how the city of san antonio increased payments for street maintenance using lean six sigma

LEAN SIX SIGMA BLACK BELT PROJECT STORYBOARD CITY OF SAN ANTONIO | TASK ORDER & INVOICING PROCESS TIMING

MARCH 24, 2016 JESSICA M. SHIRLEY-SAENZ PROJECT CONTROL MANAGER | TRANSPORTATION & CAPITAL IMPROVEMENTS DEPARTMENT

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EXECUTIVE SUMMARY

Construction Management Problem Statement

Project Control

Compliance Business Case In April 2014, the City received complaints from on-call task order Contractors regarding how long it takes to receive payment for completing work on street maintenance projects. Contractors alleged that payments were taking longer than it use to, up to 30 or more days to receive. Consequently, if payments are delayed, Contractors and their subcontractors are not paid. If continued, Contractors would no longer bid on City projects which would delay the completion of street maintenance projects city-wide. If street maintenance projects are not completed this will negatively impact and potentially compromise the City’s infrastructure - namely, its safety, transportation conveniences and accessibility.

Project Results

Graphical Display of Improvement Root Cause Analysis Identified delays in efficiently processing task order payments was significantly attributed to: ▪ Payments Rejected for Incorrect Quantities – Due to inconsistent, redundant and non-transparent documentation of approved quantities. ▪ Delayed and Combined Payment Requests (Invoicing) – Due to invoices being submitted long after project completion, an additional review was being required to verify quantities.

Solutions Implemented

▪ Implemented a tolerance threshold for quantity yield calculations to reduce number of rejects for disputed quantity amounts ▪ Implemented new daily quantity process to centralize and standardize the documentation of daily quantities information ▪ Updated the payment workflow so City can invoice on behalf of Contractor to improve timeliness and eliminate the additional review of quantities

▪ Increased overall number of payments processed monthly for street maintenance task orders from an average of 97 payment requests to 116 payment requests ▪ Reduced the overall number of rejected payments for disputed quantity amounts from an average of 17 rejects to 12 rejects ▪ Reduced the overall percentage of rejected payments for disputed quantity amounts from 58% ($21.6 million) to 42% ($15 million)

KEY WORDS Lean Six Sigma Black Belt Project Storyboard

Task Order & Invoicing Process Timing

Construction Management

Responsible for the review and approval of task orders and invoices; and creation as well as closure of Task Order Purchase Orders in the City’s financial system (i.e. SAP).

City Fiscal Accountant

Project Control

Compliance

Contracts

Fiscal

Responsible for inspecting the work Contractors perform to ensure consistency with contract drawings and specification. Inspects the work as acceptable, documents construction quantities and approves payment.

City Inspector

Consists of City’s Project Manager (PM) (customarily, an Engineer) and Project Team. Oversees the work Contractors perform, is consistent with the contract drawings and specifications, affirms the completed work as acceptable, submits task orders and approves payment.

City Project Team

Responsible to perform construction work as defined by the contract drawings and specifications.

Contractor

Is a PRIMELink form used by the Contractor or City to bill (i.e. invoice) on behalf of the Contractor for work completed.

Payment Request

Is a hosted enterprise capital improvements project portal system. It manages the electronic routing and storage of capital project documents such as Task Orders, Invoices, Payment data and all other associated project documents (i.e. change orders, contracts, plans, RFIs, submittals, etc…).

PRIMELink System

Quantities refer to the itemized list of work, materials and any cost related items supplied by the contractor in order to complete the requested work. Actual billable quantities are verified by a City Inspector and included in the Payment Request so the Contractor is paid for those items.

Quantities

Is a PRIMELink form used by the City to authorize work consistent with the scope of the contract and within the existing contract dollar authorization. It is needed to create a Purchase Order (PO) for work to be completed.

Task Order

Transportation and Capital Improvements Department (TCI) oversees and directs the development and maintenance of the publicly owned infrastructure of the City of San Antonio.

TCI

DEFIN

E PROJECT CHARTER


Project Control

Compliance

Contracts

Goal Statement

Scope In/Out

Problem Statement

Timeline

Team Members

Business Case & Benefits On-call task order Contractors are complaining about how long it takes to receive payment after completing work on street maintenance projects. The average standard processing time is 13 days, if all of the quantities are correct and scope of work is pre-approved prior to the start of work.

