Lean-Six Sigma for the Public Sector: Leveraging Continuous Process Improvement to Build Better Governments

By Brandon Cole

Organizations are continuously trying to improve by reducing cost, increasing customer satisfaction, and creating an environment of empowered employees who continuously strive for excellence in each process and product. In much the same way, governments are continuously required to do “more with less,” enhance budget and organizational performance, and identify innovative ways to increase their impact.

There are challenges to applying the Lean-Six Sigma (LSS) tools in the public sector. Examples of these challenges include hierarchical environments, a lack of common goals, and the complexity of working in the public sector. The information included as part of this book provides over 30 spotlights highlighting project examples, lessons learned, and tips and tricks for using LSS in the public sector. These spotlights are based on interviews facilitated with a robust sampling of senior operations strategy practitioners.

The LSS methodology focuses on eliminating waste (lean) and then reducing variation (Six Sigma) in a process or product that contains no waste. The information covered in this book will allow someone to have an immediate impact in any public sector organization. It describes some of the most powerful continuous process improvement tools that can be used, with limited training required. This is further enhanced by showing direct correlations to the LSS tools and the challenges that will be faced.

Because the public sector spans such a diverse range of organizational charters (such as transportation, education, and defense), this book does not focus solely on either manufacturing or services. Rather, it provides a balanced approach to utilizing LSS in all environments.

• Language: English
• Publisher: ASQ Quality Press
• Release date: Nov 19, 2010
• ISBN: 9780873899970

Book preview

Preface

The information, examples, and insights provided as part of this book do not represent the opinion of my current or past employers. The intent is to describe pitfalls I have encountered in the public sector and provide examples of how other Lean-Six Sigma (LSS) experts and I have overcome these obstacles (although they are masked to protect the identity of specific organizations and team members). I also want to provide specific tools for overcoming challenging situations. This book is not meant to demonstrate that the public sector is not willing and driving change, but rather to show that public sector leadership are willing to persevere, to overcome obstacles, and to implement true process improvement. Most of the leaders I have worked with in the public sector are driven to provide the support necessary, as part of their organizational charter, to deliver the highest quality output for their respective customers. Some organizations in the public sector are more mature than others when it comes to LSS. There are even pockets of excellence, but one item remains constant: a willingness to change, to drive improvements and efficiencies, and to become highly effective. I want to thank each and every organization I have interacted with for being open to the LSS methods and helping to drive an organization of true continuous process improvement.

Introduction – The Forcing Function

Six months = millions of dollars. This was the impact of a recent public sector LSS initiative. Results such as these are not out of the ordinary using the LSS toolkit, even in the public sector. Leaders everywhere are required to do more with less, enhance budget and organizational performance, and identify innovative ways to increase their impact. One process improvement methodology that has demonstrated time and time again that it can assist in all of these areas is LSS. Senior leaders across all industries—from pharmaceutical, automobile, and semiconductor manufacturers to financial services, construction, and information technology organizations—have seen significant returns from implementing LSS. This can also be achieved in the public sector.

Similar to people starting a new hobby, most organizations want to dive into LSS and attempt to apply all the tools in the toolkit without first developing a solid understanding of the pitfalls associated with implementing LSS in the public sector environment. One result of this can be paralysis by analysis. It’s possible to collect so much data that the information becomes overwhelming. The purpose of this book is to discuss the challenges of implementing LSS in the public sector and offer a tailored approach to overcome these obstacles.

Keep in mind that LSS is continuous process improvement, a pursuit of perfection within your organization. There is time to slowly move into the more advanced toolkit (for example, design of experiments, multi-vari charts, and regression analysis), but we will focus initially on institutionalizing the enterprise-wide approach, obtaining the voice of your customer, and creating an environment with appropriate performance indicators to measure success. Although the advanced concepts can provide significant value, using even the most basic tools, paired with a systematic approach, can result in immediate impacts to your organization.

The LSS methodology is not meant to be radical, big-bang change. LSS focuses on eliminating waste (lean) and then reducing variation (Six Sigma) in a process or product that contains no waste. There is no benefit to eliminating variation in a broken process or product. That would just make the defects or defective outputs more robust.

The information covered in this book will allow someone to have an immediate impact in any public sector organization. Organizations continuously try to make themselves better by reducing cost, increasing customer satisfaction, and creating an environment of empowered employees who continuously strive for excellence in each process and product. This book describes some of the most powerful continuous process improvement tools and also provides insights in the form of spotlights, key takeaways, and potential pitfalls. These lessons learned can be invaluable in assuring that your use of the LSS toolkit is successful.

Beyond the quality tools included in the toolkit, some areas are often overlooked as projects are being completed. One of the most critical aspects is a dedicated focus on change management and communication. People are typically averse to change, especially when they do not understand why the change is occurring, when they did not know that it was coming, and when they were not involved in the solution. To address that reluctance, change management tools and techniques are integrated throughout this book. Even if you have identified a solution that could save the organization millions of dollars, you must also communicate the who, what, when, where, how, and, most important, the why. If you skip this step, the potentially most valuable change is not likely to be successfully implemented or sustained.

