government finance officers association 1 process improvement techniques an introduction to lean

GOVERNMENT FINANCE OFFICERS ASSOCIATION

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Process Improvement Techniques

An Introduction to Lean


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What Can Lean Do For You?

GFOA Lean Training: Module 1


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Irving’s Results

Began in 2007: • Eliminated 50,000+ hours• Saved $44 million

– Cost savings and avoidances

Businesses & Residents:• Improved service and satisfaction• Faster services

Employees’ Increased:• Productivity• Job satisfaction• Communication• Collaboration / teamwork• Development/leadership opportunities



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Results

Commercial Permit Process• Plan review time reduced by 76% (15.7 to 3.7 days)• Maximum plan review time reduced 88% (49 to 6 days)

Street Cut Repairs• Reduced repair cycle time from average of 14 weeks to <6 weeks

Utility Locates• Reduced process steps from 32 to 7• Reduced cycle time by 48% (from 75 to 39 hours)

Animal Services Processes• Decreased shelter processing time by 50-66%, saving 1,120 hours

annually• Decreased field officer time by 50-66%, saving 2,330 hours

annually



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A Brief History of Lean

What we think of as Lean originated with the Toyota Motor Company Toyota was looking for a way to provide variety with

limited capital equipmentPopularized in the West and dubbed “Lean” by an

MIT study of the global car industry The Machine that Changed the World

Lean has since spread far and wide Now virtually de rigueur in the auto industry and spread to

many other manufacturing industries Extremely popular in many industries outside of

manufacturing, from health care to fast food. Now making inroads into government



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A Definition of Lean

Lean is… A system of thinking and way of working that emphasizes

providing value to the customer of a service and eliminating waste found in the workplace.

Often thought of as “process improvement” and is known for its expansive toolset.

These tools are important, but at its best Lean becomes a way of life for an organization where there is a continuous journey toward perfection.

Lean is not something that is done once or a few times per year, rather it is ingrained into the DNA of the

organization.



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In Lean Waste is the Enemy

Lean postulates there are 8 forms of waste that occur in business processes

Lean teaches employees to recognize these forms of waste

Kaizen and lean tools are used to make the waste visible and to eliminate it

Gradually, employees are able to recognize waste immediately, so they can continually strive to eliminate it.



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What “Waste” Means in Lean

Waste is where to begin looking for process efficiencies It stimulates thinking about new ways to serve the customer It helps focus the search for efficiencies

Lean does not suppose that all “waste” can be eliminated Some steps may be required by law or necessary for

administrative purposes It is physically impossible to eliminate 100% of waste

• World-class companies still have 50-75% waste in some of their processes!

However, through continuous improvement, we can consistently reduce waste to move towards the ideal process



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Examples of Tricky Areas of Government “Waste”

Answering the public’s questions To what extent are questions related to first-time

inquiries vs. failure to resolve the question earlier?

Applicant wait times Applicants (e.g., permits) are annoyed by waiting,

but… does the wait allow for review by other citizens impacted by the request?

Subsidy of services A subsidy means citizens do not pay the full cost of a

service, but … does the service have a larger public benefit?



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The 8 Forms of Waste

“The most dangerous kind of waste is the waste we do not recognize.”

Shigeo Shingo


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8 Forms of Waste

DefectsOver-Processing /

InspectionWaitingInventory/backlog

TransportMotion Over-productionUnderutilizing

people’s abilities



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DefectsIdeally work is performed correctly the first time.A defect happens when incorrect or incomplete

work is sent to the next step in the process or to the customer.

Avoiding defects starts with understanding the customer’s definition of service quality.

Once the definition of quality is understood, the process must be controlled to consistently deliver services that are free from defect.



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Defects = ReworkExamples of defects and rework

Defective instructions on forms, requiring customers to call for assistance

Failure to provide individualized attention to students-at-risk requiring more costly remediation later

Services not performed when scheduled, requiring customers to call to chase progress



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Over-Processing / Inspection

Over-processing is putting more work into a product or service than is necessary to meet the customer’s requirements Inspection/checking is a particularly prevalent form of

this waste, especially in government

Over-processing can come in other forms Overly elaborate reports Collecting too much information

from constituents



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Over-Processing / Inspection

You can not inspect your way to qualityBecause work should be done right the first

time, inspection and checking is a form of waste. A good process is designed with controls in place

that are judicious and strategic.

