financial management series number 16 implementing “lean government” alan probst local...

Financial Management Series Financial Management Series Number 16Number 16

ImplementingImplementing

“Lean Government”“Lean Government”

Financial Management Series Financial Management Series Number 16Number 16

ImplementingImplementing

“Lean Government”“Lean Government”

Alan ProbstAlan ProbstLocal Government SpecialistLocal Government SpecialistUW-Extension Local Government CenterUW-Extension Local Government Center(608) 262-5103(608) 262-5103

Lean GovernmentLean GovernmentLean GovernmentLean Government

The Lean philosophy is fundamentally The Lean philosophy is fundamentally about creating value for the about creating value for the customer/client while using the fewest customer/client while using the fewest resources possible. It’s about getting resources possible. It’s about getting the right service in the right amount to the right service in the right amount to the right person at the right time, while the right person at the right time, while minimizing waste and being flexible minimizing waste and being flexible and open to change and improvement.and open to change and improvement.


It is the application of Lean It is the application of Lean production principles and production principles and methods, borrowed from industry methods, borrowed from industry and manufacturing, to identify and and manufacturing, to identify and implement the most efficient, value implement the most efficient, value added approach to provide added approach to provide government services.government services.


There are several key principles that are at the There are several key principles that are at the core of Lean philosophy: core of Lean philosophy:

Know your customer/client – who they are and Know your customer/client – who they are and what they want and when. what they want and when.

The customer defines value. The customer defines value. Keep the process simple (and eliminate waste). Keep the process simple (and eliminate waste). Do “it” right the first time. Do “it” right the first time. Involve and empower employees. Involve and empower employees. Continually improve in pursuit of perfection. Continually improve in pursuit of perfection.

““Lean vs. Traditional”Lean vs. Traditional”““Lean vs. Traditional”Lean vs. Traditional”

Traditional government is inefficient by Traditional government is inefficient by naturenature

““Lean” moves government toward and Lean” moves government toward and industrial or business mindsetindustrial or business mindset

At it roots, the movement to “Lean” At it roots, the movement to “Lean” entails a major cultural change.entails a major cultural change.

Key Lean CharacteristicsKey Lean CharacteristicsKey Lean CharacteristicsKey Lean Characteristics

Pull service deliveryPull service delivery::

Services are “pulled” by the consumer, not pushed Services are “pulled” by the consumer, not pushed from the service delivery end.from the service delivery end.

First-time qualityFirst-time quality:: Striving for excellence/perfection, for zero Striving for excellence/perfection, for zero

defects/redoing work. Identifying & solving problems defects/redoing work. Identifying & solving problems at their source; achieving higher quality and at their source; achieving higher quality and performance at the same time; teamwork & worker performance at the same time; teamwork & worker empowerment. empowerment.


Waste minimizationWaste minimization:: Minimizing/eliminating activities that do not Minimizing/eliminating activities that do not

add value; maximizing use of resources add value; maximizing use of resources (capital, people, and space), efficient use of (capital, people, and space), efficient use of just-in-time inventory. just-in-time inventory.

Continuous improvementContinuous improvement:: Continually improving quality, increasing Continually improving quality, increasing

productivity/ performance, reducing costs productivity/ performance, reducing costs (resources), and sharing information. (resources), and sharing information.


FlexibilityFlexibility: : Being open to change; providing different Being open to change; providing different

mixes and/or greater diversity of services mixes and/or greater diversity of services quickly, without sacrificing efficiency. quickly, without sacrificing efficiency.

Long-Term RelationshipsLong-Term Relationships:: Building and maintaining effective long-term Building and maintaining effective long-term

relationships with providers/contractors relationships with providers/contractors through collaborative risk-sharing, cost-through collaborative risk-sharing, cost-sharing, and information-sharing sharing, and information-sharing arrangements. arrangements.

In Plain Language?In Plain Language?In Plain Language?In Plain Language?

Use as many good “business” ideas as Use as many good “business” ideas as possiblepossible

Borrows many concepts from “Total Borrows many concepts from “Total Quality Management (TQM)”Quality Management (TQM)”

Eliminate that which is unnecessaryEliminate that which is unnecessary Concentrate on what the customer Concentrate on what the customer

wantswants Get everyone involvedGet everyone involved Minimize bureaucracyMinimize bureaucracy

Blunt QuestionsBlunt QuestionsBlunt QuestionsBlunt Questions

If it doesn’t add value, why If it doesn’t add value, why are you doing it?are you doing it?

