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Government Agencies Working Smarter and Faster Jamie Burnett U.S. Environmental Protection Agency OSHA February 7, 2008

3 Presentation Outline What Is Lean? What Is Lean? State and Federal Lean Experience State and Federal Lean Experience Why Do Lean Why Do Lean Lean in Government Resources Lean in Government Resources

4 What Is Lean? Lean: Lean: –Lean is a set of principles and tools that improve the speed and quality of any process by eliminating waste –Developed by Toyota, adapted for other sectors “Common sense uncommonly applied” “Common sense uncommonly applied” –Methods include value stream mapping and kaizen events –Kaizen = “change for the good of all”

5 Lean at Environmental Agencies Is Rapidly Expanding - State Lean Events Completed - States Interested in Lean

6 Example State Results: Iowa Air Quality New Source Construction Permits Kaizen Event Before Lean: Before Lean: –Issue ~ 2,000 permits per year –Average lead time: 62 days After Lean: After Lean: –Lead time reduced to 12 days (down to 6 days after 6 months) –Steps cut by 70% –Handoffs cut from 18 to 4 –600 permit application backlog eliminated in 6 months –Process became more customer friendly

7 Federal Agency Lean Efforts EPA Lean Events EPA Lean Events –State-EPA Region 7 Water Quality Standards Review –Performance Track Program Other Federal Agencies Other Federal Agencies –Dept. of Defense—Army, Navy, Air Force, Marines –Depts. of Agriculture, Energy, Homeland Security, Housing & Urban Development, & Veterans Affairs –FBI, National Security Agency, NIST, PBGC, U.S. Mint, U.S. Postal Service

8 State-EPA Water Quality Standards Review Kaizen Event Participants: EPA Region 7, EPA HQ, Iowa, Kansas, Missouri, and Nebraska Participants: EPA Region 7, EPA HQ, Iowa, Kansas, Missouri, and Nebraska Process: Water Quality Standards Submittal, Review, and Approval Process: Water Quality Standards Submittal, Review, and Approval Methodology: 5-Day Kaizen Event Methodology: 5-Day Kaizen Event Results: Results: –Process steps reduced from 50 to 26, cut time –50% drop in number of EPA decisions needed –Common understanding of process –Clarified roles & responsibilities, built trust –Documented new improved process

9 Why Would Regulatory Agencies Try Lean? Backlogs eliminated or drastically reduced Backlogs eliminated or drastically reduced Lead times reduced Lead times reduced Complexity decreased Complexity decreased Quality & consistency improved Quality & consistency improved More “mission critical” work More “mission critical” work Staff morale improved Staff morale improved Transparency improved Transparency improved

10 Common Reactions Expect initial staff resistance: Expect initial staff resistance: –“We’ve already tried that.” –“The focus on streamlining processes may erode environmental protections.” –“We don’t have time to focus on process improvement.” Proactive communication and demonstrating positive results can alleviate these concerns C.A.V.E. People: Citizens Against Virtually Everything

11 What’s Powerful About Lean Results Results Accountability Accountability Empowerment Empowerment Action Action Excellence Excellence

12 EPA & State Lean in Government Resources “Working Smart for Environmental Protection” Primer “Working Smart for Environmental Protection” Primer Lean in Government Starter Kit, Lean in Government Starter Kit, Iowa Lean Website, Iowa Lean Website, ECOS Lean Government Website, ECOS Lean Government Website,

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February 7, 2007 Executive Overview Thomas J. Morin Managing Director Transforming Government The challenge and opportunity of the 21 st century U.S. Department of Labor Occupational Safety & Health Administration 14

© 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 15 Guidon Performance Solutions: Who We Are Change agents for rapidly improving responsiveness and increasing value in the new economy for all stakeholders Using time-based strategies, we help government agencies establish a competitive advantage, which contributes to the economic growth and an efficient & effective utilization of resources while improving quality of life for all the state’s constituents. Transforming Government for Improved Responsiveness 15 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

16 Evolution of LeanSigma ® The fusion of today’s most powerful improvement programs 16 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

17 Our Heritage Toyota Production System Taiichi Ohno Shigeo Shingo “One thing you can’t recycle is wasted time.” Yoshiki Iwata with Anand Toyota Roots Taiichi Ohno 17 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

18 What is World Class Government? A organization that is:  Lean, agile & connected to the actual constituents demand  Responsive to the constituents needs for new programs & services  Improving continuously to enhance all stakeholder values  Transforming culture to sustain improvements 18 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

19 4 Stakeholders Financial return Reliability Income growth Survival 1 Constituents Quality Responsiveness Cost advantage The New Government Challenge Partners Involvement Stability 3 Employees Job security Self esteem Recognition Rewards 2 19 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

20 Time-Based Management Kaizen Breakthrough Methodology LeanSigma® Value Chain Transformation Our Consistent Focus 20 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

