Lean Six Sigma For Municipal Government


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This presentation took place June 4, 2009 at the Texas Municipal Human Resources Association mid year conference in San Antonio, Texas. The presentation was given by Waters Consulting, Inc. and Quality Minds, Inc. The presentation covers using lean six sigma to improve municipal government and the role of Human Resources in the lean six sigma initiatives within municipal governments

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Lean Six Sigma For Municipal Government

  1. 1. Six Sigma and Lean Six Sigma for Municipal Government TMHRA Mid-Year Conference 2009 June 4, 2009 Presented by: Presented by: Stacy Waters Stephen Deas Principal and Founder and President for: Executive Vice President for: THE WATERS CONSULTING GROUP, INC. For more information about this presentation or related services, contact us at 800.899.1669 or via email at swaters@watersconsulting.com ©2009 Quality Minds, Inc.
  2. 2. A Brief Overview: The Waters Consulting Group, Inc. Since 1976, the firm has provided consulting services in the area of human resources consulting with a primary focus in the disciplines of compensation, strategic management, performance and executive recruitment. services nationwide to a variety of organizations in the public and private sectors including: •Educational institutions (school districts and higher education) •Healthcare •Cities, counties, other local government agencies •Utility and transit authorities •Government-related retirement systems THE WATERS CONSULTING •Professional associations GROUP, INC. 2
  3. 3. A Brief Overview: Quality Minds, Inc. Human capital development and process improvement firm located in Charleston, SC. Areas of specialty include: •Process and Quality Improvement •Lean Tools and Techniques •Lean Six Sigma •Safety Improvement •ASQ Certifications •Process Mapping •Statistical Process Control 3
  4. 4. Session Outline • What is Six Sigma? • What is Lean Six Sigma? • How is Six Sigma used to improve local government? • What can Human Resource leaders do to champion or contribute to Six Sigma initiatives in the organization? 4
  5. 5. A Short History Lesson • Industry: – Started in mid 1980’s at Motorola • Documented over $16 billion in savings because of six sigma projects • Government: – Google “municipal governments using six sigma” or “cities using six sigma” and find on the front page: • Fort Wayne, Indiana (2000): Mayor introduced six sigma as the sole process for improving government administrative and civic services – Google “Fort Wayne government six sigma” and you get 23,300 hits • Buffalo, New York (2008): Municipal Housing Authority used six sigma to improve the 72 step process for reserving a park shelter (46/72 steps were identified as waste) • Hattiesburg, Mississippi (2008): One project involved simplifying the cost it takes to tear down a building 5
  6. 6. General Overview of Six Sigma, Lean, and Lean Six Sigma
  7. 7. Philosophies of Six Sigma and Lean Philosophy Six Sigma Lean Customer Focused Top project priority is with Give the customer what he customers wants, when he wants it Organization Development Six Sigma can change work Organization is more aware of cultures wasteful activity Human Capital Development Internal employees are Workers see jobs differently, thoroughly trained to lead workers respect work projects environment more Results Oriented Projects have quick completion Waste is eliminated from times and, as much as business processes, work possible, are measured using becomes quicker and more financial criteria efficient 7
  8. 8. Lean Six Sigma Visualized Waste Lean Customer Complaints Six Sigma Incapable processes Excessive costs D Improv Efficiency ed bus IC M improvement proces iness Poor quality of service ses A W imin el as at te ed Six Sigma is a mechanism for becoming lean 8
  9. 9. Customer “Wants” Vs. Production The Six Sigma methodology systematically improves work processes to reliably meet the customer’s requirements. What the Customer Wants Fails to meet Exceeds what minimum requirement What we Produce customer wants σ Sigma is a measure of variation Here, the variation in our product or service is such that we fail to meet what the customer actually wants 9
  10. 10. The Context of Six Sigma Systems and Processes
  11. 11. The Role of Systems and Processes System (A series of processes that work together for a definite purpose) Municipal Government (Human Resources) Human Resource Processes P1 P2 P3 P4 P5 P6 P7 P8 (Hiring) Inputs Outputs P3 Step 1 P3 Step 2 P3 Step 3 P3 Step 4 11
  12. 12. The Hiring Process as an Example Supplier Inputs Process Output Customer Who supplies each What does this What are the steps What is the output of Who are the internal input? process need in that are followed to the process? and external order to produce hire someone? customers of this good output? A new employee process? Job requirement Job description Resumes Interviewers Interview process Candidates In short, six sigma methodology identifies the key inputs that drive success of outputs. Once identified, actions are taken to improve the inputs in order to improve the outputs. 12
