Lean management moves toward becoming law

The Legislature is picking up on the "lean management" philosophy that the governor has been pushing as appropriate to hard times.

The Legislature is picking up on the "lean management" philosophy that the governor has been pushing as appropriate to hard times.

Neither ice nor snow could slow down efforts to improve agency efficiency Monday (Jan. 16) as the House State Government Committee adopted by a vote of 11-0 an amended version of HB 2173: Maximizing the use of lean strategies in state government.

Here is a memo describing the changes from the original bill:

Description of the original bill
An intent is stated to encourage additional state agencies to implement Lean strategies to increase effectiveness and efficiency in delivering state services. A state agency director that initiates Lean strategies may expend up to $200,000 of the moneys appropriated to the agency that have not been appropriated for another specific purpose and may request consultation and assistance in developing its Lean strategies from the Department of Commerce or the Department of Agriculture.

Description of the proposed substitute
Encourages state agencies to continue and to expand implementation of lean strategies in order to improve customer service and to increase effectiveness and efficiency in delivering state services. Removes the language regarding use of appropriated funds and consultation and assistance in developing Lean strategies from the departments of Commerce and Agriculture.

Last December, the governor issued an Executive Order requiring all executive cabinet agencies to use lean management principles.

What exactly are lean-management tools?

Here is how Wendy Korthuis-Smith, director of GMAP, describes Lean in an Oct. 17, 2011 blog post:

When resources are thin, and getting thinner, we have to ensure that every tool we have is used in the most effective way to get every ounce of benefit out of it. Several of our state agencies are showing true innovation by following Lean principles – and the payoff is a more efficient system with more positive results. We’re seeing faster response times, less complaints and a more motivated staff. And while the purpose of lean isn’t to reduce costs, we’re seeing financial savings in some areas, as well.

Lean describes a set of proven principles, methods and tools that focus on streamlining work so that it can be done in less time, with less hassle and with a focus more on what matters most to citizens. Although Lean grew out of the manufacturing industry, over the years, Lean has spread through many industries including distribution, services, retail, healthcare, construction and government. Washington state has been using Lean tools for improvements, and is partnering with the private sector, including Boeing, to learn best-practices.

Here are some of the preliminary results from the state's current lean efforts:

  • DSHS Economic Services Administration 
    • 65% reduction in time to process applications (14-18 days to 4-7 days)
    • 99.7% reduction in wait time (from 4 weeks to 5-45 minutes)
    • Increased operational efficiencies by more than 20%
  • Labor & Industries
    • Reduced delays in the workers' compensation protest and appeal process by 81% making it easier and faster for an injured worker to receive an appeal decision
  • Corrections
    • 90% reduction in time to process paperwork down from 30 days to 3
    • $2 million cost avoidance to agency in offender clothing recycling program
    • $1.3 million cost avoidance in food to the agency through standardized menu offering

Washington is not the only state taking advantage of Lean management reforms. According to the Iowa Office of Lean Enterprise:

Lean recognizes that for most processes only 5% of activities add value for the customer, which means that 95% are either necessary non-value adding activities or waste. By clearly defining value for a specific service or product from the customer’s perspective, non value activities and waste can be targeted for removal. Eliminating waste is the greatest potential source of improvement in process performance and customer service. Once waste has been identified, processes are redesigned to allow service, information or product to flow through the new process without interruption . . .

During the 81st General Assembly, legislation was passed that authorized the Department of Management to lead the expansion of Lean efforts in Iowa state government. The Office of Lean was created within the Department of Management to promote and facilitate continuous improvement through the use of a specific set of proven tools and methodologies collectively known as Lean.

It is encouraging to see the House State Government Committee take the first step toward putting lean management requirements into law.

This story originally appeared on the Washington Policy Center's Washington Policy Blog and is reprinted with permission.


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