By Lawrence Rosier Principal Management Consultant
The DOD should implement Enterprise Lean (aka Toyota’s TPS) in all civilian offices Now! Here is why. The process immediately focuses employees on how their jobs can be done better. The process organizes employees into Functional Lean Teams that study how to improve each function performed by the Team.
The teams are organized and supported by Lean facilitators who have been trained in the Lean process by US Army Lean Six Sigma internal consultants. I suggest that Facilitators can be found available in Human Resource Departments because the DOD has a hiring freeze.
Implementation of the Team Management Organization
I further suggest that all DOD civilian employees be reorganized from the current Bureaucratic organization into a permanent Team Management organization based on the Functional Lean Teams. Each Functional Lean Team would elect its own leader by secret ballot. Cross training would begin immediately with each employee knowing how to do at least one other job this eliminates employees waiting on other employees to do their jobs and improves efficiency.
Enterprise Lean Implementation
The Enterprise Lean project would be kicked off with mass training provided by the US Army’s Lean Six Sigma internal consultants. The training would concentrate on the Value Stream Mapping tool (VSM). The Functional Lean Teams would meet for one hour each week to do the VSM study. Each Functional Lean Team would use the VSM tool to find the best way to perform the function (the most efficient and effective way). One way of doing this is to tape each step of the function on brown wrapping paper taped to the conference room walls. I suggest that the current method be done first followed by the improved method to determine savings in expenses and man hours.
All of the above work can be done without the expenditure of any funds for outside consultants. The next steps will require at least one outside consultant to train GAO Budget Analysts in how to cost out the VSM data, implement right-sizing and build a bottoms-up budgeting database.
GAO Budget Analysts
I further recommend that GAO Budget Analysts be brought in to collect and document the improved methods expenses and man hours on spread sheets. This will become the basis for right-sizing (makes sure each employee has a full time job) the functions within the department. Employees who do not have a job will become redundant. The GAO would be the custodians of the VSM functional expenses and labor costs storing the data in a new database which will eventually become a bottoms-up Budget. A bottoms-up budget would make the expense and labor cost of each function transparent to all who need and use budget data. The GAO would also be responsible for maintenance of all the Federal Government’s bottoms-up budget databases.
Saturday, November 30, 2013
Article 33. Proposal for a Pilot Demo Reform of a Ford Dept Office
Lawrence Rosier & Associates
Management Consultants Government and Industry Reform
12143 Cedar Grove Rd. Rolla, MissouriPhone 573-364-8789 Cell 573-578-4716
Letter of Transmittal: August 7, 2013
To: Ford Motor Company
From: Lawrence Rosier Principal Management Consultant
Subject: Proposal for a Pilot Demonstration of Reform of a Ford Department office
This proposal is for a pilot demonstration and implementation of a unique method of using Enterprise Lean with Lean Teams to get the highest efficiency with the most effectiveness within a Departments office environment of the Ford Motor Company.
Ford has been a leader in the use of Lean and TQM to increase the efficiency of its shop floor employees now I am proposing a demonstration of the application of Enterprise Lean (Toyota’s TPS) to its office and Knowledge workers within a department. Ford has demonstrated the effectiveness of Lean Six Sigma to solve high level individual systems problems. But this is only on a project by project basis fixing one major system at a time within Fords bureaucracy and between agencies. While the Systems are improved and there is a significant cost reduction resulting from the elimination of waste the approach does little to reform an entire department making it more efficient and effective. This is accomplished in this proposal by implementing the General Reform Model developed by Lawrence Rosier adapted specifically to address the reform of a Ford department.
Please Review the following Proposal for a Pilot demonstration of my General Reform Model. This document is intended to be used to promote understanding and to start discussion on consulting activities. The Ford Motor Co. may modify the attached Proposal to fit its specific needs.
Kindest Regards Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates
Management Consultants Government and Industry Reform
12143 Cedar Grove Rd. Rolla, Missouri
Phone 573-364-8789 Cell 573-578-4716
http://managementconsultant.blogsome.com
PROPOSAL August 7, 2013
Proposal for Pilot demonstration Reform in a Ford office environment
By Lawrence Rosier Principal Management Consultant
This proposal is for the implementation of a pilot reform using the General Reform Model developed by Lawrence Rosier Principal Consultant to be implemented in a selected office environment. The Method implements Functional Lean Teams of employees throughout the selected Department‘s office environment. The Lean concept was developed by Toyota to involve employees in increasing the efficiency and the continuous improvement of their jobs. The benefits to Ford are from efficient and effective operations but also the change in the way Ford employees view their jobs empowering them to innovate and make continuous improvements to their jobs. The General Reform Model uses the data developed by the Lean Teams for Work Measurement and from that staffing and budgeting is determined. The objective of the General Reform Model is to get the highest efficiency possible and improve the effectiveness of the selected department and turn a difficult major reform into a relatively smooth operation.
Goals:
Phase 1:
The main goal is to use Enterprise Lean to get the highest productivity possible and improve the effectiveness of a department while empowering its employees through Lean training to innovate and make continuous improvement to the systems in their jobs.
Phase 2:
The Lean Team data is used for right-sizing and the development of a bottoms-up budget the result is to increase the efficiency and effectiveness of the department which may result in the reduction of staffing. A major benefit is the transparency to Ford’s Management of the detailed costs associated with each of the functions within the department’s budget.
Phase 3.
The final Phase changes the Bureaucratic organization to a Team Managed organization using the already established High level management Lean Teams for management and the Functional Lean Teams at the functional work place. The steps are to train employees to do multiple jobs, eliminating wait times and implement weekly work planning for variable jobs. Redundant employees are remove from the work environment and retrained for other jobs. The General Reform Model is a method designed to accomplish these goals.
Proposal Details:
I suggest a meeting to allow Ford leaders and staff members to become fully familiar with the logic of the method I am proposing using my General Reform Model. I suggest this meeting be an across the table discussion of my proposed General Reform Model and how it can be implemented successfully at Ford.
The first step is the formation of a high level Implementation Committee with broad powers to lead and implement reforms. This is necessary for legitimacy and to make sure that data developed through Work Measurement belongs to the Committee and not to the Department where it was obtained. This is followed by the selection of the Department to be reformed.
I suggest that the day to day activities of the implementation be co-chaired by the Principal Consultant and a Ford Management Representative. The Management Representative will be tasked with providing those employees who will participate in the implementation and their expenses including equipment, offices and meeting rooms.
The Management Consultant will form an Implementation Team with Budget Analysts and or Auditors on loan from Ford Audit Division. The required number is entirely dependent on those who can be made available and the size of the Department. I do not bring any of my own staff to the job but chose to train current employees such as Budget Analysts from the Lean Facilitators to fill key jobs during the implementation . The advantage is that the knowledge they acquire in managing the new methods will stay within Ford.
Phase 1:
The first act of the Reform Committee and the Principal Consultant is in planning for the implementation of Lean Teams throughout the selected Department. The purpose is to resolve issues related to Lean training, Facilitators, Budget Analysts and specifically what the Lean Teams must do to meet the requirements for determining staffing and budgets. I suggest that a Certified Lean trainer be brought in to train the training staff. Lean training should begin immediately by the Ford’s training staff. Training should be made for staff members first followed by management and then Lean Facilitators. Lean facilitators organize and train each employee Functional Lean Team work group which usually meets for one hour on a weekly basis. There are three major Lean Team endeavors, a high-level Steering Lean Team, a mid-level Lean team made up of mid-level managers to make document flows efficient and at-the-work-place Functional Lean Teams, those who do the basic work of the Department. The Steering Lean Team will report to the Principal Consultant and will assist in the management of the implementation. The Steering Team also has another task to consolidate the Department’s internal Services as described in my Consolidation Model (if required). Mid level Lean Teams are tasked to study inter-department document flows.
Phase 2:
After a period of about two months most Functional Lean Teams, those that were organized and trained by Facilitators, should have their Value Stream Analyses completed. I have had success with doing the flow of the current method on long butcher or brown wrapping paper taped around a conference room on the walls. The proposed improved method is done directly under the current method to highlight the differences between the methods. I would allow the Lean Teams to present their improved method to management. After the presentation the Lean study data is given to a Budget Analyst to determine the savings from the Lean study data.
Phase 3.
The final Phase changes the Bureaucratic organization to a Team Managed organization using the already established High level management Lean Teams for management and the Functional Lean Teams at the functional work place. The steps are to train employees to do multiple jobs, eliminating wait times and implement weekly work planning for variable jobs. Redundant employees are remove from the work environment and retrained for other jobs. The General Reform Model is a method designed to accomplish these goals.
Activities of the Principal Consultant:
The Principal Consultant will play a key role in being sure that the Lean Teams are properly trained and in the selection and approach of the high-level Lean Teams. The Principal consultant will insure that the activities of Analysts currently employed by the Budgeting and Auditing Departments can determine the correct staffing level through Work Measurement and any expenses needed during the process. Some Analysts may find the proper staffing for variable processes difficult to determine. If so the analysis will be done by the Principal Consultant. This data combined with the number of occurrences of the Function over time, obtained from a daily log kept by each Lean Team, provides the basis for an accurate Functional budget. The data from the Lean study will be Transferred to a spread sheet by the Budget Analysts and summarized in a database where all of the Agency’s Functional Data is stored. The activities of Budget Analysts are important and will be followed closely by the Principal Consultant.
The Consultant will make a final review of the data to determine the actual staffing required. Note that in most cases this is not a simple calculation due to variations in the times required to do some processes. Consolidation of Departmental employees is required meaning most employees who currently do not have a full time job will have to be trained to also do a second job while other employees will become redundant. A Special skill is required in balancing the work load to give the remaining employees a full time job. This may be further complicated by jobs which continually change which will require the training of a Work Planner to balance the work load assignments for each employee on a weekly basis an appropriate management tool. This is also the period of time for Right-sizing the entire Department once it is known where staffing can be reduced. Retraining and reassignment of redundant employees should be completed within three months.
Current knowledge about Bureaucratic staffing has shown that nearly all bureaucracies are overstaffed by at least 10% and most are overstaffed by as much as 20%. Savings to the Ford Motor Company for this implementation is largely from the salaries and benefits of redundant employees. Long term benefits continue from employee empowerment to innovate and make continuous improvement to their jobs. Other benefits are from the simplification of government processes. The Return On Investment is expected to be significant and may reach as much as $100 for every $ 1 invested. After three months with the Pilot Demo projections can be made for actual savings can be made.
The Ford Motor Company Agrees to Pay Lawrence Rosier & Associates a Fee per week for services rendered. This agreement can be canceled by either party with a one week notice. All expenses such as travel, lodging, rental car, per diem are the sole responsibility of Lawrence Rosier & Associates.
The following Client signatures of the representatives for the Ford Motor Co. represents a general agreement that the Ford Motor Co. will follow the proposal’s outline of Lawrence Rosier’s General Reform Model as presented. The proposal contains suggestions for the implementation of the General Reform Model which may be modified by mutual agreement. By the following signatures the Client also agrees to the weekly fee required by Lawrence Rosier and Associates.
_____________________ ___________________
Signatures of Ford Motor Co. Representatives
______________________
Signature of Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 12143 Cedar Grove Rd. Rolla, Missouri 65401
573 364 8789, cell 573 578 4716, fax: 573 368 2907
Email: Lawrencerosier4@gmail.com
Article 32. Pilot Demo Reform of US Health and Human Services
Lawrence Rosier & Associates
Management Consultants Government Reform
LETTER of TRANSMITTAL: May 7, 2013
To: Assistant Secretary for Health Howard Koh, M.D., M.P.H.
From: Lawrence Rosier Principal Management Consultant representing Lawrence Rosier & Associates
Subject: Proposal for the implementation of a Pilot Demonstration for the Reform of the US Department of Health and Human Services.
The approach recommends the use Lean six Sigma to make high Level health decisions in health management and in health diagnostics supplemented by Enterprise Lean to get the highest efficiency with the most effectiveness in the DOHHS and in health care delivery systems nation wide.
The objective of this Proposal is for a pilot demonstration of how health care can be made efficient and affordable through the implementation of Lawrence Rosier’s General Reform Model, a unique method of using Enterprise Lean to obtain the highest efficiency and effectiveness possible; followed by right sizing the organization (making sure there is balanced work load), the development of a Bottoms-up budget and finally the conversion to a Team Management organization.
The method builds upon the implementation of Toyota’s Enterprise Lean with both high level Management Lean Teams studying agency systems and document flows and work place Functional Lean Teams studying all of the agencies functions involving all agency employees. The Lean Training of employees is done by agency training staff after a train-the-trainer program provided by a certified Lean trainer. The primary purpose of the Lean Teams is find the best way to perform the agencies functions getting the highest efficiency possible while improving the agencies effectiveness. An added benefit of Lean training is to empower employees for innovation and continuous improvement of their functions.
Please Review the following Proposal of a demo for DOHHS reform. This document is intended to be used to promote understanding and to start discussion on consulting activities and may be altered to fit required situations. The Federal Government may modify the attached Proposal to fit its specific needs.
Kindest Regards Lawrence Rosier Principal Management Consultant
Please Review the articles on my website for or details.
Lawrence Rosier & Associates
Management Consultants Government Reform
12143 Cedar Grove Rd. Rolla, Missouri
Phone 573-364-8789 Cell 573-578-4716
http://managementconsultant.blogsome.com
PROPOSAL May 7, 2013
By Lawrence Rosier & Associates
This Proposal for a Pilot demonstration of Federal Agency Reform is presented to Assistant Secretary for Health Howard Koh, M.D., M.P.H. By Lawrence Rosier Principal Management Consultant
This proposal is for the implementation of a pilot reform using the General Reform Model developed by Lawrence Rosier Principal Management Consultant to be implemented by The DOHHS. The Method implements Functional Lean Teams throughout the Agency. The Lean concept was developed by Toyota to involve employees in increasing the efficiency and the continuous improvement of their jobs. The benefits to the Government are from efficient and effective operations but also the change in the way government employees view their jobs empowering them to innovate and make continuous improvements to their jobs. The General Reform Model uses the data developed by the Lean Teams for Work Measurement and from that staffing and budgeting is determined. The objective of the General reform model is to get the highest efficiency possible and improve the effectiveness of the agency and turn a difficult major reform into a relatively smooth operation.
Goals:
The main goal is to maintain the serves of the agency while getting the highest productivity possible and improve the effectiveness of the agency by empowering its employees through Lean training to innovate and make continuous improvement to the systems in their jobs. This is followed by Right-sizing the agency‘s staffing, the development of a bottoms-up budget and the change to a Team Management organization
The developed Lean Team data is used for right-sizing and the development of a bottoms-up budget the result is to increase the efficiency and effectiveness of the agency which may result in the reduction of agency staffing. A major benefit is the transparency to the Federal Reform Commission of the Agency’s staffing budget. The “General Reform Model” is a approach designed Lawrence Rosier to accomplish these Goals.
Proposal Details:
I suggest a meeting to allow DOD leaders and staff members to become fully familiar with the logic of the method I am proposing using my General Reform Model.
The first step is the formation of a Departmental Reform Commission with broad powers to lead and implement reforms. This can be followed by the selection of the Agency to be reformed.
