lean six sigma for local and municipal government

Six Sigma and Lean Six Sigma for Municipal Government

THE WATERSCONSULTINGGROUP, INC.


ICMA Conference September 15, 2009

Presented by: Stacy Waters, MBA, CMCPrincipal and Executive Vice President for:

Presented by: Stephen Deas,CSSBBFounder and President for:

For more information about this presentation or related services, contact us at 800.899.1669 or via email at [email protected]

Since 1976, the firm has provided consulting services in the area of human resources consulting

Primary focus in the disciplines of Compensation; Strategic Management; Organization Design; Performance Management and Executive Recruitment

Nationwide services to a variety of organizations in the public and private sectors including:

•Cities, counties, other local government agencies

•Utility and transit authorities

•Government-related retirement systems

•Professional associations

A Brief Overview:The Waters Consulting Group, Inc.



2(c)2009 The Waters Consulting Group, Inc. and Quality Minds

A Brief Overview:Quality Minds, Inc

Human capital development and process improvement firm located in Charleston, SC. Areas of specialty include:

•Process and Quality Improvement

•Lean Tools and Techniques

•Lean Six Sigma

•Safety Improvement

•ASQ Certifications

•Process Mapping

•Statistical Process Control


• What is Six Sigma?

• What is Lean?

• What is Lean Six Sigma?

• How is Six Sigma used to improve local government?

Session Outline

Lean: Improves Efficiency

Six Sigma: Improves Effectiveness


• What does Lean Six Sigma Mean for Services?

– Applying Lean Six Sigma to Services

– Why Services are Full of Waste- and Ripe for Lean Six Sigma

• Why invest in Lean Six Sigma?

Lean Six Sigma for Strategic Advantages


• Why you may need BOTH Lean and Six Sigma

• Knowing the difference between Lean and Six Sigma

• What Six Sigma has to offer

• What Lean has to offer

• Why does Lean need Six Sigma?

• Why does Six Sigma need Lean?

Getting Faster to Get Better

Lean: Improves Efficiency

Six Sigma: Improves Effectiveness


• There are many case studies on the Internet regarding local

government

• We use Fort Wayne, Indiana – but there are many other examples

• Lean Six Sigma for Service (by Michael George)

Case Studies and Reference Materials

Lean Six Sigma


• Lockheed Martin has been using Six Sigma and Lean since the late 90s.

• Named "Consumer Driven 6-Sigma" for a reason, Ford’s aim is to address customer issues first: Over 70,000 Green Belts in North America.

• Dominion Energy is now in its 10th year of an enterprise-wide Six Sigma initiative. Their unique approach encourages the entrepreneurial spirit and has led to over $300 million in savings since 2001.

• From recruiting to the Bradley fighting vehicle (and everything in between - including meal scheduling), the US Army continues to improve processes and save dollars through Lean Six Sigma. They anticipate reaching a $3 billion-savings mark this year after five years of practicing LSS.

Lean and Six Sigma “Believers”


http://www.lockheedmartin.com/index.html

http://www.dom.com/index.jsp

Google “municipal governments using six sigma” or “cities using six sigma” and find on the front page:

– Fort Wayne, Indiana (2000): Mayor introduced Six Sigma as the sole process for improving government administrative and civic services (23K hits)

– Buffalo, New York (2008): Municipal Housing Authority used Six Sigma to improve the 72 step process for reserving a park shelter (46/72 steps were identified as waste)

– Hattiesburg, Mississippi (2008): One project involved simplifying the cost it takes to tear down a building

9

Six Sigma in Government – Quick Examples

(c)2009 The Waters Consulting Group, Inc. and Quality Minds

General Overview of Six Sigma,

Lean, and Lean Six Sigma

Basic Overview of Six Sigma and Lean

What they have in common Six Sigma

Structured approach to improve processes, quality,

cost, (Effectiveness)

Lean

Result of using different tools to eliminate waste from processes (Efficiency)

Customer Focused Top project priority is with customers

Give the customer what she wants, when she wants it

Organization Development Six Sigma can change work cultures

Organization is more aware of wasteful activity

Human Capital Development Internal employees are thoroughly trained to lead projects

Workers see jobs differently, workers respect work environment more

Results Oriented Projects have quick completion times and, as much as possible, are measured using financial criteria

Waste is eliminated from business processes, work becomes quicker and more efficient


Six Sigma

Waste

Waste

eliminated

Efficiency improvement

Improved business processes

Customer Complaints

Incapable processes

Excessive costs

Poor quality of service

Lean

D

M

A

IC

Six Sigma is a mechanism for becoming Lean.Six Sigma is a mechanism for becoming Lean.

