2ND WAVE

1

Project Title : Reduce Transport Services Cost

Project No. : OAS-06-010 (2W)

Champion : R. Rajan

Team Leader : Eleazer Bernabe

Lead Member : Galileo DizonMembers : Gloria Tria

Eligio Pregillano Jr.

Date : 23 October 2006

2

PROBLEM STATEMENT: OAIS-LM serves an average of 15,000 vehicle requests at ADB headquarters a year using 15 ADB vehicles and 4 contracted vehicles at an average yearly cost of US$250,000 arising in budget constraint in 2006, and there is a need to reduce the operating costs.

DEFINE

GOAL STATEMENT: To reduce the cost of transport services by 20% by end 2006.

3

DEFINE

Business Case•Transport Unit serve some 15,000

transportationrequests a year at ADB headquarters.

•This service use up an average yearly budget of

US$250,000 that includes vehicle depreciation,maintenance, labor, and fuel costs.

•The project will help us determine the right size

of fleet to maintain and is aiming to reduce thecost of transport services by 20% by end 2006.

4

StartStaff Request

Vehicle

On-Line Vehicle Request System

Approved

Acknowledgement Receipt

For Endorsement Approving Officer

VehicleDispatcher

Yes

No

VehicleAssignment

Service Providers

Support Staff Rendering Overtime

(Nissan Car Lease)/(Taxi Fare Reimbursemnt)

Airport Transfers Mission Travel

(Alamo Transport)

Bank Car

Airport Transfers for Home Leave, Official Guests, Appointment,

Repatriation, Relocation.Business Trip Within Metro Manila

Local Mission Outside Metro Manila

(Staff Drivers, and JRS Agency Drivers)

Trip Ticket For ADB Driver

Trip Ticket forJRS Driver

Trip Ticket for Alamo Driver

Trip Ticket for Nissan Car Lease

Fax Copy

CompleteVehicle

RequestsArchive

A

A

Confirmation

Completed Request

DEFINE Detailed Processing

5

CTQ S I P O CCorrect data and clear instructions for Transport Requirements

Staff from HQ and RMs

Fill-up Electronic Request

START1. Received Vehicle Request

Transport RequirementInformation

Transport Unit, OAIS-LM

Vehicle Request System

OIST Processing and archiving of data

2. Data processed, Staff, Approving Officer, and Vehicle Dispatcher notified

ElectronicData

Transport Unit,OAIS-LM

SIPOC

6

SIPOC

CTQ S I P O CTimely endorsement of request

AOs & ACs

ApprovingOfficer from HQ and RMs

OASBPMSD

Electronic Approval of Request

3.Endorsement and Approval of Request

ApprovedRequest

OAIS-LMVehicle Dispatcher

Availability of Vehicles and DriversTransport ServicesBudget

OAIS-LMVehicle Dispatcher

OASBPMSD

Schedule of Assignments

4. ProcessTransport Requests

Transport Services

ADB Staff, and Official Guests

7

SIPOC

CTQ S I P O CClear instructions, Timely arrival of Vehicles and Drivers

OAIS-LMADB Vehicles & Drivers, and Service Providers

Transport Requests Trip Tickets, Vehicles and Drivers

5. ServeTransport Requests

Vehicles and Drivers

ADB Staff, and Official Guests

Complete data

Drivers and Passengers

Input data and signature of passengers

6. Completes Service

Transport Unit

Transport Unit

Correct DataData Input and Confirmation of Vehicle Dispatcher

OAIS-LMADB Drivers,Service ProvidersVehicle Dispatcher

Data from Hard Copy of TransportRequestsServed

7. Archiving of Data of Completed Requests

Transport ServicesRecords

OAIS-LM, OGA, BPMSD and Concerned Departments

8

Define Measure Analyze

Improve

Control

1Feb to 6 Apr

7 Apr to 14 Jul

15 Jul to 15 Sep

16 Sep to 15 Oct

15Jan to 30Jan

65 days 69 days 60 days 30 days15 days

9

DEFINE

- Strong Relationship

- Moderate Relationship

- Weak Relationship

No Symbol - No Relationship

Reduce transportation cost A

vaila

bili

ty o

f V

ehic

les

Cat

ego

ry o

f R

equ

est

Mai

nte

nan

ce o

f V

ehic

les

Sal

ary

of

Dri

vers

Gas

olin

e

Ove

rtim

e o

f D

rive

rs

POTENTIAL OUTPUT MEASURES

10

DEFINE

- Strong Relationship

- Moderate Relationship

- Weak Relationship

No Symbol - No Relationship

Optimize use of resources

Ag

e o

f V

ehic

les

Typ

e o

f V

ehic

les

No

. of

Pas

sen

ger

s

Vo

lum

e &

Fre

qu

ency

of

Req

ues

ts

Ro

ute

s T

aken

Dri

vers

POTENTIAL OUTPUT MEASURES

11

CTQ

High-Level Need

Reduce Cost of Transportation Services

Output Unit Transportation cost

Output Characteristic

Reduced cost by 20%

Process starts when a vehicle request is submitted by the staff.

How process will be measured

Deviation from cost reduction target.

LSL - USL - $200,000

TargetReduce cost by $50,000 or reduce cost to $200,000

No. of Defect Opportunities

Per Unit

1 oppurtunity for defect

Total transportation cost of more than $200,000

CTQ

Project Y (Little y) Measure

Specification Limits

Defect

DEFINEDEFINE

12

MEASURE

Completed Vehicle Requests

Data Collection

Provider PurposeNo. of

Trips 2004No. of Trips

2005

1 Bank Car For travel on official Bank business and functions within the Metro Manila area. 2,763 2,504

2 Bank Car For official missions outside Metro Manila where road is the most convenient and cost effective mode of transport 63 64

3 Bank Car For airport transfers in Manila for ADB personnel either in commencement or continuation of travel funded by the Bank relating to the appointment repatriation, emergency. 140 166

4 Bank Car For airport transfers in Manila for ADB personnel home country travel. 1,198 1,307

5 Bank Car For airport transfers of official ADB guests and member country delegations including other travel on official business of these delegation members. 1,558 1,906

6 Bank Car For airport transfers of Bank personnel from Resident Missions/Regional Offices visiting ADB headquarters 231 275

