INSPIRING A PERFORMANCE CULTURE PART 2 LEAN 101 PRESENTED BY ANDY HENTO

INSPIRING A PERFORMANCE CULTURE PART 2 LEAN 101 PRESENTED BY ANDY HENTO

PERFORMANCE INNOVATION SERIES Part 3: Maintaining the Energy September 28 Larisa Benson, Principal, The Athena Group John Dickson, Chief Operations Officer, Spokane County 2

GOVERNMENT PERFORMANCE CONSORTIUM LEAN Conference December 8, UW Tacoma Facebook Channel Government Performance Consortium 3

PRESENTERS Andy Hento Kitsap County Lean Program Manager ahento@co.kitsap.wa.us www.kitsap.gov.com Tracy Burrows MRSC Executive Director tburrows@mrsc.org www.mrsc.org 206.625.1300 4

WEBINAR TECHNICAL NOTES During the webinar: Technical Difficulties: Call (206) 625-1300. Submit questions anytime through the question box. After the webinar: To submit a question or comment: Contact MRSC at mrsc@mrsc.org or (206) 625-1300. Additional materials and resources will be posted at www.mrsc.org 5

WEBINAR TECHNICAL NOTES Research and consulting services for Washington local governments at no direct cost. Legal and policy consultation Research support Training Opportunities Sample document library Online research tools Timely news and information MRSC.org 6

Our Challenge Constant increase in demand for services not matched by funds to deliver them For Counties, we are faced with Property tax annual increase limitation of 1% per year yet inflation and costs of doing business increase on average 2-3% per year. 7

Solution Look at system and process Ask why we do what we do Eliminate waste and bottlenecks Seek customer input (Voice of the Customer) Focus on effectiveness and efficiency Effectiveness: How well your customer s needs and requirements are being met. Efficiency: Resources consumed in being effective. Usually measured through time, cost, labor or value. LEAN, when done right, will do all of the above!!

LEAN ELIMINATES WASTE WHILE FOCUSING ON VALUE It utilizes an organization s most valuable resource employees. It employs the Voice of the Customer to discern value. It provides a clear, repeatable process to empower employees and remove need for micro-managing. It establishes a culture that enables employees to proactively seek improvement. It provides transparency to the process. It creates a relationship between organization and customer that encourages innovation.

CYCLE OF LEAN PRINCIPLES Establish Pull Seek Perfection Identify and Remove Waste= SPEED Specify Customer Value Identify Value Stream Achieve Flow

Lean View of Waste Learning to see waste Transport Disconnect Inspect Re-work Wait Work Work Inspect Wait Work Transport Reinstall Start FLOW TIME Finish = Value Added Time = Non-Value-Added Time (WASTE) Value-Added time is only a very small percentage of the total Time 11

Traditional Process Improvement vs. Lean NON Value-added time NON Value-added time Time Small Amount of Time Eliminated Traditional Focus Improve Value-Added work steps i.e. Better tools, machines, instructions Result: Small time savings LARGE amount of time saved Lean Focus Reduce or eliminate NVA/waste Result: LARGE time savings Time savings have a direct impact on Cost Capacity Schedule Flexibility Resources Etc. 12

Example: From our Senior Tax Exemption Kaizen (Assessor s Office) Current State Future State

8 Wastes Examples Defects Work not meeting requirements. Missing information. Rework. Overproduction Too many reports, reviews, approvals. Batching paperwork. Waiting Waiting for meetings to start. Information, paperwork and approvals. Non utilization of people/talent Over or under staffing, talents not utilized, work load not balanced. Transportation Paper- based data vs. electronic transfers. Routing of unnecessary approvals/processing. Inventory Motion Excessive backlog of work to be processed. Too much paper to be handled, processed or filed. Walking to deliver paperwork, poor ergonomics, chasing information. Extra or Over Processing Unnecessary steps. Too many handoffs, lack of SOP s.

Waste Flags Takes too long people are complaining Redundant work same work being performed Process churning can t figure out what to do next Time spent looking for information, equipment, people Excessive delays - stopping Lack of supplies or information Too much red tape The place is a mess can t find anything

POWER OF LEAN Voice of the Customer Driving force of the Enterprise: FOCUS Lean Behavior Empowered workforce Unlocks the potential of the organization Improvements become the norm Removes Waste Steps reduced/streamlined; systems simplified Cycle time reduction

TODAY Lean has developed a community of practice that encourages sharing of ideas, information, and a shared learning culture across industries. Lean has incorporated many other methodologies, tools, approaches, and business practices. Lean is constantly growing as it adopts these new tools, ideas, and best practices. Other proven methodologies work well along with Lean (Six Sigma, Theory of Constraints, Kaizen, etc.). Lean today is mostly referred to as Lean Six Sigma due to its natural tie-in with Six Sigma.

LEAN SIX SIGMA IS... Making common sense common practice A Combination of: Lean - eliminating waste, creating process steps that add value, is available, adequate, and flexible Six Sigma - reducing variation to ensure a standard, quality output; uses scientific method, utilizes performance measures

WHAT IS SIX SIGMA? According to the founders of Motorola s Six Sigma program: First, a statistical measurement Since the 1920's the word 'sigma' has been used by mathematicians and engineers as a symbol for a unit of measurement in product quality variation. Second, a business strategy A data-driven approach aimed to get it right the first time. This requires having a common focus on operational excellence throughout the organization.