POSITION PERSON

Executive Sponsor Mike Frisbie, TCI Director

Project Champion(s) Anthony Chukwudolue, TCI Streets Asst. Director

Debbie Racca-Sittre, TCI Support Services Asst. Director

Razi Hosseini, TCI Project Delivery Asst. Director

The goal is to increase the number of payment requests processed by decreasing the number of rejected invoices for disputed quantity amounts by 10% or more by the end of 4th Quarter in FY 2015 (September 2015) .

In Scope: Street Maintenance City Construction Task Order Contracts, Process Steps (Including Task Order, Payment & Associating Processes), System Upgrades Out of Scope: Street Maintenance Utility (Electric, Gas or Sewer) Work Task Orders

Improved timeliness of payment requests to Contractors will result in more timely payments to Subcontractors and restore Contractors’ confidence with the City’s invoicing process (as more reliable). Which will translate to Contractors wanting to continue to bid on City street maintenance projects; and, allow the City to release funds that would otherwise remain encumbered delaying completion of other projects.

PHASE PLANNED ACTUAL

Define April 28, 2014 April 28, 2014

Measure May 19, 2014 May 26, 2014

Analyze July 24, 2014 July 24, 2014

Improve August 25, 2014 *April 2, 2015

Control September 1, 2014 *August 3, 2015

*Project delays attributed to: (1) Team awaiting for completion

of FY 2015 budget to buy laptops needed for TCI inspectors to complete the new daily quantity log in the field.

(2) Team awaiting start of new

Street Maintenance Task Order contracts.

POSITION PERSON

Project Manager Jessica M. Shirley-Saenz

Core Team Members Contractors Fiscal PRIMELink Manager TCI Streets Engineering Project Teams TCI Inspectors

DEFIN

E SIPOC

Key Take Away: The scope of this project begins with the planning of the task order and includes when the work is initiated up through inspection of the work, ending with the payment for the work completed.

S I P O C Supplier Input Process Output Customer

Work Planning Agreed Upon Project Scope Planning Payment Contractor

Contractor Defined Project Limits Initial Phase of Task Order Completed Project Work

(City) Project Team Estimated Quantities Define Project Scope & Quantities Inspected Work

(City) Inspector Completion of Work Agreed Upon Quantities

Work Task Creation Inspection of Work Creation

Contractor Quantity Verification Task Order (Authorization/Approval of Work)

(City) Project Team

Work Completion

(Contractor) Work Crew Execution (Contractor) Superintendent Work Completion

CUSTOMER REQUIREMENTS (City) Inspector Inspection & Quantity Verification

Payment Timely & Consistent Payment

(Contractor) Fiscal Rep Payment Transparency

(Contractor) Superintendent Payment Request Creation Improved Communication

(City) Project Team Payment Request Approval

(City) Inspector

Close-Out Close-Out

(Contractor) Fiscal Rep Project Completion

(City) Project Team Coordination of Final Payment

(City) Inspector Final Task Order Completion

DEFIN

E VOICE OF THE CUSTOMER


Project Control

Compliance

Contracts

Fiscal

Customer Comment Gathering More Understanding Customer Requirement

“It takes forever to receive payment for work I complete”

Contractor not receiving payments timely Payments should be processed within 13 days or less

“I can’t invoice because the task order isn’t even processed yet”

Contractor completes work prior to task order being processed

Require the task order must be processed prior to work start

“I don’t submit invoices anymore because they just get rejected”

Contractor stop submitting payments because payments are rejected for incorrect quantities

Quantities are documented and accessible daily and agreed upon daily

“I’d be happy if I could just get paid for the work quantities we do agree upon, we can work out the ones we disagree with later”

Once the payment request is submitted the Contractor nor the City can modify or remove quantity pay items; one disputed item out of a list of many will hold up an entire Payment Request

Should have ability to generate an Payment Request with approved quantities only and pend disputing quantities until resolved

“I have to wait for quantities and when I do get them I have to hunt through emails or call inspector for quantities”

City Inspector documents quantities on various manual logs and provides quantities manually to the City’s Project Team and Contractor through email or by phone

Establish a consistent and standard process to document and provide quantity information to City staff and Contractor

Key Take Away: Project needs to address the documentation process of a project’s daily quantities. Specifically, the standardization, accessibility and consistency. Standardization of this process will help identify and rectify quantity errors in a more timely manner which will help reduce the number of rejected payments and in turn increase the number of timely payments made.

