Lean Service in the Public: a methodology to cut waste and to maximize services for citizens

1. Lean Service in the Public Sector
A methodology to cut waste and to maximize
services for citizens

2. Lean Service in the Public Sector 2
Shorter processing times and higher quality in the
services not only means lower costs for the Government
but also a better perceived service by the Citizens
In the past years, the need to reduce waste,
improve quality of public services, while
reducing operating costs, has been growing
and the Public Administrations (at Central and
Local level) are adapting to apply some
approaches in order to achieve these results.
From a business point of view, this aim can be
supported through the application of Lean Six
Sigma. This methodology, although created for
industrial environments, in the last decade has
been more and more applied to the service
sectors, based on several experiences of
companies that, through these methodologies
have been able to achieve significant results,
both in terms of increased efficiency,
effectiveness and quality.
The Public Sector: doing more with less
The Public Administration at all levels (Central and
Local) must deliver better services (health,
education, pensions, welfare, transportations, etc…
) because there is a growing demand and supply of
same services provided by private services, which
are often - but not always - able to offer better
services (in terms of quality and timing) at a
slightly higher cost.
Thus, in order to cope with the competitive
pressure of private offering of alternative services -
although many services still can only be delivered
by public companies - the Public administration is
showing increasing interest in Lean Services
Programs, to improve services speed and quality .

3. Lean Service in the Public Sector 3
Lean Six Sigma fundamentals
The Lean Services in based on strengths of two
approaches (Lean and Six Sigma) to create an
excellence platform that create sustainable
advantages in the future with an high impact on
quality and costs.
Lean: it is focused on radical reduction of process
Lead Time and several typologies of waste,
increasing overall process speed.
Six Sigma: it is instead focused on quality
improvement through a customer perspective,
problem-solving approach and dedicated
infrastructure.
The Lean Six Sigma approach integrates proven a
set of tools from the Lean (focus on speed and
simplicity) and from the Six Sigma (focus on
quality) methodologies, and these allow to create a
fact based and a logical program execution
platform that creates sustainable change in a Local
and Central Public Administration.
Why is the Lean Services helpful?
The Lean Services approach is helpful to the Public
Sector in several ways. It is not new and has been
widely tested in several international companies in
private and public sectors. Once considered
particularly effective for manufacturing company,
it is now increasingly being used to improve
performance of transactional services. In the
context of Public Sector, the advantages of Lean
Service application are even more striking because
of the strong focus on waste reduction, which is
likely to be found in areas traditionally less
exposed to the competitive pressure.
Furthermore it is suitable to be applied effectively
in the context of Public Administrations due to
some characteristics of particular interest:
 It is based on the full involvement and
mobilization of employees, creating and
disseminating a strong culture of efficiency
and relying on people actually working on
each single process. In fact specific training
programs are provided for all staff on
techniques and tools, thus transferring
skills for future uses.
 It doesn’t rely on automation programs
that require a very long time for
activation; vice versa it is based on the
concept of "work better with what is
available” and it aims at achieving real
objectives in the immediate terms through
gradual and steady steps.

4. Lean Service in the Public Sector 4
Process
Start
Process
End
Time
Time
90 - 95% 5- 10%
Execution
issues are
here
Traditional
improvements
(BPR) focus here
Value Add Time
Non Value Add Time
 It focuses on the identification and
removal of waste and loss of time (of
whatever origin) working on those aspects
of the process and operations usually
hidden in an analysis carried out centrally
or from outside. Therefore it removes the
costs "hidden" in the daily activities, such
as:
- Errors
- Waiting times
- Duplication of activities
- Unnecessary shifts of papers
- Backlog
- Under-use of services and resources
- Bottlenecks
 It is focused, not only on efficiency gains,
but also on improvements of services
quality provided. Shorter processing times
and higher quality in the services not only
means lower costs for the Government but
also a better perceived service by the
Citizens.
How much time is wasted on ...
From our experiences of Lean Programs
applications in Companies - both in the private and
public sectors – they have achieved impressive
gains in efficiencies and savings and are improving
their position in competitive areas. Also from these
application cases showed that only 5-10% of the
time between the beginning of a process and of its
completion is dedicated to work activities that
create value for the “final customers”, while the
remaining 90-95% of time is devoted to activities
that do not add value or are absorbed by time
waste (as exemplified by Exhibit I).
For example, in a central Public Company, the
average time to development a new tender was
about 16 months. A preliminary analysis showed
that there was a potential reduction of the process
Exhibit I – Activities Value Add and Activities NonValue Add