  13. 13. Some Potential HR Projects & Processes Process Project Hiring/Recruitment Recruitment; on-boarding, etc. Safety Reducing injuries at work Performance management Implementation; timeliness; consistency; introduction of technology to drive the system Performance reviews Implementation; timeliness; consistency; introduction of technology to drive the system Retention Absenteeism reduction; employee engagement; the grievance process; exit interview process; etc. Compensation and benefits Annual market review; classification analysis; introduction to technology to drive the system; appeals process; etc. 13
  14. 14. Six Sigma Leadership
  15. 15. Leadership’s Role in Deployment Leadership Support makes the Difference: • Deming’s 85/15 Rule: 85% of problems in any organization are within the system and are the responsibility of leadership while only 15% lie with the worker • Systems are made of processes. Processes are used by workers to produce products and/or services. If the system is bad, the processes are bad and consequently service and/or product will be bad. • Specific Support Needed for Six Sigma Success: • Careful planning and implementation • Proper resources allocated • Commitment beyond low hanging fruit 15
  16. 16. Traditional Six Sigma Leadership Structure Select projects, knock For Example: City Manager, Executive down barriers, be the City Council, Mayor leadership representative Sponsors for project team For Example: Department Heads, Quality Overseer of Six Process Owners Enhancement Director Sigma Program (BB) Black belts manage projects. BB BB This is typically a full time job/responsibility. (GB) Green belts are black belts in GB GB training. Green belts are usually not full time positions 16
  17. 17. Linking Projects to Goals and Organizational Performance Sources for Projects Customer complaints-should always be priority #1 Internal issues Strategic Level City Manager, City Cost drivers Employee surveys (project selection is the Council, Mayor responsibility of leadership) Performance reviews Leadership must consistently review department level Department indicators and create the “project Department hopper” Level Level Human Project Hopper Resources Division Level Division Level Compensation Benefits Projects should come from the “hopper” 17
  18. 18. Human Resource Leadership for Six Sigma
  19. 19. HR Leadership in Six Sigma S I P O C Supplier Input Process Output Customer Human Recruitment of The Six Sigma Successful Internal Resources skilled people Process within projects with customers your organization wonderful results Human Management of Highly trained Public Resources culture change people Human Rewards and Effective teams Resources Recognition Human Training for team A different culture Resources effectiveness Retention Human strategies for Resources keeping talent 19
  20. 20. A Focus on Continuous Improvement Recruitment and Retention Training for Team Rewards and Champion and Manage of Skilled Talent Effectiveness Recognition Culture Change • Find the right people. • Build a competency model. • Create job descriptions. • Help project teams work • Develop a retention together more strategy. Automate the effectively. process with technology. • Training and/or coaching in team effectiveness skills. • Determine whether and how • Act as a resource for to make appropriate Black Belts. Become a adjustments in level and • Help reduce any uncertainty Black Belt. compensation. and anxiety about Six Sigma. • Create a strategic • Draft a change management compensation plan that will communications plan that better support Six Sigma. addresses the people side of the Six Sigma rollout . • Help create a quot;case for change“. • Counsel Six Sigma Leaders. 20
  21. 21. Strengthening HR’s Leadership in Six Sigma Acquire basic knowledge of the DMAIC method, supporting tools, roles, jargon, and even simple statistical methods Meet with senior leaders to discuss their Take the lead and business goals and apply Six Sigma identify where Human successfully within Resources can provide the Human very specific and Resource function measurable help. Gather data that supports the people side of Six Sigma. 21
  22. 22. The Six Sigma Process Define Measure Analyze Improve Control
  23. 23. Two Levels of Six Sigma • Basic – Most projects can be successful using basic tools in each of the five steps • Advanced – Some projects will need to use advanced tools. (Puts heavy emphasis on Black Belt.) 23
  24. 24. Define Phase S I P O C Supplier Inputs Process Output Customer Team Members Project Scope Develop a A project Measure phase Team Members Project Goals definition of the charter Team Members Due Dates improvement opportunity Black Belt Tools Team Members Ideas Team Members Observations Leadership Mentor Team Members Process Importance It is important to develop a clear and thorough definition of the opportunity for improvement. 24
  25. 25. Identifying Project Stakeholders • What are Stakeholders? • Those who could be impacted by the results of the project • Those that must support any change proposed in the project • Who Could Stakeholders be? • Managers of the process • People working in the process • Internal and External Customers of the process • Suppliers to the process • Finance support of the process 25