13

MEASURE Data Collection

Provider PurposeNo. of

Trips 2004No. of Trips

2005

6 Bank Car For airport transfers of Bank personnel from Resident Missions/Regional Offices visiting ADB headquarters 231 275

7 Bank Car For airport transfer of staff living outside Metro Manila who are going on official mission. 221 230

8 Bank Car For airport transfers of ADB Vice Presidents, Directors and Alternates for official travel, including home leave. In case of education travel, service is extended up to their dependents. 320 329

9 Bank Car For conveyance of assigned Bank personnel liaising with government agencies, such as Department of Foreign Affairs, Dept. of Finance, for visa, passport, and travel document processing, including other government liaison activities 527 509

10 Bank Car For delivery and pick up of official documents. 29 45

11 Alamo For airport transfers of Bank personnel for mission travel, seminar partipants for Bank sponsored seminars including guests for interview 8,921 7,981

12 Nissan Car Lease

For conveyance of support staff rendering overtime 934 1,143

16,905 16,459

Completed Vehicle Requests

14

MEASURE

No.o

f Tr

ips

Perc

ent

Category

CountPercent 52.8 16.3 9.2 7.1 5.5 3.1 1.9 4.0Cum %

8921

52.8 69.1 78.3 85.4 90.9 94.1 96.0 100.0

2763 1558 1198 934 527 320 684

1800016000

140001200010000800060004000

20000

100

80

60

40

20

0

Completed Vehicle Requests in 2004

15

MEASURE

No.o

f Tr

ips

Perc

ent

Category

CountPercent 48.5 15.2 11.6 7.9 6.9 3.1 2.0 4.7Cum %

7981

48.5 63.7 75.3 83.2 90.2 93.3 95.3 100.0

2504 1906 1307 1143 509 329 780

1800016000

140001200010000800060004000

20000

100

80

60

40

20

0

Completed Vehicle Requests in 2005

MEASURE

Cost Drivers in Transport Operations

Data Collection

Bank Cars

Salary of Regular Drivers 54,473 54,430

Overtime of Regular Driver 19,612 16,162

Salary of Agency Drivers 12,350 13,179

Overtime of Agency Drivers 6,650 7,097

Vehicle Maintenance 5,573 5,465

Gasoline & Oil Consumption 11,821 21,015

Vehicle Depreciation 51,000 51,000

Sub-total 161,479 168,348

2004US$

2005US$

17

MEASURE

Cost Drivers in Transport Operations

Data Collection

2004US$

2005US$

Alamo Transport

Fixed Monthly Rental 75,664 56,185

Back-up vehicles 20,964 15,729

Sub-total 96,628 71,914

Nissan Car Lease

Monthly Rental 12,093 11,794

Sub-total 12,093 11,794

Total 270,199 252,056

18

MEASURE

Am

ount

in U

S $

Perc

ent

Cost Drivers

Count 12.3Percent 28.0 20.2 18.9 7.8 7.2 4.6 4.5 4.4

75.74.5

Cum % 28.0 48.2 67.0 74.8 82.0 86.6 91.1 95.5

54.5

100.0

51.0 21.0 19.6 12.4 12.1 11.8

300

250

200

150

100

50

0

100

80

60

40

20

0

Cost Drivers of Vehicle Requests in 2004

19

MEASURE

Am

ount

in U

S $

Per

cent

Cost Drivers

Count 12.6Percent 22.3 21.6 20.2 8.3 6.4 6.2 5.2 4.7

56.25.0

Cum % 22.3 43.9 64.1 72.4 78.9 85.1 90.3 95.0

54.4

100.0

51.0 21.0 16.2 15.7 13.2 11.8

250

200

150

100

50

0

100

80

60

40

20

0

Cost Drivers of Vehicle Requests in 2005

20

MEASURE

Cost per Kilometer for Airport Transfers

Type of VehicleCost / 15 Km

in US$ Cost/Km in US$

Alamo Sedan Car 9 0.6

Alamo Coaster 61 4.1

BC Driver / Land Cruiser 19 1.3

BC Driver / Hi-Ace 17 1.1

BC Driver / Camry 16 1.1

BC Driver / Coaster 33 2.2

Agency Driver / LandCruiser 14 0.9

Agency Driver / Hi-Ace 12 0.8

Agency Driver / Camry 10 0.7

Agency Driver / Coaster 26 1.7

21

MEASUREUS$

Perc

ent

Vehicle

Count 0.7 0.6Percent 28.3 15.2 11.7 9.0 7.6 7.6 6.2

4.15.5 4.8 4.1

Cum % 28.3 43.4 55.2 64.1 71.7 79.3

2.2

85.5 91.0 95.9 100.0

1.7 1.3 1.1 1.1 0.9 0.8

16

14

12

10

8

6

4

2

0

100

80

60

40

20

0

Cost Per Kilometer per Vehicle for Airport Transfers

22

MEASURE

Cost

Frequency

43210-1

4

3

2

1

0

Mean 1.45StDev 1.050N 10

Histogram (with Normal Curve) of Cost

23

MEASURE

43210-1

USL

10987654321

1000000

100000

10000

1000

100

10

1

Date:

Lower Spec:Nominal: 1.16 Opportunity:

Reported by:Project:Department:Process:Characteristic:Units:Upper Spec: 1.45

Actual (LT)

Process Performance Process Demographics

Actual (LT) Potential (ST)

Sigma(Z.Bench)

DPMO

0.00

500000.0

1.50

66807.2

Process Benchmarks

Report 1: Executive Summary

24

MEASURE

10987654321

4

2

0

_X=1.45

UCL=4.435

LCL=-1.535

Observation10987654321

4

2

0

__MR=1.122

UCL=3.667

LCL=0

ST

* 0.00Z.LSL * *Z.Bench 1.50 0.00Z.Shift 1.50

LT

1.50P.USL * 0.5P.LSL * *P.Total 0.0668072 0.5

Mean

Yield 93.32 50.00DPMO 66807.2 500000.0Cp * *Cpk

1.16

* *CCpk * *Pp * *Ppk *

1.45

0.00

StDev * 1.080Z.USL

1.45 1.45

4.68895-1.78895

I and MR Chart

Process Tolerance

Specifications

Potential (ST) Capability

Process Tolerance

Specifications

Actual (LT) Capability

Data Source:Time Span:Data Trace:

Capability I ndices

Report 2: Process Capability for Cost

25

MEASURE

Cost/ km

Frequency

2.01.51.00.50.0

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Mean 1.156StDev 0.5151N 9

A Camry

A Hi-Ace

A Land Cruiser

B/C T. Coaster

B/C Camry

B/C T. Hi-Ace

B/C Land Cruiser

Alamo Car

Cost of Airport Transfer Per KilometerNormal

26

MEASURE

2.01.51.00.50.0

USL

987654321

1000000

100000

10000

1000

100

10

1

Date:

Lower Spec:Nominal: 0.9248 Opportunity:

Reported by:Project:Department:Process:Characteristic:Units:Upper Spec: 1.156

Actual (LT)

Process Performance Process Demographics

Actual (LT) Potential (ST)

Sigma(Z.Bench)

DPMO

0.00

499666.3

1.50

66698.9

Process Benchmarks

Report 1: Executive Summary

27

MEASURE

987654321

2

1

0

_X=1.156

UCL=2.652

LCL=-0.340

Observation987654321

2

1

0

__MR=0.563

UCL=1.838

LCL=0

ST

* 0.00Z.LSL * *Z.Bench 1.50 0.00Z.Shift 1.50

LT

1.50P.USL * 0.499666P.LSL * *P.Total 0.0666989 0.499666

Mean

Yield 93.33 50.03DPMO 66698.9 499666.3Cp * *Cpk

0.9248

* *CCpk * *Pp * *Ppk *

1.15556

0.00

StDev * 0.531Z.USL

1.156 1.156

2.74963-0.438519

I and MR Chart

Process Tolerance

Specifications

Potential (ST) Capability

Process Tolerance

Specifications

Actual (LT) Capability

Data Source:Time Span:Data Trace:

Capability I ndices

Report 2: Process Capability for Cost/ km

28

ANALYZE

CAUSE AND EFFECT

FACTORS THAT IMPACT TRANSPORTATION COST

•People

•Vehicles

•Policies & Procedures

•Processes

29

ANALYZE

Reduce Transportation Service Cost by 20%

& Optimize Resources

PeopleVehices

Policies and Procedures Processes

Bank Drivers

Bank Policies & AOs

Bank Vehicles

Contracted Vehicles

Service Requests

Agency Drivers

SalaryOvertime

Meal AllowanceE-Cola

CC

C

SalaryOvertime

Shift Premium

C

Type/Make Fuel Consumption

Repairs

Fixed RentalOvertime

Back-up cars

Coverage of ServiceRestrictions

C

Time of Requests Drivers Schedule

Cancellation

C

CAUSE AND EFFECT DIAGRAM

30

ANALYZEANALYZE

• People

Regular drivers

– Salary – Overtime– Shift Premium

Agency Drivers

– Salary – Overtime– Meal Allowance– E-Cola

CAUSE AND EFFECT

31

ANALYZEANALYZECAUSE AND EFFECT

Agency Drivers

Personnel Appointment Age

Agency Driver 1 04-Mar-99 43

Agency Driver 2 28-Nov-01 34

Agency Driver 3 29-Nov-01 33

Agency Driver 4 01-Aug-05 26




Agency Driver 8 05-Oct-05 36

Agency Driver 9 19-Apr-06 27

Agency Driver 10 08-Jun-06 34

Agency Driver 11 08-Jun-06 29

32


Agency Drivers 2005

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total $

No. of Drivers 6 6 6 6 6 6 6 9 9 9 9 9

Salary

49,676

41,128

51,048 48,894

49,292

46,536

49,031

82,355

82,354

83,616

78,890

80,060

742,881

13,507

Overtime

43,800

37,940

42,277 38,657

36,621

54,579

64,432

64,134

59,061

69,233

76,337

72,505

659,577

11,992

Meal Allowance

11,880

10,920

12,160

11,400

11,640

11,680

11,800

19,480

20,396

19,160

19,840

19,560

179,916

3,271

E. Cola 7,425

6,465

7,175

7,125

6,896

7,228

7,925

13,366

12,756

12,222

12,531

12,281

113,395

2,062

Total 112,782

96,454

112,660

106,076

104,449

120,023

133,188

179,335

174,567

184,231

187,598

184,406

1,511,362

30,832

33


Agency Drivers 2006

Jan Feb Mar Apr May Jun Total $

No. of Drivers 9 9 9 9 11 11

Salary 89,443 73,595 93,282 76,844 96,203 95,514 524,881 10,094

Overtime 36,253 40,199 57,310 67,701 72,165 55,598 329,226 6,331

Meal Allowance 18,880 15,280 22,590 22,242 26,469 20,000 125,461 2,413

E. Cola 11,802 10,475 12,291 11,266 13,391 13,375 72,600 1,396

Total 156,378 139,549 185,473 178,053 208,228 184,487 1,052,168 20,234

34

ANALYZEANALYZE

CAUSE AND EFFECT

Regular Drivers 2005 2006

Salary $56,221

PHP3,092,148

$51,123

PHP2,658,397

Overtime 2,494 hours

$ 15,308

PHP841,931

Jan to Jun

450 hours

$3,386

PHP176,077

Shift Premium Pay 4,289 hours

$ 5,643

PHP301,422

832 hours

$ 1,320

PHP68,638

Total $77,172

PHP4,235,501

$55,829

PHP2,903,112

35

ANALYZEANALYZE

CAUSE AND EFFECT

Agency Drivers 2005 Jan to Jun 2006

Salary $13,507

PHP742,881

Jan – July 6 drivers

Aug –Dec 9 drivers

$10,094

PHP524,881

Jan –Apr 9 drivers

May - Jun 11 drivers

Overtime $11,992

PHP659,577

8,973 hours

$6,331

PHP329,226

3,480 hours

Meal Allowance

E-Cola

$3,271

PHP179,916

$2,062

PHP113,395

$2,413

PHP125,461

$1,396

PHP72,600

Total $30,832

PHP1,695,768

$20,234

PHP1,052,461

36

ANALYZEANALYZE

• Vehicles

Bank Vehicles

– Type/Model/Cost

– Fuel consumption

– Maintenance and Repair

Contracted Vehicles

– Fix Rental

– Overtime

– Back-up cars

CAUSE AND EFFECT

37

ANALYZEANALYZE

CAUSE AND EFFECT

NO. PLATE NO. DESCRIPTION MODEL US $ AMT.

