Industry research on lean and six sigma implementation in government and public sector preview

An initiative of

INDUSTRY RESEARCH REPORT ON
LASSIB
LEAN AND SIX SIGMA IMPLEMENTATION
SOCIETY IN GOVERNMENT AND PUBLIC SECTOR

Image Source: (UVM, n.d.)

Industry Research Report on Lean and Six Sigma
Implementation in Government and Public Sector

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Page 2 of 26 Lean and Six Sigma International Board
Version 1.0 http://www.lassib.org/
Release Date: January14th 2013 An initiative of LASSIB Society


TABLE OF CONTENTS

1. Abstract.............................................................................................................................................................................4

2. Present Day Challenges in Organizations....................................................................................................................5

3. Challenges Unique to Governmnet and Public Sector..............................................................................................6

4. Role of Lean Six Sigma to overcome these challenges .............................................................................................7

4.1. Strategic Benefits ..................................................................................................................................................7

4.2. Operational Benefits.............................................................................................................................................8

5. LASSIB’s Proposed Approach to Implement Lean and Six Sigma in Government and Public Sector ...............9

6. Case Studies of Lean and Six Sigma implementation in Government and Public Sector ................................ 11

6.1. Improving overall Permit Issuance Process for Transport Companies in Australia................................ 11

6.2. Florida Department of Revenue ...................................................................................................................... 11

6.3. One of the Largest Producer and Transporter of Energy in United States .............................................. 12

6.4. Water, Electrical and Sewer Utilities Organization in United States ........................................................ 13

6.5. City of Fort Wayne, Indiana.............................................................................................................................. 14

6.6. National Nuclear Security Administration, United States........................................................................... 15

6.7. Lean Six Sigma to Improve Tax Collection ..................................................................................................... 15

7. What is Lean?................................................................................................................................................................ 16

7.1. Toyota Production System................................................................................................................................ 16

7.2. MUDA i.e. Lean Waste Elimination ................................................................................................................. 17

8. What is Six Sigma? ....................................................................................................................................................... 20

9. Conclusion ..................................................................................................................................................................... 21

10. Bibliography ............................................................................................................................................................ 22

11. About Lean and Six Sigma International Board ................................................................................................. 23

12. About LASSIB Society .............................................................................................................................................. 23

13. About LASSIB Research Reports ........................................................................................................................... 23

14. Contributors to the Research Report .................................................................................................................. 24

15. How You Can Leverage and Support LASSIB Society ........................................................................................ 25



1. ABSTRACT

The purpose ofcreating this research report is to showcase the Return on Investments (ROI) and
Benefits of using Lean Six Sigma techniques in Government and Public Sector.

Government and Public Sectorare unique in the fundamental challenges they face, but at the
same time the priorities and goals remain pretty much the same as that of other organizations.
They also need to deliver customer value, at the same time minimize costs and build sustained
excellence.

This report looks at tools and techniques of Lean and Six Sigma, and how these can help the
Government and Public Sectoraddress these requirements. The report includes an overview of
both Lean and Six Sigma coupled with case studies on how these techniques have helped
Government and Public Sector organizations deliver value to their customers.

The report draws LASSIB Society’s experience in theGovernment and Public Sector as well as
secondary research sources. Please refer to the list of references at the end of the report for a
complete list of sources used to build this report.



2. PRESENT DAY CHALLENGES IN ORGANIZATIONS



3. CHALLENGES UNIQUE TO GOVERNMNET AND PUBLIC SECTOR



4. ROLE OF LEAN SIX SIGMA TO OVERCOME THESE CHALLENGES

4.1. STRATEGIC BENEFITS



4.2. OPERATIONALBENEFITS



5. LASSIB’S PROPOSED APPROACH TO IMPLEMENT LEAN AND S IX SIGMA IN
GOVERNMENT AND PUBLIC SECTOR



6. CASE STUDIES OF LEAN AND SIX SIGMA IMPLEMENTATION IN
GOVERNMENTAND PUBLIC SECTOR

6.1. IMPROVING OVERALL P ERMIT ISSUANCE PROCESS FOR TRANSPORT COMPANIES
IN AUSTRALIA

6.2. FLORIDA DEPARTMENT O F REVENUE



6.3. ONE OF THE LARGEST PRODUCER AND TRANSPORTER OF ENERGY IN UNITED
STATES



6.4. WATER, ELECTRICAL AND SEWER UTILITIES ORGANIZATIO N IN UNITED STATES



6.5. CITY OF FORT WAYNE, INDIANA



6.6. NATIONAL NUCLEAR SECURITY ADMINISTRATION, UNITED STATES

6.7. LEAN SIX SIGMA TO IMPROVE TAX COLLECTION



7. WHATISLEAN ?

Lean is a philosophy and a set of management techniques focused on continuous “waste
eliminating” so that every process, task or work action is made “value adding” (the real output
customer pays for) as viewed from customer perspective.