MEA

SUR

E DATA COLLECTION PLAN

Measure Data Type Operational Definition Stratification Factors Sampling Notes Who and How

Total Number of Task Orders

Continuous Street Maintenance City Task Orders not rejected . All task orders with a “Complete” status.

By Contractor By Purchase Order Line

Sample includes every task order processed in *Fiscal Years 2012 through 2015.

Project Lead retrieve from PRIMELink Administrator/PRIMELink

Total Number of Payments Processed

Continuous Street Maintenance City Payment Requests not rejected . All Payment Requests with a Payment Date.

By Contractor By Purchase Order Line

Sample includes every payment request processed in *Fiscal Years 2012 through 2015.


Timeliness of Payments Processed

Continuous Number of days to process payment. calculated by taking the difference between Payment Request creation date and payment date. List of payments processed within 30 days.

By Contractor By Payment Date By Day Ranges [5 days, 10 days, 15 days, 30 days and 30 days+]

Sample includes every payment request processed in *Fiscal Years 2012 through 2015.


Total Number of Payments Rejected

Continuous Street Maintenance City Payment Requests rejected. All payment requests with a “Rejected” status.

By Contractor By Reject Date

Sample includes every rejected payment request in *Fiscal Years 2012 through 2015.


Reject Types Discrete List of reasons for rejects. None Sample includes feedback retrieved from the contractor (with largest volume) and city staff approvers (inspectors, project team & fiscal)

Project Lead retrieve from interviews document top reasons and tally

Total Number of Rejected Payments by Reject Reason

Continuous Street Maintenance City Payment Requests rejected by the identified reasons retrieved from sampling above.

By Reject Reason Sample includes every rejected payment request processed in *Fiscal Years 2012 through 2015.

Project Lead from PRIMELink Administrator/PRIMELink

Key Take Away: Project lead is responsible for all data collection – team and subject matter experts (SMEs) made the appropriate adjustments to provide and/or make themselves available to accommodate the request for information.

*Fiscal Year = October 1st – September 30th

Task order Street Maintenance payment requests processed between October 2012 to June 2014 (1,531 Payment Requests valued at $69.3 million) was analyzed to understand within how many days are these payment requests being processed.

It is City’s policy that vendors (i.e. Contractors) be paid by the City within 30 days of the date a correct Payment Request is submitted for work performed for the City. The TCI department’s overall average payment processing time is 11 days.

Pareto shows that 95% of the Street Maintenance payment requests processed between October 2012 to June 2014 were processed within 30 days; and, less than 5% of the payment requests took more than 30 days to process.

BASELINE MEASURE Payment Request Timeliness

36% 34%

18%

7% 5%

DATA SUMMARY

Key Take Away: Average processing time for task order Street Maintenance payment requests is 13 days. Data shows that 95% of Street Maintenance payment requests when submitted with no issues were processed within 30 days.

Baseline Oct. 2012 - June 2014

BASELINE MEASURE Payment Rejects

Task order Street Maintenance payment requests rejected between October 2012 to June 2014 (322 valued at $21.6 million) was analyzed to understand the volume and reasons for rejected payment requests.

The Pareto shows that that payment requests were rejected for Disputed Amounts (83%) followed by Utility related disputes (14%) and Budget Adjustment (3%).

DATA SUMMARY

Key Take Away: Rejected payment requests delay payments made to the Contractor. Baseline data shows Street Maintenance payment requests are rejected more often for disputed amounts than any other reject reason. Team planned on gathering additional information from process experts to help identify what is causing the amounts to be disputed.

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Disputed Amount Utility Budget Adjustment

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Baseline Oct. 2012 - June 2014

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FISHBONE DIAGRAM

TOOLS

REPORTING

CITY PROCESS PAYMENTS

CITY PROCESS TASK ORDERS CITY STAFF

CONTRACTOR

No Transparency [For Quantities]

Inconsistent Documentation

Work Completed or Initiated Prior to Task Order

Approval Sequencing [Contractor Not Aware of Utility Rejects]

Task Order Not Processed

Rejected Payments

Quantity Discrepancies

Lack of Connectivity to PRIMELink in

the Field

Tracking & Report Duplication [Inspector, Project Team & Vendor Separately

Track]

Delayed Communication

Untimely Payment Request Submissions

Combining Payment Requests

Delayed Processing of Payment Requests (Payments to Contractors)

No Standardization [For Quantities]

Limited Accessibility [For Quantities]

Inconsistent Material “Ticket” Submissions

Delayed Utility Approvals

Key Take Away: Root Cause Analysis will focus on Daily Quantity documentation/reporting process and Payment Process.