21 The Common Element “Today, it’s all about speed.” Tom Peters Lean = speed Lean tools and techniques are the most effective way to speed up every part of your operations Time: Today’s Most Powerful Competitive Advantage 21 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

22 OPERATIONAL LEAD TIME Wasted Time and Activity Core Process Value Excessive Motion Defects & Loop Backs Hand-offs Waiting Unnecessary Processing Excessive Backlog Overprocessing Time-Based Strategies Lead-Time Reduction The key is to reduce your processes to “core value” 22 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

23 Introduction to LeanSigma Minor Improvement Traditional Improvement 0.5% 99.5% 10% Kaizen Waste Reduction Major Improvement 90% Typical Organization Original Lead Time 1% 99% Value-Adding ActivitiesNon-Value-Adding Activities 23 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

24 What is the Kaizen Breakthrough Methodology? A cross-functional team based process for rapid improvement with:  Bias for action  Creativity before capital  Focus on results Promote Rapid Change Through Involvement! Focusing on physical transformation  Learn by doing  Overcome resistance  Instill change culture 24 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

25 Step One – Pre-Kaizen “Preparation”  Select project area  Product line focus  Strategic business need  Large improvement potential  Establish project objectives  Collect base-line data, set quantitative improvement goals  Select team members  Enthusiastic Team Leader and Sub Team Leader  Team makeup 1/3, 1/3, 1/3  Pre-event communication  Full-time, five-day participation  Communications session with work area team 25 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

26 Team-based energy and creativity drives immediate process improvement Day 1 Day 2 Day 3 Day 4 Day 5 Day of Training & Understanding Day of Discovery Day of Improvement Day of Design Implementation & Documentation Day of Celebration & Results Kaizen Breakthrough Experience At the end of the week, each Kaizen team has achieved dramatic operational improvements The Kaizen Approach 26 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

27 Step Two - Kaizen Implementation Key Principles Clear objectives Team process Tight focus on time (one week) Quick and simple, action first Necessary resources available right away Immediate results (new process functioning by end of week) 27 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

28 Step Three – Post-Kaizen “Sustainment”  30-day home work requires part-time involvement by team leader and selected team members  Management must provide adequate resources to complete all homework items  Train area leaders and associates - Standard work - Visual controls - Countermeasures for abnormality and problem resolution  Post suggestion board in the work area and make sure that they are attended to 28 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

29 Introduction to LeanSigma Productivity % + Defects % + Lead Time % + Backlog % + Floor Space % + Without spending major capital Rapid, Sustainable Improvements 29 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

30 Steps to Implementing LeanSigma Create a business process map to identify areas of opportunity Identify value adding and non-value adding activities and set new performance targets Create process flow Pace work to customer demand Reduce variation and improve quality Intense focus on daily performance management and visual control 30 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

31 Process Flow Map 31 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

32 Time-Based Strategies Value-Adding Activities Transform materials and information into programs and services the customer wants and it is done right the first time Non-Value-Adding Activities Consume resources, but do not directly contribute to a program or service 32 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

Time-Based Strategies Identify and eliminate waste Defects and loop-backs Hand-offs Over-producing Unnecessary processing Decisions in process Excess transportation Waiting Lead-Time Reduction © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

34 Spaghetti Diagram Example Mail Room 34 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

35 Process Must Be Repetitive Customer must always get the same answer no matter who they ask Customer must get the same answers no matter what time of the day, or day of the week they ask Customer must always get on-time, complete, and accurate information 35 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

36 Reduce Variation Sources and causes of variation make standard business processes appear to be random, non-standard work Missing information Wrong information Wrong work sequence Non-standard training processes Non-standard decision aids 36 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

37 Assuring First-Time Quality Means… Build the system with appropriate information Build mistake-proofing devices for common problems Never passing a defect on to the next process; Detecting abnormalities Responding immediately Eliminating root causes Establish clear decision rules 37 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

38 Cultural Transformation Cultural change: long-term process requiring - Deliberate change in management attitude - Participation and empowerment - Fundamental policy changes Sustaining change requires - Align performance measures - Constant communications 38 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

39 Life In the Government Silo KaizenLaser 39 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

40 Management attention Managing Resistance Critical mass Management attention Promoting Change Increasing resistance Increasing cooperation Neutral Increasing resistance Increasing cooperation Early adopters Traditional Situation Anchor draggers "Uncommitted Mass" Strong pull from early adopters 40 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

41  Physical transformation that improves responsiveness, quality, cost & customer service  Cultural Transformation that energizes the workforce, releases creativity and encourages teamwork to sustain the improvements  Energy, enthusiasm, efficiency and effectiveness that delivers excellence to all stakeholders In Summary What to Expect from Your LeanSigma® Transformation 41 © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

Questions? Thank You © 2007 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.