1 NUD-500 Water Tank Trailer 1983 591

2 DC6358 Toyota Land Cruiser SW VX 4.8 1994 26,948

3 DC6361 Chevrolet Suburban 1998 124,550

4 DC6373 Toyota Coaster 2000 35,644

5 DC6300 Mercedes Benz - S600 2001 152,060

6 OEV 21969 Toyota Hi-Ace Ambulance 2.0 2001 27,134

7 DC6367 Toyota Camry GXE 2.0 A/T 2001 14,390

8 DC6369 Toyota Camry GXE 2.0 A/T 2001 14,390

9 DC6356 Toyota Hi-Ace GL 2.0 2001 15,228

10 DC6370 Toyota Land Cruiser SW VX 4.8 2002 35,666

11 DC6354 Toyota Land Cruiser SW GX 4.5 2002 24,347

12 DC6353 Toyota Land Cruiser SW GX 4.5 2002 24,347


14 DC6359 Toyota Camry 2.0 A/T 2003 16,010






20 DC6371 Toyota Hi-Lux Pick-Up 4 X 2 2004 11,513

21 DC6352 Toyota Camry 2.4V A/T 2004 21,789

22 DC6366 Toyota Land Cruiser GX 4.5 2005 32,218

23 OEV17672 Toyota Hi-Ace Van 2.0 2005 18,316



$ 733,425

Bank Vehicles

38

ANALYZEANALYZE

CAUSE AND EFFECT

SUMMARY ALLOCATION NO. OF VEHICLES

Dedicated Vehicles

President's Vehicles 2

Non-Pool Vehicles

Building Maintenance & Communication 2

Engineering Emergency Response Vehicle 1

Ambulance 1

PhCO 1

Pool Vehicles 17

Total 24

Bank Vehicles

39

ANALYZEANALYZE

CAUSE AND EFFECT

Bank VehiclesGASOLINE CONSUMPTION AND REPAIR 2005 2006

Plate No. Yr Model/Make Liters Amount Repair Liters Amount Repair

DC6300 2001 Mercedes Benz 2,393 69,308 230,475 1,552 50,098 110,048

DC6351 2006 T. Camry - - - 1,301 40,239 2,477

DC6352 2005 T. Camry 1,906 56,152 - 1,389 43,850 3,600

DC6353 2002 T. Land Cruiser 3,920 114,019 400 2,104 67,330 8,299

DC6354 2002 T. Land Cruiser 4,451 127,141 21,764 2,538 81,809 1,227

DC6355 2003 T. Camry 2,827 79,490 3,600 1,657 51,121 13,530

DC6356 2001 T. Hi-Ace 2,068 60,903 53,007 1,129 36,730 9,336

DC6357 2004 T. Hi-Ace 2,879 83,519 - 1,587 49,901 300

DC6358 1994 T. Land Cruiser - 3,306 - - 1,725 -

DC6359 2003 T. Camry 2,520 71,954 8,767 1,738 52,273 5,500

DC6360 2002 T. Hi-Ace 2,280 67,785 15,969 1,513 48,216 400

DC6361 1998 C.Suburban 1,176 32,441 30,655 225 8,129 456

DC6363 2003 T. Camry 2,758 78,179 20,321 1,543 47,382 14,271

DC6364 2003 T. Camry 3,315 93,638 14,086 1,653 51,653 26,280

DC6365 2003 T. Hi-Ace 2,417 67,718 11,723 1,268 40,498 222

DC6366 2005 T. Land Cruiser 2,162 64,659 - 1,114 37,447 7,673

DC6367 2001 T. Camry 3,036 45,363 4,511 1,450 45,363 89,465

DC6368 2006 T. Camry - - - 1,687 52,631 6,571

DC6369 2001 T. Camry 1,691 50,301 2,481 1,100 35,220 100

DC6370 2001 T. Land Cruiser 4,435 123,119 19,312 - - -

DC6371 2004 T. Hi-Lux 523 15,544 - 268 9,174 -

DC6373 2000 T. Coaster 1,532 45,703 34,173 671 22,808 -

OEV17672 2005 T. Close Van 1,264 38,547 9,786 907 29,421 1,400

OEV21969 2001 T. Ambulance 409 13,261 - 201 7,360 -

49,962 1,402,049 481,030 28,596 910,377 301,157

25,492 8,746 16,552 5,476

40

ANALYZEANALYZE

CAUSE AND EFFECT

Bank Vehicles 2005 2006

Vehicle Depreciation

$46,376

15 Vehicles

PHP2,550,680

$49,694

17 Vehicles

PHP1,292,044

Fuel Consumption 45,896 liters

$ 23,290

PHP1,280,935

Jan to Jun

25,937 liters

$14,973

PHP823,499

Vehicle Repairs $ 4,378

PHP240,768

$ 3,449

PHP189,709

Total $74,044

PHP4,072,383

$68,116

PHP2,305,252

41

ANALYZEANALYZE

CAUSE AND EFFECT

Particular Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Fixed Rental 342,000

