Waste not, want not

wastenot1212

Lean methodologies making their way into local government operations

Story by Cheryl Hentz

In order to create jobs and promote economic growth, state government must operate with business-like efficiency. Becoming more efficient and continuously improving government will both improve services and control its cost to taxpayers.

In keeping with this philosophy, earlier this year Wisconsin Gov. Scott Walker signed Executive Order #66, which requires state agencies to implement a lean government initiative. This initiative must engage staff and agency leaders in order to eliminate waste, save time and cost, and improve government services to the benefit of both state residents and employers. In addition, those offices must report their progress to the governor at the beginning of each year.

What is lean? Lean is a journey, an ever-changing way of continuously improving processes. In essence, it’s a way of preserving value and quality of work with doing less work. The result of lean is increased efficiencies in services for the customers of state and local government.

Its results are well documented in the private sector.

From the first lean pioneers of Henry Ford in 1913 and Toyota production in the 1930s, lean manufacturing has been able to obtain low cost, high variety, high quality, and rapid output times to respond to changing customer needs.

Over the years lean principles have been used in many types of industry within the private sector. Those principles are now making their way into local government. Though the public sector is among the last to embrace lean philosophies within its operations, ever-shrinking budgets and changes within the state’s labor environment are causing state and local governmental agencies to consider and embrace in greater numbers the various opportunities that exist to make better use of taxpayer dollars through leaner operations.

Easier building in Oshkosh

In Oshkosh, for example, the city administration began an informal lean journey a few years ago. One department with a major transformation was its building inspection services. In the past anyone wanting a building permit – whether for their own home or contractors doing jobs for customers – applied for a permit at City Hall during specific hours. Because building permit applicants would unknowingly show up outside of those hours, many became frustrated and upset making multiple trips to City Hall.

Now an inspector is available in the office all day long, making it easier to get residential building permits for home improvements or renovations. Someone is also available in the planning department in case a building permit requires a planner to look at the application or building plans as well.

With these tiny changes, people leave with their permit on the first visit in about 85 percent of the cases, as opposed to only about 30 percent under the old arrangement. While this change hasn’t necessarily saved any money, it’s improved customer service and provides greater efficiencies in that department.

“The city manager has said since these changes have been done with regard to permitting, he’s had no complaints, where before he was getting complaints pretty frequently,” said John Zarate, chief building official for the City of Oshkosh.

John Fitzpatrick, assistant city manager and director of administrative services for the City of Oshkosh, is helping to lead a variety of lean projects that stemmed from Act 10 and Act 32 last year. The projects revolve, at least in part, around performance management and pay-for-performance initiatives.

“One of the reasons I think some organizations have not been successful with performance management and pay-for-performance is they haven’t made a commitment to devote resources toward that effort (for whatever reason),” said Fitzpatrick.

As a result of a few recent vacancies in the city’s human resources department, payroll and benefits roles were able to be combined into one position, creating space for a new organizational development specialist position that will start in January.

“That person will aid the departments by working with them on all kinds of different projects – not only lean initiatives, but also other training projects that we haven’t had the ability to help the departments with up to now,” Fitzpatrick said.

The city also has a unique opportunity with its community media service department – a luxury a lot of municipalities don’t have.

“So maybe we can capture some of the efforts that employees are undertaking through video. We could then perhaps stream that video on our Intranet. We could also showcase some of that information by sharing it with the public so they can understand what we’re doing and why we’re doing it,” he continued.

Through its lean efforts, the city is also giving employees the opportunity to say what happens down the road – to participate in projects that are going to help define the future of their position.

“We really believe we’re going to have to develop more cross-functional teams and have employees participate on and provide input and ideas to those teams in terms of how we can improve the organization going forward,” Fitzpatrick explained.

Hard, fast results in Outagamie County

Increased constraints on the ability to levy taxes and unprecedented cuts in state and federal aids made lean an attractive management strategy in Outagamie County, said County Executive Tom Nelson. Outagamie County officials began their lean journey in late 2011.