Why are Payment Requests rejected for disputed amounts? -Contractor quantities included in Payment Request do not match City’s verified quantities -Why? Verified daily quantities information is not easily accessible or consistently provided to confirm quantities are correct -Why? Documentation and delivery of daily quantities varies by City Inspector - Why? There currently is no standard documentation and reporting process for daily quantities

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HYPOTHESIS TESTING RESULTS

Possible X Root Cause Hypothesis Hypothesis Test Results

Payment Request Time Period

Processing of Street Maintenance Task Order Payment Requests takes longer than it used to

One-Sample Sign False

Task Order Time Period

Processing of Street Maintenance Task Order takes longer than it used to

One-Sample Test False

Rejects

There are more payment request rejects than there used to be

One-Sample Sign True

Reject Types

Number of rejects seems to be higher for certain reject reasons

Mood’s Median True

Key Take Away: Hypothesis tests confirmed that rejected payments was a key area of focus.

ONE SIGN HYPOTHESIS TEST Hypothesis: Total payment processing time is taking longer than it use to.

Key Take Away: There was no significant change in total payment processing time. However, since “payment processing time” was a “critical X” and identified by the Contractor’s as a significant issue, the team decided they needed to complete some further analysis. The team discovered the data retrieved from PRIMELink did not capture the time expended from the Contractor with-holding and not submitting Payment Requests in PRIMELink to avoid Payment Requests from being rejected. If the with-holding days were accounted for then the total payment processing time would have reflected as taking longer than it use to. With this, the team then focused on what was causing the Contractor to not to enter payment requests in PRIMELink .

Team looked at the current payment processing time and compared it to the historical target.

P-value less than 0.05, so team rejected the null hypothesis (Ho).

Result - Total payment processing isn’t taking longer than it use to, i.e. there is no significant change in total payment processing time.

DATA SUMMARY

ONE SIGN HYPOTHESIS TEST Hypothesis: There are more payment request rejects than there use to be.

Key Take Away: There are more payment request rejects than there use to be. There was a total of 146 rejects in FY 2013 and 227 rejects in FY 2014. Improvement focused on the rejected Payment Requests. More specifically, why they are being rejected and how we can reduce the number of rejects to increase the number of payments .

Team looked at the historical reject volume and compared it to the historical target.

P-value is greater than 0.05, so team failed to reject the null hypothesis (Ho).

Result - There are more payment request rejects than there use to be.

DATA SUMMARY

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MOOD’S MEDIAN TEST Hypothesis: Number of rejects seems to be higher for certain reject reasons

Key Take Away: Mood’s Median test confirmed there is a significant difference in the number of rejects for certain reject reasons. Data reflects that Payment Request rejects are largely attributed to disputed amounts. Team focused on identifying root causes and solutions on how to reduce rejects for disputed amounts.

Team met with staff and Contractor to retrieve information on reasons why Payment Requests are rejected and compared it to the reject data retrieved from PRIMELink.

P-value less than 0.05, so team rejected the null hypothesis (Ho).

Result: There is a significant difference in the number of rejects for certain reject reasons.

DATA SUMMARY

IMPRO

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IMPACT & EFFORT MATRIX Impact Effort Matrix

Objective: Increase Overall Number of Invoices Processed On-Time

Sponsor: TCI Project Delivery, Streets and Support Services Asst. Directors

Stakeholder: Contractor

High Impact

Hard Easy

Low Impact

1. Update PRIMELink workflows to optimize the sequencing of task order and payment request approval steps (i.e. adding the City as a Payment Request submitter and enabling the copy furnish feature to include Contractor on rejected items).

2. Facilitate the exchange of i-pads for laptop computers so Inspectors can document quantities in the field.

3. Implement a tolerance threshold for yield calculations to minimize quantities rejections for minor quantity threshold discrepancies.

4. Create an inspector quantity log in PRIMELink to allow inspector to log and track quantities and allow all authorized users (including the Contractor) to view quantities.

5. Document and implement a new quantity authorization process which will entail the documentation, acknowledgement and agreement of approved quantities.

6. Change invoicing process such that the City will create and initiate the Payment Request on behalf of the Contractor based on approved documented quantities.