342,000

342,000

342,000

342,000

228,000

228,000

228,000

228,000

228,000 2,850,000

Overtime

Dispatchers 20,200

22,800

19,650

17,100

19,050

13,500

9,250

9,600

10,300

10,950 152,400

Drivers 50,070

52,710

43,410

41,520

43,008

28,090

34,290

35,130

40,620

33,600 402,448

Back-up Cars 26,135

208,837

40,825

21,232

14,810

12,700

12,250

20,587

30,846

21,020 409,242

MO. TOTAL PHP

438,405

626,347

445,885

421,852

418,868

282,290

283,790

293,317

309,766

293,570 3,814,090

MO. TOTAL

$ 7,971

11,388

8,107

7,670

7,616

5,133

5,160

5,333

5,632

5,338 69,347

Contracted Vehicles2005

42

ANALYZEANALYZE

CAUSE AND EFFECT

Particulars Jan Feb Mar Apr May Jun Total

Fixed Rental

228,000

228,000

228,000

228,000

228,000

228,000

1,368,000

Overtime

Dispatchers 7600 5950

5,250 10,500

5,650

5,000

39,950

Drivers 22120 26110 29,460

28,930

25,510

25,000

157,130

Back-up Cars 9330 18260

8,790 18,510

47,530

3,180

105,600

MO. TOTAL PHP

267,050

278,320

271,500

285,940

306,690

261,180

1,670,680

MO. TOTAL$

5,136

5,352

5,221

5,499

5,898

5,023

32,128

Contracted Vehicles2006

43

ANALYZEANALYZE

CAUSE AND EFFECT

Contracted Vehicles

2005 2006

Jan to Jun

Alamo

Fixed Rental

$51,818

PHP2,850,000

$26,308

PHP1,368,000

Alamo Dispatchers & Drivers Overtime

$ 10,089

PHP554,848

$3,790

PHP197,080

Alamo

Back-up cars

$ 7,440

PHP409,242

$ 2,030

PHP105,600

Total $69,347

PHP3,814,090

$32,128

PHP1,670,680

44

ANALYZEANALYZE

• Policies and Procedures

Coverage of Service

– Types of Services Covered

– Restrictions

CAUSE AND EFFECT

45

ANALYZEANALYZE

CAUSE AND EFFECT

AO4.14

SCOPE OF TRANSPORT SERVICE

3.1 Bank vehicles may be used, subject to availability, for the following purposes:

(a) For travel on official Bank business within the Metro Manila area. For official missions outside Metro Manila, vehicles may be used for destinations not serviced by domestic airline companies and where road travel is the most convenient and cost effective mode of travel, subject to clearance by the Bank's Security Unit;

(b) For Bank-sponsored seminars, meetings and conferences, the need for additional vehicles may be satisfied, in case the requirement cannot be met by Bank vehicles, by leasing the necessary units from the outside, with the cost chargeable to the special budget allocated for the function;

(c) Airport transfers in Manila for Bank personnel either in commencement or continuation of travel funded by the Bank relating to the appointment, repatriation, emergency and home leave of personnel;

(d) Airport transfers of official Bank guests and member country delegations including other travel on official Bank business of these guests and delegation members;

(e) For delivery and pick-up of official documents; and

(f) Other official uses, subject to the approval of Head, OASS-TS.

46

ANALYZEANALYZE

CAUSE AND EFFECT

A01.05

TRANSPORTATION SCHEME

7.1 All national officers and administrative staff in ADB Headquarters who render overtime continuously for at least four (4) hours until 7:30 p.m. or later during regular workdays of ADB are entitled to avail of either of the following transportation options:

Option 1: Reimbursement of taxi transportation expensesOption 2: Contracted vehicle service

7.2 Only Option 1 will be available for overtime work rendered during weekends and ADB holidays when staff members have worked at least 12 hours of work until 7:30 p.m. or later. (including meal breaks). For staff members who are shift workers who render overtime on such weekdays or ADB holidays, only Option 1 will be available on completion of 8 hours of overtime work, which should conclude between 7:30 p.m. and 5:00 a.m. The guidelines and procedures governing the implementation of this scheme are provided in detail in Appendix 1.

47

ANALYZEANALYZE

• Processes

Service Requests

– Type & Time Request

– Schedule of drivers

– Cancellation of Requests

CAUSE AND EFFECT

48

ANALYZEANALYZE

CAUSE AND EFFECT

CATEGORY ALAMO BC B/UP TOTAL

Mission Travel 3457 852 353 4662

HOMELEAVE 2 637 0 639

OTHERS 31 568 6 605

APPOINTMENT 0 0 0 0

INTERVIEW 61 8 0 69

EMERGENCY 3 5 0 8

3554 2070 359 5983

2005 TRIPS FOR DEPARTURE AIRPORT TRANSFER

49

ANALYZEANALYZE

CAUSE AND EFFECT

CATEGORY ALAMO BC B/UP TOTAL

MISSION 3462 809 498 4769

HOMELEAVE 6 664 5 675

OTHERS 46 426 29 501

APPOINTMENT 5 115 1 121

INTERVIEW 58 8 0 66

EMERGENCY 1 5 0 6

3578 2027 533 6138

2005 TRIPS FOR ARRIVAL AIRPORT TRANSFER

50

ANALYZEANALYZE

CAUSE AND EFFECT

2006 AIRPORT TRANSFERS TRIPS

PARTICULAR ALAMO BC B/UP TOTAL

DEPARTURE

MISSION 986 775 42 1,803

HOME LEAVE - 204 - 204

OTHERS 6 210 - 216

INTERVIEW 20 14 1 35

TOTAL 1,012 1,203 43 2,258

PARTICULAR ALAMO BC B/UP TOTAL

ARRIVAL

MISSION 1,028 603 43 1,674

HOMELEAVE - 282 5 287

OTHERS 4 201 - 205

APPOINTMENT 5 30 - 35

EMERGENCY 1 2 - 3

INTERVIEW 20 10 - 30

TOTAL 1,058 1,128 48 2,234

51

ANALYZEANALYZE

CAUSE AND EFFECT

2005 VEHICLE REQUEST FOR BUSINESS TRIPS

Particular JAN. FEB. MAR. APR. MAY JUN JUL AUG SEPT OCT. NOV. DEC. Total

BANK GUEST 1 3 0 11 7 2 0 2 11 9 4 7 57

EMBASSY 11 15 12 8 13 24 19 5 15 10 19 8 159

GOV'T. OFFICES 45 51 43 60 58 40 68 70 66 77 5 57 640

LOAN NEGOTIATION 4 2 19 19 6 10 9 21 31 37 5 22 185

MEETING 71 49 100 86 72 70 61 69 76 73 73 39 839

NAIA 6 8 8 7 0 12 0 0 0 0 0 0 41

OFFICIAL 13 3 20 13 10 12 0 5 6 2 4 1 89

SERVICE 34 44 42 30 29 21 18 25 32 13 27 18 333

SEMINAR 17 59 71 70 66 38 23 47 90 98 50 34 663

3006

52

ANALYZEANALYZE

CAUSE AND EFFECT

2006 VEHICLE REQUEST FOR BUSINESS TRIPS

PARTICULAR JAN. FEB. MAR. APR. MAY JUN TOTAL

BANK GUEST 2 8 6 3 5 48 72

EMBASSY 3 22 12 13 4 8 62

GOV'T. OFFICES 37 99 40 94 45 23 338

LOAN NEGOTIATION 1 29 3 21 15 21 90

MEETING 36 72 51 68 21 29 277

NAIA 0 3 0 0 0 0 3

OFFICIAL 1 7 22 4 10 21 65

SERVICE 5 25 15 23 11 10 89

SEMINAR 12 78 15 64 31 37 237

97 343 164 290 141 197 1232

53

ANALYZEANALYZE

CAUSE AND EFFECT

LOCAL MISSION OUTSIDE METRO MANILA

JAN. FEB. MAR. APR. MAY JUN JUL AUG SEPT OCT. NOV. DEC. Total

2005 1 2 2 3 8 11 2 4 4 18 6 3 64

2006 6 7 7 8 6 34

CONVEYANCE OF SUPPORT STAFF RENDERING OVERTIME

YearNo. of

request Amount

2005 1,143 $11,794

2006 331 $4,263

54

ANALYZEANALYZE

• Quick Wins

– Schedule & shifting of drivers.

