Six Sigma and Lean Six Sigma

for Municipal Government

ICMA Conference September 15, 2009

Presented by:
Presented by:
Stacy Waters, MBA, CMC
Stephen Deas,CSSBB
Principal and
Founder and President for:
Executive Vice President for:
THEWATERS
THE WATERS
CONSULTING
CONSULTING
GROUP,
GROUP, INC.INC.

For more information about this presentation or related services,

contact us at 800.899.1669 or via email at swaters@watersconsulting.com
 A Brief Overview:
The Waters Consulting Group, Inc.

Since 1976, the firm has provided consulting services in the area of human
resources consulting

Primary focus in the disciplines of Compensation; Strategic Management;

Organization Design; Performance Management and Executive Recruitment

Nationwide services to a variety of organizations in the public and private

sectors including:

•Cities, counties, other local government agencies

•Utility and transit authorities

THEWATERS
THE WATERS
•Government-related retirement systems
CONSULTING
CONSULTING
GROUP,
GROUP, INC.INC.
•Professional associations

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 2

 A Brief Overview:
Quality Minds, Inc
Human capital development and process improvement firm located in Charleston,
SC. Areas of specialty include:

•Process and Quality Improvement

•Lean Tools and Techniques

•Lean Six Sigma

•Safety Improvement

•ASQ Certifications

•Process Mapping

•Statistical Process Control

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 3

 Session Outline

• What is Six Sigma?

• What is Lean?
• What is Lean Six Sigma?
• How is Six Sigma used to improve local government?

Lean: Improves Efficiency

Six Sigma: Improves
Effectiveness

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 Lean Six Sigma for Strategic Advantages

• What does Lean Six Sigma Mean for Services?

– Applying Lean Six Sigma to Services

– Why Services are Full of Waste- and Ripe for Lean Six Sigma

• Why invest in Lean Six Sigma?

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 5

 Getting Faster to Get Better

• Why you may need BOTH Lean and Six Sigma

• Knowing the difference between Lean and Six Sigma
• What Six Sigma has to offer
• What Lean has to offer
• Why does Lean need Six Sigma?
• Why does Six Sigma need Lean?

Lean: Improves Efficiency

Six Sigma: Improves
Effectiveness

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 6

 Case Studies and Reference Materials

• There are many case studies on the Internet regarding local

government
• We use Fort Wayne, Indiana – but there are many other examples
• Lean Six Sigma for Service (by Michael George)

Lean Six Sigma

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 7

 Lean and Six Sigma “Believers”

• Lockheed Martin has been using Six Sigma and Lean since the late 90s.

• Named "Consumer Driven 6-Sigma" for a reason, Ford’s aim is to address customer issues
first: Over 70,000 Green Belts in North America.

• Dominion Energy is now in its 10th year of an enterprise-wide Six Sigma initiative. Their
unique approach encourages the entrepreneurial spirit and has led to over $300 million in
savings since 2001.

• From recruiting to the Bradley fighting vehicle (and everything in between - including meal
scheduling), the US Army continues to improve processes and save dollars through Lean
Six Sigma. They anticipate reaching a $3 billion-savings mark this year after five years of
practicing LSS.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 8

 Six Sigma in Government – Quick Examples

Google “municipal governments using six sigma” or

“cities using six sigma” and find on the front page:

– Fort Wayne, Indiana (2000): Mayor introduced Six Sigma as the

sole process for improving government administrative and civic
services (23K hits)

– Buffalo, New York (2008): Municipal Housing Authority used Six

Sigma to improve the 72 step process for reserving a park shelter
(46/72 steps were identified as waste)

– Hattiesburg, Mississippi (2008): One project involved simplifying

the cost it takes to tear down a building

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 9

General Overview of
Six Sigma,
Lean,
and Lean Six Sigma
 Basic Overview of Six Sigma and Lean

What they have in common Six Sigma Lean

Structured approach to improve Result of using different tools to
processes, quality, cost, eliminate waste from processes
(Effectiveness) (Efficiency)

Customer Focused Top project priority is with Give the customer what she wants,
customers when she wants it

Organization Development Six Sigma can change work Organization is more aware of
cultures wasteful activity

Human Capital Development Internal employees are thoroughly Workers see jobs differently,
trained to lead projects workers respect work environment
more

Results Oriented Projects have quick completion Waste is eliminated from business
times and, as much as possible, processes, work becomes quicker
are measured using financial and more efficient
criteria

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 Lean Six Sigma Visualized

Waste Lean

Customer Complaints Six Sigma

Incapable processes
D Improv
Excessive costs Efficiency ed bus
IC M improvement proces iness
Poor quality of service ses
A

W imin
as at
el

te ed
Six Sigma is a mechanism for becoming Lean.