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3 4

5

6

Key Take Away: Leveraging the low/high impact quadrant, the team was able to prioritize the implementation of the solutions. Implementing “quick wins” first and gradually all of the rest the solutions as follows: 3, 1, 2, 4, 5 and 6.

IMPRO

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INNOVATION TRANSFER OPPORTUNITIES

PROCESS IMPROVEMENT [Innovation/Addition/Change/Removal]

PROCESS BENEFITS

IMPACTED ENTITY

[Area/Department/Business Unit]

Update task order PRIMELink workflow (i.e. enabled the copy furnish feature to include Contractor on rejected task orders)

• Expedites action needed on rejected task orders • Reduces time needed to process task order so payment requests can be submitted

• Contractor • Streets Engineering Project Team

Update payment request PRIMELink workflow (i.e. added the City as a Payment Request submitter)

• Provides Contractor option to continue to invoice or permit the City to invoice on their behalf

• Contractor • Fiscal

Implemented 5% tolerance threshold for quantity yield calculations

• Minimize and eliminate the unnecessary rejection of payment requests due to quantity discrepancies

• Contractor • Inspector

Established connectivity to PRIMELink for Inspectors in the field (i.e. facilitated the purchase and exchange of i-pads for laptops for all TCI Inspectors)

• Inspectors able to remotely access PRIMElink and shared drives in the field • Allow for near real time data entry of daily quantities, reports and approvals • Promote documentation standardization (i.e. provide a centralized and easily accessible way to report) • Eliminated the need for inspectors to drive to and from a service center to upload data, thus allowing more time to be spent in the field

• Inspector

Implemented new daily quantity log documentation and reporting process

• Improved transparency and communication • Report standardization • Reduce payment requests for incorrect quantities

• Contractor • Inspector •Streets Engineering Project Team

Implemented City initiated payment request (invoicing) process • Ensures timely and consistent payments based on approved quantities

• Contractor • Fiscal

IMPRO

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BEFORE & AFTER PAYMENT REQUEST REJECTS

Key Take Away: Implemented solutions decreased total number of payments rejected for disputed quantity amounts by 17% achieving the project goal of decreasing the number of rejects for disputed quantity amounts by 10% or better.

Fiscal Year Oct. 1 – Sept. 30

42% [ $15.1M] REJECTED

58% [ $21.6M] REJECTED

Mean: 15.10

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IMPRO

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RISK MANAGEMENT

Key Take Away: For each identified risk, leveraged training, visual management/procedural guides, system and/or procedural controls where needed to mitigate risks and proactively elevate issues.

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MONITORING & RESPONSE PLAN MONITORING PLAN

MEASURE INPUT/OUTPUT/

PROCESS TRIGGER MEASURES MEASURMENT METHOD

CHECKING FREQUENCY

WHO MEASURES

Daily Quantities Timing Input Daily Quantity Log must be completed within 48 hours; No later than Tuesdays End of Day

Time Stamp When Log is Completed Daily Inspector Supervisor

Daily Quantities Discrepancies Output Zero quantity discrepancies prior to invoicing date (within two weeks of quantities being posted)

Time Stamp When Log is Completed Daily Contractor

Total Payment Requests Timing Process No greater than 15 days (Upper Control Limit) Time Stamp from When Payment Request is Submitted to When Payment Request is Paid

Monthly Fiscal Accountant

Total Number of Rejects Process No greater than 27 rejects (Upper Control Limit) Total Number of Rejects By Vendor for Disputed Amount

Monthly Performance Management Team

RESPONSE PLAN DAMAGE CONTROL PROCESS ADJUSTMENT EFFECTIVENESS ASSESSMENT CONTINOUS IMPROVEMENT

Daily Quantity Discrepancies Report any quantity discrepancies to the Inspector to either correct the discrepancy or agree to not include in Invoice until discrepancy can be corrected

Determine if discrepancy attributed to typo or missing documentation Project Team to verify quantities daily

Project Team to verify once material tickets are received to what is reflected on daily quantity log, verify daily entry

Corrected Daily Quantity Log Inspector to either (a) correct quantity on the appropriate daily quantity log (only if the log has not already been pulled for invoicing) or (b) create new daily log and reflect the corrected difference

Project Team and Inspector to review Daily Quantity Summary Report to monitor quantity and dollar balances

Project Team through review of balances can as necessary submit appropriate budget adjustment to elevate delays in invoicing; Inspector can know when quantities are not within or exceeding specifications.

