Winner of the Association for Project Safety Awards 2012: • CDM Co-ordinator of the Year Award • Regional Health & Safety AwardFinalist for 3 major Association for Project Management Awards 2012: • Programme of the Year • Shell HSSE Award • Project of the YearRunner-up for the Constructing Excellence Awards for London and the SouthEast 2012:•Project of the Year, Client of the Year and OutstandingCustomer Satisfaction 20
  • 21. We continue to learn as we go….What’s going well? •Safety and service at the heart of the modernisation •Clear governance •Major successes in automation and mail centre rationalisationWhat do we need to do better? •This is tough for all of our people •Ensuring we deliver ‘sticky change’ •Establish momentum in modernising the rest of our delivery operation21
  • 22. Summary • Transforming Royal Mail is essential for our future success and ability to deliver the USO • The Postal Services Act 2011 has been a major enabler • We are delivering a huge technical programme – but at the core it is a people programme • We have invested £1.8 billion to date and enabled £0.9 billion of recurring annual benefits • We have many successes under our belt and are hugely proud of what we have achieved! 22

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