1. Determine the Purpose and Motivation for Continuous Improvement ©1

2. Which Would You Rather Have? A million dollars today -or- A penny today plus twice the previous day’s input for a month? (i.e. 2 cents tomorrow, 4 cents the next day, etc) … ©

3. Terminal Learning Objective Task: Determine the Purpose and Motivation for Continuous Improvement Condition: You are training to become an ACE with access to ICAM course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors. Standard: with at least 80% accuracy: Describe the benefit of Continuous Improvement Describe the process of stimulating Continuous Improvement and creativity ©3

4. The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23 Day Two’s two cents + Day One’s one cent = three cents

5. The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23 Day Three’s four cents + Day Two’s two cents + Day One’s one cent = seven cents

6. The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23 And so on…. And so on… And so on…. And so on… …

7. The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23 By the end of the first week we have $1.27

8. The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23 By the end of the second week we have $163.83

9. By the end of the month the total is more than $10 Million! By the end of the month the total is more than $10 Million! The Power of Continuous Improvement 20.020.03 30.040.07 40.080.15 50.160.31 60.320.63 70.641.27 81.282.55 92.565.11 105.1210.23 1110.2420.47 1220.4840.95 1340.9681.91 1481.92163.83 15163.84327.67 16327.68655.35 17655.361310.71 181310.722621.43 192621.445242.87 205242.8810485.75 2110485.7620971.51 2220971.5241943.03 2341943.0483886.07 2483886.08167772.15 25167772.16335544.31 26335544.32671088.63 27671088.641342177.27 281342177.282684354.55 292684354.565368709.11 305368709.1210737418.23

10. Consider a 3% Annual Improvement For a $250 billion organization over ten years: The Army you save may be your own!!!! ©

11. Consider a 3% Annual Improvement For a $250 billion organization over ten years: The Army you save may be your own!!!! ©

12. Consider a 3% Annual Improvement For a $250 billion organization over ten years: The Army you save may be your own!!!! ©

13. Consider a 3% Annual Improvement For a $250 billion organization over ten years: The Army you save may be your own!!!! © $M12345678910total budget25000024250023507522772422044721324320611019904919205918513874% savings750074257351727772047132706169906921685171713

14. Continuous Improvements: Lots of Small Victories Continuous improvement’s success based on: Many, many small initiatives Widespread employee involvement The long term power of accumulation The AAR is the forum to monitor progress in generating initiatives ©

15. Learning Check How would you describe the power of Continuous Improvement? Where is Continuous Improvement monitored? ©15

16. How Do You Get Continuous Improvements? You ask for them (Why did the chicken cross the road?) You reward them You expect them You build a team that knows continuous improvement is expected ©

17. You Will Be Amazed “What you have done is unleash the creativity of your people” HQDA staff officer after CSA review Who knows best how to fix a problem? Congress? Auditors? HQ staff? The person who lives with the problem? ©

18. Opportunities for Creativity Shedding activities no longer needed Resizing service levels to current needs Eliminating redundancies Redefining service levels provided Challenging inefficient guidance Removing deadwood ©

19. Learning Check What are two ways of achieving Continuous Improvement initiatives? What are three opportunities for Continuous Improvement? ©19

20. Shedding Activities No Longer Needed Organizational inertia tends to institutionalize services once started No clear mechanism exists to reassess the requirement for service Results in continuance of non essential tasks while sometimes cutting essential Example from Fort Huachuca ©

21. Title: Contractor property accountability Status: (Achieved or in-progress) IN-PROGRESS Responsible Manager: Forecasted annual cost reduction: $ 23K Number of positions (FTE): 1 Target date for cost reduction: February U.S. Paul A. Rossi C Cost Reduction Initiative $000

22. Share the Wealth Garrison Commander: “You know those computers you’ve wanted for the warehouse that we couldn’t afford? Well, thanks to your action we can now afford them. Take $6K of the savings and get them. I’ll take the other $17K for unfunded requirements that I have at the Garrison Level. Great job!” ©

23. Resizing Service Level to Current Needs Many missions have downsized Many support functions have not Examples: Hours of airfield operation at Fort Huachuca Staffing for ammunition issue point at Fort Huachuca ©

24. Eliminating Redundancies Organizations often generate a “stove pipe” approach Consolidating across institutionalized boundaries can improve efficiency Beware the danger of creating non-responsive monopolies Examples: Fort Detrick and Fort Huachuca ©

25. Fort Detrick Initiator: Initiator: Maintenance Supervisor Description Description: Cross train monitoring, preventive maintenance, and emergency response personnel Result Result: Save $600K per year while increasing uptime ©

26. Title: Fire Watch Station Consolidation Status: (Achieved or in-progress) IN-PROGRESS Responsible Manager: Forecasted annual cost reduction: $ 87K Number of positions (FTE): 3 Target date for cost reduction: May U.S. Paul A. Rossi C Cost Reduction Initiative $000

27. Fix Problems, Not Blame But it is Instructive to consider: Why this had not been done already, when: Budgets had been reduced for the previous four or five years? Internal Review Audit in 1992 had suggested it? What’s different here? Productivity oriented culture driven by leadership that expects creativity ©

28. Redefining Service Levels Provided Support services are free goods to users Free goods have infinite demand Redefining basic “free” service level can lead to more efficient consumption Beware of the danger in creating costly accounting cross charges that don’t create desired behavior modification ©

29. Cutting Non-Productive Employees All organizations and leaders find it difficult to cut non-productive workers Relatively abundant resources allowed avoidance of the issue in the past Could your organization operate as effectively as now without bottom 5%? Could you use 5% more funding? How important is it? ©

30. The Long Term Power of Continuous Improvement Often consider only digital decisions Kill it or keep it Too little thought given to gradually making operations more efficient A 4% annual productivity increase will not solve current crisis or get much attention Ten years of 4% annual productivity increases will ©

31. Learning Requires Teaching: Leadership Has KEY Role Government organizations can learn Who is responsible for teaching? Support exists and provides training materials like this but... “Effective training requires the personal time, energy, and guidance of commanders. Commanders must personally observe and assess training at all echelons.” –United States Army Field Manual FM 25-101

32. The Payoff: New Source of Funding After six months of pilot, Ft Huachuca Garrison Commander disclosed that he: Had cost reductions greater than worse case budget cut for the next fiscal year Could now afford key spending initiatives that were previously unaffordable in: Information technology Quality of life FY98 ©

33. U.S. Paul A. Rossi C GARRISON MANAGEMENT SYSTEM FY03

34. U.S. Paul A. Rossi C GARRISON MANAGEMENT SYSTEM FY03

35. Learning Check How does Continuous Improvement differ from the “kill it or keep it” mentality? Who is responsible for ensuring that learning occurs? ©35

36. How Can You Motivate Continuous Improvement? The Army motivates soldiers to do much harder things Under threat of great personal risk For limited monetary compensation Under often adverse conditions Is it patriotism? Is it for the money? Is it to win a medal? ©

37. Why Soldiers Fight Possible reasons: Expected by peers Demanded by leader Trained by the institution These are the ingredients that define an organization’s culture ©

38. Cold War Cost Culture Will Lose the Cost War Performance management is not important when resources are plentiful Budget management dominates actions Spend 99.9% Work on defining “needs” to get more Never give any back Result: “Why should I reduce cost - we don’t get to keep it?” culture ©

39. Battlefield Culture Needed to Win the Cost War Good commanders are inherently cost conscious in achieving missions Minimize cost in soldiers lost Minimize cost in resources and capabilities Winning the Cost War requires the same cost conscious mentality Excessive casualties and excessive costs are unacceptable ©