Webinar: Process Improvement in Government Using Lean Six Sigma
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This document outlines how to implement Lean Six Sigma projects in government to drive continuous process improvement and savings. It discusses the challenges of continuous improvement in government compared to business. A solution presented is to treat Lean Six Sigma projects as strategic financial assets in a "Money Machine" approach to generate an ongoing pipeline of improvement projects and financial benefits. Key elements are identifying meaningful projects, reliably assessing their potential financial impact, and ensuring timely project completion to maintain a steady flow of savings. Leadership engagement is important to prioritize projects and support progress. The overall goal is to build an engine for sustainable value creation and a more adaptive organization.
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Webinar: Process Improvement in Government Using Lean Six Sigma
- 1. PROCESS IMPROVEMENT IN GOVERNMENT USING LEAN SIX SIGMA Presented by Ken Maynard Where are you from? Let us know in the Chat area!
- 2. FEATURED SPEAKER Ken Maynard • Master Black Belt • Senior Consultant, GoLeanSixSigma.com 2
- 3. Learning objectives • Identify current challenges to successful Continuous Improvement within government • Describe how to drive continuous savings and value • Explain how the Lean Six Sigma Project approach—Money Machine—addresses the current challenges • List the elements needed to maintain a Lean Six Sigma project approach to continuous savings • Outline how to build a Money Machine in a government organization
- 4. Agenda • The Challenge: Accelerating improvement and savings • The Current Situation: Challenges of Lean Six Sigma in government vs business • A Solution: Lean Six Sigma Project Approach—Projects as strategic financial assets • Implementation: Building continuous savings—Money Machine • How to Get Started • Questions and Answers
- 5. The Need to Accelerate Improvement • Continued pressure to Achieve More with Less • Decreasing revenue per Citizen • Increasing population and demand • Undesirable options: • Increase taxes • Reduce functions/services provided • Reduce function/service quality Revenue Service Demand Performanc e Gap Question: What do you or will you do with the GAP? Current Environment
- 6. Challenges of Continuous Improvement in government Some challenges we hear from the public sector: A. Risk adverse – if something goes wrong then it’s in the News B. Many Stakeholders to consider C. Delayed feedback from the marker/customer (except for complaints) D. Time E. Less focus on outcomes and more focused on inputs like budget or cost Poll: Which is the biggest challenge for you?
- 7. But what if you could Achieve more with Less? Imagine…… • Your team improving 25% to 50% • Seeing measurable improvements • Better quality and faster service • Greater productivity • Less cost per unit • Every manager knowing what it cost to provide their service • A team of 18 people doing the work of 25, easier than before Question: What would you do with the value realized?
- 8. Solution – Value Creation with LSS Projects • Develop improvement capabilities of the organization • Engine for Culture Change – Creating a dynamic and adaptive organization in pursuit of Mission • Create sustainable continuous Value Creation, a “Money Machine”
- 9. Value Creation – “While standard financial accounting systems can capture financial flows through and organization together with the costs expended by an organization in producing particular products and services, it should be clear that if we want to measure the public value an organization produces, we will have to construct some other technical system that can allow us to record when public value is being produced.” Mark Moore – Harvard University professor and author of “Recognizing Public Value”
- 10. Value Creation •Value = Quality Throughput (QT) / Operating Expense (OE) • Quality = the number of quality or desirable results • Throughput = of volume of transactions or people served • OE = the total costs associated with providing the service • Value = QT/OE = the efficiency of the system •Track improvement consistent with Mission Developed by Eli Goldratt (Theory of Constraints) and Robert Fox in The Race for measuring productivity. Counter the illogical cost-cutting fad Government application presented by Alfred Mycue - Director of Business Transformation and Rapid Process Improvement at Texas Workforce Commission, TWC
- 11. Value Creation Example: Your making pizza for the big game party this weekend. You make 10 pizzas. It cost you $100 to make all 10 pizzas. However: • 7 good pizzas • 3 bad ones • Only 7 for the party Throughput (T) is 10 pizzas, only 7 are “quality (Q) • QT is 7 or (7/10 x 10) = 7 • OE is the total cost to produce, $100 • Value = QT/OE = 7/100=0.07, Or the inverse (1/0.07) = $14.29 per pizza Value Creation: • ↑QT -- Quality goes up to 8 good per 10 pizza & Value up • ↑T -- Bake more pizzas (with Q & OE constant) & Value up • ↓OE -- Lower your cost, your Value goes up
- 12. 12 LSS Projects are Strategic Assets $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$ $$$$Value Directly Traceable to the Bottom Line Many Projects Project Define Measure Analyze Improve Control Resources Spent Investigating Money Generated $ Ongoing Gains
- 13. Pipeline flow of financial gains (Value Creation) $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$$$$$ $$$$ $$$$ $$$$ $$$$ Value Directly Traceable to the Bottom Line Steady Stream of Projects Completed Over Time Pipeline of Meaningful Projects Problems
- 14. Necessary Conditions for Predictable Ongoing Value Creation A. Steady Stream of Meaningful Projects B. Reliable Assessment of potential impact on process performance, operating expenses and/or Quality Throughput C. Timely Completion of Projects Poll: Which of these would be your biggest challenge?