– Utilize agency drivers.

– Reduce utilization of back-up cars

CAUSE AND EFFECT

55

IMPROVEIMPROVE

NEW DATA

Dispatcher &

Regular Drivers

Mar to Aug 2005

(PHP)

Mar to Aug 2006

(PHP)

Salary 1,562,500

1 OIC Dispatcher

6 Drivers

1,349,995

1 OIC Dispatcher

5 Drivers


515,405

446 hours

174,779


189,662

868 hours

59,821

Total 2,267,567 1,584,595

56

IMPROVEIMPROVE

NEW DATA

Agency Drivers Mar to Aug 2005

(PHP)

Mar to Aug 2006

(PHP)

Salary 327,156

Mar– July 6 drivers

Aug - 9 drivers

551,376

Mar - Apr 9 drivers

May – Aug 11 drivers

Overtime 300,700

4,623hours

340,783

4,275 hours

Meal Allowance

E-Cola

78,160

49,715

129,941

76,399

Total 775,731 1,098,499

57

IMPROVEIMPROVE

NEW DATA

Bank Vehicles Mar to Aug 2005

(PHP)

Mar to Aug 2006

(PHP)

Vehicle Depreciation

1,275,340

15 Vehicles

1,292,044

17 Vehicles

Fuel Consumption 557,004

21,142 liters

26/liter

821,610

25,231 liters

32/liter

Maintenance & Repairs

141,345 348,969

Total 1,973,689 2,462,623

2001 Land Cruiser replacement of transmission2001 T. Camry replacement of under chassis

58

IMPROVEIMPROVE

NEW DATA

Contracted Vehicles

Mar to Aug 2005

(PHP)

Mar to Aug 2006

(PHP)

Alamo Transport

Fixed Rental

1,938,000 1,368,000

Overtime of Dispatchers & Drivers

371,108 195,060

Back-up cars 324,089 126,410

Total 2,633,197 1,689,470

59

IMPROVEIMPROVE

NEW DATA

Contracted Vehicles

Mar to Aug 2005

(PHP)

Mar to Aug 2006

(PHP)

Nissan Car Lease

Rental Charges

399,514 305,357

60

IMPROVEIMPROVE

NEW DATA

Am

ount

in P

HP (

,000)

Perc

ent

Cost Drivers

Count 324 301 190 269Percent 24.1 19.5 15.9 6.9 6.4

19385.0 4.6 4.1 4.0 3.7 2.4 3.4

Cum % 24.1 43.6

1563

59.5 66.4 72.8 77.8 82.4 86.5 90.5 94.3 96.6 100.0

1275 557 515 399 371 327

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

100

80

60

40

20

0

Cost Drivers of Vehicle Trips from Mar to Aug 2005

61

IMPROVEIMPROVE

Am

ount

in P

HP (

,000)