Will anything really bad Will anything really bad happen if you stop doing it?happen if you stop doing it?

Common ApproachesCommon ApproachesCommon ApproachesCommon Approaches

To identify non-value added activities To identify non-value added activities (waste):(waste):

Value Stream MappingValue Stream Mapping KaizenKaizen 5S5S Lean Six SigmaLean Six Sigma

Value Stream MappingValue Stream MappingValue Stream MappingValue Stream Mapping

Manufacturing technique used to Manufacturing technique used to analyze the flow of materials and analyze the flow of materials and information required to bring a product information required to bring a product or service to a customeror service to a customer

Originated with ToyotaOriginated with Toyota


Value Stream Mapping (VSM) is a visual mapping tool that outlines all the steps in a process and helps to identify ineffective procedures and waste, as well as to develop implementation action plans for making continuous improvements.


Steps:Steps:

1.1. Identify the target product, process, or serviceIdentify the target product, process, or service

2.2. Draw a current situation value map which shows the current Draw a current situation value map which shows the current steps, delays, and information flowssteps, delays, and information flows

3.3. Assess or evaluate the current state stream map for waste Assess or evaluate the current state stream map for waste and bottlenecksand bottlenecks

4.4. Draw an improved future state value stream mapDraw an improved future state value stream map

5.5. Work toward the improved future conditionWork toward the improved future condition


While the approach can be applied to While the approach can be applied to government services, it requires a government services, it requires a different perspectivedifferent perspective

Approach might be more focused on Approach might be more focused on speeding up services and eliminating speeding up services and eliminating roadblocksroadblocks

Example: Time and steps required to Example: Time and steps required to issue a building permitissue a building permit


At it’s very essence, with Value Stream At it’s very essence, with Value Stream Mapping, you identify steps or actions Mapping, you identify steps or actions that do not add value or are not really that do not add value or are not really necessary and necessary and YOU STOP DOING YOU STOP DOING THEM!THEM!

KaizenKaizenKaizenKaizen ““KaizenKaizen” is Japanese for “improvement” or ” is Japanese for “improvement” or

“change for the better”“change for the better”

Refers to a philosophy or practices that Refers to a philosophy or practices that focus on continues improvement of focus on continues improvement of processesprocesses

Very similar to “Total Quality Management”Very similar to “Total Quality Management”

KaizenKaizenKaizenKaizen Daily processDaily process Humanizes the workplaceHumanizes the workplace Teaches people how to use Teaches people how to use

experiments in their work using experiments in their work using scientific methods to learn to spot and scientific methods to learn to spot and eliminate wasteeliminate waste

In government, requires a currently In government, requires a currently uncommon level of trust in employees uncommon level of trust in employees by elected officialsby elected officials

Iowa Lean Government Iowa Lean Government “Kaizen” Event“Kaizen” Event

Iowa Lean Government Iowa Lean Government “Kaizen” Event“Kaizen” Event

5S5S5S5S

5S is a workplace methodology based on the 5S is a workplace methodology based on the five Japanese words:five Japanese words:

1.1. Seiri Seiri sortingsorting2.2. SeitonSeiton straightening or setting in straightening or setting in

order order3.3. SeisoSeiso systematic cleaningsystematic cleaning4.4. SeiketsuSeiketsu standardizing standardizing5.5. ShitsukeShitsuke sustaining disciplinesustaining discipline

Phases of 5SPhases of 5SPhases of 5SPhases of 5S

SeiriSeiri (sorting) (sorting) is intended to eliminate is intended to eliminate unnecessary tools, parts and unnecessary tools, parts and instructions. Store or discard that instructions. Store or discard that which is not necessarywhich is not necessary

SeitonSeiton (setting in order) (setting in order) places an places an emphasis on everything being in its emphasis on everything being in its proper place, properly marked, and proper place, properly marked, and easily accessible when needed.easily accessible when needed.