I suggest that the day to day activities of the implementation be co-chaired by the Management Consultant and a high level Department representative. The Department representative will be tasked with providing those employees who will participate in the implementation and their expenses such as equipment offices and meeting rooms. The Department representative shall be given the authority to remove any employee who attempts to block this reform implementation and refer them to the Departmental Reform Commission for disciplinary action.
The Management Consultant will form an Implementation Team with Budget Analysts and or Auditors on loan from the GAO and or the Department’s Audit Division. The required number is entirely dependent on those who can be made available and the size of the Agency. I do not bring any of my own staff to the job but chose to train current employees as Budget Analysts and Lean Facilitators to fill key jobs during the implementation . The advantage is that the knowledge they acquire in managing the new methods will stay within the Department and will be used for other continuing implementations.
The first act of the Departmental Reform Commission and the Principal Consultant is in planning for the implementation of Lean Teams within the selected Agency. The purpose is to resolve issues related to Lean training, Facilitators, Budget Analysts and specifically what the Lean Teams must do to meet the requirements for determining staffing and budgets. I suggest that a Certified Lean trainer be brought in to train the agency’s training staff. Lean training should begin immediately by the Agency’s training staff. I also suggest that the Agency’s normal training curriculum be suspended and an all out effort be made for Lean Training of all personnel. Training should be made for staff members first followed by management and then Lean Facilitators. Lean facilitators organize and train each employee Lean Team work group which usually meets for one hour on a weekly basis. There are three major Lean Team endeavors, a high-level Steering Lean Team, a mid-level Lean team made up of mid-level managers to make document flows efficient and at-the-work-place Functional Lean Teams those who do the basic work of the Agency. The Steering Lean Team will report to the Principal Consultant and will assist in the management of the implementation.
The Steering Team also has an alternate task when required to consolidate the Agency’s internal Services as described in Lawrence Rosier’s Consolidation Model. Mid level Lean Teams are tasked to study inter-department and agency document flows.
After a period of about three to six months most Functional Lean Teams, those that were organized and trained by Facilitators, should have their Value Stream Analyses completed. I have had success with doing the flow of the current method on long butcher or brown wrapping paper taped around a conference room on the walls. The proposed improved method is done directly under the current method to highlight the differences between the methods. I would now allow the Lean Team to present the improved method to management. After the presentation the Lean study data is given to a Budget Analyst to determine the savings from the proposal.
Activities of the Principal Consultant:
The Principal Consultant will play a key role in being sure that the Lean teams are properly trained and in the selection and approach of the high-level Lean teams. The Principal consultant will insure that the activities of Analysts currently employed by the GAO and Department Auditors can determine the correct staffing level through Work Measurement and any expenses needed during the process. Some Analysts may find the proper staffing for variable processes difficult to determine. If so the Analyst should wait for the Management Consultant to make this determination. This data combined with the number of occurrences of the Function over time, obtained from a daily log kept by each Lean Team, provides the basis for an accurate Functional budget. The data from the Lean study should be Transferred to a spread sheet by the Budget Analysts and summarized in a database where all of the Agency’s Functional Data is stored. The activities of Budget Analysts are important and will be followed closely by the Principal Consultant.
The Principal Consultant will make a final review of the data to determine the actual staffing required. Note that in most cases this is not a simple calculation due to variations in the times required to do some processes. Consolidation of Agency employees is required meaning most employees who currently do not have a full time job will have to be trained to also do a second job while other employees will become redundant. A Special skill is required in balancing the work load to give the remaining employees a full time job. This may be further complicated by jobs which continually change which will require the training of a Work Planner to balance the work load assignments for each employee on a weekly basis using six sigma as a management tool. This is also the period of time for Right-sizing the entire Agency once it is known where staffing can be reduced. Layoffs should be completed within three months.
Current knowledge about Bureaucratic staffing has shown that nearly all bureaucracies are overstaffed by at least 10% and most are overstaffed by as much as 20%. Savings to the Federal Government for this implementation is largely from the salaries and benefits of redundant employees. Long term benefits continue from employee empowerment to innovate and make continuous improvement to their jobs. Other benefits are from the simplification of government processes. The Return On Investment is expected to be significant and may reach as much as $100 for every $1 invested. After three months with the Pilot Demo projections for actual savings can be made.
The Federal Government Agrees to Pay Lawrence Rosier & Associates a Fee per week for services rendered. This agreement can be canceled by either party with a one week notice. All expenses such as travel, lodging, rental car, per diem are the sole responsibility of Lawrence Rosier & Associates.
The following Client signatures of the representatives for the Federal Government represents a general agreement that the Federal Government will follow the proposal’s outline of Lawrence Rosier’s General Reform Model as presented. The proposal contains suggestions for the implementation of the General Reform Model which may be modified by mutual agreement. By the following signatures the Client also agrees to the weekly fee required by Lawrence Rosier and Associates.
_____________________ ___________________
Signatures of Federal Government Representatives
______________________
Signature of Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 12143 Cedar Grove Rd. Rolla, Missouri 65401
573 364 8789, cell 573 578 4716, fax: 573 368 2907
Email: Lawrencerosier4@gmail.com
Management Consultants Government Reform
LETTER of TRANSMITTAL: May 7, 2013
To: Assistant Secretary for Health Howard Koh, M.D., M.P.H.
From: Lawrence Rosier Principal Management Consultant representing Lawrence Rosier & Associates
Subject: Proposal for the implementation of a Pilot Demonstration for the Reform of the US Department of Health and Human Services.
The approach recommends the use Lean six Sigma to make high Level health decisions in health management and in health diagnostics supplemented by Enterprise Lean to get the highest efficiency with the most effectiveness in the DOHHS and in health care delivery systems nation wide.
The objective of this Proposal is for a pilot demonstration of how health care can be made efficient and affordable through the implementation of Lawrence Rosier’s General Reform Model, a unique method of using Enterprise Lean to obtain the highest efficiency and effectiveness possible; followed by right sizing the organization (making sure there is balanced work load), the development of a Bottoms-up budget and finally the conversion to a Team Management organization.
The method builds upon the implementation of Toyota’s Enterprise Lean with both high level Management Lean Teams studying agency systems and document flows and work place Functional Lean Teams studying all of the agencies functions involving all agency employees. The Lean Training of employees is done by agency training staff after a train-the-trainer program provided by a certified Lean trainer. The primary purpose of the Lean Teams is find the best way to perform the agencies functions getting the highest efficiency possible while improving the agencies effectiveness. An added benefit of Lean training is to empower employees for innovation and continuous improvement of their functions.
Please Review the following Proposal of a demo for DOHHS reform. This document is intended to be used to promote understanding and to start discussion on consulting activities and may be altered to fit required situations. The Federal Government may modify the attached Proposal to fit its specific needs.
Kindest Regards Lawrence Rosier Principal Management Consultant
Please Review the articles on my website for or details.
Lawrence Rosier & Associates
Management Consultants Government Reform
12143 Cedar Grove Rd. Rolla, Missouri
Phone 573-364-8789 Cell 573-578-4716
http://managementconsultant.blogsome.com
PROPOSAL May 7, 2013
By Lawrence Rosier & Associates
This Proposal for a Pilot demonstration of Federal Agency Reform is presented to Assistant Secretary for Health Howard Koh, M.D., M.P.H. By Lawrence Rosier Principal Management Consultant
This proposal is for the implementation of a pilot reform using the General Reform Model developed by Lawrence Rosier Principal Management Consultant to be implemented by The DOHHS. The Method implements Functional Lean Teams throughout the Agency. The Lean concept was developed by Toyota to involve employees in increasing the efficiency and the continuous improvement of their jobs. The benefits to the Government are from efficient and effective operations but also the change in the way government employees view their jobs empowering them to innovate and make continuous improvements to their jobs. The General Reform Model uses the data developed by the Lean Teams for Work Measurement and from that staffing and budgeting is determined. The objective of the General reform model is to get the highest efficiency possible and improve the effectiveness of the agency and turn a difficult major reform into a relatively smooth operation.
Goals:
The main goal is to maintain the serves of the agency while getting the highest productivity possible and improve the effectiveness of the agency by empowering its employees through Lean training to innovate and make continuous improvement to the systems in their jobs. This is followed by Right-sizing the agency‘s staffing, the development of a bottoms-up budget and the change to a Team Management organization
The developed Lean Team data is used for right-sizing and the development of a bottoms-up budget the result is to increase the efficiency and effectiveness of the agency which may result in the reduction of agency staffing. A major benefit is the transparency to the Federal Reform Commission of the Agency’s staffing budget. The “General Reform Model” is a approach designed Lawrence Rosier to accomplish these Goals.
Proposal Details:
I suggest a meeting to allow DOD leaders and staff members to become fully familiar with the logic of the method I am proposing using my General Reform Model.
The first step is the formation of a Departmental Reform Commission with broad powers to lead and implement reforms. This can be followed by the selection of the Agency to be reformed.
I suggest that the day to day activities of the implementation be co-chaired by the Management Consultant and a high level Department representative. The Department representative will be tasked with providing those employees who will participate in the implementation and their expenses such as equipment offices and meeting rooms. The Department representative shall be given the authority to remove any employee who attempts to block this reform implementation and refer them to the Departmental Reform Commission for disciplinary action.
The Management Consultant will form an Implementation Team with Budget Analysts and or Auditors on loan from the GAO and or the Department’s Audit Division. The required number is entirely dependent on those who can be made available and the size of the Agency. I do not bring any of my own staff to the job but chose to train current employees as Budget Analysts and Lean Facilitators to fill key jobs during the implementation . The advantage is that the knowledge they acquire in managing the new methods will stay within the Department and will be used for other continuing implementations.
The first act of the Departmental Reform Commission and the Principal Consultant is in planning for the implementation of Lean Teams within the selected Agency. The purpose is to resolve issues related to Lean training, Facilitators, Budget Analysts and specifically what the Lean Teams must do to meet the requirements for determining staffing and budgets. I suggest that a Certified Lean trainer be brought in to train the agency’s training staff. Lean training should begin immediately by the Agency’s training staff. I also suggest that the Agency’s normal training curriculum be suspended and an all out effort be made for Lean Training of all personnel. Training should be made for staff members first followed by management and then Lean Facilitators. Lean facilitators organize and train each employee Lean Team work group which usually meets for one hour on a weekly basis. There are three major Lean Team endeavors, a high-level Steering Lean Team, a mid-level Lean team made up of mid-level managers to make document flows efficient and at-the-work-place Functional Lean Teams those who do the basic work of the Agency. The Steering Lean Team will report to the Principal Consultant and will assist in the management of the implementation.
The Steering Team also has an alternate task when required to consolidate the Agency’s internal Services as described in Lawrence Rosier’s Consolidation Model. Mid level Lean Teams are tasked to study inter-department and agency document flows.
After a period of about three to six months most Functional Lean Teams, those that were organized and trained by Facilitators, should have their Value Stream Analyses completed. I have had success with doing the flow of the current method on long butcher or brown wrapping paper taped around a conference room on the walls. The proposed improved method is done directly under the current method to highlight the differences between the methods. I would now allow the Lean Team to present the improved method to management. After the presentation the Lean study data is given to a Budget Analyst to determine the savings from the proposal.
Activities of the Principal Consultant:
The Principal Consultant will play a key role in being sure that the Lean teams are properly trained and in the selection and approach of the high-level Lean teams. The Principal consultant will insure that the activities of Analysts currently employed by the GAO and Department Auditors can determine the correct staffing level through Work Measurement and any expenses needed during the process. Some Analysts may find the proper staffing for variable processes difficult to determine. If so the Analyst should wait for the Management Consultant to make this determination. This data combined with the number of occurrences of the Function over time, obtained from a daily log kept by each Lean Team, provides the basis for an accurate Functional budget. The data from the Lean study should be Transferred to a spread sheet by the Budget Analysts and summarized in a database where all of the Agency’s Functional Data is stored. The activities of Budget Analysts are important and will be followed closely by the Principal Consultant.
The Principal Consultant will make a final review of the data to determine the actual staffing required. Note that in most cases this is not a simple calculation due to variations in the times required to do some processes. Consolidation of Agency employees is required meaning most employees who currently do not have a full time job will have to be trained to also do a second job while other employees will become redundant. A Special skill is required in balancing the work load to give the remaining employees a full time job. This may be further complicated by jobs which continually change which will require the training of a Work Planner to balance the work load assignments for each employee on a weekly basis using six sigma as a management tool. This is also the period of time for Right-sizing the entire Agency once it is known where staffing can be reduced. Layoffs should be completed within three months.
Current knowledge about Bureaucratic staffing has shown that nearly all bureaucracies are overstaffed by at least 10% and most are overstaffed by as much as 20%. Savings to the Federal Government for this implementation is largely from the salaries and benefits of redundant employees. Long term benefits continue from employee empowerment to innovate and make continuous improvement to their jobs. Other benefits are from the simplification of government processes. The Return On Investment is expected to be significant and may reach as much as $100 for every $1 invested. After three months with the Pilot Demo projections for actual savings can be made.
The Federal Government Agrees to Pay Lawrence Rosier & Associates a Fee per week for services rendered. This agreement can be canceled by either party with a one week notice. All expenses such as travel, lodging, rental car, per diem are the sole responsibility of Lawrence Rosier & Associates.
The following Client signatures of the representatives for the Federal Government represents a general agreement that the Federal Government will follow the proposal’s outline of Lawrence Rosier’s General Reform Model as presented. The proposal contains suggestions for the implementation of the General Reform Model which may be modified by mutual agreement. By the following signatures the Client also agrees to the weekly fee required by Lawrence Rosier and Associates.
_____________________ ___________________
Signatures of Federal Government Representatives
______________________
Signature of Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 12143 Cedar Grove Rd. Rolla, Missouri 65401
573 364 8789, cell 573 578 4716, fax: 573 368 2907
Email: Lawrencerosier4@gmail.com
Article 31. Why Medical Bills Are Killing Us
Excerpt: “Why Medical Bills Are Killing Us”
The American health care system dominates the
nation’s economy and puts demands on taxpayers to a degree unequaled
anywhere else on earth...
Nick Veasey for TIME
Below is an excerpt of Steve Brill’s Special Report for TIME. Sean Recchi is a 42-Year-Old from Lancaster, Ohio, who was told last March that he had non-Hodgkin’s lymphoma.
I got the idea for this article when I was visiting Rice University last year. As I was leaving the campus, which is just outside the central business district of Houston, I noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. I was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medial facilities, of which MD Anderson is the lead brand name. Medicine had obviously become a huge business. (In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies.) How did that happen? I wondered. Where’s all that money coming from? And where is it going? I have spent the past seven months trying to figure out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.
When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational-no rhyme or reason- about the costs they face in a marketplace they entered through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.
Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?
What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester at college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?
The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country- from Stamford Conn., to Marlton, N.J., to Oklahoma City- the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to second-tier hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over a $1 million.
Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. We now spend almost 20% of our gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.
Article 30. Affordable Health Care in Cities but not in Rural Areas
Obamacare was designed after the Boston Health Care example with large populations and large numbers of hospitals and other health care facilities serving a large urban population. It was built around the competition for health services for the urban population. This strategy appears to work well in Boston New York and Chicago. But this approach breaks down into complete failure in rural areas of the country that have only one hospital covering as much as a hundred square miles. These rural hospitals struggle to survive anyway they can by charging enormous hospital fees and getting state and federal support. Obamacare seeks to get around this problem by creating state wide competition among its hospitals an approach that has virtually no chance for success.