“Undergirding this journey, however, is my personal belief that it’s the right thing to do and that lean holds great promise in the public sector,” Nelson said. “What every county worker has in common is a passion to serve their community and do the most good with their God-given talents. Becoming more effective at their jobs and embracing a culture of continuous improvement is tantamount to accomplishing that goal.”

Since beginning this process, 13 departments and more than 20 department heads and support staff have become lean process-certified. Various departments have undertaken lean projects and the outcomes are impressive.

– increased/decreased speed of MRF hertz (run) rate depending on composition of materials and capturing more recyclables. Projected savings of $50,000 annually.

– reduced mailing from 41.5 hours to 9.5 hours by consolidating labeling, collating, stuffing and sealing processes and streamlining other related steps. Projected savings of 77 percent less hours of labor per mailing.

– eliminated 32 percent of the days required to complete a foreclosure process by eliminating unnecessary wait and non-value-added steps. Projected savings of 128 fewer days to complete a foreclosure.

– Reduced the hiring cycle time from between 100 and 180 days to less than 90 days by increasing the number of applicants interviewed and increasing the percent of those hired from 11 to 25 percent.

– streamlined production of employee anniversary certificates and eliminated non-value-added steps by hand-delivering certificates before every employee anniversary occurs.

County administration also launched a lean steering committee to help keep the trained department heads and staff members on task completing their lean projects and continuing to build a lean culture throughout the county.

They use several companies in the private sector as mentors to show them how they’ve applied lean principles with real-world examples.

“It’s good to learn from the examples of things others have done. I’ve certainly encouraged my department heads to establish and maintain those contacts, and so far they’ve been very helpful,” said Nelson.

He acknowledges lean is not only about saving money, but creating other process efficiencies that improve a variety of other nonfinancial outcomes.

“It’s about how you do your jobs in a different manner that translates into improvement and greater efficiencies that may very well in the long run also save money,” Nelson said. “But at the heart of lean is a value that waste by definition is immoral and that the labor that someone gives to an organization is the greatest gift that they can give it.”

Efforts elsewhere

Meanwhile, Green Bay-based Northeast Wisconsin Technical College has accumulated quite a bit of institutional knowledge about lean training and lean management, and has implemented the practices it preached to others within its own operations. Dean Stewart, the dean of corporate training and economic development, said one of the lean processes they’ve done in-house is to look at the order entry process for contract training.

A cross-functional team of six people from sales, support, finance and the seminar team sat down and evaluated the process from start to finish.

“When I took over the department this past January we were trending negative in our budget, and just with some of the small changes we made in the first six months we ended up meeting our budget in terms of our cost,” Stewart said. “So we saw some improvement, and that was before we even really started taking full steps toward getting everyone trained in lean.”

Stewart’s colleagues at NWTC would like to implement these lean processes in other parts of the college itself. In addition, they’re teaching lean principles to other organizations in the community, one of which is the Green Bay Metropolitan Sewerage District.

Last year, the municipal utility incorporated lean principles to improve its organizational effectiveness. The first lean project involved replacing its paper paystub with an emailed paystub. Switching to an E-stub, staff reduced the total number of process steps by 43 percent and reduced the total amount of time by 28 percent.

A second initiative, a lean office supply project, created a new process for ordering supplies and a standardized office supply list for improved efficiency. In total, the lean office supply project resulted in savings of more than $18,000, a reduction in costs of 22 percent, reduction in necessary inventory of 15 percent, and reduced labor time by 30 percent. Subsequent projects are also realizing efficiencies in labor and costs.

“The joke around lean is that it’s an acronym for ‘Less Employees Around Now.’ And that’s where lean has been applied improperly,” Stewart said. “Getting rid of people is the easy way out because that will always give you savings. But you can only eliminate so many people using that approach.”

Lean is all about having better efficiencies and applying people from one area to another where additional manpower is needed, Stewart said.

“Sometimes jobs may get eliminated along the way, but it’s not about that. It’s about using all your resources more effectively.”

Cheryl Hentz is a freelance writer from Oshkosh with nearly 30 years of professional writing experience. She can be reached at 920.426.4123, via email at cheryl.hentz@gmail.com, or through her blog at www.cherylhentz.blogspot.com.