The intent of this book is to not discuss every LSS tool that exists or describe the most advanced tools in excruciating detail (entire books are written about some of the tools covered here). Rather, I will focus on the tools I believe will help improve a public sector organization without requiring extensive amounts of training or ramp-up. Training is definitely crucial as part of a long-term LSS program, but I want you to be able to make an impact today. Once leaders have seen the value of LSS and you have gained some momentum, you can work to launch an enterprise-wide LSS program.

Because the public sector spans such a diverse range of organizational charters (such as transportation, education, and defense), this book will not focus solely on either manufacturing or services. Rather, it will attempt to provide a balanced approach to utilizing LSS in all environments. We will provide specific examples of how tools can be applied and what the output means from both a services and manufacturing perspective. I hope you are excited about the journey because it will be a fulfilling ride, especially if you follow the guidance provided in this book.

Section 1

Overview of the Lean-Six Sigma Methodology

To improve is to change; to be perfect is to change often.

– Winston Churchill

Process Improvement

Process improvement has existed for hundreds of years, in the creation of the first printing press, which set the stage for mass production, and later in the development of Henry Ford’s modern-day assembly lines and factories. Improving an organization is a continuous journey, rather than a big bang, once-and-done transformation. Improvement methods have changed over time, but the fundamental pursuit of making products, processes, and services better remains central to the success of today’s organizations.

The difficult part of any process improvement is instilling it as part of the DNA of an organization and making it part of everyone’s job function, not just a responsibility of the LSS program office or another specific support function. This can be accomplished by ensuring that people involved in LSS projects are empowered to identify areas for improvement and made to feel as though they can truly make an impact on their job roles. If those three items are accomplished, which is no easy task, resources will be positively driven to improve the organization.

Lean

In simple terms, lean is the elimination of waste within a process or product. In this definition, waste is anything that does not directly add value in the customer’s eyes. This improvement approach focuses on the entire value-stream, from a raw materials supplier perspective to the ultimate customer and even looping back into the stream in the form of post-customer reuse or recycling where possible. By focusing on the customer and the value stream, you can improve your process as a secondary effect. For example, reduced costs can result in reduced costs to the customer. An increase in quality may result in increased customer sales. The focus of lean is to deliver only what the customer wants and needs (that is, waste-free products and services).

The toolkit for lean includes common sense improvement tools that can help you focus on high-impact, quick wins. This can help you gain significant leadership buy-in early in your deployment by providing an approach that is easy to understand and that results in significant, quick, sustainable results.

Used alone, lean can result in important improvements, but there is one drawback. Even if you eliminate all the wastes in a process, you may still have significant unseen variation if you lack statistical tools to identify variation in your process, product, or service.

Six Sigma

Six Sigma, a term first coined by Motorola, focuses on the elimination of variation. In statistical or theoretical terms, Six Sigma is a process that is able to limit defects to only 3.4 per million opportunities. From a reality or continuous process improvement methodology stand-point, Six Sigma is a collection of management and statistical tools that are used to identify and sustain high-value improvement efforts.

There is one significant pitfall to Six Sigma. It focuses only on the reduction of variation within an existing process and does not address whether all the steps in the process add value. As an example, consider the variation in making pizza. Six Sigma focuses only on ensuring that each large pepperoni pizza contains twenty pieces of pepperoni. It does not consider whether the customer actually wanted twenty slices of pepperoni. No attention is paid to overall customer value. This is what has led to the integration of the two methodologies, lean and Six Sigma.

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Integration of Lean and Six Sigma

The integration of the lean and Six Sigma methodologies creates a best of both worlds approach. It is the fundamental integration of an improvement toolkit that focuses on the elimination of waste and the elimination of variation. In terms of displaying immediate value in your organization, focus on areas where mass amounts of waste can be eliminated quickly. This is known as kaikaku. Then focus on lean. Address these areas first and achieve success in order to gain leadership and stakeholder support for your overarching LSS efforts. This will assist in gaining critical leadership buy-in, create a collaborative environment across organizational stovepipes, and demonstrate that the focus is not on eliminating specific positions or resource functions but rather on creating a streamlined public sector organization. Once you have gained momentum and begun to reduce the amount of low-hanging fruit, focus your efforts on reducing variation in the streamlined process through Six Sigma.

The integration of the two improvement methods helps focus initiatives on areas such as cost reduction, work-in-process inventory, and space requirements while increasing productivity, quality, and overall customer satisfaction. These are the most important aspects to sustaining your organization’s relevance. The goal is to use a systematic approach to problem solving in order to foster and sustain an environment of continuous process improvement. Working toward 3.4 defects per million opportunities may sound like a difficult and complex project, but don’t let that defeat your enthusiasm. This book will provide insights into typical roadblocks and explain methods you can use to overcome them using LSS tools to identify, implement, and sustain high-value initiatives.

We will discuss the basic LSS tools, and you will use some of them on each project you take on. It’s important that you use only the tools necessary to achieve your goal statement as created in the project charter (more to come on that topic later). Before we introduce the tools of LSS, we first must understand some important terminology.

As a newer practitioner, it is crucial that you remember that appropriately marketing the value of LSS on the front end can help ensure a lasting transformation. Your job is to help people feel excited about what is coming and keep them excited until the results are delivered and sustained. It’s important to obtain buy-in from all parties (leadership, functional experts, and other project participants). This is critical to the deployment, project success, and sustainment of your LSS program.

A pool of personnel will want to be involved including Master Black Belts,