WHAT IS SIX SIGMA PERFORMANCE? We are going to relentlessly chase perfection, knowing full well we will not catch it because nothing is perfect. But we are going to chase it, because we know in the process, we will catch excellence. - Vince Lombardi Six Sigma is an optimized performance level approaching zero defects (3.4 ppm) or 99.99966% performance. It means 1st-time perfect quality (no variation).

QUALITY FLAGS Quality standards not met, or inconsistently met Repeated mistakes Rework required consistently People use work-arounds People get the run-around Unclear definition of processes Unclear definition of expectations

PERFORMANCE EXCELLENCE ACROSS KITSAP (PEAK) Encourage a county-wide culture of performance excellence, continuous improvement and empirically based decision making as a means of improving quality, consistency, speed and cost of County Services.

TRAINING AND SKILL BUILDING Developed customized training curriculum for local government Established training program with internal certifications Yellow Belt How to actively participate in Process Improvement activities Green Belt How to facilitate and lead Process Improvement Kaizens and Projects Champions Training How to lead in a Lean environment Created Practitioner Council for knowledge sharing Constantly developing new educational offerings, templates, tools, and documents to improve skills

VISION & STRATEGY Our Vision - A process improvement program with strong foundation built for sustainability and growth. A program designed to influence the culture while aligning County operations with strategic goals and objectives. Our Mission - Encourage a county-wide culture of performance excellence, continuous improvement and empirically based decision making as a means of improving quality, consistency, speed and cost of County Services. To incorporate our vision and mission we used these strategies: Extensive leadership to align program with County goals and objectives Robust training to develop internal resources to sustain and grow program IT and Improvement projects aligned with County s strategic goals and objectives Aligning the program with countywide Budget process 21 Dept./Offices

STRATEGIES FOR INTEGRATING LEAN WITH IT All IT requests will first be analyzed for Process Improvement opportunities. Both IT and PEAK will use same, standardized prioritization matrix. If P.I. opportunities exist, the IT project management lifecycle will be integrated with the DMAIC P.I. project lifecycle. Control plans will be created that monitor both process and technology performance. Performance Indicators will be integrated into Budget Process

BENEFITS OF OUR PROGRAM A clear management philosophy A data driven plan Improved transparency Increase in employee morale Improved leadership skills Increased capacity Most importantly - Cost savings!!!* * Seen through: Hard Savings Budget Impact Soft Savings Increased productivity and efficiency creating capacity

PEAK PROGRAM 2012 2013 2014 2015 No Standard Metrics No Selection Criteria No Countywide Methodology Individual research for improvement methods to address budgetary challenges Individual Hero Improvements Lean Demo Hire Enterprise Process Analyst $7,500 cost for consultants () = Cumulative totals of program to date Propose County Process Improvement Program PEAK PEAK Program Approved PEAK Training Program developed Trained: 124 Yellow Belts 9 Green Belts 21 Champions 22 PEAK Directly Led Process Improvement Events 20 Indirectly Led Process Improvement Events $220,000 in consultant cost avoidance* Data Collection forms and methods created Website developed Project Selection & prioritization developed Trained: 121(245)Yellow Belts 15(24)Green Belts 40(61)Champions 20(42) PEAK Coordinated Improvements 40(60) Indirectly Led Process Improvement Events Budget Committee Requests improvement data for hearings $180,000($400,000) in consultant cost avoidance* Dept./Office Improvement Data Included in Budget Hearings Increase to 1.5 FTE Project Request Standardization Implementation of Project Management Software Trained: 98(343)Yellow Belts 21(45) Green Belt 9(70) Champions 60 Improvements Reported $1,138,878 Projected Soft Cost Savings $140,000($540,000) consultant cost avoidance*

EXAMPLES OF LEAN KAIZENS/PROJECTS Account Payable/Receivable Single Family Resident Permit Payroll I.T. Project Intake Commercial Building Permits Land Use Permits Public Disclosure Requests E-Coordination in Courts Senior Tax Exemption Parks scheduling Code Compliance Customer Inquiries (Sheriff) Public Works Asset Management Court Calendar PW/SDAP Permit Process Concealed Weapons Permit Family Medical Leave Act Job Reclassification Learning Management System Cash Transmittals New Employee I.T. Help Desk Addressing & Road Naming Code Development Graphic Design Contracts

MOST COMMON QUESTION ASKED: How do you successfully deploy a Lean Six Sigma program in government? Answer: Carefully

MY ADVICE: Brand it. Create a brand that the whole organization can rally behind that doesn t specifically call out Lean or other specific tool/methodology but rather focusses on overall performance. Emphasize training and skill building. Tie training with hands-on projects/activities that employees can utilize new skills. Highlight the importance of data. Constantly improve the program involving a steering committee made up of organizational Lean Champions. Target the right audience. (Review Diffusion of Innovations Theory)

1. Innovators and Early Adopters will be attracted by Training and Kaizen/Project opportunities. 2. Not everyone else is a Laggard! Resistance comes from Early Majority and Late Majority too. a. Identify Root Cause to resistance b. Proactively address c. Highlight success Diffusion of Innovation, Everett M. Rogers

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