Unable to Process Payment Request Due to Insufficient Funds

Report funding insufficiency to Project Manager so that a budget adjustment can be completed.

Project Team will run the summary daily quantity report to monitor potential over runs.

Project Team and Inspector working together to help proactively elevate the need for last minute adjustments at time of invoice rather complete adjustments sooner.

Rejected Payment Requests Fiscal Accountant to work with Contractor and/or Project Team on correction needed. If quantity related, work with Inspector to correct accordingly.

PRIMELink report regarding number of rejects and payment timing will be evaluated monthly.

Team to review control charts to help trigger additional investigation of causes and as needed adjustments to control limits.

Key Take Away: Team devised a monitoring and response plan to help sustain improvements and know how identify as well as handle issues should they arise.

IMPRO

VE

RACI MATRIX

TASK FREQUENCY DUE DATE

Responsibility Approver Consulted Informed The person responsible for producing the deliverable

and/or completing the task.

The person accountable for the deliverable.

The person or persons that must be consulted before a

decision can be made.

The person or persons that must be informed of any

decision that has been made.

Complete Daily Quantity Usage Record Daily Within 48 hours; No Later

than Tuesdays End of Day Inspector Inspector Supervisor Project Manager/Team Construction Management Manager

Run Daily Quantity Usage Reports Weekly or As Needed Wednesdays End of Day Inspector Supervisor Construction

Management Manager Project Manager/Team Project Delivery Assistant Director

Review Daily Quantity Usage Reports Weekly or As Needed Wednesdays End of Day Project Manager/Team Streets Engineering

Manager Inspector Supervisor Streets Assistant Director

Validate Daily Quantities Weekly or As Needed Wednesdays End of Day Contractor Contractor Owner Project Manager/Team Streets Assistant Director

Communicate Daily Quantity Discrepancies As Needed Within 2 Weeks of Quantities

being Posted Contractor Contractor Owner Project Manager/Team Streets Assistant Director

Complete Daily Quantity Discrepancy Revisions As Needed

Within 2 Weeks of Quantities being Posted or PM Team Notification

Inspector Inspector Supervisor Project Manager/Team Contractor

Consolidation of Daily Quantities (for City Issued Payment Requests)

Monthly or As Needed

First Wednesdays of Month or within 48 Hours of Receiving PM Team Notification

Fiscal Accountant Capital Fiscal Manager Project Manager/Team Contractor

Consolidation of Daily Quantities (for Vendor Payment Requests)

Monthly or As Needed Contractor Contractor Owner Project Manager/Team Streets Assistant Director

Creation & Submission of Payment Requests

Monthly or As Needed

First Fridays of Month or within 48 Hours of Receiving PM Team Notification

Fiscal Accountant Capital Fiscal Manager Project Manager/Team Contractor

Notification of Overruns Daily As Needed Project Manager/Team Streets Engineering Manager Inspector Supervisor Streets Assistant Director

Creation & Submission Task Orders (for Overruns or Project Close-Out) Daily As Needed Project Manager/Team Streets Engineering

Manager Inspector Supervisor Streets Assistant Director Updating Major Changes to Standard Operating Procedures Document As Needed As Needed Performance

Management Team Inspector Supervisor Project Manager/Team Project Delivery & Steets Assistant Director

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CONTROL CHART

Key Take Away: Team is continuing to work on causes of variation and control limits. The control charts will be a key part of TCI’s on-going monitoring of the process in identifying ways to improve and address issues. As a result, of the immediate success of the 6-month pilot and overwhelming positive response from Contractors following the pilot, TCI has begun rolling-out the new Daily Quantity Log and Payment Request process for all Street Maintenance Improvement construction contracts and eventually all TCI managed construction contracts.

PAYMENT REQUESTS Avg. Process Timing Trigger = 15 Days or Greater

[Upper Control Limit = 16]

16.49

Mean CL: 12.875

9.26

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Individuals Control Chart Data UCL CL (Mean) LCL

26.76

15.1025641

3.44

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C (Count) Control Chart Rejects Data UCL CL (Mean) LCL

REJECTS No. Rejects Trigger = 20 Rejects or Greater

[Upper Control Limit = 27 Rejects]

NEXT STEPS Black Belt Project Storyboard

Task Order & Invoicing Process Improvement

EXTEND SUSTAIN

COLLABORATE IMPROVE

Roll out daily inspection quantity and invoicing process for all other capital construction contracts.