Consider the compliance pyramid as an alternative (2 slides later)

When checks are necessary consider if peer checks or self-checks are an option


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Fun Fact

A global study of automotive manufacturing showed that it took

one German luxury car manufacturer more time to inspect and correct for

defects than it took a Japanese luxury car manufacturer to build an

entire car**See: Womack, et al. 2007



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The Compliance Pyramid*


*Teeuwen, 2011


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WaitingThe idle time created when employees wait for

invoices, copiers, parts, materials, machines, information from coworkers, help, etc. Wait time = downtime

Causes include: Unbalanced workloads Too few office machines Quality problems or bottlenecks



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WaitingWaiting could also apply to customers

Citizens waiting in line is a waste of taxpayer time Other departments waiting is delaying the value

stream the public Students waiting is time not spent learning



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Inventory / BacklogIn an administrative process, the sum of all tasks

waiting to be processed is considered inventory or backlog

A primary culprit is batch processing Lean advocates continuous flow of work

Poor housekeeping may also contribute “5S” is a simple but powerful Lean tool for improving

the organization of the work environment – from one’s own work area, to a vehicle, to an entire office or department



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Inventory/Backlog

Physical inventory is a waste too Must be stored and insured Is not a liquid asset

Physical inventory could be a great opportunity for hard-dollar savings Example: Fort Wayne reduced street light inventory

budgets and actual expenditures by over 50% ($250,000) over three years*


*Richard, 2008


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TransportTransporting anything that does not directly add

value to a final product or service is a form of waste. Documents, materials, customers

Hand-offs could be a major source of transport waste

Improper electronic workflow could be a culprit Beware simply doing the wrong thing faster however

Suboptimal office layout may also play a role Consider spaghetti diagrams.



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Spaghetti Chart*

Before After


*Courtesy of Gwinnett County, GA


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MotionExcess motion to complete a task causes wastePoor ergonomics can lower productivitySearching is another form of motion waste

Consider 5S to help with this

Train employees to use computer short-cutsDevelop standard, easy-to-read formats for

policies and procedures



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Follow Basic Workplace Design Principles

Chairs Ergonomic, adjustable Consider if chairs are necessary – standing may be better in

some cases

Storage Provide enough so that frequently used items are within reach,

without twisting or turning. Avoid excess storage

Use gravity to move materials Avoid requiring jerking motions, excess reaching

U or L-shaped desks are good



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Over-Production

This kind of waste results when a product is made in greater amounts than necessary Root cause is poor understanding of customer’s

requirements

Common examples Distributing information that isn’t read Creating services or rules that aren’t needed Information overload! Producing any service that constituents don’t need



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Underutilizing People’s Abilities

The most insidious form of waste is failing to make use of employees’ full talents and skills

Big example: Using sworn police officers to perform administrative tasks that could be performed just as well by civilians

Smaller examples Lack of cross training to allow idle employees to help

resolve temporary bottlenecks Lack of skill monitoring and professional

development Not promoting a healthy workplace



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Recognizing Waste

Taichii Ohno said… Eliminating waste is easy, recognizing waste is difficult

Use tools like value stream maps, swim lanes, or 5S to make waste visible – or be creative One school made student transport waste visible

• Buses were delayed up to two hours trying to get all students on the right bus

• Instead, all buses left on time, leaving stragglers. This made the causes of the delay visible and easier to deal with.

• The stragglers were put on a spare bus and even ended up getting home earlier than usual!

Now a little practice…



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Exercise for Identifying Waste

Example: Accepting an application for a business license

Instructions Identify the non-value adding activities For each non-value adding activity, identify the type

of waste

5 minutes to complete



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Identify Waste Instructions. Identify which steps are waste & what kind of waste

1. Open envelope_____________________

2. Review application for completeness______________________

3. Contact applicant for missing info___________________

4. File application until info is received__________________

5. Examine history of applicant for violations, etc._________________

6. Process application_________________________

7. Print embossed license________________________

8. Get city clerk to sign the license*_________________

9. Get mayor to sign the license**__________________

10. Mail the license________________________

11. Applicant receives license______________________

*Legally required to run a business

**Mayor wants to know what businesses are operating in town



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The End

GFOA Lean Resources June 2013 issue of Government Finance Review

• All Lean issue• Lead article available for free on-line

GFOA Lean training• I have attended several GFOA training programs

over the years. In my opinion, this was not among the best - the "Lean" program was clearly THE BEST training program I have ever attended! – Tim Kelso, Douglas County, Nebraska

government finance officers association 1 process improvement techniques an introduction to lean

Documents

lean slide

days maximum plan review

repair cycle time

irvings results

process improvement

days street cut repairs

improved service

cost savings