  26. 26. Example: The Project’s Stakeholders • Operations Feedback – Quality Technician • In general, the overall perception of scrap as a plant – Receiving issue is the same between levels of the organization. We did see evidence of differences – Product Technician within levels of the organization. Project: – Process Engineers • Actual measured scrap performance is not fully Improve the – Tool Setters understood between levels of the organization and process for within levels of the organization handling, • A percent scrap goal is set for the plant but not for • Operations Management each department recording – Team Leader • There are diverse opinions and ideas on what and – Superintendents causes scrap and how to prevent scrap analyzing – Purchasing • Based on the answers to the questions, the process scrapped – Accounting/Controller for handling, reporting, reviewing, and fixing scrap is not well defined and understood. (what to do, who material in does it, when is it done, how is it done) For the plant • Plant Management example, there were different answers on who enters scrap into the system. – Plant Manager • Incoming material is not verified – Engineering Manager • The accounting of scrap must improve and provide – Quality Manager more detail – Production Manager • The feedback suggests that more emphasis should be placed at catching problems at the source. 26
  27. 27. The Project Charter • A written document that defines the project team, team leader, project mission, process scope, business case for project, goals for projects, and time frames for project. • Charters can be created by top management or teams can create their own charter 27
  28. 28. Measure Phase S I P O C Supplier Inputs Process Output Customer Black Belt Tools Measure the A map of the Analyze phase Team Members Data process’ process Team Leader Video Recorder performance Black Belt Software A current state Define Phase Project Charter of performance Black Belt Stop Watch Team Members Ideas and opinions Once you identify the process to be improved, study and document the process to understand its current state of performance 28
  29. 29. Outside Tank Supplier Floralife Receive Order liquid Store liquid ships liquid receives liquid customer dextrose dextrose dextrose dextrose order Inside Tank Based on Measure Fill tank to 80% Add 150g water Put 5140 lbs of customer chemicals of capacity with to tank dextrose in order, create a water tank with water production job Turn blender on No Make for 5 minutes Add chemicals Mix chemicals Is PH adjustments before adding to tank and dextrose in ok? chemicals tank for 1 hour Yes Fill containers Move to Label Cap containers finished goods containers A Process Map: “What We Do” Store in Ship from finished goods finished goods 29
  30. 30. Analyze Phase S I P O C Supplier Inputs Process Output Customer Black Belt Tools Analyze the A root cause Improve phase Black Belt Forms process to statement Black Belt Software determine root causes Measure phase Current state of process performance Once you measure the process, analyze the results of the measurement to establish tangible opportunities for improvement. 30
  31. 31. Examples: Tools for the Analyze Phase Machine Workplace Production Organization Ne e d P M sy ste m L i n e sy ste m (h o se s) Im p ro v e e ffi ci e n cy o f l a b e l e r Ne e d fi l l sta ti o n th a t ca n fi l l d i ffe re n t si ze s Re d u ce fl o o r sp a ce n e e d e d On ti m e d e l i v e ry <1 0 0 % Ha v e o wn a i r p re ssu re sy ste m Use d i ffe re n t ro o m to sto re ch e m i ca l s a n d l a b e l s Im p ro v e e q u i p m e n t re l i a b i l i ty Ne e d co n v e y o r sy ste m a n d p a l l e ti ze r Mo re v i su a l m a n a g e m e n t Ne e d b e tte r sy ste m fo r cl e a n i n g d e xtro se l i n e s C re a te sch e d u l e co m p l i a n ce m e a su re s Wo rk a re a to o cl u tte re d Ge t n e w fi l l m a ch i n e Mo d i fy ta b l e a t e n d to m a k e l o a d i n g co n ta i n e rs e a si e r Ne e d b e tte r a i r co n d i ti o n e r Di re ct fi l l v e rsu s d ru m Ma k e e v e ry i te m e v e ry sh i ft T a p e m a ch i n e fo r b o xe s P u t fi n i sh e d p ro d u ct cl o se r to ta b l e S to p p i n s a t ca p p i n g sta ti o n P a rt b i n fo r ca p s In cl i n e co n v e y o r fo r h e a t se a l /l a b e l e r Improving Liquid Two p e o p l e p a ck i n g De fi n e ro l e s o f o p e ra to rs Ge t p re -p ri n te d ju g s Use i n cl i n e d fe e d ta b l e fo r l o a d i n g co n ta i n e rs S e p a ra te re p o rts b y l i q u i d a n d p o wd e r Im p ro v e e rg o n o m i cs Ne e d a u to m a ti c fo l d i n g b o xe s Ge t a n a ccu m a to r sy ste m fo r g a l l o n s C o n v e rt ca p p i n g to a n e xte rn a l ta sk Methods O ther Material Fishbone Diagram: A simple but powerful tool for summarizing the results of a brainstorming session. 31
  32. 32. Examples: Tools for the Analyze Phase 1 2 3 4 5 T Put finished 2 1 1 2 2 8 product closer to table Inclined feed 5 4 5 5 5 24 table to load Modify 3 3 2 1 3 12 table at end Direct fill vs drum 1 2 3 3 1 10 Part bin for caps 4 5 4 4 4 21 Nominal Group Technique: A simple but powerful tool for prioritizing ideas generated in a brainstorming session. 32