Example of the Rural vs. Urban problem
A close elderly friend of mine living a rural small town in Missouri needed Cataract Surgery for her to continue to drive her car. Cataract Surgery involves replacing the damaged eye lens with a plastic lens costing about $11. The procedure takes about five minuets for each eye. Only one eye is done at a time in out patient surgery with the patient coming in the next day for the removal of the eye bandages and inspecting of the eye.
I did some research for her to find the most affordable alternative she had Medicare but no supplemental insurance these are the results:
1. The best prices were in Springfield Missouri more than a hundred miles away. A private eye clinic gave me the following estimate:
$190 for eye examination
Cataract surgery Doctor and Clinic fee for each eye $1635 done in the clinic
Total cost for two eyes = $3460
Patients cost at 20% of total = $692
Total Cost to Medicare for two eyes = $2768
2. The second best price in her home town Rolla Missouri at Mercy Clinic.
$220 for eye examination
Cataract surgery each eye: Doctors fee $2066
Clinic out patient fee for each eye $5400 done in the clinic
Total cost for two eyes = $15,152
Patients cost at 20% of total = $3,030
Total Cost to Medicare for two eyes = $12,122
3. The third and highest price in her home town at Rolla Missouri Phelps County hospital.
$220 for eye examination
Cataract surgery each eye: Doctors fee $1835
Clinic out patient fee for each eye $9500 done in the hospital,
Total cost for two eyes = $22,890
Patients cost at 20% of total = $4578
Total Cost to Medicare for two eyes = $18,312
Since the patient could not get to the Springfield Missouri Clinic she decided to get MediGap supplemental insurance and have the Eye surgery done in her home town at the cost of the Medigap annual preimium cost. This an excellent example of the differences between urban and rural healthcare costs.
I saw on TV recently that a group of Eye Surgeons from the US had flown to Africa for a one week stay to treat hundreds of indigent patients with Cataract Surgery at the cost of bandages and an eleven dollar plastic lens. Since there is practically no medical emergency associated with Cataract Surgery Why couldn’t Medicare do this in the US at a fraction of the cost. Could it be that there might be some objection from Eye Surgeons and other doctors who specialize in diseases of the rich tax payer.
Obama care has not addressed this affordable health care “dead on arrival” problem. This problem is just one of what appears to hundreds of similar problems among them the higher cost of drugs in the US being another.
Comment by Lawrence Rosier
Somehow the Federal Government must provide a competitive environment in health care in the rural areas of the US to even begin to make Obamacare work.
My recommendation is that since the federal government must provide health care for thousands of Veterans and that the current aging VA Hospitals need to be replaced. I would replace them with efficient modular hospitals. These new efficient hospitals could provide the basis for an affordable Health Care competitive system in the US. But to do this I further recommend that the Washington bureaucrats not be allowed to design this new system and that it be designed by the DOD’s own Lean Six Sigma trained personnel.
Example of the Rural vs. Urban problem
A close elderly friend of mine living a rural small town in Missouri needed Cataract Surgery for her to continue to drive her car. Cataract Surgery involves replacing the damaged eye lens with a plastic lens costing about $11. The procedure takes about five minuets for each eye. Only one eye is done at a time in out patient surgery with the patient coming in the next day for the removal of the eye bandages and inspecting of the eye.
I did some research for her to find the most affordable alternative she had Medicare but no supplemental insurance these are the results:
1. The best prices were in Springfield Missouri more than a hundred miles away. A private eye clinic gave me the following estimate:
$190 for eye examination
Cataract surgery Doctor and Clinic fee for each eye $1635 done in the clinic
Total cost for two eyes = $3460
Patients cost at 20% of total = $692
Total Cost to Medicare for two eyes = $2768
2. The second best price in her home town Rolla Missouri at Mercy Clinic.
$220 for eye examination
Cataract surgery each eye: Doctors fee $2066
Clinic out patient fee for each eye $5400 done in the clinic
Total cost for two eyes = $15,152
Patients cost at 20% of total = $3,030
Total Cost to Medicare for two eyes = $12,122
3. The third and highest price in her home town at Rolla Missouri Phelps County hospital.
$220 for eye examination
Cataract surgery each eye: Doctors fee $1835
Clinic out patient fee for each eye $9500 done in the hospital,
Total cost for two eyes = $22,890
Patients cost at 20% of total = $4578
Total Cost to Medicare for two eyes = $18,312
Since the patient could not get to the Springfield Missouri Clinic she decided to get MediGap supplemental insurance and have the Eye surgery done in her home town at the cost of the Medigap annual preimium cost. This an excellent example of the differences between urban and rural healthcare costs.
I saw on TV recently that a group of Eye Surgeons from the US had flown to Africa for a one week stay to treat hundreds of indigent patients with Cataract Surgery at the cost of bandages and an eleven dollar plastic lens. Since there is practically no medical emergency associated with Cataract Surgery Why couldn’t Medicare do this in the US at a fraction of the cost. Could it be that there might be some objection from Eye Surgeons and other doctors who specialize in diseases of the rich tax payer.
Obama care has not addressed this affordable health care “dead on arrival” problem. This problem is just one of what appears to hundreds of similar problems among them the higher cost of drugs in the US being another.
Comment by Lawrence Rosier
Somehow the Federal Government must provide a competitive environment in health care in the rural areas of the US to even begin to make Obamacare work.
My recommendation is that since the federal government must provide health care for thousands of Veterans and that the current aging VA Hospitals need to be replaced. I would replace them with efficient modular hospitals. These new efficient hospitals could provide the basis for an affordable Health Care competitive system in the US. But to do this I further recommend that the Washington bureaucrats not be allowed to design this new system and that it be designed by the DOD’s own Lean Six Sigma trained personnel.
Article 29. Suggestions for How Boeing Can Deal with Sequestration
Besides the massive cost reductions sequestration is bringing to government it is also impacting government contractors especially defense contractors like Boeing. Boeing is one of the best managed companies in the US so it becomes critical to its survival in how it deals with the sequestration threat.
Boeing will shrink its defense business by cutting $1.6 billion in its operations over the next three years.
Boeing has been a leader in implementing Lean Six Sigma in its operations even volunteering its Lean expertise to the state of Washington. But what Boeing missed is that it has not followed Toyota’s TPS (Toyota’s Production System) aka Enterprise Lean and used it to empower all of its employees to innovate and make continuous improvements to its functional systems.
Nearly all manufacturing companies manage their production and production support areas well and they have been doing this since Henry Ford introduced the automated assembly line. But few American manufactures have introduced Enterprise Lean into their office areas except Toyota and other oriental auto manufactures. Chrysler and General Motors are among the poorest managed even Ford doesn’t get it. They all are continuing to ignore Toyota’s practice of using Enterprise Lean throughout its manufacturing facilities including its office areas. I call the office areas found in American manufacturing their “Dead Zone” an area of considerable inefficiency that has been completely ignored by manufacturing management. This is the key to making American manufacturing competitive with the rest of the world. Now is the time for the DOD to bring Defense Contractors to the table and implement Enterprise Lean across the board.
Suggestion for Getting the highest Efficiency in all Manufacturing Companies
I propose that manufacturing companies can get the highest efficiency and effectiveness possible by implementing by General Reform Model.
The Steps of the General Reform Model
1. Formation of a Company Reform Committee to oversee the implementation of the reforms. See Article 259. Bringing Bureaucracy from the 19 Century to the 21 Century.
2. Implementation of Enterprise Lean, brings a cultural change by training all relevant employees in Lean Teams to use Lean tools and to innovate making continuous improvements to company systems. See Article 137. Role of Lean Facilitator and Budget Analyst, and Article 239. Applying Toyota’s TPS to Government.
3. Documentation of the Lean Team’s improved methods and the time to do each function. Done by Budget analysts with special training the data is used in the next step for right-sizing the organization. Download my example Lean Team Data documentation spreadsheet. Click on the link “Free Ebooks”.
4. The employee work force is Right-Sized to fit the workload (making sure each employee has a full time job). this step uses the Lean Team Data as Work Measurement to Right-size the organization. It is important that redundant employees must be removed from the work environment and retrained for new jobs or laid off.
5. Improving Efficiency in Office Workload Planning and Scheduling by first grouping functions by skill level and expertise. This is followed by developing a weekly Work Load Plan. As actual data is developed the plan is revised for continuous improvement. See Article 249. Office Workload Planning and Scheduling.
6. The bureaucratic organization is replaced with a Team Managed organization with even greater efficiency. See Article 241. Bureaucracy Versus Team Management.
The Process of Work Measurement and Right-Sizing
This phase of the general reform Model is not a part of Enterprise Lean but is necessary for getting the highest efficiency possible. Budget Analysts analyze the Lean Teams’ data method and determine the staffing and expenses required for each process in a function and then documents the function’s processes their staffing and costs in spread sheet. Reporting of work completions may be necessary to ensure a balanced work load. Staffing of variable functions does not require measurement to the level of detail that a Standard requires for productivity reporting in industry on an assembly line.
This effort is used to arrive at Right-Sizing with a bottoms-up budget. This simplifies the budgeting process based on real numbers rather than a top-down budget based on last years staffing and expenses.
This depends on the characteristics of the process and how it varies. Which may appear to be difficult but don’t throw up your hands too soon remember it does not have to be perfect. The staffing of a function can be an estimate because you cannot staff with less than a full person.
Article on How Boeing is Dealing with Sequestration
'Sequestration' Threat Hits Boeing Defense Nov. 7, 2012
Dominic Gates Source: 2012 The Seattle Times
Boeing said Wednesday it will continue to shrink its defense business by reducing the number of managers and facilities and consolidating business units to cut another $1.6 billion in costs in the next three years.
The shake-up in Boeing's defense division is an acceleration of a cost-cutting and restructuring process that has been going on for two years in response to reduced U.S. spending on new military and space programs.
Boeing's ongoing cost cuts must continue even if the threat of budget sequestration is averted by the new Congress, Boeing spokesman Todd Blecher said.
"No matter what happens to the defense budget, the trend line is flat to down," he said.
In a memo to defense-side employees Wednesday, Dennis Muilenburg, chief executive of the St. Louis-based Boeing Defense, Space & Security, or BDS, division, said the cost-cutting program has saved $2.2 billion over the past two years.
For the next $1.6 billion cost-reduction phase, the company is "putting everything in our business under a microscope," Muilenburg wrote.
He announced the amalgamation of various business units within BDS that will cut the number of executives by 10 percent - with a "sharp reduction in vice president and director-level positions."
The remaining executives will have expanded roles.
Overall, Muilenburg said in the memo, by the end of this year the number of executives will be 30 percent lower than it was in 2010.
He said BDS wants to reduce its management costs by a further 10 percent by the end of next year, reducing the ratio of managers to non-managers to 12.5 to 1, from 9.7 to 1 today.
Blecher said Boeing is "looking at management levels below the executive ranks" for the next round of reductions.
Rather than lose their jobs, some displaced BDS managers may transfer to the booming Commercial Airplanes side of the company, he said.
The company's defense operations in Washington state's Puget Sound region remain "very robust," particularly the P-8 anti-submarine plane and the Air Force KC-46 refueling tanker, Blecher said.
"Those two programs alone are huge growth drivers for the defense side of the business," he said.
Boeing will shrink its defense business by cutting $1.6 billion in its operations over the next three years.
Boeing has been a leader in implementing Lean Six Sigma in its operations even volunteering its Lean expertise to the state of Washington. But what Boeing missed is that it has not followed Toyota’s TPS (Toyota’s Production System) aka Enterprise Lean and used it to empower all of its employees to innovate and make continuous improvements to its functional systems.
Nearly all manufacturing companies manage their production and production support areas well and they have been doing this since Henry Ford introduced the automated assembly line. But few American manufactures have introduced Enterprise Lean into their office areas except Toyota and other oriental auto manufactures. Chrysler and General Motors are among the poorest managed even Ford doesn’t get it. They all are continuing to ignore Toyota’s practice of using Enterprise Lean throughout its manufacturing facilities including its office areas. I call the office areas found in American manufacturing their “Dead Zone” an area of considerable inefficiency that has been completely ignored by manufacturing management. This is the key to making American manufacturing competitive with the rest of the world. Now is the time for the DOD to bring Defense Contractors to the table and implement Enterprise Lean across the board.
Suggestion for Getting the highest Efficiency in all Manufacturing Companies
I propose that manufacturing companies can get the highest efficiency and effectiveness possible by implementing by General Reform Model.
The Steps of the General Reform Model
1. Formation of a Company Reform Committee to oversee the implementation of the reforms. See Article 259. Bringing Bureaucracy from the 19 Century to the 21 Century.
2. Implementation of Enterprise Lean, brings a cultural change by training all relevant employees in Lean Teams to use Lean tools and to innovate making continuous improvements to company systems. See Article 137. Role of Lean Facilitator and Budget Analyst, and Article 239. Applying Toyota’s TPS to Government.
3. Documentation of the Lean Team’s improved methods and the time to do each function. Done by Budget analysts with special training the data is used in the next step for right-sizing the organization. Download my example Lean Team Data documentation spreadsheet. Click on the link “Free Ebooks”.
4. The employee work force is Right-Sized to fit the workload (making sure each employee has a full time job). this step uses the Lean Team Data as Work Measurement to Right-size the organization. It is important that redundant employees must be removed from the work environment and retrained for new jobs or laid off.
5. Improving Efficiency in Office Workload Planning and Scheduling by first grouping functions by skill level and expertise. This is followed by developing a weekly Work Load Plan. As actual data is developed the plan is revised for continuous improvement. See Article 249. Office Workload Planning and Scheduling.
6. The bureaucratic organization is replaced with a Team Managed organization with even greater efficiency. See Article 241. Bureaucracy Versus Team Management.
The Process of Work Measurement and Right-Sizing
This phase of the general reform Model is not a part of Enterprise Lean but is necessary for getting the highest efficiency possible. Budget Analysts analyze the Lean Teams’ data method and determine the staffing and expenses required for each process in a function and then documents the function’s processes their staffing and costs in spread sheet. Reporting of work completions may be necessary to ensure a balanced work load. Staffing of variable functions does not require measurement to the level of detail that a Standard requires for productivity reporting in industry on an assembly line.
This effort is used to arrive at Right-Sizing with a bottoms-up budget. This simplifies the budgeting process based on real numbers rather than a top-down budget based on last years staffing and expenses.
This depends on the characteristics of the process and how it varies. Which may appear to be difficult but don’t throw up your hands too soon remember it does not have to be perfect. The staffing of a function can be an estimate because you cannot staff with less than a full person.
Article on How Boeing is Dealing with Sequestration
'Sequestration' Threat Hits Boeing Defense Nov. 7, 2012
Dominic Gates Source: 2012 The Seattle Times
Boeing said Wednesday it will continue to shrink its defense business by reducing the number of managers and facilities and consolidating business units to cut another $1.6 billion in costs in the next three years.
The shake-up in Boeing's defense division is an acceleration of a cost-cutting and restructuring process that has been going on for two years in response to reduced U.S. spending on new military and space programs.