- 15. “Meaningful” Projects • Focuses on a verifiable problem where the causes and/or solutions are not “known” • Aligned with mission drives customer satisfaction, quality throughput (QT) and/or operating expenses (OE) • Prioritized • Potential Impact: Rough assessment based on experience • Effort to Required: Time and money, rough estimate • Leadership is willing to sponsor
- 16. Steady Stream of Projects – Operating a Money Machine • A pipeline of projects at various stages of development assures a steady stream of improvement work, and financial benefits Raw Project Ideas Defined Projects Validated Projects Active Projects Finished Projects • Unevaluated ideas • From anywhere in the organization • Target: ≥5x number of problem-solving teams • Potentially viable LSS projects • From Review of Raw project ideas • Begin gathering data and financial assessment • Target: ≥2x number of problem-solving teams • Ready to be worked • Target: ≥1x number of problem-solving teams • Charter, historical performance and financial assessment complete Being worked by problem solving teams Delivering ongoing benefits
- 17. How To Identify Projects Ideas Strategic Direction (gaps) Data Mining KPIs, Data, Reports “Known” Problems & Issues Identify Problems Review and Refine Impact / Difficulty Draft Charter • Leadership team • Launches with a project identification session • Identifies and prioritizes ideas • Draft problem statement, business case and process scope (draft charter) • Regularly meets to update and add to the
- 18. Project Prioritization • All projects which appear to be worth doing are consolidated into a numbered list • Knowledgeable Leadership judge relative difficulty and impact of each project, posting it’s number • Focus on high impact projects • Don’t rule out high difficulty • Low difficulty might be quick wins Difficulty of ProjectImpactofProject HIGH LOWHIGH 6 7 31 Impact / Difficulty Matrix 2 5 LOW 8 4
- 19. Reliable Assessment of Impact • Problem: Our service is experiencing too many errors • So?: • There are too many delays and rework • The backlog is growing • Ask: What other problems happen because of this? • Loss of process capacity • Late service • Overtime needed to address rework and backlog • Premium costs required expedite service • Lower quality (because some bad output gets shipped)
- 20. Initial Financial Impact Service Errors ↓ Capacity ↑ Staff Rework ↓ Overtime ↓Staffing ↓$ ? $ ?
- 21. All Potential Financial Impact Service Errors ↓ Capacity ↑ Staff Rework ↓ $ Timely Delivery ↑ Customer Satisfactio n ↑ Revenue ↑ Overtime ↓ Staffing ↓ $ $ Throughpu t ↑ Value ↑ $ Enhance Services
- 22. All Potential Financial Impact Service Errors ↓ Capacity ↑ Staff Rework ↓ $ Timely Delivery ↑ Customer Satisfactio n ↑ Revenue ↑ Overtime ↓ Staffing ↓ $ $ Throughpu t ↑ Value ↑ $ Enhance Services
- 23. Timely Project Completion • Projects cannot be allowed to linger – progress must continue • Keys to ensure progress • Assign only well-defined, vetted projects • Sufficient resources to conduct the project • Active coaching by a Master Black Belt • Process Owner takes over at end of project • Champions - active leadership support and progress reports
- 24. Leadership Engagement “Designed” In • Identifies the projects and prioritizes • Sponsors active projects • Identifies project leaders and key resources • Reviews project progress and sets direction
- 25. Keep the Pipeline Flowing • Periodic leadership sessions to review overall progress and identify new raw project ideas • Active and completed projects often identify new projects • Continually capture project ideas from customers and employees • Maintain at least 1 validated projects per available project lead $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$
- 26. Putting it All Together – Money Machine in Operation
- 27. Getting Started •Identify a few Meaningful projects •Define these projects and validate Value $ •Identify your best to lead these projects and train them •Plan, manage and coach projects to timely completion!! Reach out for advice: Contact me: ken@goleansixsigma.com
- 28. QUESTIONS? 28
- 29. CONTINUE THE DISCUSSION ON LINKEDIN! GoLeanSixSigma.com/Forum/ •Get help with your project or change management •Help others with their projects or change management •Network and build our problem-solving muscles together •Get Lean Six Sigma updates on newly released guides, webinars and more!
- 30. THANK YOU FOR JOINING US! @GoLeanSixSigma/company/GoLeanSixSigma-com /GoLeanSixSigma 30 Questions about registration? Email us at contact@goleansixsigma.com Questions about today’s webinar topic? Check out our LinkedIn Group: GoLeanSixSigma.com/Forum/ Download free tools, templates, infographics and more!