This is achieved through the implementation of the Toyota Production System and Lean Waste
Elimination, also called as Muda.

7.1. TOYOTA PRODUCTION SYSTEM

(Toyota, n.d.)Toyota Production System (TPS) has three desired outcomes:
To provide the customer with the highest quality, at lowest possible cost, in a timely
manner with the shortest possible lead times
To provide members with work satisfaction, job security and fair treatment
It gives the organization flexibility to respond to the market, achieve profit through
cost reduction activities and long-term prosperity
TPS strives for the absolute elimination of waste, overburden and unevenness in all areas to
allow members to work smoothly and efficiently. The foundations of TPS are built on
standardisation to ensure a safe method of operation and a consistent approach to quality.
Just-in-Time:



o Essentially, 'Just-in-Time' manufacturing consists of allowing the entire
production process to be regulated by the natural laws of supply and demand
o Customer demand stimulates the production of a product or delivery of the
service. In turn the production or delivery stimulates production and delivery of
the necessary parts and services, and so on
o The result is that the right products and services are produced and served, and
provided in the exact amount needed - and when and where they are needed
o Under 'Just-in-Time' the ultimate arbiter is always the customer. This is because
activity in the system only occurs in response to customer orders. Production is
'pulled' by the customer rather than being 'pushed' by the needs or capabilities
of the production system itself
Jidoka:
o In Japanese 'Jidoka' simply means automation. At Toyota it means 'automation
with a human touch'
o In 1902 Sakichi Toyoda invented the world's first automatic loom that would
stop automatically if any of the threads snapped. This principal, Jidoka, of
designing equipment and processes to stop and call attention to problems
immediately when they sense a problem is a central concept of TPS
Heijunka:(Wikipedia, 2012)
o Production leveling, also known as production smoothing or – by its Japanese
original term – Heijunkais a technique for reducing the Muda (waste)
o It was vital to the development of production efficiency in the Toyota Production
System and Lean Manufacturing. The goal is to produce intermediate goods at a
constant rate so that further processing may also be carried out at a constant
and predictable rate.

7.2. MUDA I.E. LEAN WASTE ELIMINATION

Lean “waste elimination” targets the “Eight Wastes” namely:
Motion – Mainly people, document movement, searching etc.
Waiting – For material, information, people, equipment, procedures, approvals and
more
Overproduction – Making more than what is needed by customer / market demand



Over-processing – Doing more to a product / service (but not perceived as value by
customer or business)
Defects – Errors, mistakes, non-
complying products, services,
documents, transactions
Rework and Scrap – Products,
transactions or outputs not
meeting specifications and have to
be fixed, redone, rectified, marked
down or scrapped / unusable
Inventory – Buffer stocks or
resources (Raw, Work in process,
Finished Goods, Bench staff etc.)
Transportation – Movement of products / items during or after production
Unused Creativity – People knowledge and skills that are not utilized by the
company
Lean methods help to remove / reduce waste and contributes to drive agility (velocity)
through smooth work flow across the organization resulting in rapid fulfilment of customer
needs in an optimum manner.
Lean tools and techniques are designed to eliminate waste, and every organization is subject
to generating waste.
Waste in the supply chain

Waste in the technical specifications

Waste in the staff support functions

Waste in the office processing

Waste in the manufacturing processes
Waste equates to dollars wasted, opportunities lost, and loss of human motivation. Each of
these three criteria can have a negative impact on the organization's cost.



Waste equates to dollars wasted

Every organization has an intrinsic proclivity to generate waste in the way they run their
business. Waste is the difference between the way things are now and the way things could
be if everything were perfect - no errors, troubles, problems or complexities.

The Lean Enterprise process can be simplified by first, “find the waste;” secondly, to “get rid
of the waste;” and thirdly, “prevent its return-forever." The Lean process looks everywhere
for waste and reviews every activity to evaluate whether it adds value from the external
customer’s viewpoint.

Waste equates to opportunities lost

Implementing lean tools and techniques will enable your organization, no matter how large
or small, to meet your customers’ demand for a quality product or service, at the time they
need it, and for a price that is competitive.

A Lean system also creates processes that are agile and efficient, and that will help your
company manage its total costs and provide a fair ROI.

Waste equates to loss of human motivation

For Lean management to be successful, everyone in your organization must contribute to
the effort. They must feel a part of the improvement process, and be empowered to commit
time and intellectual resources to the effort.



