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Pursuing Excellence at GNB through Formal Management System
- 2. Pursuing Excellence at GNB 1.Context 2.Integrated âFormal Management Systemâ 3.Public Reporting Initiative Management Daily Management Process Management Strategy Management Performance Management
- 3. New Brunswick â˘751,151 citizens (2011 census) â˘public service ~45,000 employees â˘7.9 billion dollar budget ⢠2014-15 deficit budgeted at $391 million
- 4. Economic Slowdown Brings Change in Fiscal Reality ($ millions) 5,800 6,300 6,800 7,300 7,800 8,300 8,800 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13R 13-14B Revenue Expense 4
- 5. 2011: Government Renewal To ensure the Government of New Brunswick is able to provide appropriate and affordable services to citizens on a sustainable basis.
- 7. History 2011 Office of Strategy Management 2012-2013 GNB and Pilot Departments 2013-2014 Wave 2 Departments 2014-2015 Wave 3 Departments Government Renewal pre 2011 NB Liquor NB Power Service New Brunswick Department of Natural Resources
- 8. Office of Strategy Management (OSM) âŚresponsible for developing the principles, methods and tools by which NB Government leaders can: âenhance alignment and execution of strategy, âdrive improvement results, âbuild a sustainable continuous improvement culture.
- 9. GNB Change Agenda from Economic Growth to Declining position Competitive position Public sector driven Private sector driven Job focused Innovation focused Quality of Life Government dependency Self-reliance Treatment Wellness Skill/need imbalance Ready workforce Living within Means Deficit Balanced Budget More services Service improvements GNB Culture Working in silos Working together Budget centered Performance centered Cut and Control Continuous improvement
- 10. The Strategic Change Journey âIn the majority of failures â we estimate 70% â the real problem isnât bad strategyâŚ. Itâs bad execution.â ďâWhy CEOâs Failâ, Fortune Magazine âLess than 10% of strategies effectively formulated are effectively executedâ ďFortune Magazine
- 12. Principles of High Performance: 1.Purpose is customer driven⌠âŚsolve their problems. 2. 85% of problems are process (not people)⌠âŚdeliver faster, better, cheaper; âŚleadership is a process. 3. Engage people⌠âŚinvolve employees, differentiate performance, develop leaders.
- 13. Initiative Management Daily Management Process Management Strategy Management Performance Management GNB Formal Management System
- 14. ` Strategy Management Priorities and speed! GNB Formal Management System Strategy Map Balanced Scorecard
- 15. ` Strategy Management Priorities and speed! GNB Formal Management System Strategy Map Balanced Scorecard Vision Objective Objective Objective Strategic Themes
- 16. 3 Year Vision
- 17. ` Strategy Management Priorities and speed! GNB Formal Management System Strategy Map Balanced Scorecard Vision Objective Objective Objective Measures Measures Measures Strategic Themes
- 19. Dollars saved per continuous improvement Performance Excellence Maturity Index Base Target StretchTarget Plan Target
- 20. Objectives Measures Q1 Q2 Q3 Q4 "Provide value for my tax dollars" Cost of GNB/capita (inflation adjusted) ďźďź ďźďź ďŤ Achieve sustainable budget Ratio of actual to budgeted expenditures ďźďź ďŤ ďŤ Ratio of actual to budgeted revenue l x x Prioritize, optimize and improve processes Dollars saved per: continuous improvement ďŤ ďŤ ďŤ Positions reduced and savings achieved through attrition - Parts I, II and III ďŤ ďź ďŤ Procurement savings across Parts I and II ďźďź ďźďź ďźďź Balanced Scorecard âLiving within our meansâ Theme
- 22. Spending measures have kept deficit from worsening ($ millions) 6,000 6,500 7,000 7,500 8,000 8,500 9,000 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Expense (actual) Expense (growing at inflation) Revenue $300 M
- 23. Strategy Management Priorities and speed! Initiative Management Priority initiatives and projects! S O M I A GNB Formal Management System Strategy Map Balanced Scorecard