Boeing's ongoing cost cuts must continue even if the threat of budget sequestration is averted by the new Congress, Boeing spokesman Todd Blecher said.
"No matter what happens to the defense budget, the trend line is flat to down," he said.
In a memo to defense-side employees Wednesday, Dennis Muilenburg, chief executive of the St. Louis-based Boeing Defense, Space & Security, or BDS, division, said the cost-cutting program has saved $2.2 billion over the past two years.
For the next $1.6 billion cost-reduction phase, the company is "putting everything in our business under a microscope," Muilenburg wrote.
He announced the amalgamation of various business units within BDS that will cut the number of executives by 10 percent - with a "sharp reduction in vice president and director-level positions."
The remaining executives will have expanded roles.
Overall, Muilenburg said in the memo, by the end of this year the number of executives will be 30 percent lower than it was in 2010.
He said BDS wants to reduce its management costs by a further 10 percent by the end of next year, reducing the ratio of managers to non-managers to 12.5 to 1, from 9.7 to 1 today.
Blecher said Boeing is "looking at management levels below the executive ranks" for the next round of reductions.
Rather than lose their jobs, some displaced BDS managers may transfer to the booming Commercial Airplanes side of the company, he said.
The company's defense operations in Washington state's Puget Sound region remain "very robust," particularly the P-8 anti-submarine plane and the Air Force KC-46 refueling tanker, Blecher said.
"Those two programs alone are huge growth drivers for the defense side of the business," he said.
Article 28. Example Proof of More than 10% and 50% Overstaffing
Atlanta Georgia Example:
Ref. Where Less is More Efficient Atlanta’s four-day workweek has unexpected results.
By John O’Leary from Governing.com September 2, 2009
…Like many cities, Atlanta was facing a big projected revenue shortfall, between $60 million and $80 million. To generate savings, Mayor Shirley Franklin chose to institute a furlough program. Starting in December 2008, all municipal employees (except certain public safety workers) were shifted from 40 hours per week to 36 and began working four days per week, nine hours per day. Cost savings were generated through a commensurate 10 percent decrease in pay, as well as additional savings from decreased energy usage in municipal buildings.
“Employees love it,” says David Edwards, a senior policy advisor to Mayor Franklin. “They really love having the three-day weekends.” Employee commute time and gas usage has been reduced by 20 percent, and the increased leisure time of a steady stream of three-day weekends has been a major quality-of-life boost. In addition to improved morale, it appears that the reduced work week may be cutting absenteeism. The biggest surprise with the Atlanta four-day work week program has been the unexpected boosts to productivity. “There has been a direct productivity boost in a lot of operations, particularly those that entail travel, setup and breakdown time, such as road repairs,” says Edwards. For those jobs with one-hour transitions on each end, the four-hour weekly reduction in compensation translates into only two hours fewer of productive labor.
Moreover, productivity per hour seems to have increased. Atlanta’s ATLStat performance measurement system shows that the decrease in work hours has not translated into lower outputs. “The 10 percent decrease in work time is not showing up on the outcome side,” said Edwards. “There has been no increase in backlogs, and all the performance targets we use — potholes filled, building permits issued, and that sort of thing — are showing no decreases in output. Zero.”
According to Edwards, when the program was first introduced, residents still came to City Hall or elsewhere seeking services on Fridays, only to be turned away. “Once people adjusted to the new hours, we really haven’t seen any complaints from the public,” says Edwards. In some cases, shorter business hours at City Hall prompt citizens to change their behaviors, renewing business licenses by mail or paying parking tickets on the Web rather than in person. Such transactions are generally less costly for the city to process.
In late June, with the support of Mayor Franklin, the city council voted 8-7 to increase city property taxes by more than 40 percent. In light of this tax hike, officials chose to discontinue the reduced work schedule. The furlough programs were mostly ended at the beginning of July, and Atlanta’s employees are back to the old nine-to-five.
Comments by the Author
Let’s take another look at what is going on here “city employees working 36 hours per week still produce the same as when they worked 40 hours per week”. This proves that the city is at least over staffed by 10%. I have stated in numerous articles that where Work Measurement is not used in a bureaucracy there exists at least 10% over staffing. But since the city of Atlanta does not do Work Measurement over staffing is most likely more than 10%.
Example Proof of More than 50% Over Staffing
Milan County Texas near Austin Texas:
Milan County Texas employees were found to be spending 52% of their work time on unnecessary websites especially Facebook. The following article shows that by using Work Measurement 50% of the Milan County Texas employees are redundant and County Commissioners could save the county taxpayers $millions. But all the County Commissioners did was to block access to Facebook. The fact is that most government employees Never get laid off!
Some of the 130 county employees in Milam County were spending more than 50% of their work time on Facebook. After the county’s computers started going down with viruses they found that employees were spending over half of their work time on Facebook. The result was that the Facebook site was blocked on employee’s computers. The commissioners said that by blocking the Facebook site more work will get done.
Ref. ABC News: Milan County Texas Milam Co. employees spending hours on Facebook at work
Dec 28, 2010 By: Amanda Gomez.
Comment by the Author
I would ask the Commissioners this question. How is having twice as many employees than are needed going to get more productivity? But even if the County Commissioners were to downsize by 50% within a few years most of the jobs would be replaced. It may be obvious which of the 130 employees should be laid off and which should be kept in Milan County but in larger cities with more employees city leaders would have no idea which employees are productive and which are not without doing Work Measurement or as in this case measuring the time spent on nonessential activities and websites.
With my General Reform Model using Lean Teams and Work Measurement you will know that of the 130 employees which of the 68 employees are redundant. You will also know how long it takes to do each of the county’s tasks and with that data you can create a bottoms-up budget for all of the city’s tasks. With Team Management as a permanent implementation city employees are empowered use innovation and to work together in teams for the continuous improvement of the city’s services.
Proposal to Milan County Texas
From: Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 573 364 8789 Website: http://managementconsultant.blogsome.com Since 2005, 280 articles and ebooks. REF: Article 198. Milam County Texas was Found to be Over Staffed by fifty Percent
From ABC News: MILAM COUNTY TEXAS
Milam Co. employees spending hours on Facebook at work
Posted: Dec 28, 2010 5:21 PM CST By: Amanda Gomez
To: Dave Barkemeyer Milam County Judge Milam, Texas
From: Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 573 364 8789 Cell 573 578 4716 Website: http://managementconsultant.blogsome.com Since 2005, 280 articles and ebooks.
Attached is my proposal for the reform of Milam County's government. I have chosen Milam County because it is the only county in the nation that has been honest in reveling the problem of staffing county government. All County Governments have the problem of staffing spikes caused mostly by elections.
The intent of this proposal is create a pilot template for reform which Texas Counties can follow to improve the efficiency and service to county residents. The approach is to follow the reform models developed by the Principal Consultant Lawrence Rosier after which most details and findings can be directly replicated if so desired by other Texas counties. The intended purpose of this Pilot implementation is to benefit Milam County as well as the State of Texas therefore it is suggested that funding for the development of the pilot be provided by the Texas State government.
Savings and Consulting fees
Estimated annual savings of $768,000 is based on 20% of the total salaries and benefits of the 2012 Milam County Budget. Actual savings is unknown but may be more than the 20% shown.
The County Government may terminate the implementation and the Consultants contract at any time with one weeks notice. The weekly consulting fee covers all fees and expenses including travel and overhead and is to be paid weekly.
For more information on this proposal please contact the author.
Lawrence Rosier Principal Management Consultant
12143 Cedar Grove Rd. Rolla Missouri 65401 573 364 8789
Cell Phone 573 578 4716
Followup Letter to the editor
Editor & Publisher Of the Cameron Herald October 12, 2012
On Dec 28, 2010 ABC News reporter Amanda Gomez reported that Milam Co. employees were spending half of their work time on Facebook. This problem is not unique to Milam County all counties have this problem.
I have submitted a Proposal to Dave Barkemeyer on October 8, 2012.
The proposal is to implement reforms in the county government to make it operate more efficiently like a private business. The reform implements Toyota’s Enterprise Lean training all county employees in using the Lean tools to review the county systems making them more efficient and effective. County employees will be trained in the methods of work assignments and balancing work loads to increase productivity. The objective is make the county government more efficient but with increased efficiency there is a reduced requirement for personnel. To minimize the impact I have recommended that the county go to a four day workweek this gives the county an automatic 10% increase in productivity with out reducing staffing. The result is an annual estimated savings of from $700 thousand to $1 million. Please comment on this proposal.
Lawrence Rosier Principal Management Consultant 573 364 8789 In the proposal I estimated that the savings to Milam County could be more than 20% of current county salaries and benefits (from Milam county 2012 budget).
20% overstaffed $768,000 annual savings
30% overstaffed $1,152,000 annual savings
50% overstaffed $1,920,000 annual savings
This is a limited time offer which could save Milan County significant savings leading to lower taxes. If you have questions concerning this proposal contact me by email or by phone 573 364 8789. There was no response to this letter or the proposal.
Ref. Where Less is More Efficient Atlanta’s four-day workweek has unexpected results.
By John O’Leary from Governing.com September 2, 2009
…Like many cities, Atlanta was facing a big projected revenue shortfall, between $60 million and $80 million. To generate savings, Mayor Shirley Franklin chose to institute a furlough program. Starting in December 2008, all municipal employees (except certain public safety workers) were shifted from 40 hours per week to 36 and began working four days per week, nine hours per day. Cost savings were generated through a commensurate 10 percent decrease in pay, as well as additional savings from decreased energy usage in municipal buildings.
“Employees love it,” says David Edwards, a senior policy advisor to Mayor Franklin. “They really love having the three-day weekends.” Employee commute time and gas usage has been reduced by 20 percent, and the increased leisure time of a steady stream of three-day weekends has been a major quality-of-life boost. In addition to improved morale, it appears that the reduced work week may be cutting absenteeism. The biggest surprise with the Atlanta four-day work week program has been the unexpected boosts to productivity. “There has been a direct productivity boost in a lot of operations, particularly those that entail travel, setup and breakdown time, such as road repairs,” says Edwards. For those jobs with one-hour transitions on each end, the four-hour weekly reduction in compensation translates into only two hours fewer of productive labor.
Moreover, productivity per hour seems to have increased. Atlanta’s ATLStat performance measurement system shows that the decrease in work hours has not translated into lower outputs. “The 10 percent decrease in work time is not showing up on the outcome side,” said Edwards. “There has been no increase in backlogs, and all the performance targets we use — potholes filled, building permits issued, and that sort of thing — are showing no decreases in output. Zero.”
According to Edwards, when the program was first introduced, residents still came to City Hall or elsewhere seeking services on Fridays, only to be turned away. “Once people adjusted to the new hours, we really haven’t seen any complaints from the public,” says Edwards. In some cases, shorter business hours at City Hall prompt citizens to change their behaviors, renewing business licenses by mail or paying parking tickets on the Web rather than in person. Such transactions are generally less costly for the city to process.
In late June, with the support of Mayor Franklin, the city council voted 8-7 to increase city property taxes by more than 40 percent. In light of this tax hike, officials chose to discontinue the reduced work schedule. The furlough programs were mostly ended at the beginning of July, and Atlanta’s employees are back to the old nine-to-five.
Comments by the Author
Let’s take another look at what is going on here “city employees working 36 hours per week still produce the same as when they worked 40 hours per week”. This proves that the city is at least over staffed by 10%. I have stated in numerous articles that where Work Measurement is not used in a bureaucracy there exists at least 10% over staffing. But since the city of Atlanta does not do Work Measurement over staffing is most likely more than 10%.
Example Proof of More than 50% Over Staffing
Milan County Texas near Austin Texas:
Milan County Texas employees were found to be spending 52% of their work time on unnecessary websites especially Facebook. The following article shows that by using Work Measurement 50% of the Milan County Texas employees are redundant and County Commissioners could save the county taxpayers $millions. But all the County Commissioners did was to block access to Facebook. The fact is that most government employees Never get laid off!
Some of the 130 county employees in Milam County were spending more than 50% of their work time on Facebook. After the county’s computers started going down with viruses they found that employees were spending over half of their work time on Facebook. The result was that the Facebook site was blocked on employee’s computers. The commissioners said that by blocking the Facebook site more work will get done.
Ref. ABC News: Milan County Texas Milam Co. employees spending hours on Facebook at work
Dec 28, 2010 By: Amanda Gomez.
Comment by the Author
I would ask the Commissioners this question. How is having twice as many employees than are needed going to get more productivity? But even if the County Commissioners were to downsize by 50% within a few years most of the jobs would be replaced. It may be obvious which of the 130 employees should be laid off and which should be kept in Milan County but in larger cities with more employees city leaders would have no idea which employees are productive and which are not without doing Work Measurement or as in this case measuring the time spent on nonessential activities and websites.
With my General Reform Model using Lean Teams and Work Measurement you will know that of the 130 employees which of the 68 employees are redundant. You will also know how long it takes to do each of the county’s tasks and with that data you can create a bottoms-up budget for all of the city’s tasks. With Team Management as a permanent implementation city employees are empowered use innovation and to work together in teams for the continuous improvement of the city’s services.
Proposal to Milan County Texas
From: Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 573 364 8789 Website: http://managementconsultant.blogsome.com Since 2005, 280 articles and ebooks. REF: Article 198. Milam County Texas was Found to be Over Staffed by fifty Percent
From ABC News: MILAM COUNTY TEXAS
Milam Co. employees spending hours on Facebook at work
Posted: Dec 28, 2010 5:21 PM CST By: Amanda Gomez
To: Dave Barkemeyer Milam County Judge Milam, Texas
From: Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates 573 364 8789 Cell 573 578 4716 Website: http://managementconsultant.blogsome.com Since 2005, 280 articles and ebooks.
Attached is my proposal for the reform of Milam County's government. I have chosen Milam County because it is the only county in the nation that has been honest in reveling the problem of staffing county government. All County Governments have the problem of staffing spikes caused mostly by elections.
The intent of this proposal is create a pilot template for reform which Texas Counties can follow to improve the efficiency and service to county residents. The approach is to follow the reform models developed by the Principal Consultant Lawrence Rosier after which most details and findings can be directly replicated if so desired by other Texas counties. The intended purpose of this Pilot implementation is to benefit Milam County as well as the State of Texas therefore it is suggested that funding for the development of the pilot be provided by the Texas State government.
Savings and Consulting fees
Estimated annual savings of $768,000 is based on 20% of the total salaries and benefits of the 2012 Milam County Budget. Actual savings is unknown but may be more than the 20% shown.
The County Government may terminate the implementation and the Consultants contract at any time with one weeks notice. The weekly consulting fee covers all fees and expenses including travel and overhead and is to be paid weekly.
For more information on this proposal please contact the author.
Lawrence Rosier Principal Management Consultant
12143 Cedar Grove Rd. Rolla Missouri 65401 573 364 8789
Cell Phone 573 578 4716
Followup Letter to the editor
Editor & Publisher Of the Cameron Herald October 12, 2012
On Dec 28, 2010 ABC News reporter Amanda Gomez reported that Milam Co. employees were spending half of their work time on Facebook. This problem is not unique to Milam County all counties have this problem.
I have submitted a Proposal to Dave Barkemeyer on October 8, 2012.