Lean Six Sigma Visualized


Customer “Wants” Vs. Production

What the Customer Wants-you must know this and incorporate it into your work

What we Produce-you must be measuring this and understand how

well your production meets what your customer wants

Exceeds what customer

wants

Fails to meet minimum

requirement

Sigma is a measure of variation

The Six Sigma methodology systematically improves work processes to reliably meet the customer’s requirements.


The “Cost” of Doing Things Wrong

• Things done right 99.9% of the time means that there are things done wrong

0.1% of the time…

– One hour of unsafe drinking water per month

– Two unsafe landings at O’Hare International Airport each day

– 16,000 lost pieces of mail per hour

– 20,000 incorrect drug prescriptions per year

– 500 incorrect surgical operations per week

– 50 newborn babies dropped each day by hospital staff

– 22,000 checks per hour deducted from the wrong account


The Time it Takes to Complete a Work Task

Worker One

0

10

20

30

40

50

60

Same Work Task Timed Multiple Times

Waste

Actual WorkTime


The Context of Six SigmaSystems and Processes

System (A collection of processes that work together for a definite purpose)

Municipal Government (Human Resources)

P1 P2 P3 (Hiring)

P4 P5 P6 P7 P8

P3 Step 1 P3 Step 2 P3 Step 3 P3 Step 4

Human Resource Processes

Inputs Outputs

The Role of Systems and Processes


Supplier Inputs Process Output Customer

Who supplies each input?

What does this process need in order to produce good output?

Job requirement

Job description

Resumes

Interviewers

Interview process

Candidates

What are the steps that are followed to hire someone?

What is the output of the process?

A new employee

Who are the internal and external customers of this process?

In short, six sigma methodology identifies the key inputs that drive success of outputs. Once identified, actions are taken to improve the inputs in order to improve the outputs.

The Hiring Process as an Example


Six Sigma Leadership

Leadership Support makes the Difference:

Deming’s 85/15 Rule: 85% of problems in any organization are within the system and are the responsibility of leadership while only 15% lie with the worker

• Systems are made of processes. Processes are used by workers to produce products and/or services. If the system is bad, the processes are bad and consequently service and/or product will be bad.

Specific Support Needed for Six Sigma Success:

• Careful planning and implementation

• Proper resources allocated

• Commitment beyond low hanging fruit

Leadership’s Role in Deployment


Executive Sponsors

Overseer of Six Sigma Program

BB

GB

BB

GB

Select projects, knock down barriers, be the leadership representative for project team

(BB) Black belts manage projects. This is typically a full time job/responsibility.

(GB) Green belts are black belts in training. Green belts are usually not full time positions

For Example: City Manager, City Council, Mayor

For Example: Department Heads, Quality Enhancement Director

Process Owners-subject matter experts

Six Sigma Leadership Structure - Example


Linking Projects to Goals and Organizational Performance

Strategic Level(project selection is the responsibility of leadership)

Department Level-also called

tactical level

Division Level-also

called working level

Division Level

Department Level

Projects should come from the “hopper”

Project Hopper

Leadership must consistently review department level

indicators and create the “project hopper”

City Manager, City Council, Mayor

Human Resources

BenefitsCompensation

Sources for ProjectsCustomer complaints-should always be priority #1Internal issuesCost driversEmployee surveysPerformance reviews


The Six Sigma ProcessDefine

Measure

Analyze

Improve

Control

Two Levels of Six Sigma

• Basic– Most projects can be successful using basic tools in

each of the five steps

• Advanced– Some projects will need to use advanced tools.

(Puts heavy emphasis on Black Belt.)


