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

    • An initiative of INDUSTRY RESEARCH REPORT ONLASSIB LEAN AND SIX SIGMA IMPLEMENTATIONSOCIETY IN GOVERNMENT AND PUBLIC SECTOR Image Source: (UVM, n.d.)
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector COPYRIGHT LICENSE This work is licensed under the Creative Commons Attribution- NonCommercial-ShareAlike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.Page 2 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector TABLE OF CONTENTS1. Abstract.............................................................................................................................................................................42. Present Day Challenges in Organizations....................................................................................................................53. Challenges Unique to Governmnet and Public Sector..............................................................................................64. Role of Lean Six Sigma to overcome these challenges .............................................................................................7 4.1. Strategic Benefits ..................................................................................................................................................7 4.2. Operational Benefits.............................................................................................................................................85. LASSIB’s Proposed Approach to Implement Lean and Six Sigma in Government and Public Sector ...............96. 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 ..................................................................................................... 157. What is Lean?................................................................................................................................................................ 16 7.1. Toyota Production System................................................................................................................................ 16 7.2. MUDA i.e. Lean Waste Elimination ................................................................................................................. 178. What is Six Sigma? ....................................................................................................................................................... 209. Conclusion ..................................................................................................................................................................... 2110. Bibliography ............................................................................................................................................................ 2211. About Lean and Six Sigma International Board ................................................................................................. 2312. About LASSIB Society .............................................................................................................................................. 2313. About LASSIB Research Reports ........................................................................................................................... 2314. Contributors to the Research Report .................................................................................................................. 2415. How You Can Leverage and Support LASSIB Society ........................................................................................ 25Page 3 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector1. ABSTRACTThe purpose ofcreating this research report is to showcase the Return on Investments (ROI) andBenefits of using Lean Six Sigma techniques in Government and Public Sector.Government and Public Sectorare unique in the fundamental challenges they face, but at thesame 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 sustainedexcellence.This report looks at tools and techniques of Lean and Six Sigma, and how these can help theGovernment and Public Sectoraddress these requirements. The report includes an overview ofboth Lean and Six Sigma coupled with case studies on how these techniques have helpedGovernment and Public Sector organizations deliver value to their customers.The report draws LASSIB Society’s experience in theGovernment and Public Sector as well assecondary research sources. Please refer to the list of references at the end of the report for acomplete list of sources used to build this report.Page 4 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector2. PRESENT DAY CHALLENGES IN ORGANIZATIONSPage 5 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector3. CHALLENGES UNIQUE TO GOVERNMNET AND PUBLIC SECTORPage 6 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector4. ROLE OF LEAN SIX SIGMA TO OVERCOME THESE CHALLENGES 4.1. STRATEGIC BENEFITSPage 7 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 4.2. OPERATIONALBENEFITSPage 8 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector5. LASSIB’S PROPOSED APPROACH TO IMPLEMENT LEAN AND S IX SIGMA IN GOVERNMENT AND PUBLIC SECTORPage 9 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public SectorPage 10 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector6. 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 REVENUEPage 11 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 6.3. ONE OF THE LARGEST PRODUCER AND TRANSPORTER OF ENERGY IN UNITED STATESPage 12 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 6.4. WATER, ELECTRICAL AND SEWER UTILITIES ORGANIZATIO N IN UNITED STATESPage 13 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 6.5. CITY OF FORT WAYNE, INDIANAPage 14 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 6.6. NATIONAL NUCLEAR SECURITY ADMINISTRATION, UNITED STATES 6.7. LEAN SIX SIGMA TO IMPROVE TAX COLLECTIONPage 15 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector7. WHATISLEAN ?Lean is a philosophy and a set of management techniques focused on continuous “wasteeliminating” so that every process, task or work action is made “value adding” (the real outputcustomer pays for) as viewed from customer perspective.This is achieved through the implementation of the Toyota Production System and Lean WasteElimination, 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:Page 16 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 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 worlds 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 demandPage 17 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 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 organizations cost.Page 18 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector 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.Page 19 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector8. 