The proposal is to implement reforms in the county government to make it operate more efficiently like a private business. The reform implements Toyota’s Enterprise Lean training all county employees in using the Lean tools to review the county systems making them more efficient and effective. County employees will be trained in the methods of work assignments and balancing work loads to increase productivity. The objective is make the county government more efficient but with increased efficiency there is a reduced requirement for personnel. To minimize the impact I have recommended that the county go to a four day workweek this gives the county an automatic 10% increase in productivity with out reducing staffing. The result is an annual estimated savings of from $700 thousand to $1 million. Please comment on this proposal.
Lawrence Rosier Principal Management Consultant 573 364 8789 In the proposal I estimated that the savings to Milam County could be more than 20% of current county salaries and benefits (from Milam county 2012 budget).
20% overstaffed $768,000 annual savings
30% overstaffed $1,152,000 annual savings
50% overstaffed $1,920,000 annual savings
This is a limited time offer which could save Milan County significant savings leading to lower taxes. If you have questions concerning this proposal contact me by email or by phone 573 364 8789. There was no response to this letter or the proposal.
Article 27. The Difficult Details of Reform
Handling Variations in Process Times
You don’t need to know how to do differential equations in this section but what is needed is patience to prevent you from becoming frustrated, basic logic and the ability to do arithmetic.
What usually happens is that managers make no attempt to do Work Measurement because a function’s processes vary in time. The other extreme is that followed by the US government where an elaborate effort is made to set Standards on all processes so that productivity can be measured. I disagree with the US government approach because a valid Standard can only be set on non-variable processes for the measurement of productivity. If a process varies in the length of time to perform it, then the measurement of a process’s productivity becomes invalid and therefore useless. Besides; most employees are smart enough to manipulate their productivity reports to their advantage. I don’t recommend productivity reporting because it is usually invalid and wastes the employee’s time I do recommend a daily log of the activities performed, the type of activity and the number of times it occurs. This will form the basis of the historical data needed for determining the time for the activity and in determining a budget.
The approach recommend by the author
First have a Lean Team study a function’s Process Flow to determine the best way of performing the function.
Second have a OIG Analyst analyze the Lean Team’s method and determine the staffing and expenses required for each process in a function and then document the function’s processes their staffing and costs in spread sheet. Then get out of the employees’ way and let them do their job. Don’t badger employees with recording and reporting their productivity. Staffing does not require measurement to the level of detail that a Standard requires for productivity reporting. The staffing of a function can be an estimate because you cannot staff with less than a full person.
All this effort is to arrive at a satisfactory staffing base with a bottoms-up budget. This simplifies the budgeting process based on real numbers rather than a top-down budget based on last years staffing and expenses.
How you handle variations in process times when staffing a function.
This depends on the characteristics of the process and how it varies. But don’t throw up your hands too soon remember it does not have to be perfect.
For analysis purposes a functions processes can be divided into classifications based on the characteristics of the work content of the processes. The following characteristics may be used:
Technical Capability Involvement
I have found that technical tasks can vary directly with the experience and capability of the employee doing the task. An employee with 3 years experience can do a job in half the time of a new employee. With a new employee I would staff using the pay level of a 3 year employee and expect to absorb the difference in pay grade in overtime expense for the new employee.
An engineer with 10 years experience may be five times more efficient than a new engineering employee. In this case you may have to hire more engineers when the experienced engineer retires but don’t change the budget until he retires.
Routine Activities versus Non-Routine Activities
This is the case where on the job decisions must be made. For example an inspector on a dock inspects incoming pallets of equipment. A time for doing this job can be estimated based on the number of pallets that arrive on the dock based on history. But what varies is when the inspector finds a defective pallet of equipment. This again is best handled by historical data. Remember if the inspector falls behind then due to increased problems then overtime may be necessary. To prevent overtime abuse I have recommended that all employees be a part of a team that works together to get the job done.
Where decisions are the job
All work involves continuous decision making it is just that we are so unaware of the routine decisions that we make that we don’t recognize them as decisions. All decisions can have a preset approach that can lead to more efficiency. Think of an original big decision as a set of known small decisions with something new added. This is generally done by management leaving the position just to be filled.
Then there are the lower level routine decisions which are repeatable within limits. Here again use historical data to determine staffing. I don’t recommend putting a time limit on making important original decisions other pressures will generally determine a time limit.
Estimating Workload by Determining Impact Triggers
One of the necessary jobs of a manager or any planner is determining how long it takes to complete a task. If the task takes too long it brings pressure on a tight schedule and if the schedule is too loose there is lost time waiting. I use the following process to analyze the task for what I call impact triggers. Impact triggers are difficult to explain because they only exist in the particular task at hand and must be identified in each task. They are the key parts to the task that cause it to vary in completion time. When estimating how long it takes to do a task look for those processes in the task that are likely to vary significantly. These are the items most likely to prevent you from meeting your schedule. If the number of these items are only a few then these need to be managed (watched) during the progress of doing the task. If these items are numerous (more than ten) then you should count off their completions. This gives you a lead time warning as to whether or not you will meet the schedule and gives you time to take corrective action by shaving time from other processes or by eliminating a process. You will probably recognize that this as exactly the process used to manage a daily speaking event on the campaign trail.
Now let’s examine this process in another example. A planner in a state highway department needs to estimate how long it will take to complete a road construction project. He does this from drawings, cut and fill estimates and feet of asphalt to be laid. The planner should first estimate all the processes in a strait forward manor using past data. Then he should look for triggers those items that bring significant variability to the project. There are two one is the extent and the hardness of rock lying in the cut areas and the other is the weather both can have a major impact on the schedule. If blasting is required to remove rock it can be very costly because all activities are shutdown during the process. The weather can vary significantly too much rain slows progress too little rain means that tank trucks must add moisture. When managing a project like this both the discovery of unforeseen rock and excessive rain are monitored closely in order to lessen schedule impact.
Assumptions in Work Measurement for Staffing
Staffing levels are infused with many relevant pressures that need to be balanced. Among them are: seasonal work, training, vacations, and special time off (bereavement and pregnancy). All of the above tend to cloud the staffing issue but none more than not knowing how long it actually takes to do the job. This can also be confusing because of a wide range of employee capability. New hires are expected to grow into the job while others my not have the capability or the will to master the details of the job. The key to Work Measurement is in finding an employee to time-study who has mastered all of the details of the job and may be the top performer in the department. It is easier rate this employee at 120% than it is to rate an inexperienced employee 60% and have the results come out at 100%. Where Work Measurement is not used employers tend to rely on history for decision making such as how many employees worked in the department last year.
This example of staffing I encountered at McDonnell Douglas Missile Systems Company demonstrates another issue. When I was making a preliminary assessment to find out how much time should be allowed to process engineering drawings from a new missile into work instructions in the Production Planning department. I encountered an eye-opening discovery. Although the engineering drawings were not finalized the preliminary drawings were forwarded to the planning department. I had been told that the planning was yet to be written and while I was interviewing an exceptionally qualified and experienced planner he simply turned in his chair pointed to the bookshelf full of volumes and said “its already done“. This one employee had somehow written all of the planning for a new missile and was doing it faster than new drawings could come out. The question occurred to me what are all the other fifteen planners doing. With experience and knowledge of the capability of machining processes and having applied all his knowledge from previous missiles this planner could do the impossible. Clearly management did not know what a highly skilled employee could do. A new employee would have taken months to do the same job because every decision made would have had to be checked out in the shop. If I had time-studied this planner even a high rating of 130% would have distorted the nature of the job but I would not have time-studied this planner. I would have picked an experience planner who better represented the group this planner was near retirement and no one could replace him.
My first job experience was as an Industrial Engineer doing time-studies on the final assembly line of the McDonnell Douglas F4 Phantom airplane. While it took only a few months to become proficient at doing time-studies. It took nearly two years for me to become proficient at balancing the assembly line but by the third year I had memorized all of the jobs on the assembly line. So when it came time to balance the assembly line I would balance the first part of the assembly line which was assigned to me and go on to balance the entire assembly line while the five other newer employees watched in amazement. In time the other five Industrial Engineers could be able to do the same. The problem was there were too many Industrial Engineers. The Defense Department had a policy of awarding contracts to the company with the most Engineers and no one was concerned about finding out how many were actually required. This was at a time when work measurement was only used in the shop areas and not in the office.
The conclusion is that Work Measurement should be the basis for all staffing. It can be done using the above time study or Lean team study data to determine the process times. The other issues: seasonal work, training, vacations, and special time off, should be added back in on a percentage basis to balance the work force. Balancing the workforce where there is seasonal work means trying to schedule training, vacations and time off in off peak periods.
A significant difference occurs when reducing staff during budget cuts. The present method tends to lay-off those at bottom usually the most recently employed. The government reform method using Lean Teams keeps in tact those employees that are actually doing the work and eliminates management staff.
Setting Standards and developing a Staffing Base
In industry standards are set for manufacturing widgets which are repeated day after day. The main purpose of the standard is to be able to plan in advance the work to be done including staffing and to determine the efficiency of the completed task using Performance Measurement. In government widgets sometimes are made but mostly you encounter repeatable processes to do a task which amounts to the same thing as manufacturing widgets. This may cover as much as 60% of government tasks. But for those who don’t make widgets the process of establishing a base for staffing is complicated and in non-repeatable tasks will require some time in the collection of data. The data can be used to support staffing requirements but because the base can vary it should not be called a standard nor should it be used for Performance Measurement.
I have indicated two main ways to set standards through Work Measurement they are time-study and Lean Teams. These two methods cover repeatable tasks very easily. Now for those areas of non-repeatable tasks where the processes vary in time I suggest this method for setting a staffing base. Select several knowledgeable employees who actually do the tasks. Have them collect data for a few months by recording each activity they do and the actual time to do the activity. From this data you can create the staffing base. This process is sometimes complicated but not impossible to do. Since this is a non-repeatable base you will have to rely on history for estimating the number of occurrences for budgeting.
In the most difficult instances the base can be created using a matrix of tasks and simply picking off those that apply to come up with a calculated base. A calculated base is most useful for planning the time length of the task for scheduling purposes and less for Budgeting. This is a one time calculation to aid in setting the staffing budget and for planning and scheduling but because of the day to day variations it should not be used for Performance Measurement.
Another way of approaching this problem is after collection of the work data look for repeated sets of processes of the same time length these become the base for some of the tasks or they may be combined into single processes and used for calculating the base for staffing. You may also look for key impact items (triggers) which make a set of processes unique with their own base. This approach is used also in estimating for contacts.
Decision Making relates to repeated occurrences of the same type of decision process. I don’t recommend setting standards for making decisions. The results of the decision is more important than measuring the time to arrive at a decision. The rule here is that important tasks are always more important than their productivity measurement.
A general rule for setting standards in a new area is that the task should be repeated at least several times before a standard is set. The first time a task is done can take as much as ten times the second time the process is repeated. Once standards are set they can be used anywhere in the state where the same task is used, that is where the task does not vary. They can also be elevated to Best Practices with recognition of those who developed the process. Why are Standards important? They can reduce budgets by more than ten percent.
The collection of data is the key to proper Work Measurement. And the recording of the number of times a function occurs is needed to establish a bottoms-up budget. I recommend that this data be collected by the Team Leader of each Lean team in a Daily Log.
Functional Restructuring Rather than Departmental Restructuring
Because Functions can precisely describe a task, breaking down a budget into Functions simplifies the budgeting process. This allows Functions to be easily excluded or included in the budget as a funded entity. Lean Teams study data for each Function is costed-out using Work Measurement as a bottom-up budgeting strategy. In contrast departmental level funding using the Top-down budgeting strategy uses gross estimates and blurs the issue of just where and how the funds are being spent leaving open the debate on the amount of departmental funding needed.
When several departments are to be consolidated breaking the departments into functions makes for a smooth consolidation allowing independent functions and their budgets to be easily moved to the new desired locations.
Reorganizing using Vertical and Horizontal Functions
The greatest danger with reorganization is simply throwing different departmental organizations together to reduce personnel by combining duplicate or nearly duplicate processes. This can lead to internal turf battles over petty issues like, how big my office is, or how far away am I from the boss’s office etc. Productivity gains can be lost in a quagmire of endless bickering. It is better to leave an organization in place and restructure its Functions.
What should be done is to organize a high level Lean Team make sure that Functions are clearly identified within a department and budgeted separately. Then if reorganization is necessary the Function can be more easily moved to where it makes the most sense taking its budgeted amount with it. Each department or organization contains one or more Functions and these are usually vertical Functions (stand alone functions). A Function must satisfy a specific “need” (service to the public) and contains a set of processes to accomplish that.
An example of a vertical Function is “elementary education” within the Department of Elementary and Secondary Education. An example of a horizontal Function is “child welfare”, which crosses such vertical Functions as ”foster parents”, “elementary education”, “secondary education”, “juvenile justice”, “public health” etc. Because of the fact that a particular state organization or department my have both vertical and horizontal Functional obligations well meaning persons may try to switch a vertical structured organization into a horizontally structured organization. It cannot be structured both ways and there is little to gained in this type of reorganization.
A high level horizontal Function is managed by a Steering Committee or a Cabinet (as some states call this organization) where most of the members come from the various vertical Functions that have obligations to the horizontal Function. This is a high level policy making group of stake holders who make the rules both practical and legal (with legislative approval) for the County level horizontal Function Lean Teams. County level Lean Teams are the best and safest way to provide management and over site for horizontal Functions such as “child welfare“. One of the obligations of the State level Cabinet is to review the Value Stream Maps developed by each County level Lean Team and to recommend the implementation of the best Value Stream Maps. The Cabinet is also responsible for the development of the budget for the horizontal Function. The Lean team’s Value Stream Maps provide the basis for calculating the number of caseworkers needed at the county level. Caseworkers may have to be moved to counties where caseloads have increased.
About: Needs, Functions, Funding Formulas, and Budgeting
A “Needs List” (mostly called by other names) is a list of the state’s obligations to its citizens in various areas: highways, foster children, health care for low-income seniors etc. Each need is satisfied by one or more Functions. Functions have processes that are depicted on a Value Stream Map in detail by each Lean Team organized and self-managed by the employees in the Function. The man hours required to do a Function is derived directly from the flowchart. Other cost inputs such as purchased items, mileage etc are tied directly to each process so if a process is eliminated all of the costs involved are also eliminated. The Value Stream Map becomes the input for the development of a funding formula for the Function and it in turn becomes a direct input to the Budgeting system. Note that Functions are budgeted not departments or organizations which means that the cost of managing a Function is not included in the functions working budget. However management costs may be added by prorating the cost of management and overhead to each Function.
What we want to do is to cost out the Function for example, in highways per “highway mile” and in foster children per ‘foster child served” creating a Funding Formula for each Function. We now have the basis for forming a budget based on actual costs we simply multiply the number of highway miles needed or expected foster children by the function’s funding formula to arrive at the new budget. Using the funding formula method simplifies the whole budgeting process. The actual expenditure from the year before is then used in calculating next year’s budget. Note that for the first time the cost of managing the function can be calculated by subtracting the working budget from a previous budget which included management and overhead costs.