Perc

ent

Cost Drivers

Count 195 175 130 262Percent 19.2 18.9 18.1 11.5 7.7

13684.9 4.8 4.3 2.7 2.5 1.8 3.7

Cum % 19.2 38.1

1350

56.2 67.7 75.4 80.3 85.1 89.3 92.1 94.5 96.3 100.0

1292 822 551 349 341 305

Other

Agency

Driv

ers M

eal A

llowan

ce

Regul

ar Staf

f Ove

rtime

Alamo OT

of disp

tache

rs an

d dr

ivers

Nissan

Car

Lease

Agency

Driv

ers O

vertime

Main

tenan

ce &

Rep

air

Agency

Driv

ers S

alary

Fuel

Consu

mption

Vehic

le Dep

recia

tion

Regul

ar Staf

f Sala

ry

Alamo fix

rental

charges

8000

7000

6000

5000

4000

3000

2000

1000

0

100

80

60

40

20

0

Cost Drivers of Vehicle Trips from Mar to Aug 2006

NEW DATA

62

IMPROVEIMPROVE

NEW DATA

Category Alamo Bank cars Back up Total

Mission 1,898 270 209 2,377

Home Leave 1 375 - 376

Others (Bank guests, Loan negotiation) 16 269 - 285

Appointment - - - -

Interview 36 5 - 41

Emergency 3 4 - 7

1,954 923 209 3,086

Summary of Departure Trips March to August 2005

63

IMPROVEIMPROVE

NEW DATA

Summary of Departure Trips March to August 2006

Category Alamo Bank cars Back-up Total

Mission 1,157 1,006

63

2,226

Home Leave - 428 -

428

Others (Bank guests, Loan negotiation) 7 273

-

280

Interview 21 19

3

43

Emergency - 17 -

17

Repatriation - 1 -

1

993 1,231

55

2,995

64

IMPROVEIMPROVE

NEW DATA


Mission 1897 255 342 2494

Home Leave 5 357 5 367

Others (Bank guests, Loan negotiation) 35 189 12 236

Appointment 1 69 0 70

Interview 32 1 0 33

Emergency 0 4 0 4

1970 875 359 3204

Summary of Arrival Trips March to August 2005

65

IMPROVEIMPROVE

NEW DATA

Summary of Arrival Trips March to August 2006


Mission 1,376 970 54 2,400

Home Leave 3 322 3 328

Others (Bank guests, Loan negotiation) 5 259 -

264

Appointment 10 44 - 54

Emergency 3 3 - 6

For interview 24 20 - 44

1,421 1,618 57 3,096

66

IMPROVEIMPROVE

NEW DATA

Summary of Business Trips March to August 2005

Category Mar Apr May Jun Jul Aug Total

Bank guests 2 7 17 2 9 18 55

Visa filing at embassy 13 8 7 31 16 4 79

Visit to Philippine government offices (DFA,DOF, BOC) 43 32 36 34 27 40 212

Loan negotiations, signing 20 32 21 16 9 36 134

Official meetings 124 156 126 95 111 98 710

Training, Seminar & Conferences 69 34 34 28 19 33 217

Service for inspection, site visits, & liaison work at NAIA 21 7 12 6 4 4 54

Delivery & pick-up of equipment & document, house moving 24 28 9 5 3 11 80

Local mission outside Metro Manila 2 3 8 11 2 4 30

318 307 270 228 200 248 1,571

67

IMPROVEIMPROVE

NEW DATA

Summary of Business Trips March to August 2006

Category Mar Apr May Jun Jul Aug Total

Bank guests 11 3 9 5 4 9 84

Visa & passport filing at embassy 15 8 9 11 6 14 63

Visit to Philippine government offices (DFA,DOF, BOC) 35 31 36 37 20 44 203

Loan negotiations & signing 9 2 33 47 13 29 133

Official meetings 158 102 103 82 63 139 647

Training, Seminar & Conferences 15 11 50 33 15 34 158

Service for inspection, site visits, & liaison work at NAIA 9 3 9 5 4 8 38

Delivery & pick-up of equipment & document, house moving 5 8 16 5 5 11 50

Local mission outside Metro Manila7 7 8 6 1 6 35

264 175 273 231 131 294 1,376

68

IMPROVEIMPROVE

NEW DATA

Summary of Trips for Conveyance of Support Staff After Overtime

Year Mar Apr May Jun Jul Aug Total

Mar to Aug 2005 224 141 78 88 92 55 678

Mar to Aug 2006 98 66 61 70 54 26 375

69

IMPROVEIMPROVE

• Quick Wins

– Schedule & shifting of drivers

1. We discontinued the regular pool drivers to work on shift schedule and were scheduled to work from 8:00am to 4:30pm. This reduced the overtime of regular drivers by 70%.

2. Increased the agency drivers from 6 to 11 to work on shift to serve the requirements that entail overtime. This reduced the shift premium pay of regular drivers by 73%.

3. Agency drivers were assigned on 3 shifts during weekends to monitor transport operations. Put regular drivers working on shift on weekends in the regular pool on weekdays.

70

IMPROVEIMPROVE

• Quick Wins

4. Reduced the number of contracted vehicles in August 2005 from 6 to 4 and utilized ADB vehicles and drivers for additional requirements for mission airport transfers. This increased the number of mission airport transfers served by ADB vehicles by 60%

5. Reduced the use of back-up vehicles for mission airport transfers by 80%.

71

IMPROVEIMPROVE

NEW DATA

VehiclesMar-Aug

2005Mar-Aug

2006Increase/

(Decrease)

Contracted VehiclesAlamo Transport & Nissan Car Lease

3,032,711 1,994,827

(1,037,884)

Bank Vehicles4,998,992

5,147,723 148,731

Total 8,029,698 7,140,544(889,154)

Summary of Cost for Transportation Services

72

IMPROVEIMPROVE

Cost per Kilometer for Airport Transfers March to August 2005

Vehicle Used SalaryVehicle

Depreciation Fuel Maintenance Cost/Trip Cost/Km

Alamo Contracted Vehicles 494 32

Bank Vehicles w/ Staff Driver 641 176.7 77 20 895 60

Bank Vehicles w/ Agency Driver 201 176.7 77 20 455 30

Nissan Car Lease 575 38

73

IMPROVEIMPROVE

Cost per Kilometer for Airport Transfers March to August 2006



AlamoContracted Vehicles 567 38




74

IMPROVEIMPROVE

Cost per Kilometer for Airport Transfers Sept to Dec 2006 (projected)



AlamoContracted Vehicles 567 38




75

NEW DATA

60555045403530

Median

Mean

6050403020

Anderson-Darling Normality Test

Variance 189.333Skewness 1.65822Kurtosis 2.69024N 4

Minimum 30.000

A-Squared

1st Quartile 30.500Median 35.0003rd Quartile 54.500Maximum 60.000

95% Confidence I nterval for Mean

18.105

0.44

61.895

95% Confidence I nterval for Median

30.000 60.000

95% Confidence I nterval for StDev

7.795 51.304

P-Value 0.129

Mean 40.000StDev 13.760

95% Confidence I ntervals

Mar-Aug 2005 Cost Per Km

Mean is P40 per Km.

Normal Distribution

76

Indiv

idual V

alu

e

4321

100

50

0

_X=40

UCL=98.5

LCL=-18.5

Movin

g R

ange

4321

80

40

0

__MR=22

UCL=71.88

LCL=0

Observation

Valu

es

4321

60

45

30

75604530150

LSL USL

SpecificationsLSL 30USL 60

100500

Within

Overall

Specs

WithinStDev 19.5035Cp 0.26Cpk 0.17

OverallStDev 14.935Pp 0.33Ppk 0.22Cpm *

Process Capability Sixpack of Cost Per Km Mar-Aug 2005I Chart

Moving Range Chart

Last 4 Observations

Capability Histogram

Normal Prob PlotAD: 0.439, P: 0.129

Capability Plot

Ppk is 0.22

Sigma Level is 2.16.

77

605550454035

Median

Mean

6050403020



Minimum 33.000

A-Squared



25.307

0.24

62.693


33.000 60.000


6.655 43.801

P-Value 0.523

Mean 44.000StDev 11.747


Cost Per Km Mar-Aug 2006

Mean is P44/Km.

Distribution is Normal.

78

Indiv

idual V

alu

e

4321

100

50

0

_X=44

UCL=98.1

LCL=-10.1M

ovin

g R

ange

4321

50

25

0

__MR=20.33

UCL=66.43

LCL=0

Observation

Valu

es

4321

60

50

40

7560453015

LSL USL

SpecificationsLSL 30USL 60

100500

Within

Overall

Specs

WithinStDev 18.026Cp 0.28Cpk 0.26

OverallStDev 12.7506Pp 0.39Ppk 0.37Cpm *

Process Capability Sixpack of Cost per Km 2006 NewI Chart

Moving Range Chart

Last 4 Observations



Capability Plot

Ppk is 0.37

Sigma level is 2.61.