- 24. GNB Formal Management System Vision Measures Measures Measures Strategic Themes Objective Objective Objective Initiative Initiative Initiative Initiative Initiative Initiative Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans S I M O A
- 25. SOMIA 2013 - 2014 a stronger economy 7 enhanced quality of life 12 living within our means 11 âTheme Teamâ Priority Initiatives: Initiatives: 180 Action Plans: 856
- 26. Deputy Minister Theme Teams
- 27. Priority Initiatives Q1 Q2 Q3 Q4 1.Health Reduction Targets ďź ďŤ ďŤ 2.Social Development Reduction Targets ďź ďź ďź 3.Education and Early Childhood Development Reduction Targets ďź ď˝ ď˝ 4.DTI Reduction Targets ď ď ď˝ 5.Pension ď˝ ďź ďź 6.Procurement ďź ďź ďź 7.Attendance Management ď ď˝ ď 8.Attrition ď ďŤ ďŤ 9.Back Office /PMO ď˝ ď ď 10.Collections ď ď ďź 11.Continuous Improvement through Lean Six Sigma ďź ďŤ ďŤ Summary of Priority Initiatives: âLiving within our meansâ Theme
- 28. GNB Formal Management System Vision Measures Measures Measures Strategic Themes Objective Objective Objective Initiative Initiative Initiative Initiative Initiative Initiative Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans Action Plans S I M O A
- 30. Projects Full Project Kaizen Waste Walks
- 31. Projects 155+ projects 2000+ involved Top $ project $999,487
- 32. Hard Cost Savings Actual vs. Target $218,480 $952,988 $2,521,380 $3,997,565 $6,176,282 $10,781,651 $12,050,711 $15,304,091 $11,198,333 $14,750,000 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Actual Stretch Target Target FY 2012-13 FY 2013-14
- 33. Reduce Complexity Eliminate Waste Speed Lean & Six Sigma â Together Reduce Variability Eliminate Defects Customer Focused Team Approach Data Driven Decision Making
- 34. A well designed process should flow like a river.
- 35. âBeforeâ Process 81 steps to complete process!
- 36. âAfterâ Process 56 steps to complete process!
- 38. How good is good enough? 99% Performance Six Sigma Performance (~2.4 Sigma) â˘No telephone service or TV transmission for nearly 2 hours per week â˘Unsafe drinking water 7 ½ hours each month â˘10,000 plane crashes every 1,000,000 flights â˘5000 incorrect surgical operations per week â˘200,000 wrong drug prescriptions per year â˘No telephone service or TV transmission for 5 minutes every 3 years â˘Unsafe drinking water for 1 minute every 7 months â˘3.4 plane crashes every 1,000,000 flights â˘1.2 incorrect surgical operations per week â˘60 wrong drug prescriptions per year
- 39. Vehicle Management Agency Inventory Management Process Problem statement: Cost of Inventory: Stockrooms are working in silos, considerable effort is spent on managing inventory, and inventory levels are inadequately maintained Goal: Purchase and implement bar code scanning technology Reduce inventory management effort by 20%, to right-size inventory levels, and to reduce purchasing costs by 5.5%
- 40. Vehicle Management Agency: Inventory Management Process Potential Cause: It was taking too long to key part numbers on a PO (when ordering and receiving parts) and on a requisition (when issuing parts and returning them to stock). Potential Solution: Purchase and implement bar code scanning technology
- 41. X2: Time keying POs, receipts, and requisitions is a factor Ho It is not a factor Ha It is a factor Test : Regression Test Results: Only 5.4% of Stockroom Lead Time is explained by keying effort Regression Statistics Multiple R 0.25 R Square 0.0623 Adjusted R Square 0.0535 Not a significant factor Standard Error 143.16 Observations 108.00 ANOVA df SS MS F Significance F Regression 1.00 144,419.50 144,419.50 7.05 0.01 Residual 106.00 2,172,339.41 20,493.77 Strong model Total 107.00 2,316,758.92 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 51.45 17.84 2.88 0.00 16.09 86.81 16.09 86.81 Time procuring/issuing 1.91 0.72 2.65 0.01 0.48 3.33 0.48 3.33 Time procuring/issuing parts is a factor y = 1.9087x + 51.45 R² = 0.0623 - 100 200 300 400 500 600 700 800 900 - 20 40 60 80 100 120 140 160 Stockroom Lead Time (minutes) Time procuring/issuing parts Stockroom Lead Time Time Procuring/Issuing Stockroom Lead Time 1.00 Time procuring/issuing 0.25 1.00 Moderate Correlation
