LEAN Ohio: Transforming State Government One Process at a Time

LEAN Ohio: Transforming State Government One Process at a TimeBy: Steve Wall, Director of Continuous Improvement, Ohio State Government

Your Presenter Today

• Appointed by four Governors in two states to direct their state-wide continuous improvement efforts, which resulted in over $400 million in savings.

Steve WallDirector of Continuous ImprovementOhio State Government

2© 2010 Guidon Performance Solutions, LLC. All rights reserved.

improvement efforts, which resulted in over $400 million in savings.

• He has served Governor’s from both parties and twice been a cabinet official.

• Testified before subcommittees of the US House of Representatives, the US Senate and the US Secretary of Labor’s Office as an expert witness on continuous improvement in government.

• An applicant, examiner, judge, member of the board of trustees and officer for the Ohio Partnership for Excellence – the state’s Malcolm Baldrige Quality award program.

What We’ll Cover Today

• Welcome – Lean Six Sigma in Ohio State Government

• Background and in the Beginning

• Results, Results, Results.

• Lessons Learned• Lessons Learned

• Next Steps


Background and in the Beginning

Ohio State Government

• No money

• Many MANY processes that have been around a long time.

• Good Partnership with Union regarding need for continuous improvementneed for continuous improvement

• Some past success with Deming stuff

• Strong desire to make government services simpler, faster, better and less costly


Selecting The First Kaizen Event

• Planning or Pain?

• Confidence or Courage?

• Hurdles:

– An entire week?

– You are bringing in outsiders??– You are bringing in outsiders??

– The new process WILL be implemented immediately and is not just a recommendation to consider???


And The Winner Is…The Bureau of Workers’ Compensation

The First Kaizen Event Team

By statute BWC has 60 days from receiving a protest to conduct the requested hearing, but data showed it was taking an average of 142 days. In addition, it was taking 27 days to inform the employer of the decision after the hearing was conducted, for a total of 169 days of waiting.


Current State Business Process Map

• 87 steps• 37 handoffs• 20 decision points• 12 delays

• A Kaizen team was created to reduce the duration of the appeals process. The team created a business process map and identified the non-value-added activities, analyzed solutions and completely redesigned the way they conducted business.


The New Process for Hearings


• 27 steps

• 10 handoffs

• 7 decision points

• 2 delays

Before and After

Before


After

Projected Results

Measure Before Target Projected Difference

# of steps 87 27 69%

# of decisions 20 7 65%

# of delays 12 2 83%

# of handoffs 37 10 73%

Complaint lead time

unknown 14


timeunknown 14

Hearing lead time 142 60 days 34 75%

Post hearing lead time

27 4 85%

Cases going to protest

880 440 TBD 50%

Potential savings (440 cases X $500) $220,000

How They Did It

• Created new customer focused process to resolve complaints & issues before they become a formal protest

• Everything goes through one funnel

• Employer complaint is accurately and timely

referred to proper subject matter expertreferred to proper subject matter expert

• Established detail performance metrics

• Creation of quality assurance function

• New forms created & approved in 4 hours(a record!)


Sustained Results

• The team has been able to stay below the 60-day statute for scheduling hearings for OVER TWO YEARS.

• They also made a 75 percent reduction in the time needed to inform an employer of the decision after the hearing – from 27 days to an average of only seven days.

• Most impressively, these significant gains did not come at the expense of quality to customers. In addition to shortening the process, the team also made the process less confusing, provided greater access and more convenient locations for the hearings, and created a front-end mediation process to help solve problems before they went to hearings – all of which saved considerable money problems before they went to hearings – all of which saved considerable money for Ohio businesses and taxpayers.

• Eric Burkland, President of the Ohio Manufacturers' Association attended the team's end-week presentation and was impressed by the process and the results.

"I want to congratulate the team for listening to their customers and having the courage to make needed changes and improvements. We strongly endorse the use of Lean tools in state government and feel Kaizen events like this one can have a major impact on the business climate in Ohio," Burkland said.


First Kaizen Event Facilitated by State Employees

• Department of Taxation – Compliance Division

Current state: Sixty-six days to turn around taxpayer

correspondence


Backlog

Ninety day, 13,000 volume backlog


Current Business Process Map


New Process

Results

Measure Before Target After Difference

# of Steps 87 20

# of Decisions 25 6

# of Delays 7 1

#of Handoffs 11 8

# of Loopbacks 10 2

# of days to Sort the Mail

4 days

Average of Work on shelf

90 days13,000 pieces

14 days 2-4 days 58-86 days

Lead Time 66-112 days 30 days 11-13 days 55-90 days


Success Increased Demand

• Thirty Lean Events in just over 2 years

– Eliminated over 2000 unneeded time-wasting steps from government processes

– Cut over 60% of all steps documented during Kaizen events, and 70 percent of delays (More than 250 decision points, 200 delays and 350 than 250 decision points, 200 delays and 350 handoffs eliminated from government processes overall)