The development of a valid Funding Formula is difficult. Here is an example of the approach I would use for the function, “Foster children“. After the Value Stream Map has been developed by the Lean Team and mileage and other costs are added to each process on the flow chart. I would request that the Lean Team submit a proposal for the number (range) of foster children that can be safely managed by a caseworker. I would do this to obtain a consensus among all stake holders of when to add extra caseworkers. Having done this, note that there is a relationship between the mileage traveled and the number of foster children that each caseworker can manage. Rural areas have fewer cases but must travel further than urban areas. I would develop two charts one for rural and one for urban showing how many foster children can be safely managed in each and when this number or range is exceeded then an extra case worker should be added to the budget. The VSM should cover 80% of the foster child cases leaving 20% of the cases requiring additional expenditures and unique decisions to be made by the Lean Team. Thus 20% of the cases may have extra expenses that need to be budgeted for. Because these are not predictable they should be budgeted outside the funding formula. What I have done is to try and account for all of the variables that can occur in the funding formula thus making the final budget for the Function dependent on projections of case loads for each county either rural or urban. Each county budget is rolled up into the state budget. Where the Function’s budget is presented to the legislative budget committee along with last year’s performance numbers. The unique expenditures budgeted for 20% of foster children not a part of the Funding Formula are not included in the next year’s budget. I caution you that the above example was done to show how difficulties in getting a valid funding formula can be overcome but the actual process in most instances may be different.
There is also a “Wants List” those things that are good for the State but are discretionary and not a direct obligation of the state. An example of the items in this list is Tourist promotion, business promotion etc. Each want has one or more functions and as in the above Need’s List each has a funding formula for budgeting. The Functions in both the Needs list and the Wants list are combined and prioritized and then approved by the legislature. Functions at the bottom of the combined list may not be funded and those not approved are not funded.
Establishing a Funding Formula for Budgeting
The Funding Formula is the key to simplifying the budgeting process. While current state budgeting systems provide for Departmental level budget expenditures the actual expenditures at the functional process level are not known and are not measured. I call this budgeting method “Top-Down Budgeting”. Because legislatures meet only for a few months each year oversight of Departmental budgets is not possible leaving bureaucratic Departments with control of their own budgets. The budgeting method I recommend I call “Bottoms-up Budgeting”. The method involves measuring each Function’s processes and building up the actual expenditures for staffing and expenses for each Function to obtain an actual budget for doing the work of the Department. Management costs are budgeted separately.
Each function is broken down into the “one best set“ of processes determined by the self-managed Lean Team which does the Function. An OIG Analyst determines the man-hour cost (staffing) for each process from the Lean Team’s data or an Industrial Engineer Time Studies each process to obtain the same information. Additional expenditures are added to each process such as mileage and purchased supplies. All of the above is represented on a detailed flow chart with man hour costs, mileage and expenses being keyed to each process. If a process were to be eliminated all of the costs associated with it would also be eliminated. The funding formula is created from this data providing a solid base for the bottoms-up budgeting method.
Establishing a Balanced work Load
Most managers fail to understand the importance of having a balanced work load. This means simply having the right person, with the right tools, at the right time. This prevents workers from having to wait on other people to do their jobs. The best example of this is with the Boeing assembly of aircraft. After time study of the necessary jobs is completed the work is laid out with on a scale showing what jobs are to be in the correct order such that no worker has to wait on another. If this is not done workers will continually have to wait on others causing built in inefficiency. This is called Short Interval Scheduling if a supervisor monitors work progress at short intervals.
This also applies to jobs that repeated and are time studied but it can also help when planning and scheduling large operations.
You don’t need to know how to do differential equations in this section but what is needed is patience to prevent you from becoming frustrated, basic logic and the ability to do arithmetic.
What usually happens is that managers make no attempt to do Work Measurement because a function’s processes vary in time. The other extreme is that followed by the US government where an elaborate effort is made to set Standards on all processes so that productivity can be measured. I disagree with the US government approach because a valid Standard can only be set on non-variable processes for the measurement of productivity. If a process varies in the length of time to perform it, then the measurement of a process’s productivity becomes invalid and therefore useless. Besides; most employees are smart enough to manipulate their productivity reports to their advantage. I don’t recommend productivity reporting because it is usually invalid and wastes the employee’s time I do recommend a daily log of the activities performed, the type of activity and the number of times it occurs. This will form the basis of the historical data needed for determining the time for the activity and in determining a budget.
The approach recommend by the author
First have a Lean Team study a function’s Process Flow to determine the best way of performing the function.
Second have a OIG Analyst analyze the Lean Team’s method and determine the staffing and expenses required for each process in a function and then document the function’s processes their staffing and costs in spread sheet. Then get out of the employees’ way and let them do their job. Don’t badger employees with recording and reporting their productivity. Staffing does not require measurement to the level of detail that a Standard requires for productivity reporting. The staffing of a function can be an estimate because you cannot staff with less than a full person.
All this effort is to arrive at a satisfactory staffing base with a bottoms-up budget. This simplifies the budgeting process based on real numbers rather than a top-down budget based on last years staffing and expenses.
How you handle variations in process times when staffing a function.
This depends on the characteristics of the process and how it varies. But don’t throw up your hands too soon remember it does not have to be perfect.
For analysis purposes a functions processes can be divided into classifications based on the characteristics of the work content of the processes. The following characteristics may be used:
Technical Capability Involvement
I have found that technical tasks can vary directly with the experience and capability of the employee doing the task. An employee with 3 years experience can do a job in half the time of a new employee. With a new employee I would staff using the pay level of a 3 year employee and expect to absorb the difference in pay grade in overtime expense for the new employee.
An engineer with 10 years experience may be five times more efficient than a new engineering employee. In this case you may have to hire more engineers when the experienced engineer retires but don’t change the budget until he retires.
Routine Activities versus Non-Routine Activities
This is the case where on the job decisions must be made. For example an inspector on a dock inspects incoming pallets of equipment. A time for doing this job can be estimated based on the number of pallets that arrive on the dock based on history. But what varies is when the inspector finds a defective pallet of equipment. This again is best handled by historical data. Remember if the inspector falls behind then due to increased problems then overtime may be necessary. To prevent overtime abuse I have recommended that all employees be a part of a team that works together to get the job done.
Where decisions are the job
All work involves continuous decision making it is just that we are so unaware of the routine decisions that we make that we don’t recognize them as decisions. All decisions can have a preset approach that can lead to more efficiency. Think of an original big decision as a set of known small decisions with something new added. This is generally done by management leaving the position just to be filled.
Then there are the lower level routine decisions which are repeatable within limits. Here again use historical data to determine staffing. I don’t recommend putting a time limit on making important original decisions other pressures will generally determine a time limit.
Estimating Workload by Determining Impact Triggers
One of the necessary jobs of a manager or any planner is determining how long it takes to complete a task. If the task takes too long it brings pressure on a tight schedule and if the schedule is too loose there is lost time waiting. I use the following process to analyze the task for what I call impact triggers. Impact triggers are difficult to explain because they only exist in the particular task at hand and must be identified in each task. They are the key parts to the task that cause it to vary in completion time. When estimating how long it takes to do a task look for those processes in the task that are likely to vary significantly. These are the items most likely to prevent you from meeting your schedule. If the number of these items are only a few then these need to be managed (watched) during the progress of doing the task. If these items are numerous (more than ten) then you should count off their completions. This gives you a lead time warning as to whether or not you will meet the schedule and gives you time to take corrective action by shaving time from other processes or by eliminating a process. You will probably recognize that this as exactly the process used to manage a daily speaking event on the campaign trail.
Now let’s examine this process in another example. A planner in a state highway department needs to estimate how long it will take to complete a road construction project. He does this from drawings, cut and fill estimates and feet of asphalt to be laid. The planner should first estimate all the processes in a strait forward manor using past data. Then he should look for triggers those items that bring significant variability to the project. There are two one is the extent and the hardness of rock lying in the cut areas and the other is the weather both can have a major impact on the schedule. If blasting is required to remove rock it can be very costly because all activities are shutdown during the process. The weather can vary significantly too much rain slows progress too little rain means that tank trucks must add moisture. When managing a project like this both the discovery of unforeseen rock and excessive rain are monitored closely in order to lessen schedule impact.
Assumptions in Work Measurement for Staffing
Staffing levels are infused with many relevant pressures that need to be balanced. Among them are: seasonal work, training, vacations, and special time off (bereavement and pregnancy). All of the above tend to cloud the staffing issue but none more than not knowing how long it actually takes to do the job. This can also be confusing because of a wide range of employee capability. New hires are expected to grow into the job while others my not have the capability or the will to master the details of the job. The key to Work Measurement is in finding an employee to time-study who has mastered all of the details of the job and may be the top performer in the department. It is easier rate this employee at 120% than it is to rate an inexperienced employee 60% and have the results come out at 100%. Where Work Measurement is not used employers tend to rely on history for decision making such as how many employees worked in the department last year.
This example of staffing I encountered at McDonnell Douglas Missile Systems Company demonstrates another issue. When I was making a preliminary assessment to find out how much time should be allowed to process engineering drawings from a new missile into work instructions in the Production Planning department. I encountered an eye-opening discovery. Although the engineering drawings were not finalized the preliminary drawings were forwarded to the planning department. I had been told that the planning was yet to be written and while I was interviewing an exceptionally qualified and experienced planner he simply turned in his chair pointed to the bookshelf full of volumes and said “its already done“. This one employee had somehow written all of the planning for a new missile and was doing it faster than new drawings could come out. The question occurred to me what are all the other fifteen planners doing. With experience and knowledge of the capability of machining processes and having applied all his knowledge from previous missiles this planner could do the impossible. Clearly management did not know what a highly skilled employee could do. A new employee would have taken months to do the same job because every decision made would have had to be checked out in the shop. If I had time-studied this planner even a high rating of 130% would have distorted the nature of the job but I would not have time-studied this planner. I would have picked an experience planner who better represented the group this planner was near retirement and no one could replace him.
My first job experience was as an Industrial Engineer doing time-studies on the final assembly line of the McDonnell Douglas F4 Phantom airplane. While it took only a few months to become proficient at doing time-studies. It took nearly two years for me to become proficient at balancing the assembly line but by the third year I had memorized all of the jobs on the assembly line. So when it came time to balance the assembly line I would balance the first part of the assembly line which was assigned to me and go on to balance the entire assembly line while the five other newer employees watched in amazement. In time the other five Industrial Engineers could be able to do the same. The problem was there were too many Industrial Engineers. The Defense Department had a policy of awarding contracts to the company with the most Engineers and no one was concerned about finding out how many were actually required. This was at a time when work measurement was only used in the shop areas and not in the office.
The conclusion is that Work Measurement should be the basis for all staffing. It can be done using the above time study or Lean team study data to determine the process times. The other issues: seasonal work, training, vacations, and special time off, should be added back in on a percentage basis to balance the work force. Balancing the workforce where there is seasonal work means trying to schedule training, vacations and time off in off peak periods.
A significant difference occurs when reducing staff during budget cuts. The present method tends to lay-off those at bottom usually the most recently employed. The government reform method using Lean Teams keeps in tact those employees that are actually doing the work and eliminates management staff.
Setting Standards and developing a Staffing Base
In industry standards are set for manufacturing widgets which are repeated day after day. The main purpose of the standard is to be able to plan in advance the work to be done including staffing and to determine the efficiency of the completed task using Performance Measurement. In government widgets sometimes are made but mostly you encounter repeatable processes to do a task which amounts to the same thing as manufacturing widgets. This may cover as much as 60% of government tasks. But for those who don’t make widgets the process of establishing a base for staffing is complicated and in non-repeatable tasks will require some time in the collection of data. The data can be used to support staffing requirements but because the base can vary it should not be called a standard nor should it be used for Performance Measurement.
I have indicated two main ways to set standards through Work Measurement they are time-study and Lean Teams. These two methods cover repeatable tasks very easily. Now for those areas of non-repeatable tasks where the processes vary in time I suggest this method for setting a staffing base. Select several knowledgeable employees who actually do the tasks. Have them collect data for a few months by recording each activity they do and the actual time to do the activity. From this data you can create the staffing base. This process is sometimes complicated but not impossible to do. Since this is a non-repeatable base you will have to rely on history for estimating the number of occurrences for budgeting.
In the most difficult instances the base can be created using a matrix of tasks and simply picking off those that apply to come up with a calculated base. A calculated base is most useful for planning the time length of the task for scheduling purposes and less for Budgeting. This is a one time calculation to aid in setting the staffing budget and for planning and scheduling but because of the day to day variations it should not be used for Performance Measurement.
Another way of approaching this problem is after collection of the work data look for repeated sets of processes of the same time length these become the base for some of the tasks or they may be combined into single processes and used for calculating the base for staffing. You may also look for key impact items (triggers) which make a set of processes unique with their own base. This approach is used also in estimating for contacts.
Decision Making relates to repeated occurrences of the same type of decision process. I don’t recommend setting standards for making decisions. The results of the decision is more important than measuring the time to arrive at a decision. The rule here is that important tasks are always more important than their productivity measurement.
A general rule for setting standards in a new area is that the task should be repeated at least several times before a standard is set. The first time a task is done can take as much as ten times the second time the process is repeated. Once standards are set they can be used anywhere in the state where the same task is used, that is where the task does not vary. They can also be elevated to Best Practices with recognition of those who developed the process. Why are Standards important? They can reduce budgets by more than ten percent.
The collection of data is the key to proper Work Measurement. And the recording of the number of times a function occurs is needed to establish a bottoms-up budget. I recommend that this data be collected by the Team Leader of each Lean team in a Daily Log.
Functional Restructuring Rather than Departmental Restructuring
Because Functions can precisely describe a task, breaking down a budget into Functions simplifies the budgeting process. This allows Functions to be easily excluded or included in the budget as a funded entity. Lean Teams study data for each Function is costed-out using Work Measurement as a bottom-up budgeting strategy. In contrast departmental level funding using the Top-down budgeting strategy uses gross estimates and blurs the issue of just where and how the funds are being spent leaving open the debate on the amount of departmental funding needed.
When several departments are to be consolidated breaking the departments into functions makes for a smooth consolidation allowing independent functions and their budgets to be easily moved to the new desired locations.
Reorganizing using Vertical and Horizontal Functions
The greatest danger with reorganization is simply throwing different departmental organizations together to reduce personnel by combining duplicate or nearly duplicate processes. This can lead to internal turf battles over petty issues like, how big my office is, or how far away am I from the boss’s office etc. Productivity gains can be lost in a quagmire of endless bickering. It is better to leave an organization in place and restructure its Functions.
What should be done is to organize a high level Lean Team make sure that Functions are clearly identified within a department and budgeted separately. Then if reorganization is necessary the Function can be more easily moved to where it makes the most sense taking its budgeted amount with it. Each department or organization contains one or more Functions and these are usually vertical Functions (stand alone functions). A Function must satisfy a specific “need” (service to the public) and contains a set of processes to accomplish that.
An example of a vertical Function is “elementary education” within the Department of Elementary and Secondary Education. An example of a horizontal Function is “child welfare”, which crosses such vertical Functions as ”foster parents”, “elementary education”, “secondary education”, “juvenile justice”, “public health” etc. Because of the fact that a particular state organization or department my have both vertical and horizontal Functional obligations well meaning persons may try to switch a vertical structured organization into a horizontally structured organization. It cannot be structured both ways and there is little to gained in this type of reorganization.