8. WHATIS SIX SIGMA?

System1979:
Motorola 1995: Jack
Starts Six Welch
2000: GE Saves ~$2
Sigma Initiates Six
Billion Annually
Initiative Sigma in GE

1986: Motorola 1998: Allied
Saves ~$16 Billion Signal Saves
~$1.2 Billion

Six Sigma is a break through and continuous improvement management strategy, originally
developed by Motorola in 1986. Six Sigma became well known after Jack Welch made it a
central focus of his business strategy at General Electric in 1995, and today it is widely used in
many sectors of industry.

Six Sigma seeks to help prioritize and define organizational strategies that help with:

Better delivery of value to end customers, along with

Improve Revenue Realization

Six Sigma also helps improve the quality of outcomes delivered by identifying and removing the
causes of defects (errors) and minimizing variability in processes.

It uses a set of Management methods, and creates a special infrastructure of people within the
organization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Each Six
Sigma project carried out within an organization follows a defined sequence of steps and has
quantified outcomes.

In the late-1980's following the success of the initiative, Motorola extended the Six Sigma
methods to its critical business processes, and significantly Six Sigma became a formalized in-
house 'branded' name for an Improvement Methodology, i.e., beyond purely 'defect reduction',
in Motorola Inc.

In a little over ten years, Six Sigma quickly became not only a hugely popular methodology used
by many corporations for quality and process improvement.



The tools, techniques and framework of Six Sigma have helped organizations like GE, Honeywell,
and Allied Signal save more than $2 Billion dollars annually. In addition to cost reduction,
organizations have used Six Sigma to define their strategy, identify and meet customer
requirements and overall achieve Organization excellence.

9. CONCLUSION

Far from being unable to plan and implement improvement methodologies, Government and
Public Sectororganizations have a unique opportunity to benefit from doing so. While it is true
that improvement efforts can be frustrated by changes in administration and that processes are
subject to change, there are still many opportunities for those with an eye for improving
customer value delivery. If good data is available, Six Sigma may be useful. If not, Lean or other
continuous process improvement techniques may be more appropriate. Either way, the reward
is compelling:

Savings and improvements not only for the Government and Public Sector, but also
Savings of tax payers’ money and improvements to the value delivered to the respective
communities



10. BIBLIOGRAPHY

Abbott, B. (2010, February 26). Six Sigma in Government: Focusing on the Customer . Retrieved from
isixsigma.com: http://www.isixsigma.com/industries/government/six-sigma-government-focusing-
customer/

American Society for Quality. (2008, JANUARY 30). KNOW LEDGE BASED LEADERSHIP (KBL) OR SIX SIGMA
“LIGHT BUSINESS PROCESS IMPROVEMENT" CASE STUDY SUMMARY. Retrieved from American Society
for Quality: http://rube.asq.org/gov/knowledge-based-leadership.pdf

Dominion. (n.d.). Six Sigma at Do minion. Retrieved from Dominion: https://www.dom.com/about/six-
sigma/index.jsp

Maleyeff, J. (2007). Improving Service Delivery in Govern ment with Lean Six Sigma . Retrieved from IBM Center
for the Business of Government: http://www.businessofgovernment.org/report/improving-service-
delivery-government-lean-six-sigma

Society, LASSIB. (2010). Lean Six Sig ma White Belt eLearning. Retrieved August 28, 2012, from Lean and Six
Sigma International Board: www.lassib.org

Toyota. (n.d.). Toyota Production System. Retrieved from Toyota:
http://www.toyota.com.au/toyota/company/operations/toyota -production-system

U. S. Mayor Newspaper. (2001, June 11). Best Pra ctice: Fort Wayne Adopts Six Sigma Methodology to Imp rove
City Services. Retrieved from United States Conference of Mayors:
http:www.usmayors.org/usmayornewspaper/documents/06_11_01/ft_wayne_best_practice.asp

United States Environmental Protection Agency. (2010). Lean Six Sigma and Environ ment Case Study: JEA.
Retrieved from United States Environmental Protection Agency:
http://www.epa.gov/lean/environment/studies/jea.pdf

UVM. (n.d.). http://www.uvm.edu/~in trnatl/iew/. Retrieved from UVM.edu.

WEEK, I. (n.d.). Can Lean Six Sigma reduce Governmen t waste? Retrieved from
http://www.industryweek.com/public-policy/can-lean-six-sigma-reduce-government-waste

Wikipedia. (2012, November 11). Production leveling. Retrieved from Wikipedia:
http://en.wikipedia.org/wiki/Production_leveling



11. ABOUTLEAN AND SIX SIGMA INTERNATIONAL BOARD

Lean and Six Sigma International Board, an initiative of LASSIB Society is an organization
pioneering and spreading the knowledge of Lean and Six Sigmato the worldwide community.
Our vision is to create and provide the world's most useful Lean and Six Sigma resource centre
and certification programs, available for the users at the lowest cost.