  33. 33. Improve S I P O C Supplier Inputs Process Output Customer Team Members Ideas Improve the An improved Control phase Team Leader Focus process by process or a Team Members Patience attacking the solved root cause(s) problem Leadership Time Analyze Phase Root cause (Plan-Do-Check-Act) statement Black Belt Tools Take actions on the tangible improvement opportunities from the Analyze Phase. 33
  34. 34. PDCA Cycle of Improvement Plan To improve processes, first find out what areas need improvement. Based on what you learn, plan a change or test. Now you must decide what actions to take as a result of your check. The options typically include: •Adopt the change Act Do Once you have a plan, •Abandon it and go carry out the change or test back to the drawing on a small scale board •Run it through the cycle again using a different area, running a larger scale trial, or making the trial more complex. Check After completing the Do phase, check to see if the changes or tests are working (What did you learn? What went right? What went wrong? What does the data mean?) 34
  35. 35. Control S I P O C Supplier Inputs Process Output Customer Black Belt Tools Control the A stable and Internal and/or Team Members Ideas improved predictable external Leadership Follow up process to process customers of sustain the the improved Improve phase Improved improvement process process Implement controls to sustain the process improvement. If you do not, the process may revert back to previous performance levels. 35
  36. 36. Using Six Sigma to Increase Performance in City Government: Fort Wayne, Indiana – Six Sigma Introduced in 2000
  37. 37. Fort Wayne’s Six Sigma Structure Executive Mayor Council (Deployment Team) Quality Master Side Note: Enhancement Black Belt Director The mayor was first elected in 2000. A significant theme in his campaign was “reforming government”. Six Sigma was his mechanism. 10 black belts were trained and each had to complete a City- approved project each year. 37
  38. 38. From City Leadership • City Challenges More Services, Fewer Employees – More people, more territory 1999 2006 % Change – Revenue down – Demands for service up – State and federal mandates Population 190,000 252,000 33% up – Tornadoes, terrorism, floods Non-public 936 950 2% safety • Questions Posed employees – Who is your customer? – Is your service improving? Miles of 850 1200 41% – How do you measure roads improvement? – Show me the data Square 79 109 39% miles 38
  39. 39. Other Fort Wayne Projects & Results Project Results Comment Reduce amount of late garbage Reduced amount of late garbage Also improved relationship pickups pickups by 50% between city and contractor Reduce time to repair potholes Reduced average pothole repair Improved communication and time from 2 days to 3 hours increased repair capacity Improve business permit accuracy Approval time reduced by 300% More business was attracted to and approval time Fort Wayne Improve efficiency of waste water Efficiency improved 300% beyond treatment processes goal, city avoided $1.7 million purchase of new equipment Improve process for managing Process improved such that Reduced street light inventories to street light inventory $500,000 was saved and freed for optimal levels by establishing other areas proper tracking and control practices Other Notable Results: 1. 2005 City Budget ($229,539,522): 5% savings due to projects ($11,476,976) 2. From 2000-2005, 60 projects completed by city workers 39
  40. 40. Typical Benefits of Lean Six Sigma • Internal Benefits – Reduced claims filed – Overtime reduction – More positive public image – Higher morale – Positive change in culture and effectiveness • External Benefits – Safer organizational initiatives – Improved customer service – Improved relations with neighborhood associations – Overall better local, regional and even national image 40
  41. 41. A Quick Workshop • On the next page, describe a work process for your city, town, department, or division that needs to be improved • Write the general steps to the process in the P column • Write the critical output of the process in the O column • Write the internal and external customers of the process in the C column • Write the critical inputs to the process in the I column • Write the suppliers for each input in the S column Congratulations! You just mapped a process and are on your way to process improvement using the basic techniques of Six Sigma. 41
  42. 42. Process Mapping Name: Process: ___________________________________________ ___________________________________________ Organization Name: ___________________________________________ General Description of Opportunity for Improvement: Email: ____________________________________________ ___________________________________________ S I P O C Supplier Input Process Output Customer 42
  43. 43. Six Sigma and Lean Six Sigma for Municipal Government TMHRA Mid-Year Conference 2009 June 4, 2009 Presented by: Presented by: Stacy Waters Stephen Deas Principal and Founder and President for: Executive Vice President for: THE WATERS CONSULTING GROUP, INC. For more information about this presentation or related services, contact us at 800.899.1669 or via email at swaters@watersconsulting.com