A high level horizontal Function is managed by a Steering Committee or a Cabinet (as some states call this organization) where most of the members come from the various vertical Functions that have obligations to the horizontal Function. This is a high level policy making group of stake holders who make the rules both practical and legal (with legislative approval) for the County level horizontal Function Lean Teams. County level Lean Teams are the best and safest way to provide management and over site for horizontal Functions such as “child welfare“. One of the obligations of the State level Cabinet is to review the Value Stream Maps developed by each County level Lean Team and to recommend the implementation of the best Value Stream Maps. The Cabinet is also responsible for the development of the budget for the horizontal Function. The Lean team’s Value Stream Maps provide the basis for calculating the number of caseworkers needed at the county level. Caseworkers may have to be moved to counties where caseloads have increased.
About: Needs, Functions, Funding Formulas, and Budgeting
A “Needs List” (mostly called by other names) is a list of the state’s obligations to its citizens in various areas: highways, foster children, health care for low-income seniors etc. Each need is satisfied by one or more Functions. Functions have processes that are depicted on a Value Stream Map in detail by each Lean Team organized and self-managed by the employees in the Function. The man hours required to do a Function is derived directly from the flowchart. Other cost inputs such as purchased items, mileage etc are tied directly to each process so if a process is eliminated all of the costs involved are also eliminated. The Value Stream Map becomes the input for the development of a funding formula for the Function and it in turn becomes a direct input to the Budgeting system. Note that Functions are budgeted not departments or organizations which means that the cost of managing a Function is not included in the functions working budget. However management costs may be added by prorating the cost of management and overhead to each Function.
What we want to do is to cost out the Function for example, in highways per “highway mile” and in foster children per ‘foster child served” creating a Funding Formula for each Function. We now have the basis for forming a budget based on actual costs we simply multiply the number of highway miles needed or expected foster children by the function’s funding formula to arrive at the new budget. Using the funding formula method simplifies the whole budgeting process. The actual expenditure from the year before is then used in calculating next year’s budget. Note that for the first time the cost of managing the function can be calculated by subtracting the working budget from a previous budget which included management and overhead costs.
The development of a valid Funding Formula is difficult. Here is an example of the approach I would use for the function, “Foster children“. After the Value Stream Map has been developed by the Lean Team and mileage and other costs are added to each process on the flow chart. I would request that the Lean Team submit a proposal for the number (range) of foster children that can be safely managed by a caseworker. I would do this to obtain a consensus among all stake holders of when to add extra caseworkers. Having done this, note that there is a relationship between the mileage traveled and the number of foster children that each caseworker can manage. Rural areas have fewer cases but must travel further than urban areas. I would develop two charts one for rural and one for urban showing how many foster children can be safely managed in each and when this number or range is exceeded then an extra case worker should be added to the budget. The VSM should cover 80% of the foster child cases leaving 20% of the cases requiring additional expenditures and unique decisions to be made by the Lean Team. Thus 20% of the cases may have extra expenses that need to be budgeted for. Because these are not predictable they should be budgeted outside the funding formula. What I have done is to try and account for all of the variables that can occur in the funding formula thus making the final budget for the Function dependent on projections of case loads for each county either rural or urban. Each county budget is rolled up into the state budget. Where the Function’s budget is presented to the legislative budget committee along with last year’s performance numbers. The unique expenditures budgeted for 20% of foster children not a part of the Funding Formula are not included in the next year’s budget. I caution you that the above example was done to show how difficulties in getting a valid funding formula can be overcome but the actual process in most instances may be different.
There is also a “Wants List” those things that are good for the State but are discretionary and not a direct obligation of the state. An example of the items in this list is Tourist promotion, business promotion etc. Each want has one or more functions and as in the above Need’s List each has a funding formula for budgeting. The Functions in both the Needs list and the Wants list are combined and prioritized and then approved by the legislature. Functions at the bottom of the combined list may not be funded and those not approved are not funded.
Establishing a Funding Formula for Budgeting
The Funding Formula is the key to simplifying the budgeting process. While current state budgeting systems provide for Departmental level budget expenditures the actual expenditures at the functional process level are not known and are not measured. I call this budgeting method “Top-Down Budgeting”. Because legislatures meet only for a few months each year oversight of Departmental budgets is not possible leaving bureaucratic Departments with control of their own budgets. The budgeting method I recommend I call “Bottoms-up Budgeting”. The method involves measuring each Function’s processes and building up the actual expenditures for staffing and expenses for each Function to obtain an actual budget for doing the work of the Department. Management costs are budgeted separately.
Each function is broken down into the “one best set“ of processes determined by the self-managed Lean Team which does the Function. An OIG Analyst determines the man-hour cost (staffing) for each process from the Lean Team’s data or an Industrial Engineer Time Studies each process to obtain the same information. Additional expenditures are added to each process such as mileage and purchased supplies. All of the above is represented on a detailed flow chart with man hour costs, mileage and expenses being keyed to each process. If a process were to be eliminated all of the costs associated with it would also be eliminated. The funding formula is created from this data providing a solid base for the bottoms-up budgeting method.
Establishing a Balanced work Load
Most managers fail to understand the importance of having a balanced work load. This means simply having the right person, with the right tools, at the right time. This prevents workers from having to wait on other people to do their jobs. The best example of this is with the Boeing assembly of aircraft. After time study of the necessary jobs is completed the work is laid out with on a scale showing what jobs are to be in the correct order such that no worker has to wait on another. If this is not done workers will continually have to wait on others causing built in inefficiency. This is called Short Interval Scheduling if a supervisor monitors work progress at short intervals.
This also applies to jobs that repeated and are time studied but it can also help when planning and scheduling large operations.
Thursday, November 28, 2013
Article 26. The Biggest Boondoggle Ever in State Information Technology
The Biggest Boondoggle Ever in State Information Technology Wasted Funds
This is how I describe what happened in Virginia’s Information Technology Agency VITA.
Unless the VITA contract leads to a Relational Database Management System RDMS solution the present $2.3 billion contract between VITA and Northrop Grumman will be the biggest waste ever in State Information Technology.
Background
Virginia hired Northrop Grumman the giant defense and systems-management company in 2005 under a controversial 10-year, $2.3 billion contract to run its computer and communications networks providing IT services to 90 agencies. But the state also pays the contractor for work outside of what the contract covers. So far NG has spent a good deal of funds on linking all of the Virginia Agencies with a new protected email system and the question of centralized application software and database development is still up to the individual agencies. This has prompted state legislators to ask just what is the state getting for its money. Ref 9. Lucas Mearian Computerworld article September 2, 2010
Comment by the author
It appears that the VITA, Northrop Grumman contract did not include a provision for the development of a centralized cloud IT system as I have recommended. Instead they have pored nearly a $billion into trying to link together the obsolete IBM systems found in the 90 different Virginia state agencies.
VITA’s new chief information officer George F. Coulter has sacked or reassigned several senior executives of the Virginia Information Technologies Agency, according to state government sources. The casualties apparently include critics of Northrop Grumman. The shakeup is an attempt to extract VITA from months of political turmoil and put back on track a shift to privately managed information-technology services beset by delays and mounting costs. Since the RDMS solution is the best and most cost effective solution Virginia’s VITA appears to be floundering making it the biggest ever boondoggle in State Information Technology.
Bringing Virginia’s State Government Back on Track
Here is what the state of Virginia needed to do to get out of this mess and start anew. I can say with complete confidence that what ever VITA is doing it is nearly a complete waste of state funds. In fact
VITA should never have been tasked at all. VITA was setup to manage and to make all of the 90 or so state agencies’ and entities’ computer systems work efficiently and to do this they contracted with Northrop Grumman in 2005. This was the wrong approach the assumption made then was that there was a computer problem and I agree the state’s computer systems are obsolete stand alone systems sometimes described as silos and there are more than 90 of them. But there isn’t enough money in the state of Virginia and there never will be to fix this problem by patching the old systems together. Five years into the contract and there is little to show for all the money spent except an integrated email system.
So if this were the wrong problem what should the Legislature have been doing? For all government problems the correct approach is to determine the best way to meet the states obligation organize for that and then investigate how to make it operate efficiently and only then automate the process. This attempt to fix Virginia’s obsolete IT systems before organizing and streamlining the 90 agencies and entities makes the current approach completely backward.
The real problem should have been stated “How does the state make the process of providing service to the public more efficient?” And after you have determined the best way to do that, then provide the more efficient computer systems support. I have developed four Government Reform Models which the state of Virginia should follow.
I recommend the following approach. The state of Virginia should form a Government Reform Committee a select group of persons to study my reform models.
The State Central Cloud Information Technology Data Center
This is also is a part of the Centralization of State Services Reform Model. I further recommend the implementation of a new Centralized Relational Database Management System RDMS similar to that being developed in Washington State. The RDMS is developed completely separate from the current obsolete agency computer systems. No funds should have been wasted on trying to patch the old systems. When the New Centralized Data Center and its systems are up and running the plug is pulled on the old systems.
Why didn’t VITA come up with this solution? The answer is nearly all of the people associated with VITA have training or some kind of connection to IBM. So what’s the problem with IBM? Simply this, IBM is in business to sell a proprietary system that shuts out competitors and forces the customers to use its proprietary software. The RDMS is an open software system where an IBM computer could be replaced by a competitor’s computer. Computers can then be purchased simply for their competitive computing power and not just because it will work with the software. At least some of the VITA members must have known about the RDMS solution because it has been around for more than twenty years but it is simply not good business for IBM or its friends. VITA for all practical purposes may as well be on the IBM payroll.
My final recommendation is for streamlining by eliminating levels of government and downsizing the way agencies are organized through the elimination of their bureaucratic structure. The high level Lean Team after completing their work on the reorganization of Virginia’s agencies and is then merged with Top Management to become the Top Management Steering Team. Group Steering Management Teams are formed from mid management with Functional Lean Team Management reporting to them from the lower level.
The Contract with Northrop Grumman should be and probably will be canceled. The quickest way for that to happen is through pressure from the public. But the reality is that there is going to be a huge fight to keep Northrop Grumman on the job and prevent the loss of the old obsolete systems and especially the obsolete IT jobs with them.
What’s different from these reforms?
The State of Virginia will have moved from its 19th century bureaucratic organization to the 21st century Steering Management Teams and Functional Management Teams. The state has a Centralized Cloud IT facility with a
Why Major Attempts to Fix Information Technology Are Failing
Major Information Technology failures have occurred in Indiana, Texas and the biggest of all in Virginia. These failures have several things in common aging IBM software and its inability to meet state needs with high maintenance costs. The complexity of the systems is enormous coupled by programmers who years ago failed to properly document the changes made to the software. With these problems IT managers opted to throw the problem over the fence to an outside contractor. The outside contractors were even more removed from the state’s system problems but signed on due to generous contracts.
These problems are not the fault of IBM or the states programmers. Over the years since the 1960s IBM offered the best solutions for applications and systems but in the late 80’s these systems became obsolete with the advent of Relational Database Management Systems which could be easily integrated and were much simpler cheaper to maintain. The problem was that as long as the old systems were doing a reasonable job. Why convert to the RDMS since all application programs would have to be rewritten. A second problem for IBM is that the RDMS is an open system which means that the system does not use IBM software and any vendor’s computer could replace IBM computers. IBM has known about the RDMS since the 1980’s and since most state IT managers use IBM computers and software the RDMS became a closely held secret.
These systems were not created all at one time instead states have built their systems application by application using IBM software. When it came time to pass data from one application program to another a software patch had to be written. This is extremely complicated and costly in these old obsolete IBM application programs. Yet almost all states use these systems.
The systems contractors in Indiana and Texas failed to deliver and the contracts were canceled but not before $millions of state revenues were wasted.
With Virginia’s 270 boards and commissions each with their own application programs the system also became very expensive to maintain. In 2005 Virginia formed VITA to solve the problem of integrating the 270 systems. Remember that these systems are using software technology developed 30 years ago. With the start of the Northrop Grumman contract in 2005 in Virginia and now with nearly one $billion spent with little to show VITA again renewed the contract. There simply isn’t enough money in the state of Virginia to fix this problem by linking these old obsolete systems and you will have a bigger mess if you are able to do it. Still VITA with close ties to IBM refused to consider the obvious solution a RDMS. The people of Virginia apparently have little understanding of the VITA disaster while VITA continues to wastes another $billion of tax payers money.
These failures should be a warning for state governors their IT managers may have close ties to IBM and will only recommend an IBM solution.
In Washington State Governor Gregoire became aware of the problem when a legislator suggested that the new State Data Center would not be an integrated system because the IT manager was going to move the old obsolete systems to the new center.
In a letter to Gov. Gregoire, State Rep. Reuven Carlyle and Rep. Hans Dunshee urged the Governor to seek a second opinion before selling the construction bonds for the new IT Data Center. They wanted her to take a hard look at shifting from “hardware-centric, expensive, IBM proprietary silos of data trapped in old databases” to newer technologies. It now appears that Washington State is considering the implementation of a RDMS in its new State Data Center as recommended by their new IT manager.
The answer is for states to follow Washington State’s example and build a State IT Data Center using Relational Databases rather than patching the old systems.
States Lose Millions by Using Obsolete Computer Systems
There is an incredible lack of understanding of computer systems mostly of a technical nature among state Decision Makers who time after time turn to the wrong people for advice on how to fix their state’s computer problems. Bad IT decisions come about mostly by the failure of Decision Makers in the past who were not computer literate and by the piecemeal stop gap fixing of obsolete stand alone computer application programs. Decision Makers in many cases are led astray by self-serving Information Technology (IT) Managers who wanted to keep their programmers busy by patching and developing new application programs for their obsolete systems.
System implementation planning failures are generally the fault of the Decision Makers funding the project. It wasn’t but a few years ago when almost none of the leaders in government had any computer experience at all. They relied completely on their Information Technology (IT) manager for planning and implementation of computer systems. Even today the situation is not much better. Faced with throwing out all of the present computer applications and implementing what is needed a Relational Database management System (RDMS). IT managers fight to continue their obsolete systems pointing out the cost of bringing up a new RDMS. This argument pales in light of the losses to the state from Medicaid fraud and the inability to manage state services over and above the added cost for maintaining the present obsolete systems.
But what if the Federal Government were to fund the state’s development of their computer applications and RDBS? Homeland Security is trying to find a way to link all of the states’ motor vehicle registration databases through an unfunded mandate called the Real ID. On the surface this appears to be nearly impossible task since nearly all of these databases have been developed as proprietary systems.
The answer is to have the federal government fund the state’s development of the software application program for a state motor vehicle Relational Database (RD) and give the software to each of the states. Each state would then load the new RD with the motor vehicle data from their old proprietary database. Since the state RDs are easily linked this would provide a giant national motor vehicle RD which could be easily accessed by law enforcement and Homeland Security.
Among computer literate personnel an organization’s computer department is known as an IBM “shop” or a Digital Equipment “shop” meaning that the organization only uses a specific type of vendor computer hardware. It also means that only IBM or Digital Equipment software is used. When the IBM Operating System software is used all Application Programs are written to run on it. The result is that if the organization only has IBM computers you will most likely get an IBM solution. And you will not get a system that can be integrated with other non-IBM systems. What I have observed is that most IT managers are more loyal to their “shop” (vendor specific system) whatever it is than they are to state Decision Makers. The same problem occurs when Decision Makers seek to contract out services few of them seam to be aware that they are getting a proprietary solution when they contract services to an IBM shop nor do they seam to care about the cost except when there is a major failure and yet they still don’t know what went wrong.
