Six Sigma Campaign Works Wonders
- Korea Post saved 12 bln won in expenses last year

Korea Post with 120 years of history dating back to 1884 has been proud of its history and its operation, but it had to contend with a deficit of 46.1 billion won in the mail delivery sector in 2003. It also had to contend with dwindling profit at its finance department, handing the state-run Korea Post a "twin crisis."
The world has changed rapidly with the development of the Internet mail, the popular use of wireless communication, and the opening of the mail delivery market and post offices just cannot wait for their customers to come to them. They had to find their way out of the problems facing them such as the opening of the financial market, the low interest rates due to the economic downturn cutting into interest margins, which hurt profit margins. They were all results of the lack of effort to find new profit models and trying to cling to past comfort.
"Lose the past before its too late," explains well the 200-year old Dupont's strategy to bring changes to its traditional line of business of chemicals by switching to bio-tech industry. The word also meant a lot to Korea Post, which faced a great change in its business strategies to overcome the twin crisis to survive.
Korea Post was able to set its direction for its reform jointly with its labor union including detailed steps to bring them along.
The crux of the problem was that they had yet to find out what was wrong with them and exact changes they have to make. Some in the company criticized the lack of actions with reform strategies being put in danger of extinction as empty slogans.
At that time, Minister Chin Dae-je, who was the former CEO of a private firm, came to the rescue and suggested the six sigma campaign, which ought to tell where to launch it first, and the extent of problems so that they may be able to know their solutions.
The six sigma is geared to understanding what customers want and continue to improve corporate strategies to satisfy them so that both customer satisfaction and corporate growth might be maximized, which just suited the needs for Korea Post.
Korea Post decided to take on the reform programs to reduce costs and improve productivity first; training manpower to manage reform was the second reason; and third one was improving competitiveness of Korea Post by expanding reform culture to raise the level of customer satisfaction.
Korea Post undertook 5 projects under the strategy in August, 2003 and established a five-man task force to take responsibility for the project. The task force carried on with the project for five months, but a number of targets was incomplete because they were set up too high due to an enormous expectation for the success of the project. Some thought that the project will stop when Minister Chin is replaced, thinking that it has a limited life as if the entire 6 sigma project will be finished when the initial project is over.
The project failed to live up to the company's expectation, but every one knew that it would be applicable to Korea Post and its success would have a great impact on the company.
In January of last year, the company decided to push the project again all over its business areas. In March, the company set up an office in charge the project with mid-and long-term plans for a systematic promotion of the plan ensuring the independent operation of the new project office.
Korea Post employed professional lecturers and consultants and had them tour Korea Post offices around the country to train officers and staff on the workings of the project.
The company set up 158 tasks to be accomplished by Korea Post offices around the country with priority given to each task.
In the first half, the project involved only 22 Korea Post offices with renovation work focused on training manpower and their effective assignment, along with raising effects of using machinery. In the second half, the project was expanded to all over the company, including the mail delivery and finance department.
Korea Post completed 80 tasks last year, improving irrational processes and simplifying them, along with a better mail delivery system and saving 12 billion won in budget expense. nw