- 42. Slow Moving Inventory â Turnover Ratio $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 1 2 3 4 5 6 7 8 9 10 11 12 INVENTORY $ ON HAND TURNS PER YEAR Turns per Year Average Inventory On Hand Annual Interest Costs (0.95%) Total Annual Inventory Costs Total Savings 2 $ 5,020,828 $ 47,698 $ 5,068,526 0% 3 $ 3,347,219 $ 31,799 $ 3,379,017 33% 4 $ 2,510,414 $ 23,849 $ 2,534,263 50% 5 $ 2,008,331 $ 19,079 $ 2,027,410 60% 6 $ 1,673,609 $ 15,899 $ 1,689,509 67% 7 $ 1,434,522 $ 13,628 $ 1,448,150 71% 8 $ 1,255,207 $ 11,924 $ 1,267,131 75% 9 $ 1,115,740 $ 10,600 $ 1,126,339 78% 10 $ 1,004,166 $ 9,540 $ 1,013,705 80% 11 $ 912,878 $ 8,672 $ 921,550 82% 12 $ 836,805 $ 7,950 $ 844,754 83% Currently 2X Target 6X Reduction: 67% One-time: $2.6m Annually: $30,000 Average Inventory On Hand Annual Interest Costs (0.95%) High ROI Lower risk Lower ROI Higher risk
- 43. Vehicle Management Agency Inventory Management Process Problem statement: Stockrooms are working in silos, considerable effort is spent on managing inventory, and inventory levels are inadequately maintained Goal: Purchase and implement bar code scanning technology Reduce inventory management effort by 20%, to right-size inventory levels, and to reduce purchasing costs by 5.5% Results: â˘Purchasing cost savings $641,849 (5%) â˘Inventory levels reduced by $455,164 (10%)
- 44. Success through Lean Six Sigma projects⌠Reduced travel costs $999,487 savings year 1 Routine ECG wait times 22 weeks to < 4 weeks
- 45. Success through Lean Six Sigma projects⌠Asphalt Leveling Work completed in 2 months instead of 3. $453,259 savings Reduced bank interest costs $719,900 savings year 1
- 46. Waste Walk Transportation Inventory Motion Waiting Overproduction Overprocessing Defects People's Knowledge/Skills Unevenness Overburden â˘High inventories â˘Wasted materials â˘Absenteeism â˘Late deliveries â˘Rework â˘Invoices â˘Returns to Suppliers â˘Repackaging â˘Inspecting â˘Expediting â˘Moving â˘Counting â˘Sorting â˘Loading / Unloading â˘Receiving Report
- 47. 12-person approval process for contract documents Excess cost of mail delivery Computers & monitors left on after hours Executive Flight Service map subscription Improper removal of light bar on trucks VPNs not being used Phone lines not required Printing of daily reports Storage of disposable records Excess printing of annual reports Improper storage of tools 30% of violation reports contained errors Excess motion within the lab Renting of storage units Excess of shred boxes Production of both digital & paper copies of reports Excess motion for delivering interoffice mail Personal files stored on shared drive Frequency of meetings Redundancy in data entry âWaste Walksâ 600 walksâŚ$2,000,000+ savings
- 48. Strategy Management Priorities and speed! Initiative Management Priority initiatives and projects! S O M I A Daily Management Hold the gains! GNB Formal Management System Standard Operating Procedures (SOP) Standard work! Strategy Map Balanced Scorecard Process Management Operational KPI Dashboard
- 51. Strategy Management Priorities and speed! Initiative Management Priority initiatives and projects! S O M I A Daily Management Hold the gains! GNB Formal Management System Standard Operating Procedures (SOP) Performance Management Align and engage teams and people Standard work! Strategy Map Balanced Scorecard Process Management Operational KPI Dashboard
- 52. Karl Moore is an Associate Professor at McGill University, Montreal, Canada. The winter 2005 issue of Business Strategy Review, published by the London Business School, identified Karl Moore among a group of worldâs greatest business thinkers.