S

Supplier

I

Inputs

P

Process

O

Output

C

CustomerTeam Members

Team Members

Team Members

Black Belt

Team Members

Team Members

Leadership

Team Members

Project Scope

Project Goals

Due Dates

Tools

Ideas

Observations

Mentor

Process Importance

Develop a definition of the improvement opportunity

A project charter

Measure phase

It is important to develop a clear and thorough definition of the opportunity for improvement.

Define Phase


• What are Stakeholders?

• Those who could be impacted by the results of the project

• Those that must support any change proposed in the project

• Who Could Stakeholders be?

• Managers of the process

• People working in the process

• Internal and External Customers of the process

• Suppliers to the process

• Finance support of the process

Identifying Project Stakeholders


• A written document that defines the project team, team leader, project mission, process scope, business case for project, goals for projects, and time frames for project.

• Charters can be created by top management or teams can create their own charter

The Project Charter


S

Supplier

I

Inputs

P

Process

O

Output

C

CustomerBlack Belt

Team Members

Team Leader

Black Belt

Define Phase

Black Belt

Team Members

Tools

Data

Video Recorder

Software

Project Charter

Stop Watch

Ideas and opinions

Measure the process’ performance

A map of the process

A current state of performance

Analyze phase

Once you identify the process to be improved, study and document the process to understand its current state of performance

Measure Phase


S

Supplier

I

Inputs

P

Process

O

Output

C

CustomerBlack Belt

Black Belt

Black Belt

Measure phase

Tools

Forms

Software

Current state of process performance

Analyze the process to determine root causes

A root cause statement

Improve phase

Once you measure the process, analyze the results of the measurement to establish tangible opportunities for improvement.

Analyze Phase


Improve Phase

S

Supplier

I

Inputs

P

Process

O

Output

C

CustomerTeam Members

Team Leader

Team Members

Leadership

Analyze Phase

Black Belt

Ideas

Focus

Patience

Time

Root cause statement

Tools

Improve the process by attacking the root cause(s)

(Plan-Do-Check-Act)

An improved process or a solved problem

Control phase

Take actions on the tangible improvement opportunities from the Analyze Phase.


PDCA Cycle of Improvement

Do

Check

Act

Now you must decide what actions to take as a result of your check. The options typically include: •Adopt the change•Abandon it and go back to the drawing board•Run it through the cycle again using a different area, running a larger scale trial, or making the trial more complex.

PlanTo improve processes, first find out what areas need improvement. Based on what you learn, plan a change or test.

Once you have a plan, carry out the change or test on a small scale

After completing the Do phase, check to see if the changes or tests are working (What did you learn? What went right? What went wrong? What does the data mean?)


S

Supplier

I

Inputs

P

Process

O

Output

C

CustomerBlack Belt

Team Members

Leadership

Improve phase

Tools

Ideas

Follow up

Improved process

Control the improved process to sustain the improvement

A stable and predictable process

Internal and/or external customers of the improved process

Implement controls to sustain the process improvement. If you do not, the process may revert back to previous performance levels.

Control Phase


Using Six Sigma to Increase Performance in City Government:

Fort Wayne, Indiana – Six Sigma Introduced in 2000

How They Did It

*In the first three years of deployment:

– Trained more than 20 Black Belts and 40 Green Belts

– Launched 60 projects resulting in direct savings (or avoidance of expected costs) of approximately $3 million

– Gained many less tangible improvements with quality and service improvements – not to mention employee morale

*Lean Six Sigma for Service©


*Some Highlights

• Goal: A safer city – Now Fire Department performs more than 23% more re-inspections a year without additional staffing.

• Goal: Reduce street complaints – Now 98% of potholes repaired within 24 hours (down from an average of 80 hours for a repair)

• Goal: Stop variation in the cost of transportation engineering projects – Now only 14% of projects exceed their estimates by more than 10%

• Goal: Reduce citizen complaints about tree trimming – Now rate of complaint calls reduced by 33% through determining the optimum level of communication methods

*Lean Six Sigma for Service©


MayorExecutive Council

(Deployment Team)

Quality Enhancement

Director

Master Black Belt

10 black belts were trained and each had to complete a City- approved project each year.