IMPROVEMENT Coordinate with local utilities to have them begin utilizing new daily inspection quantity and invoicing process for utility work on City projects.

Continue to retrieve feedback from process owner, staff and contractors. Follow through and review monitor and control plans.

Continue quarterly meeting with process owners and users to access process progress, identify ways to improve and address any associated issues.

LESSONS LEARNED

Lessons Learned

Lean Six Sigma methodology is not just applicable to manufacturing operations it can be applied in Municipal business functions and services. Lean Six Sigma methodology has provided a roadmap to not only implement but sustain improvements . Data does matter – performance and its established triggers are essential in maintaining efficient and effective delivery of services/deliverables.

Lean Six Sigma Methodology

Having a clear and consistent communication plan is key in sustaining success and ensuring issues are addressed accordingly. Communication helps fosters better collaboration and a greater awareness of the team’s overall goal and responsibilities.

Communication

Lack of standardized, documented and agreed upon policies/processes leads to variability which results in inconsistency, additional work and potentially costly processing delays. Creating uniform policies and procedures helps reduce confusion and improves communication for City staff and among Contractors. Information regarding policies and procedures should be accessible and easy to understand both for Contractors and City staff.

Standardized Processes

With out the involvement through the project and buy-in of the process owner of the improved process the realized improvements can not be sustained. Simply, “if its not important to the boss its not important to staff.”

Ownership

APPENDIX

Lean Six Sigma Black Belt Project Storyboard

Task Order & Invoicing Process Timing

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STAKEHOLDER ANALYSIS

Key Take Away: There was no resistance to the process improvement and all appropriate key stakeholders were included as part of the team.

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AS-IS PROCESS MAPS

Key Take Away: Understanding the Task Order and associated Payment Process was instrumental in identifying areas of focus and has provided City staff a renewed and visible perspective of the entire process.

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FIVE (5) WHY’S

Why are Payment Requests rejected?

Why ?: Contractor quantities included in Payment Request do not match City’s verified quantities.

Why ?: Verified daily quantities information is not easily accessible or consistently provided to confirm quantities are correct.

Why?: Documentation and delivery of daily quantities information varies by City Inspector.

Why?: There currently is no standard documentation and reporting process for daily quantities.

Key Take Away: Payment Requests rejected for disputed quantities is attributable to the lack of a defined process and impacts the Contractor, City Project Team and City Inspector.

Expedite Project Delivery and Completion of Infrastructure

Projects City-Wide

City Staff

Contractor

City Processes

Reporting & Tools

MATCHING X & Y MEASURES

Key Take Away: X’s that impact Y (Expedited project delivery and completion of Infrastructure Projects city-wide) are as follows: City Staff (includes Project Team and Inspector), Contractor, City’s Processes and reporting/tools.

X 1 X 2 X 3 X 4 Y City Staff

Communication Report Duplication

Contractor

Communication Consistency

City Processes

Standardization Documentation

Reporting & Tools

Equipment Transparency Standardization Accessibility

Expedite Project

Delivery and Completion of Infrastructure Projects City-

Wide

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8 WASTES CHECK SHEET

Process Area: Daily Quantity Process

Waste Definition Level Description of Issues

D Defects Information, products and services that are incomplete or inaccurate High

Inconsistent documentation of daily project quantities makes it difficult to research, verify and approve quantities; instances of incorrect quantities more likely

O Overproduction Making more of something - making it earlier or faster- than it's needed High

Redundant and non-transparent documentation (i.e. quantities documented in emails and various manual logs by Contractor, Project Team and Inspectors)

W Waiting Waiting for information, equipment, materials, parts or people Medium

Daily quantities information is not centralized and easily assessable (i.e. project team and vendor have to await for information to be sent by Inspector )

N Non-Utilized Talent Not properly utilizing people's experience, skills, knowledge or creativity Medium

Inspectors are unable to leverage PRIMELink in the field consistently which forces inspectors to track and communicate manually requiring additional time as a opposed to documenting information in the system for all to access

T Transportation Unnecessary movement of materials, information or equipment High

Inspectors not able to document daily quantities in field so Inspectors manually track and transfer information to various logs and emails the same information

I Inventory Accumulation of parts, information, applications, etc. beyond what is required by the customer High

Since there is no daily log in PRIMELink Inspectors manually track quantities in the field and for most they wait until the end of the week or several days so they have to update manual logs and provide updates once