- 53. Initiative Management Daily Management Process Management Strategy Management Performance Management GNB Formal Management System âINâ âONâ
- 54. Strategy versus Operations Working âINâ the business (day-to-day operations) Initiatives Action Plans âimprove, add or delete processesâ REVIEW RESULTS Calendar of Commitments Measure for IMPROVEMENT: Measure for process CONTROL: Working âONâ the business (prioritized improvement) MISSION SOMIA VISION Value Stream Processes âindividual responsibilitiesâ (process owners) Operating Plan Balanced Scorecard DASHBOARD: Key Process Indicators (KPI) Strategy Map
- 55. Balanced Scorecard Measures: â˘Percent of Calendar of Commitments on track â˘Employee engagement survey results â˘Percent performance reviews complete â˘Percent of SOMIA on track â˘Employee attendance â˘Percent of senior leaders developed in formal management system/business improvement Performance Management Align and engage teams and people
- 57. GNB Quarterly Performance Review Theme Teams
- 58. Wave I â˘Environment & Local Government â˘Natural Resources â˘Service New Brunswick â˘Transportation & Infrastructure â˘Horizon Health Network â˘Finance Wave II â˘Justice & Attorney General â˘Education and Early Childhood Development â˘Agriculture, Aquaculture & Fisheries â˘Public Safety â˘Post-Secondary Training, Education & Labour â˘Social Development â˘New Brunswick Internal Services Agency Wave III â˘Health â˘Facilicorp NB â˘Executive Council Office â˘Economic Development â˘Invest NB â˘Healthy & Inclusive Communities â˘Efficiency NB â˘Human Resources â˘Tourism, Heritage & Culture â˘Energy & Mines Departments
- 61. Balanced Scorecard Measures: â˘Percent of Calendar of Commitments on track â˘Employee engagement survey results â˘Percent performance reviews complete â˘Percent of SOMIA on track â˘Employee attendance â˘Percent of senior leaders developed in formal management system/business improvement Performance Management Align and engage teams and people
- 62. Information Readiness Internal Processes Grow leadership capacity Customers: GNB/Dept Leadership Teams and Employees DHR Mission: Human resource leadership to enable a high performing GNB workforce. NB Public Service Values: competence â impartiality â integrity â respect â service 2014-2015 DHR Strategy Map A stronger economy and an enhanced quality of life, while living within our means. People Readiness Align leadership talent to drive Execution of GNB Strategy Enable GNB HR Community People Readiness Performance Excellence Culture Provide relevant, timely and quality HR information VISION 2015 Align employee performance to the GNB formal management system Align HR leadership to drive execution of GNB strategy Information Readiness Access relevant, timely and quality information Culture Readiness Align department performance to GNB Strategy Build mutually beneficial employee- employer solutions Achieve sustainable budget. Build HR continuous improvement competencies Financial Prioritize, standardize, and improve HR processes Information Readiness Improve attendance
- 63. Building Improvement Leaders Improvement Roles Operational Roles Individual Contributors Managers Directors Assistant Deputy Ministers Deputy Ministers Lean Six Sigma Black Belt (2yrs) Change Champion lead significant organizational change
- 64. Build Capacity for Sustainability Future Leader? Personal Attributes Cognitive Ability Leadership Potential Knowledge & Experience
- 66. âEmployees Making a Differenceâ www.gnb.ca/excellence
- 68. Canadian Government Executive Leadership Award 2014 âproviding improved public service at lower costâ
- 69. Thank you!
- 70. Strategy Management Priorities and speed! Initiative Management Priority initiatives and projects! S O M I A Daily Management Hold the gains! GNB Formal Management System Standard Operating Procedures (SOP) Performance Management Align and engage teams and people Standard work! Strategy Map Balanced Scorecard Process Management Operational KPI Dashboard