79

656055504540

Median

Mean

706050403020



Minimum 38.000

A-Squared



26.151

0.60

67.349


38.000 66.000


7.333 48.268

P-Value 0.040

Mean 46.750StDev 12.945


Summary for Cost Per Km Sep-Dec 2006

Mean is P46.75/Km.

Distribution is Non-normal.

80

Ppk is 0.37

Sigma level is 2.61.

Indi

vidu

al V

alue

4321

2

0

-2

_X=-0.009

UCL=3.164

LCL=-3.182

Mov

ing

Ran

ge

4321

4

2

0

__MR=1.193

UCL=3.898

LCL=0

Observation

Val

ues

4321

1

0

-1

210-1-2

LSL* USL*

Specifications

LSL* -1.33887USL* 0.95972

40-4

Overall

Specs

Overall

Location -0.00883964Scale 0.865475Pp 0.44

Ppk 0.37

Process Capability Sixpack of Cost Per Km Sep-Dec 2006Johnson Transformation with SU Distribution Type-0.255 + 0.241 * Asinh( ( X - 41.026 ) / 0.248 )

I Chart

Moving Range Chart

Last 4 Observations



Transformed Capa Plot

81

SummaryMar-Aug

2005

Mar-Aug

2006

Sept - Dec

2006 (Projected)

Mean 40 44 46.75

Sigma Level 2.16 2.61 2.61

Operating Cost

P8,029,698

($156,068)

P7,140,544

($138,786)

P4,358,873

($87,177)

Cost Savings P889,154

($17,282)

P9,530

($190)

Improvement in Process capability.Target – Reduce cost to $200,000 for 2006 (budgeted amount) or reduce cost by $50,000.Cost reduction for Mar-Aug 2006 is $17,282.

82

IMPROVEIMPROVE

• Major Proposed Solutions: With Timeline

– Termination of contract with Alamo Transport - Implemented 1 September 2006.

– To optimize use of available ADB vehicles and hire additional agency drivers to serve mission airport transfers.

– Implementation of revised Administrative Order on Transportation Services – Implemented 1 September 2006

83

CONTROLCONTROL

• From 1 September 2006, airport transfers are provided with ADB vehicles driven agency drivers. This will optimize the use of ADB vehicles which is estimated to serve some 8,000 trips annually and eliminate the need for contracted vehicles.

• Agency drivers will replace regular drivers who will retire in the last quarter of 2006. This will further reduce cost on regular staff salaries in 2006 and 2007.

• From 1 September 2006, an estimated 7.5% reduction on vehicle trips for home leave airport transfers is expected with the implementation of the new AO on Transportation Services.

• Further review to determine fleet size, type of vehicles to maintain will be conducted in the last quarter of 2006. This will also include the retention period of each vehicles.

Project Implementation

84

Revised Specification LimitsCONTROLCONTROL

LSL USL Target

Reduce Transport Services Costby 20%

2005 Budget PHP 14,466,412

2006 Budget PHP 11,573,130 11,573,130

85

CONTROLCONTROL

Regular Drivers 2005

PHP

2006

Jan to Aug

PHP

Projected

Sep to Dec 2006

PHP

Salary 3,092,148 1,799,994 712,500


841,931

602 hours

176,077

301

78,894


301,422

868 hours

59,821

434 hours

39,881

Total 4,235,501 2,035,892 831,275

Total 2006 2,867,167

Increase/(Decrease) (1,368,334)

86

CONTROLCONTROL

Agency Drivers 2005

PHP

2006

Jan to Aug

PHP

Projected

Sep to Dec 2006

PHP

Salary 742,881 717,414 735,168

Overtime 659,577 329,226 454,377

Meal Allowance

E-Cola

179,916

113,395

164,101

98,676

173,255

101,865

Total 1,695,768 1,394,426 1,464,665

Total for 2006 2,859,091

Increase/(Decrease) 1,163,323

87

CONTROL CONTROL

Bank Vehicles 2005

PHP

2006

Jan to Aug

PHP

Projected

Sep to Dec

PHP

Vehicle Depreciation 15 Vehicles

2,550,680

17 Vehicles

1,722,725

17 Vehicles

861,363

Fuel Consumption 45,896 liters

1,280,935

36,100 liters

1,155,200

24,000 liters

888,000

Vehicle Repairs 240,768 395,729 110,000

Total 4,072,383 3,273,654 1,859,363

Total for 2006 5,133,017

Increase/(Decrease) 1,060,634

88

CONTROLCONTROL

Contracted Vehicles

2005

PHP

2006

Jan to Aug

PHP

Projected

Sep to Dec

PHP

Alamo Fixed Rental 2,850,000 1,368,000 0

Alamo Overtime of Dispatchers & Drivers

554,848 258,690 0

Alamo Back-up cars 409,242 129,910 0

Nissan Car Lease 648,670 367,245 184,000

Total 4,462,760 2,123,845 184,000

Total for 2006 2,307,845

Savings 2,154,915

89

Cost Drivers 2005

PHP

2006

PHP

Increase/

(Decrease)

Regular Drivers 4,235,501 2,867,167 (1,368,334)

Agency Drivers 1,695,768 2,859,091 1,163,323

Bank Vehicles 4,072,383 5,133,017 1,060,634

Contracted Vehicles 4,462,760 2,307,845 (2,154,915)

Total 14,506,026 13,167,120 (1,299,292)

9% of the Target

Or Savings of US$ 25,986

Summary

90

CONTROLCONTROLBenefits

• With the implementation of proposed solutions, projected cost reduction for Transport Services is estimated at $26,000

• Process Sigma improved from 2.16 to 2.61. More improvement in the process is envisaged with the implementation of proposed solutions.

91

CONTROLCONTROL

Soft Savings

•Increased customer satisfaction – staff enjoy ADB cars that are bigger, cleaner, and well maintained.

• Optimized staff productivity previously spent on waiting for trips with the discontinuation of contracted vehicles.

• Optimized used of bank vehicles.

92

Lessons Learned

1. Six Sigma process is a powerful tool in analyzing data and making decisions.

2. Although controlling cost drivers is possible, some factors like price increases in vehicle maintenance and fuel cost that are beyond our control may affect the cost reduction.

3. Every member in the project is important, we were able to communicate ideas and learn from each others’ experience and in the process develop a team project.

93

The End

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Documents

2ND WAVE