M Motion Any movement by people that is not of value to the customer Medium

Project team, vendor and inspector have to search through manual logs and emails to verify quantities to approve or reject payment requests

E Extra- Processing

Any steps that do not add value in the eyes of the customer Medium Project team, vendor and inspector each track quantities

on their own separate logs same information

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COMMUNICATION PLAN

Stakeholder Group Objectives/Actions Desired Message Delivery Method Timing

Executives (Project Champions) Inform of project findings, create buy-in and ownership

Results of analysis and hypothesis tests; solutions selected

Share at Regular Scheduled Executive Meeting Within1 Week

Construction Management & Street Engineering Supervisors

Inform of project findings, install confidence in team and process changes

Results of analysis and hypothesis tests; solutions selected Schedule Meeting Within 2 Weeks

Construction Management Inspectors

Inform of project findings, create buy-in and ownership, participate in pilot & roll- out

Pilot results, training and implementation plan Schedule Meeting Within 3 Weeks

Street Engineering Project Manager & Project Team Members

Inform of project findings, create buy-in and ownership, participate in pilot & roll- out


Fiscal Purchase new laptops , inform of project findings, create buy-in and ownership, participate in pilot & roll-out

Purchasing new hardware, execution dates, training and implementation plan

Email After Executive and Manager Approval

Vendors Inform of project findings, create buy-in and ownership, participate in pilot & roll- out


Key Take Away: Adhering to Communication Plan was instrumental in making sure the team and its project champions were informed on what was happening with the project and anticipated due dates.

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IMPLEMENTATION PLAN Plan Do Check Act

Action Responsible Due Date

Plan

Complete Test Task Order and Payment Request Work Flow Changes PRIMELink Manager 07/12/2014

Procure (32) Windows-based Laptops Project Team Leader, Fiscal, Information Technology 11/14/2014

Design Inspector Daily Quantity Log in PRIMELink PRIMELink Manager 12/15/2014

Design Daily Quantity Log Detailed & Summary PRIMELink Reports PRIMELink Manager 12/15/2014

Design Payment Request Detailed & Summary PRIMELink Reports PRIMELink Manager 12/15/2014

Facilitate Exchange I-pads for Laptops Project Team Leader, Fiscal, Construction Management 04/02/2015

Do

Create Inspector Daily Quantity Log in PRIMELink PRIMELink Manager 01/15/2015

Create Daily Quantity Log Detailed & Summary Reports in PRIMELink PRIMELink Manager 02/15/2015

Create Payment Request Detailed and Summary Reports in PRIMELink PRIMELink Manager 02/15/2015

Document Procedures, Visual Management Guide and Control Plan for Inspector Daily Quantity Log and Payment Process

Project Team Leader 04/15/2015

Train PRIMELink Helpdesk, Inspectors, Project Team, Fiscal & Contractor Project Team Leader, PRIMELink Manager 05/08/2015

Che

ck Deploy Pilot [Test Process & New Changes in PRIMELink with (1)

[Willing and Able Contractor] PRIMELink Manager 06/26/2015

Monitor Inspector Daily Quantity Log Completion, Payment Process Timing and Reject Volume for Team

Project Team Leader 07/26/2015

Act

Made Adjustments to Daily Quantity Log and Payment Process Based on Pilot

Project Team Leader, Construction Management Inspectors, Street Engineering Project Team, Fiscal

08/03/2015

Roll Out New Daily Quantity Log and Payment Process for All Other Street Maintenance Construction Contracts

Project Team Leader, Construction Management Inspectors, Street Engineering Project Team, Fiscal

09/01/2015

Key Take Away: Implementation Plan was used to organize key tasks and provide the team an overview of what is to be completed and the team’s role in tasks to be completed.

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CONTROL CHART

5

1

2 2

2 2

5 5 5

12.88

9.26

16.49

9.0010.0011.0012.0013.0014.0015.0016.0017.0018.0019.0020.0021.0022.00

Indi

vidu

als:

Dat

a

1.36

0.00

4.44

-1.000.001.002.003.004.005.006.007.008.00

MR

: Dat

a

Key Take Away: The I-MR-R chart turned out to be the visual tool to review payment processing time. Team has both a cumulative monthly and daily chart to illustrate the process’s progress and any variation. The Upper Control Limit and Response Plan trigger is 16 days.

I-MR Chart | Monthly Payment Processing Time