Reducing Mail Packaging Time From 415 to 96 Minutes
Project Summary
- The Challenge: UC San Diego students’ accounts were being sent to collections before they ever received Final Notice Letters—leaving them no time to react.
- The Discovery: The time it took the Student Business Services Department to produce, stuff and mail Final Notice Letters varied greatly, with a median of 415 minutes.
- The Improvements: They eliminated unnecessary process steps, reduced the wastes of transportation and motion and established a firm monthly letter production date.
- The Results: They reduced the Final Notice Letter packaging time by 77%—from 415 to 96 minutes.
- What’s Next: The team has adopted the Lean Six Sigma methodology and is now focusing more on the Voice of the Customer.
THE CHALLENGE
Imagine receiving a letter announcing that your past-due account will be sent to collections after the fact—the collection agency is already trying to get a hold of you and your credit score has gone down. This was the case for many UC San Diego students. They received the Final Notice Letter close to or after their account had already been sent to collections. A frustrating experience for students receiving the letter and an expensive problem for the university. This resulted in more accounts than necessary being sent to collections—with an 18.5% premium that ran to about $740,000 annually.
Franklin Garrett, Assistant Director and Jared Church, Associate Director at the Student Business Services Department at UC San Diego decided to seize the opportunity and turn this issue into a DMAIC (Define, Measure, Analyze, Improve & Control) project.
THE DISCOVERY
Franklin and Jared dug deeper into the process and found that the median letter packaging time—the time it takes to produce, stuff and mail the letter—was 415 minutes. This meant that Student Business Services sent out many final notice letters too late to give students any time to respond.
They used Spaghetti Maps and Swimlane Maps, Voice of the Customer (VOC) Matrix and Fishbone Diagrams and found dozens of unnecessary steps in the process. In addition to not receiving the final notice letter in time, they learned from their customers that the letter didn’t list a specific contact person or the collection due date. It also failed to mention the temporary payment plan option.
Franklin and Jared found that most of the long lead time was caused by a lot of waste in the process—Transportation, Motion, Overproduction, Waiting and Non-utilized Talent were the major contributors.
The most challenging part for Franklin and Jared was how to get buy-in from their team. The team was very focused on the Voice of the Process (VOP)—What would a change in process mean for the department? Would it negatively impact the other work they had to do?
THE IMPROVEMENTS
Franklin and Jared were able to shift the team’s focus to the Voice of the Customer (VOC). Using Process (Gemba) Walks, creating visual aids and sharing the information, they enjoyed seeing the team’s attention shift to what the customers were telling them. They were excited to see the “light bulbs come on” when the team realized what was behind all of those process steps and times and what was happening for the students.
Together with their team, Franklin and Jared were able to eliminate unnecessary steps in the process, such as sorting, producing and delivering 3rd party letters. They greatly reduced the wastes of Transportation and Motion in the process—going from 8 workstations down to 2 workstations. They established a firm monthly date for the letter production and they were able to remove and reassign an analyst from within the process.
THE RESULTS
Franklin and Jared reduced the median packaging time from 415 minutes downto 96 minutes—a 77% improvement. As a result, they are anticipating a 5% reduction of accounts going into collections, which translates into $6,900 annual savings. They also found they were using only 2 mailboxes but were paying for 5. By reducing the number of mailboxes to 2 they saved another $4,900 annually. They were able to put the reassigned analyst to good use and in terms of their customers, they weren’t sure, but they thought they could hear a big sigh of relief from a certain segment of the student population.
WHAT'S NEXT
After using the DMAIC process and seeing the tools in action Franklin and Jared are now leading their department’s Lean Six Sigma transformation. Both of them are looking to become Black Belt certified and all of their staff have gone through Yellow Belt Training. They are eager to continue digging into their current processes, removing waste, saving money and keeping the university, the staff and the students happy.
"The key takeaway here is that we showed positive improvement. We were able to reduce our median time significantly, 415 minutes down to 96."
Franklin Garrett is an Assistant Director at the Student Business Services Center at UC San Diego. He oversees the Student Account Services Unit including Customer Service and Student Accounts Receivable. Franklin has a Master’s Degree in Education and is a certified Lean Six Sigma Green Belt.
Jared Church is an Associate Director at the Student Business Services Center at UC San Diego. He has an MBA and is a certified Lean Six Sigma Green Belt.