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 Customer “Wants” Vs. Production
The Six Sigma methodology systematically improves work processes to reliably meet the
customer’s requirements.

What the Customer Wants-

you must know this and incorporate
it into your work

What we Produce-you must be

measuring this and understand how
Fails to meet Exceeds what
minimum well your production meets what your customer
requirement customer wants wants

σ Sigma is a measure of variation

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 The “Cost” of Doing Things Wrong

• Things done right 99.9% of the time means that there are things done wrong
0.1% of the time…
– One hour of unsafe drinking water per month

– Two unsafe landings at O’Hare International Airport each day

– 16,000 lost pieces of mail per hour

– 20,000 incorrect drug prescriptions per year

– 500 incorrect surgical operations per week

– 50 newborn babies dropped each day by hospital staff

– 22,000 checks per hour deducted from the wrong account

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 The Time it Takes to Complete a Work Task

Worker One

60
50
40 Waste

30 Actual Work
Time
20
10
0

Same Work Task Timed

Multiple Times

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The Context of Six Sigma
Systems and Processes
 The Role of Systems and Processes

System (A collection of processes that work together for a definite purpose)

Municipal Government (Human Resources)

Human Resource Processes

P1 P2 P3 P4 P5 P6 P7 P8
(Hiring)

Inputs Outputs
P3 Step 1 P3 Step 2 P3 Step 3 P3 Step 4

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 The Hiring Process as an Example

Supplier Inputs Process Output Customer

Who supplies each What does this process What are the steps that What is the output of Who are the internal
input? need in order to are followed to hire the process? and external customers
produce good output? someone? of this process?
Job requirement A new employee
Job description
Resumes
Interviewers
Interview process
Candidates

In short, six sigma methodology identifies the key inputs that

drive success of outputs. Once identified, actions are taken to
improve the inputs in order to improve the outputs.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 18

Six Sigma Leadership
 Leadership’s Role in Deployment

Leadership Support makes the Difference:

Deming’s 85/15 Rule: 85% of problems in any organization are within the system and are the
responsibility of leadership while only 15% lie with the worker
• Systems are made of processes. Processes are used by workers to produce products and/or services. If
the system is bad, the processes are bad and consequently service and/or product will be bad.

Specific Support Needed for Six Sigma Success:

• Careful planning and implementation

• Proper resources allocated

• Commitment beyond low hanging fruit

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 20

 Six Sigma Leadership Structure - Example

Select projects, knock

For Example: City Manager, down barriers, be the
Executive leadership representative
City Council, Mayor
Sponsors for project team

For Example: Department

Heads, Quality Overseer of Six Process Owners-
Enhancement Director Sigma Program subject matter experts

(BB) Black belts manage projects.

BB BB This is typically a full time
job/responsibility.
(GB) Green belts are black belts in
GB GB training. Green belts are usually not
full time positions

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 21

 Linking Projects to Goals and
Organizational Performance
Sources for Projects
Customer complaints-should
always be priority #1
Internal issues Strategic Level City Manager, City
Cost drivers
Employee surveys
(project selection is the Council, Mayor
responsibility of leadership)
Performance reviews

Leadership must consistently

review department level
Department indicators and create the “project Department
hopper”
Level-also called Level
tactical level

Human
Project
Hopper Resources

Division Division Level

Level-also
called working
level

Compensation Benefits Projects should come

from the “hopper”
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The Six Sigma Process
Define
Measure
Analyze
Improve
Control
 Two Levels of Six Sigma

• Basic
– Most projects can be successful using basic tools in
each of the five steps

• Advanced
– Some projects will need to use advanced tools.
(Puts heavy emphasis on Black Belt.)