SeisoSeiso (sweeping/systematic cleaning) (sweeping/systematic cleaning) Ensuring you know where everything is Ensuring you know where everything is where it belongs and cleaning is part of where it belongs and cleaning is part of daily workdaily work

SeiketsuSeiketsu (consistency & (consistency & standardization) standardization) Everyone knows how Everyone knows how to do the required tasks the same way to do the required tasks the same way with the same toolswith the same tools


Shitzuki Shitzuki (sustaining discipline/self-(sustaining discipline/self-discipline)discipline) This is about maintaining This is about maintaining and reviewing standards. Once you’ve and reviewing standards. Once you’ve made the changes required with the made the changes required with the first four “S’s” this is to keep you from first four “S’s” this is to keep you from sliding back into the old methods and sliding back into the old methods and bad habits.bad habits.


There are two more phases that are There are two more phases that are sometimes added:sometimes added:

Safety:Safety: As an enhancement to As an enhancement to efficiencyefficiency

Security:Security: Security for intellectual Security for intellectual property, IT, human capital, etc.property, IT, human capital, etc.

Lean Six SigmaLean Six SigmaLean Six SigmaLean Six Sigma

Lean is a production approach and set of methods that seeks to eliminate all non-value added activity or “waste” from a process

Six Sigma is a collection of statistical tools designed to reduce defects and other forms of process variation.

Lean Six SigmaLean Six SigmaLean Six SigmaLean Six Sigma

Lean and Six Sigma efforts identify and eliminate unnecessary and non-valued added process steps and activities that have built up over time

In non-manufacturing settings, waste is most prevalent in the information flows associated with processes

Lean Six SigmaLean Six SigmaLean Six SigmaLean Six SigmaBy getting routine activities and

mechanisms of a process to function smoothly and consistently, staff time can be freed to focus on higher value activities

Performance MeasurementPerformance MeasurementPerformance MeasurementPerformance Measurement

Performance measurement programs Performance measurement programs and benchmarking are useful in helping and benchmarking are useful in helping to identify those programs or actions to identify those programs or actions within programs that all little or no within programs that all little or no valuevalue

(See Financial Management Series #7 and handbook)(See Financial Management Series #7 and handbook)

City of Cape CoralCity of Cape CoralCity of Cape CoralCity of Cape CoralUsed Used “Lean Thinking” “Lean Thinking” principles as basis:principles as basis:

1.1. SpecifySpecify the value desired by the the value desired by the customercustomer

2.2. IdentifyIdentify the value stream for each the value stream for each product to challenge all the wasted product to challenge all the wasted steps currently necessary to provide itsteps currently necessary to provide it

Principles (cont.)Principles (cont.)Principles (cont.)Principles (cont.)

3.3. MakeMake the product flow the product flow continuously through the continuously through the remaining, value-added stepsremaining, value-added steps

4.4. IntroduceIntroduce pull between all stops pull between all stops where continuous flow is possiblewhere continuous flow is possible

5.5. ManageManage toward perfection. toward perfection.

Team of employeesTeam of employeesTeam of employeesTeam of employees Mapped and dissected the existing Mapped and dissected the existing

processesprocesses

Eliminated the unnecessary steps (waste)Eliminated the unnecessary steps (waste)

Redesigned the process to allow service or Redesigned the process to allow service or information to flow more efficientlyinformation to flow more efficiently

Focused on delivering “the right service in Focused on delivering “the right service in the right amount at the right time.”the right amount at the right time.”

ResultsResultsResultsResults

The Building Division reduced the time to The Building Division reduced the time to obtain a permit for construction from 21 days obtain a permit for construction from 21 days to eight daysto eight days

The Fire Department reduced the time to hire The Fire Department reduced the time to hire a firefighter from 66 days to 30 daysa firefighter from 66 days to 30 days

Code Enforcement reduced ordinance Code Enforcement reduced ordinance violation grass mowing time from 52 days to violation grass mowing time from 52 days to 19 days19 days

Site Development reduced cycle time for first Site Development reduced cycle time for first reviews from 28 days to 5 days.reviews from 28 days to 5 days.

ReferencesReferencesReferencesReferences ““Lean Thinking”, Womack and Jones, 1996Lean Thinking”, Womack and Jones, 1996

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