12. ABOUT LASSIB SOCIETY

LASSIB Society is a not-for-profit organization focussed on ‘Nurturing Next Generation
Governance Globally’.

LASSIB Society’s mission is to create and provide the world's most useful ‘Governance
Management’ resource centre and a set of certification programs, available for Individuals,
Organizations and Governments at the lowest cost.

Based on the principles on Gandhian Engineering, we deliver cutting edge industry research and
enhanced value to the community at large.

LASSIB Society organizes multiple events, enabling face-to-face interactions and virtual
interactions among the global community.

13. ABOUT LASSIB RESEARCH REPORTS

In conjunction with the Knowledge Base LASSIB Society publishes, LASSIB Society also releases a
host of research reports through primary and secondary research. These research reports get
wide audience across the industry and are sought after by International Journals as well.

Some of the research reports published by LASSIB Society around the world include:

Framework for Implementation of Lean Tools in Indian MSME Sector

Lean Six Sigma for Graduates and Post Graduates

Return on Investment after Implementation of 5S

Industry Research on Lean and Six Sigma Implementation in Logistics Industry



Industry Research on Lean and Six Sigma Implementation in Electrical and Electronic
Industry

These Research Reports are a valuable resource for the industry at large, and serve to provide
key insights that can be used by industry leaders to shape the strategy for their organizations.

Please refer to http://www.lassib.org/ for details of all research reports of LASSIB Society.

14. CONTRIBUTORS TO THE RESEARCH REPORT

Role Full Name Designation Organization
Author Mr.Rana Chetan Singh Intern, M. Tech in Industrial Indian School of Mines
Engineering and University
Management Dhanbad
Reviewer Mr. Ujwal Tripurari Global Evangelist LASSIB Society
Reviewer Ms. Shilpa Roy Kota Secretary LASSIB Society
Reviewer Mr. Pavan Kota Executive President LASSIB Society



15. HOWYOUCAN LEVERAGEAND SUPPORT LASSIB SOCIETY
Although LASSIB is a not for profit organization, it does not believe in raising funds through charitable means,
without providing direct value to the contributor. There are many different ways in which organizations,
institutions, governments and individuals across the globe are working with LASSIB to deliver value to
themselves and their customers. LASSIB is proud to be associated with all of them in developing and delivering
cutting edge solutions that have not only delivered quantified business value to them but also added thought
leadership to the industry at large. Below are some ways in which you can leverage and support LASSIB.
Leverage LASSIB for Benefits to you Support to LASSIB
your initiatives
Become an Individual Access complete knowledge base including Funds collected through
or Organization training materials, best practices, cas e studies, membership fees are used to
Member of LASSIB. videos and webinars from LASSIB Society maintain and grow LASSIB
Visit Network, learn and contribute to the fastest knowledge base.
https://lassib.org/inde growing community of specialist, senior
x.php/membershipto leaders from the industry
know mor e about Get latest updates, insights and research from
LASSIB membership the industry delivered to your Inbox
options.
Leverage Training and Get trained from the leading experts from the Training and certification fees
Certification in themes industry who bring together years of charged by LASSIB Society are
of Organization experience and best in class training skills, the lowest in the Industry in
Excellence tools and technologies order to ensure these key
Acquire not only knowledge but skills to components are available
implement the knowledge in real life scenarios within reach to masses. The
Attain internationally respected certifications fees charged helps cover the
thereby adding value to your organization and cost incurred by LASSIB
yourself Society for hiring trainers and
Join the growing panel of Accredited Training issuing certificates
Providers (ATP) and Accredited Test Centr es
(ATC) of LASSIB Society to deliver value within
your organization.
Consult with LASSIB Solve organization problems, create strategy, Consulting fees derived by
experts to deliver deliver customer value through proven tools and LASSIB Society aids LASSIB to
business and customer techniques of Lean and Six Sigma fund research, host events
value and provide free consulting
services to organizations
which cannot afford to pay
yet.
Participate in LASSIB Network, brainstorm, and learn from industry Sponsorship costs and
Events leaders, face to face, over exciting discussions delegate fees assist LASSIB in
conducting these events and
spreading the awareness
within the community.
Participate and Understand the trends in the industry By participating in building
leverage Industry Identify common challenges and best these reports, you provide the
Research practices opportunity to LASSIB to share
Hear from exper ts on future forecasts your knowledge with the r est
of the industry.

Please refer to http://www.lassib.org/ for details on LASSIB or
Send a note to contact@lassib.orgto get connected to a LASSIB Associate or
Call +91-9246185187 (India) to speak to a LASSIB Associate directly.


An initiative of

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