– Average Kaizen event reduced start-to-finish process time by 41% (More than 1000 hours of wait time overall, multiplied by the thousands of customers that use those processes)


Biggest Successes

• From over 30 Lean Events, we present the “Kai-Zenny” awards for best team performances in the following categories:

– “Most Process Steps Eliminated”

– “Most near knockdown fights by team members in one week”

– “Most Time Delays for Eliminated for Customers”

– “Biggest Kaizen Event Ever”

– “Most Money Saved by a Kaizen Event Team”

• And the winners are…


The “Kai-Zenny” AwardsIn the category of: “Most Process Steps Eliminated”

And the winner is… The Ohio Department of Agriculture for eliminating 124 steps from the Farmland Preservation Application Process

• Ohio's 75,700 farms are crucial to our state. Food and agriculture contribute more than $98 billion annually to the Ohio economy. They provide jobs to one in seven Ohioans. And they keep us fed with delicious sweet corn (Ohio is the nation's #5 producer), soybeans (#5), cucumbers (#6), tomatoes (#6), and much more.

• To make this happen, the Ohio Office of Farmland Preservation helps farmers and local officials in their efforts to preserve Ohio's agricultural resources. A state program purchases easements from interested Ohio farmland owners, with easement transactions re-corded easements from interested Ohio farmland owners, with easement transactions re-corded on the property deed and thus transferred to all future landowners. This keeps the land under private owner-ship while guaranteeing that it remains used for farming.

• The Farmland Preservation Office receives some 200 applications per year for this program, but it was taking 18 to 24 months for accepted landowners to get their funds -- too long for everyone. So the Ohio Department of Agriculture put together an improvement team made up of office staff, landowners, Advisory Board members, county officials, Federal officials, local sponsors, and others.

• When all the improvements are in place, the new process will take half the time. What used to cover 18-24 months will be completed in 7-14 months.

• The team eliminated 124 process steps and 295 days of delay.


The “Kai-Zenny” Awards

In the category of “Most near knockdown fights by team members in one week”

And the winner is… The Department of Natural Resources

The team brought together members of Ohio DNR, Ohio


members of Ohio DNR, Ohio EPA, U.S. Army Corp of Engineers, and five members of the coal mining industry to take on the costly, complex, time-consuming integrated coal mining application process.


In the category of “Most Time Delays Eliminated for Customers”

And the winner is… Also The Department of Natural Resources for eliminating almost a full year from the Coordinated Application Process team.

• During two Kaizen events they saved businesses applying to mine coal in Ohio a total of 224 to 359 days. Along the way they saved thousands of dollars by reducing items like the buffer zone variance document from 50 pages to 3-4 pages and jurisdiction reports from 300 to 10 pages.



In the category of “Biggest Kaizen Event Ever”

And the winner is… The Department of Job and Family Services “Show Us The Money” Kaizen Event Team that improved the process for auditing paid claim issues for long term-care providers.

• This Combined Proposed Adjudication Order (CPAO) team consisted of over 30 participants and 7 facilitators, that outgrew 3 large conference rooms and 6 break-out rooms and plastered flip chat paper up and down hallways.



In the category of “Most Money Saved by a Kaizen Event Team”

And the winner is… A Double Win for Job and Family Service’s “Show us the Money” team who so far have recovered


so far have recovered over $33 million dollars as a result of the event.

To see details of team success, go to: www.governor.ohio.gov/Default.aspx?tabid=1465

Common Interventions

• Batch Processing

• Multiple levels of authority/signatures required

• Back and forth with customers clarifying incomplete applications

• Applications / requests come to many places

• Complicated requests slow standard or easy • Complicated requests slow standard or easy requests

• Rely on heroics

• “We thought the Feds, legislature, governor, auditor, statute, said we have to it this way.”


Lessons Learned

• Senior management / sponsor must not just support, but swear to implement

• No shirt, no shoes, no data – no event

• Don’t pull plug Wednesday no matter how tempted you are

• Need trained, experienced Lean experts to lead • Need trained, experienced Lean experts to lead the event

• Follow up, follow up, follow up


Next Steps

• Value Stream Maps first to define and focus Kaizen events

• Train more internal facilitators

• Develop better infrastructure to track follow up and results

• Incorporate Lean principles in day to day • Incorporate Lean principles in day to day management and not just during Kaizen events


Questions?


Steve Wall

Director of Continuous Improvement

Ohio State Government

Thank You

Lean Six Sigma in Ohio State Government

Ohio State Governmentwww.governor.ohio.gov/LeanOhio.aspx

Guidon Performance Solutions

866-986-4414 or [email protected]

www.GuidonPS.com

© 2008 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.


LEAN Ohio: Transforming State Government One Process at a Time

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Transcript of LEAN Ohio: Transforming State Government One Process at a Time