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 24

 Define Phase

S I P O C
Supplier Inputs Process Output Customer
Team Members Project Scope Develop a A project charter Measure phase
Team Members Project Goals definition of the
Team Members Due Dates improvement
opportunity
Black Belt Tools
Team Members Ideas
Team Members Observations
Leadership Mentor
Team Members Process
Importance

It is important to develop a clear and thorough definition of the opportunity for improvement.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 25

 Identifying Project Stakeholders
• What are Stakeholders?
• Those who could be impacted by the results of the project

• Those that must support any change proposed in the project

• Who Could Stakeholders be?

• Managers of the process

• People working in the process

• Internal and External Customers of the process

• Suppliers to the process

• Finance support of the process

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 26

 The Project Charter

• A written document that defines the project team, team leader, project
mission, process scope, business case for project, goals for projects, and
time frames for project.
• Charters can be created by top management or teams can create their own
charter

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 27

 Measure Phase

S I P O C
Supplier Inputs Process Output Customer
Black Belt Tools Measure the A map of the Analyze phase
Team Members Data process’ process
performance
Team Leader Video Recorder
Black Belt Software A current state
of performance
Define Phase Project Charter
Black Belt Stop Watch
Team Members Ideas and
opinions

Once you identify the process to be improved, study and document the process to
understand its current state of performance
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 Analyze Phase

S I P O C
Supplier Inputs Process Output Customer
Black Belt Tools Analyze the A root cause Improve phase
Black Belt Forms process to statement
determine root
Black Belt Software
causes
Measure phase Current state of
process
performance

Once you measure the process, analyze the results of the measurement to
establish tangible opportunities for improvement.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 29

 Improve Phase

S I P O C
Supplier Inputs Process Output Customer
Team Members Ideas Improve the An improved Control phase
Team Leader Focus process by process or a
attacking the root solved problem
Team Members Patience
cause(s)
Leadership Time
Analyze Phase Root cause (Plan-Do-Check-Act)
statement
Black Belt Tools

Take actions on the tangible improvement opportunities from the Analyze Phase.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 30

 PDCA Cycle of Improvement

Plan
To improve processes, first find out what
areas need improvement. Based on what
you learn, plan a change or test.
Now you must decide
what actions to take as
a result of your check.
The options typically
include:
•Adopt the change Act Do Once you have a plan,
•Abandon it and go
carry out the change or test
back to the drawing
on a small scale
board
•Run it through the
cycle again using a
different area, running a
larger scale trial, or
making the trial more
complex.

Check
After completing the Do phase, check to see if the changes or
tests are working (What did you learn? What went right?
What went wrong? What does the data mean?)
31
(c)2009 The Waters Consulting Group, Inc. and Quality Minds
 Control Phase

S I P O C
Supplier Inputs Process Output Customer
Black Belt Tools Control the A stable and Internal and/or
Team Members Ideas improved process predictable external
to sustain the process customers of the
Leadership Follow up
improvement improved process
Improve phase Improved process

Implement controls to sustain the process improvement.

If you do not, the process may revert back to previous performance levels.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 32

 Using Six Sigma to Increase
Performance in City Government:

Fort Wayne, Indiana – Six Sigma Introduced in 2000

 How They Did It

*In the first three years of deployment:

– Trained more than 20 Black Belts and 40 Green Belts

– Launched 60 projects resulting in direct savings (or

avoidance of expected costs) of approximately $3 million

– Gained many less tangible improvements with quality and

service improvements – not to mention employee morale

*Lean Six Sigma for Service©

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 34

 *Some Highlights
• Goal: A safer city – Now Fire Department performs more than
23% more re-inspections a year without additional staffing.

• Goal: Reduce street complaints – Now 98% of potholes repaired

within 24 hours (down from an average of 80 hours for a repair)

• Goal: Stop variation in the cost of transportation engineering

projects – Now only 14% of projects exceed their estimates by
more than 10%

• Goal: Reduce citizen complaints about tree trimming – Now rate

of complaint calls reduced by 33% through determining the
optimum level of communication methods
*Lean Six Sigma for Service©

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 35

 Fort Wayne’s Six Sigma Structure

Strategic Executive
Mayor Council
(Deployment Team)

Quality Master
Tactical
Enhancement Black Belt
Director

10 black belts were trained and

each had to complete a City- Working
approved project each year.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 36