Fort Wayne’s Six Sigma Structure

Strategic

Tactical

Working


• City Challenges– More people, more territory– Revenue down– Demands for service up– State and federal mandates up– Tornadoes, terrorism, floods

• Questions Posed– Who is your customer?– Is your service improving?– How do you measure

improvement?– Show me the data

1999 2006 % Change

Population 190,000 252,000 33%

Non-public safety employees

936 950 2%

Miles of roads

850 1200 41%

Square miles

79 109 39%

More Services, Fewer Employees

From City Leadership


Project Results CommentReduce amount of late garbage pickups

Reduced amount of late garbage pickups by 50%

Also improved relationship between city and contractor

Reduce time to repair potholes Reduced average pothole repair time from 2 days to 3 hours

Improved communication and increased repair capacity

Improve business permit accuracy and approval time

Approval time reduced by 300% More business was attracted to Fort Wayne

Improve efficiency of waste water treatment processes

Efficiency improved 300% beyond goal, city avoided $1.7 million purchase of new equipment

Improve process for managing street light inventory

Process improved such that $500,000 was saved and freed for other areas

Reduced street light inventories to optimal levels by establishing proper tracking and control practices

Other Notable Results:

1. 2005 City Budget ($229,539,522): 5% savings due to projects ($11,476,976)

2. From 2000-2005, 60 projects completed by city workers

Other Fort Wayne Projects & Results


Steps in Getting Started

When to Use Lean Six Sigma?

• Unknown causes to problems/ongoing challenges and “situations”

• Problems are frequent, common but not well defined; lots of “noise” and disruption

• A “broad brush” approach is not appropriate

• When other problem solving methods fail

• In complex situations with many variables


Choosing a Pilot Project

• Select the right project

• Select the right team members

• Get outside help on your first project

• Become self sufficient


Six Sigma Belts – Leading the Initiative

• First things first, get certified – get team certified

• Three levels of Belts: Green; Black; Master Black Belt

• Belts are based on level of competence in understanding and applying tools

• Actual definition and competencies for each belt can vary by organization and training institutions


Tip 1 – Slow and Steady

• Public sector organizations should expect to have a longer learning curve with the first few projects because:

1. Most staff will not have hada prior history of formal quality initiatives.

2. Training of Black Belts takes time, energy, commitment. Prepare for this to be the focus of the first six months at least.


Tip 2 – Persistence

• Expect to be faced with having to overcome long-held patterns of behavior

• Silo-ing of departments provides a lot of protection and security for individuals – so be prepared to face the challenge of this

• Continue to deliver the message of change with persistence, commitment and respect to all affected in the process


Tip 3 – Use the Tools

• Process Maps help people understand what is going on

• Failure Modes and Effects Analysis (FMEA) helps people prevent problems before they happen and provides control and structure

• Utilize tools to help keep things on track and shape the desired results for success


Tip 4 – Communicate

• Having a team that is dedicated to communication is vital when change is in the air

• Making sure the right and accurate message is communicated

• Keeping the project on track

• Maintaining commitment and consistency

• This goes for internal and external communications


Tip 5 – Praise and Recognition

• Maintaining commitment and consistency

• People like to be recognized for their efforts and contribution.


Tip 6 – Involvement

• Have a mixture of people from front line to management to union

• The team for a project should consist of the people that “touch the problem” the most

• If the project is controversial, the selection of team members is even more critical


Benefits of Lean Six Sigma Projects

• Internal Benefits– Reduced claims filed– Overtime reduction– More positive public image– Higher morale– Positive change in culture and effectiveness

• External Benefits– Safer organizational initiatives– Improved customer service– Improved relations with neighborhood associations– Overall better local, regional and even national image


Six Sigma and Lean Six Sigma for Municipal Government



ICMA Conference September 15, 2009

Presented by: Stacy Waters, MBA, CMCPrincipal and Executive Vice President for:

Presented by: Stephen Deas, CSSBBFounder and President for:

For more information about this presentation or related services, contact us at 800.899.1669 or via email at [email protected]

lean six sigma for local and municipal government

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