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 BillionSix Sigma is a break through and continuous improvement management strategy, originallydeveloped by Motorola in 1986. Six Sigma became well known after Jack Welch made it acentral focus of his business strategy at General Electric in 1995, and today it is widely used inmany 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 RealizationSix Sigma also helps improve the quality of outcomes delivered by identifying and removing thecauses of defects (errors) and minimizing variability in processes.It uses a set of Management methods, and creates a special infrastructure of people within theorganization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Each SixSigma project carried out within an organization follows a defined sequence of steps and hasquantified outcomes.In the late-1980s following the success of the initiative, Motorola extended the Six Sigmamethods 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 usedby many corporations for quality and process improvement.Page 20 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public SectorThe 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 customerrequirements and overall achieve Organization excellence.9. CONCLUSIONFar from being unable to plan and implement improvement methodologies, Government andPublic Sectororganizations have a unique opportunity to benefit from doing so. While it is truethat improvement efforts can be frustrated by changes in administration and that processes aresubject to change, there are still many opportunities for those with an eye for improvingcustomer value delivery. If good data is available, Six Sigma may be useful. If not, Lean or othercontinuous process improvement techniques may be more appropriate. Either way, the rewardis 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 communitiesPage 21 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector10. BIBLIOGRAPHYAbbott, 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.pdfDominion. (n.d.). Six Sigma at Do minion. Retrieved from Dominion: https://www.dom.com/about/six- sigma/index.jspMaleyeff, 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-sigmaSociety, LASSIB. (2010). Lean Six Sig ma White Belt eLearning. Retrieved August 28, 2012, from Lean and Six Sigma International Board: www.lassib.orgToyota. (n.d.). Toyota Production System. Retrieved from Toyota: http://www.toyota.com.au/toyota/company/operations/toyota -production-systemU. 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.aspUnited 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.pdfUVM. (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-wasteWikipedia. (2012, November 11). Production leveling. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Production_levelingPage 22 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector11. ABOUTLEAN AND SIX SIGMA INTERNATIONAL BOARDLean and Six Sigma International Board, an initiative of LASSIB Society is an organizationpioneering and spreading the knowledge of Lean and Six Sigmato the worldwide community.Our vision is to create and provide the worlds most useful Lean and Six Sigma resource centreand certification programs, available for the users at the lowest cost.12. ABOUT LASSIB SOCIETYLASSIB Society is a not-for-profit organization focussed on ‘Nurturing Next GenerationGovernance Globally’.LASSIB Society’s mission is to create and provide the worlds most useful ‘GovernanceManagement’ 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 andenhanced value to the community at large.LASSIB Society organizes multiple events, enabling face-to-face interactions and virtualinteractions among the global community.13. ABOUT LASSIB RESEARCH REPORTSIn conjunction with the Knowledge Base LASSIB Society publishes, LASSIB Society also releases ahost of research reports through primary and secondary research. These research reports getwide 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 IndustryPage 23 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector Industry Research on Lean and Six Sigma Implementation in Electrical and Electronic IndustryThese Research Reports are a valuable resource for the industry at large, and serve to providekey 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 REPORTRole Full Name Designation OrganizationAuthor Mr.Rana Chetan Singh Intern, M. Tech in Industrial Indian School of Mines Engineering and University Management DhanbadReviewer Mr. Ujwal Tripurari Global Evangelist LASSIB SocietyReviewer Ms. Shilpa Roy Kota Secretary LASSIB SocietyReviewer Mr. Pavan Kota Executive President LASSIB SocietyPage 24 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • Industry Research Report on Lean and Six Sigma Implementation in Government and Public Sector15. HOWYOUCAN LEVERAGEAND SUPPORT LASSIB SOCIETYAlthough 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 tothemselves and their customers. LASSIB is proud to be associated with all of them in developing and deliveringcutting edge solutions that have not only delivered quantified business value to them but also added thoughtleadership 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 initiativesBecome an Individual Access complete knowledge base including Funds collected throughor Organization training materials, best practices, cas e studies, membership fees are used toMember of LASSIB. videos and webinars from LASSIB Society maintain and grow LASSIBVisit Network, learn and contribute to the fastest knowledge base.https://lassib.org/inde growing community of specialist, seniorx.php/membershipto leaders from the industryknow mor e about Get latest updates, insights and research fromLASSIB membership the industry delivered to your Inboxoptions.Leverage Training and Get trained from the leading experts from the Training and certification feesCertification in themes industry who bring together years of charged by LASSIB Society areof Organization experience and best in class training skills, the lowest in the Industry inExcellence 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 byexperts to deliver deliver customer value through proven tools and LASSIB Society aids LASSIB tobusiness and customer techniques of Lean and Six Sigma fund research, host eventsvalue and provide free consulting services to organizations which cannot afford to pay yet.Participate in LASSIB Network, brainstorm, and learn from industry Sponsorship costs andEvents 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 buildingleverage Industry Identify common challenges and best these reports, you provide theResearch 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.Page 25 of 26 Lean and Six Sigma International BoardVersion 1.0 http://www.lassib.org/Release Date: January14th 2013 An initiative of LASSIB Society
    • An initiative ofHeadquarter Address:#5-62/9/22-B, V. V. Nagar, Street No. 8, Habsiguda, Hyderabad, Andhra Pradesh, India. PIN: 500007Office: +91-40-40045614 | India Fax: +91-40-40045615 | Toll Free Number: 1-800-425-1388Email: contact@lassib.org| Website:http://www.lassib.org/