5. Lean Service in the Public Sector 5
time from about 16 to 11 months, equal to a 31%
of overall time reduction.
Therefore, the Lean Service Program works also
where a traditional approaches already has been
adopted, eliminating the time and labor with no
added value and thus improving the quality of
service combined with cost reductions previously
unthinkable.
How to obtain advantages from a Lean
Service Program
Through Lean Service application, the public sector
can improve performance and productivity, but this
is not effective unless it is flanked by a broader
transformation program of people culture and
every day working approach. To this end, Lean
Service Program can be driven by a real application
on every day activities but they also require an
A case of Lean Services application on the Procurement Department of a Italian Public Company
The Client, a central Public Administration’s Company, requested the Accenture support in order to apply
the Lean Services approach to the Business Unit deputed to manage the "tenders" for supplies of goods and
services. The internal unit was experiencing declining performances for tenders and agreement development
especially in terms of increasing lead time, this was causing difficulties to achieve overall company goals.
The aim of this project was to identify a set of interventions aimed at improving and rationalizing the
purchases and tenders processes.
The Lean Six Sigma methodology has been applied to the process of developing a tender in order to assess
opportunities for improvement there. The instrument used to identify opportunity of time reduction was
the Process Cycle Efficiency (PCE), which aims to measure the impact of “value added activities” (i.e. actual
working time) on the completion of the activities (i.e. time length of a tender phase).
In the first assessment's phase, the analysis conducted in the end to-end process of “New Tenders” showed
a Process Lead Time equal to an average of 19 months (from the need identification of requirements to
the contract activation). From the opportunity to reduce the time, quantified by the PCE, in the 30%
(theoretical), the next project activities has been focus on finding of levers and actions to reduce the
overall process lead time. For each actions of the Improvement Plan was defined the impact in terms of
time reduction, - the total impact of actions was 22%, only one part of 30% theoretical. Through the
application of tools and methodologies and Lean Six Sigma, Accenture has been able to design a number
improvement solutions throughout the process, and provided a proof of concept for them on some pilot
tenders obtaining the forecasted yet challenging results.
At end, thanks to the introduction of those improvement solutions identified the Lead time was reduced by
30-35%, obtaining an average time of end-to-end process equal to about 16 months.

6. Lean Service in the Public Sector 6
overall training program to engage resources and
to demonstrate them which are the true
advantages and benefits of this kind of
transformation program.
Before beginning a Lean Service Program in a
Public Administration, it is necessary to keep in
mind the following significant issues that are
generally present in the public sector and that
these need to be addressed in order to avoid the
potential failure of the project.
Compliance with the rules: One of the most
difficult challenges in Public Administration is the
focalization to the aims of compliance with the
rules and not to the results for customers. The
focus towards compliance with the rules becomes a
particular problem when a Lean Services project
start within an organization. In fact, changes of
processes - such as cuts and reduction - across
different government institutions (central versus
local) is not easy, and it required a share of a result
focalization, trying to free the mind from rules
complexity.
Performance Measurement rejection: Another
relevant challenge in the public sector is that
performance measurement is not always
acknowledged. This is often due to a incorrect
perception of measurements tools – often seen as a
form of control and not as a possibility to monitor
the work results and consequently a way to
identify area of improvement of services quality
provided to citizens, it is the Lean Service
perspective.
Innovation and evolution aversion: Finally, another
mind-set frequently encountered is the aversion to
innovation and evolution. Traditionally, the
introduction of innovations and changes - such as
the use of visual management tools - often leads
employees to reject because perceived as risks, and
not as improvements both for themselves and for
Customers.
Lean Service programs require a long-term
commitment levels of the organization. Firstly
through a relevant sponsorship from the high level
of the organization, added to a strong commitment
of all employees, but once the program is initiated
it enables Public Administrations to achieve cost
reductions, waste elimination and quality services
improvements.
Luca Bondini
Francesco Santoro
Copyright © 2011 Accenture All Rights Reserved.