 From City Leadership
More Services, Fewer Employees
• City Challenges 1999 2006 % Change
– More people, more territory
– Revenue down
– Demands for service up Population 190,000 252,000 33%
– State and federal mandates up
– Tornadoes, terrorism, floods
Non-public 936 950 2%
• Questions Posed safety
– Who is your customer? employees
– Is your service improving?
– How do you measure Miles of 850 1200 41%
improvement? roads
– Show me the data
Square miles 79 109 39%

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 37

 Other Fort Wayne Projects & Results

Project Results Comment

Reduce amount of late garbage Reduced amount of late garbage Also improved relationship between
pickups pickups by 50% city and contractor

Reduce time to repair potholes Reduced average pothole repair time Improved communication and
from 2 days to 3 hours increased repair capacity

Improve business permit accuracy Approval time reduced by 300% More business was attracted to Fort
and approval time Wayne

Improve efficiency of waste water Efficiency improved 300% beyond

treatment processes goal, city avoided $1.7 million
purchase of new equipment
Improve process for managing street Process improved such that Reduced street light inventories to
light inventory $500,000 was saved and freed for optimal levels by establishing proper
other areas tracking and control practices

Other Notable Results:

1. 2005 City Budget ($229,539,522): 5% savings due to projects ($11,476,976)
2. From 2000-2005, 60 projects completed by city workers

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 38

Steps in Getting Started
 When to Use Lean Six Sigma?
• Unknown causes to problems/ongoing challenges and “situations”

• Problems are frequent, common but not well defined; lots of “noise”
and disruption

• A “broad brush” approach is not appropriate

• When other problem solving methods fail

• In complex situations with many variables

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 Choosing a Pilot Project
• Select the right project

• Select the right team members

• Get outside help on your

first project

• Become self sufficient

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 41

 Six Sigma Belts – Leading the Initiative
• First things first, get certified – get team certified

• Three levels of Belts: Green; Black; Master Black Belt

• Belts are based on level of competence in

understanding and applying tools

• Actual definition and competencies

for each belt can vary by organization
and training institutions

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 42

 Tip 1 – Slow and Steady
• Public sector organizations should expect to have a longer
learning curve with the first few projects because:

1. Most staff will not have had

a prior history of formal
quality initiatives.

2. Training of Black Belts

takes time, energy,
commitment. Prepare for this
to be the focus of the first six
months at least.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 43

 Tip 2 – Persistence

• Expect to be faced with having to

overcome long-held patterns of
behavior

• Silo-ing of departments provides

a lot of protection and security for
individuals – so be prepared to
face the challenge of this

• Continue to deliver the message

of change with persistence,
commitment and respect to all
affected in the process

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 44

 Tip 3 – Use the Tools
• Process Maps help people
understand what is going on

• Failure Modes and Effects

Analysis (FMEA) helps
people prevent problems
before they happen and
provides control and
structure

• Utilize tools to help keep

things on track and shape
the desired results for
success

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 45

 Tip 4 – Communicate
• Having a team that is dedicated to
communication is vital when change
is in the air

• Making sure the right and accurate

message is communicated

• Keeping the project on track

• Maintaining commitment and

consistency

• This goes for internal and external

communications

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 46

 Tip 5 – Praise and Recognition

• Maintaining commitment and consistency

• People like to be recognized

for their efforts and
contribution.

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 47

 Tip 6 – Involvement

• Have a mixture of people from

front line to management to
union

• The team for a project should

consist of the people that “touch
the problem” the most

• If the project is controversial, the

selection of team members is
even more critical

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 48

 Benefits of Lean Six Sigma Projects

• Internal Benefits
– Reduced claims filed
– Overtime reduction
– More positive public image
– Higher morale
– Positive change in culture and effectiveness

• External Benefits
– Safer organizational initiatives
– Improved customer service
– Improved relations with neighborhood associations
– Overall better local, regional and even national image

(c)2009 The Waters Consulting Group, Inc. and Quality Minds 49

Six Sigma and Lean Six Sigma
for Municipal Government
ICMA Conference September 15, 2009

Presented by:
Presented by:
Stacy Waters, MBA, CMC
Stephen Deas, CSSBB
Principal and
Founder and President for:
Executive Vice President for:
THEWATERS
THE WATERS
CONSULTING
CONSULTING
GROUP,
GROUP, INC.INC.

For more information about this presentation or related services,

contact us at 800.899.1669 or via email at swaters@watersconsulting.com