Problems in Missouri
Most states including Missouri have been developing or purchasing stand alone application programs which store their own data internally. When it becomes necessary to link one application with another a special linking program has to be developed so that an application program can share data between them. This obsolete system is more costly to maintain than a Relational Database Management System (RDBMS) using SQL (Structured Query Language). A RDMS has a different architecture, an application program does not store its data within itself but rather stores its data in separate relational databases (RDs). All application programs in the system can access any of the relational databases (RDs) as it needs data for running its application. This means that the amount of stored data in a RDBMS is significantly less since it is not duplicated over and over as it is in the old application programs.
Missouri is still using IBM’s DB2 databases which have been obsolete for the last twenty years. It is a part of the state’s aging computer systems which is a stand alone system and can not be integrated easily with other systems.
Collaborative Innovation between States and Federal Government
Homeland Security is trying to find a way to link all of the states’ motor vehicle registration databases through a program called the Real ID. On the surface this appears to be nearly impossible task since nearly all of these databases have been developed as proprietary systems. The answer is to have the federal government develop the software application program for a state motor vehicle Relational Database (RD) and give the software to each of the states. Each state would then load the new RD with the motor vehicle data from their old proprietary database. Since the state RDs are easily linked this would provide a giant national motor vehicle RD which could be easily accessed by law enforcement and Homeland Security.
The system could also become a National ID database. The addition of a thumb print system would make it a fool proof system for Identification. This would save the public, businesses and the Federal Government $ billions in stolen identities.
This is also a simple solution to a much larger problem. State information systems are mostly obsolete proprietary systems that have been developed over the years by adding application programs that were developed or purchased by the state Computer Information Systems Departments. Each state has sunk $millions into the development of these obsolete systems.
Most states have been developing or purchasing stand alone application programs which store their own data internally. When it becomes necessary to link one application with another a special linking program has to be developed. So that a program can share data with another. This obsolete system is more costly to maintain than a Relational Database Management System (RDBMS) using SQL (Structured Query Language). A RDMS has a different architecture, an application program does not store its data within itself but rather stores its data in separate relational databases (RDs). All application programs in the system can access any of the relational databases (RDs) as it needs data for running its application. This means that the amount of stored data in a RDBMS is significantly less since it is not duplicated over and over as it is in the old application programs.
Now for the innovation, the state of Colorado is in the process of developing a centralized RDMS. This is a large undertaking but it was recognized by the state’s IRM as a necessary step to simplifying and reducing the cost of its computer systems. If the federal government were to fund the development of this RDMS in Colorado or some other state the developed software could be provided to all the other states. Each state would load the new application programs and relational data bases onto its computers. Then they would copy their data form the old system into the new relational databases. The old system would be kept running until the new system is up and proven. Only then would they pull the plug on the old system. The Motor Vehicle RD would only be one of the new RDs.
This centralized state RDMS could be expanded to provide computer services for local counties and cities as well. The state of Nebraska uses its state computing capability to do just that provide computer services to local counties and cities within the state.
This RDMS can be easily integrated with the proposal I made for a centralized Customer Relationship Management (CRM) system to reduce Red Tape and simplify California’s Agencies and Commissions.
This is how I describe what happened in Virginia’s Information Technology Agency VITA.
Unless the VITA contract leads to a Relational Database Management System RDMS solution the present $2.3 billion contract between VITA and Northrop Grumman will be the biggest waste ever in State Information Technology.
Background
Virginia hired Northrop Grumman the giant defense and systems-management company in 2005 under a controversial 10-year, $2.3 billion contract to run its computer and communications networks providing IT services to 90 agencies. But the state also pays the contractor for work outside of what the contract covers. So far NG has spent a good deal of funds on linking all of the Virginia Agencies with a new protected email system and the question of centralized application software and database development is still up to the individual agencies. This has prompted state legislators to ask just what is the state getting for its money. Ref 9. Lucas Mearian Computerworld article September 2, 2010
Comment by the author
It appears that the VITA, Northrop Grumman contract did not include a provision for the development of a centralized cloud IT system as I have recommended. Instead they have pored nearly a $billion into trying to link together the obsolete IBM systems found in the 90 different Virginia state agencies.
VITA’s new chief information officer George F. Coulter has sacked or reassigned several senior executives of the Virginia Information Technologies Agency, according to state government sources. The casualties apparently include critics of Northrop Grumman. The shakeup is an attempt to extract VITA from months of political turmoil and put back on track a shift to privately managed information-technology services beset by delays and mounting costs. Since the RDMS solution is the best and most cost effective solution Virginia’s VITA appears to be floundering making it the biggest ever boondoggle in State Information Technology.
Bringing Virginia’s State Government Back on Track
Here is what the state of Virginia needed to do to get out of this mess and start anew. I can say with complete confidence that what ever VITA is doing it is nearly a complete waste of state funds. In fact
VITA should never have been tasked at all. VITA was setup to manage and to make all of the 90 or so state agencies’ and entities’ computer systems work efficiently and to do this they contracted with Northrop Grumman in 2005. This was the wrong approach the assumption made then was that there was a computer problem and I agree the state’s computer systems are obsolete stand alone systems sometimes described as silos and there are more than 90 of them. But there isn’t enough money in the state of Virginia and there never will be to fix this problem by patching the old systems together. Five years into the contract and there is little to show for all the money spent except an integrated email system.
So if this were the wrong problem what should the Legislature have been doing? For all government problems the correct approach is to determine the best way to meet the states obligation organize for that and then investigate how to make it operate efficiently and only then automate the process. This attempt to fix Virginia’s obsolete IT systems before organizing and streamlining the 90 agencies and entities makes the current approach completely backward.
The real problem should have been stated “How does the state make the process of providing service to the public more efficient?” And after you have determined the best way to do that, then provide the more efficient computer systems support. I have developed four Government Reform Models which the state of Virginia should follow.
I recommend the following approach. The state of Virginia should form a Government Reform Committee a select group of persons to study my reform models.
The State Central Cloud Information Technology Data Center
This is also is a part of the Centralization of State Services Reform Model. I further recommend the implementation of a new Centralized Relational Database Management System RDMS similar to that being developed in Washington State. The RDMS is developed completely separate from the current obsolete agency computer systems. No funds should have been wasted on trying to patch the old systems. When the New Centralized Data Center and its systems are up and running the plug is pulled on the old systems.
Why didn’t VITA come up with this solution? The answer is nearly all of the people associated with VITA have training or some kind of connection to IBM. So what’s the problem with IBM? Simply this, IBM is in business to sell a proprietary system that shuts out competitors and forces the customers to use its proprietary software. The RDMS is an open software system where an IBM computer could be replaced by a competitor’s computer. Computers can then be purchased simply for their competitive computing power and not just because it will work with the software. At least some of the VITA members must have known about the RDMS solution because it has been around for more than twenty years but it is simply not good business for IBM or its friends. VITA for all practical purposes may as well be on the IBM payroll.
My final recommendation is for streamlining by eliminating levels of government and downsizing the way agencies are organized through the elimination of their bureaucratic structure. The high level Lean Team after completing their work on the reorganization of Virginia’s agencies and is then merged with Top Management to become the Top Management Steering Team. Group Steering Management Teams are formed from mid management with Functional Lean Team Management reporting to them from the lower level.
The Contract with Northrop Grumman should be and probably will be canceled. The quickest way for that to happen is through pressure from the public. But the reality is that there is going to be a huge fight to keep Northrop Grumman on the job and prevent the loss of the old obsolete systems and especially the obsolete IT jobs with them.
What’s different from these reforms?
The State of Virginia will have moved from its 19th century bureaucratic organization to the 21st century Steering Management Teams and Functional Management Teams. The state has a Centralized Cloud IT facility with a
Why Major Attempts to Fix Information Technology Are Failing
Major Information Technology failures have occurred in Indiana, Texas and the biggest of all in Virginia. These failures have several things in common aging IBM software and its inability to meet state needs with high maintenance costs. The complexity of the systems is enormous coupled by programmers who years ago failed to properly document the changes made to the software. With these problems IT managers opted to throw the problem over the fence to an outside contractor. The outside contractors were even more removed from the state’s system problems but signed on due to generous contracts.
These problems are not the fault of IBM or the states programmers. Over the years since the 1960s IBM offered the best solutions for applications and systems but in the late 80’s these systems became obsolete with the advent of Relational Database Management Systems which could be easily integrated and were much simpler cheaper to maintain. The problem was that as long as the old systems were doing a reasonable job. Why convert to the RDMS since all application programs would have to be rewritten. A second problem for IBM is that the RDMS is an open system which means that the system does not use IBM software and any vendor’s computer could replace IBM computers. IBM has known about the RDMS since the 1980’s and since most state IT managers use IBM computers and software the RDMS became a closely held secret.
These systems were not created all at one time instead states have built their systems application by application using IBM software. When it came time to pass data from one application program to another a software patch had to be written. This is extremely complicated and costly in these old obsolete IBM application programs. Yet almost all states use these systems.
The systems contractors in Indiana and Texas failed to deliver and the contracts were canceled but not before $millions of state revenues were wasted.
With Virginia’s 270 boards and commissions each with their own application programs the system also became very expensive to maintain. In 2005 Virginia formed VITA to solve the problem of integrating the 270 systems. Remember that these systems are using software technology developed 30 years ago. With the start of the Northrop Grumman contract in 2005 in Virginia and now with nearly one $billion spent with little to show VITA again renewed the contract. There simply isn’t enough money in the state of Virginia to fix this problem by linking these old obsolete systems and you will have a bigger mess if you are able to do it. Still VITA with close ties to IBM refused to consider the obvious solution a RDMS. The people of Virginia apparently have little understanding of the VITA disaster while VITA continues to wastes another $billion of tax payers money.
These failures should be a warning for state governors their IT managers may have close ties to IBM and will only recommend an IBM solution.
In Washington State Governor Gregoire became aware of the problem when a legislator suggested that the new State Data Center would not be an integrated system because the IT manager was going to move the old obsolete systems to the new center.
In a letter to Gov. Gregoire, State Rep. Reuven Carlyle and Rep. Hans Dunshee urged the Governor to seek a second opinion before selling the construction bonds for the new IT Data Center. They wanted her to take a hard look at shifting from “hardware-centric, expensive, IBM proprietary silos of data trapped in old databases” to newer technologies. It now appears that Washington State is considering the implementation of a RDMS in its new State Data Center as recommended by their new IT manager.
The answer is for states to follow Washington State’s example and build a State IT Data Center using Relational Databases rather than patching the old systems.
States Lose Millions by Using Obsolete Computer Systems
There is an incredible lack of understanding of computer systems mostly of a technical nature among state Decision Makers who time after time turn to the wrong people for advice on how to fix their state’s computer problems. Bad IT decisions come about mostly by the failure of Decision Makers in the past who were not computer literate and by the piecemeal stop gap fixing of obsolete stand alone computer application programs. Decision Makers in many cases are led astray by self-serving Information Technology (IT) Managers who wanted to keep their programmers busy by patching and developing new application programs for their obsolete systems.
System implementation planning failures are generally the fault of the Decision Makers funding the project. It wasn’t but a few years ago when almost none of the leaders in government had any computer experience at all. They relied completely on their Information Technology (IT) manager for planning and implementation of computer systems. Even today the situation is not much better. Faced with throwing out all of the present computer applications and implementing what is needed a Relational Database management System (RDMS). IT managers fight to continue their obsolete systems pointing out the cost of bringing up a new RDMS. This argument pales in light of the losses to the state from Medicaid fraud and the inability to manage state services over and above the added cost for maintaining the present obsolete systems.
But what if the Federal Government were to fund the state’s development of their computer applications and RDBS? Homeland Security is trying to find a way to link all of the states’ motor vehicle registration databases through an unfunded mandate called the Real ID. On the surface this appears to be nearly impossible task since nearly all of these databases have been developed as proprietary systems.
The answer is to have the federal government fund the state’s development of the software application program for a state motor vehicle Relational Database (RD) and give the software to each of the states. Each state would then load the new RD with the motor vehicle data from their old proprietary database. Since the state RDs are easily linked this would provide a giant national motor vehicle RD which could be easily accessed by law enforcement and Homeland Security.
Among computer literate personnel an organization’s computer department is known as an IBM “shop” or a Digital Equipment “shop” meaning that the organization only uses a specific type of vendor computer hardware. It also means that only IBM or Digital Equipment software is used. When the IBM Operating System software is used all Application Programs are written to run on it. The result is that if the organization only has IBM computers you will most likely get an IBM solution. And you will not get a system that can be integrated with other non-IBM systems. What I have observed is that most IT managers are more loyal to their “shop” (vendor specific system) whatever it is than they are to state Decision Makers. The same problem occurs when Decision Makers seek to contract out services few of them seam to be aware that they are getting a proprietary solution when they contract services to an IBM shop nor do they seam to care about the cost except when there is a major failure and yet they still don’t know what went wrong.
Problems in Missouri
Most states including Missouri have been developing or purchasing stand alone application programs which store their own data internally. When it becomes necessary to link one application with another a special linking program has to be developed so that an application program can share data between them. This obsolete system is more costly to maintain than a Relational Database Management System (RDBMS) using SQL (Structured Query Language). A RDMS has a different architecture, an application program does not store its data within itself but rather stores its data in separate relational databases (RDs). All application programs in the system can access any of the relational databases (RDs) as it needs data for running its application. This means that the amount of stored data in a RDBMS is significantly less since it is not duplicated over and over as it is in the old application programs.
Missouri is still using IBM’s DB2 databases which have been obsolete for the last twenty years. It is a part of the state’s aging computer systems which is a stand alone system and can not be integrated easily with other systems.
Collaborative Innovation between States and Federal Government
Homeland Security is trying to find a way to link all of the states’ motor vehicle registration databases through a program called the Real ID. On the surface this appears to be nearly impossible task since nearly all of these databases have been developed as proprietary systems. The answer is to have the federal government develop the software application program for a state motor vehicle Relational Database (RD) and give the software to each of the states. Each state would then load the new RD with the motor vehicle data from their old proprietary database. Since the state RDs are easily linked this would provide a giant national motor vehicle RD which could be easily accessed by law enforcement and Homeland Security.
The system could also become a National ID database. The addition of a thumb print system would make it a fool proof system for Identification. This would save the public, businesses and the Federal Government $ billions in stolen identities.
This is also a simple solution to a much larger problem. State information systems are mostly obsolete proprietary systems that have been developed over the years by adding application programs that were developed or purchased by the state Computer Information Systems Departments. Each state has sunk $millions into the development of these obsolete systems.
Most states have been developing or purchasing stand alone application programs which store their own data internally. When it becomes necessary to link one application with another a special linking program has to be developed. So that a program can share data with another. This obsolete system is more costly to maintain than a Relational Database Management System (RDBMS) using SQL (Structured Query Language). A RDMS has a different architecture, an application program does not store its data within itself but rather stores its data in separate relational databases (RDs). All application programs in the system can access any of the relational databases (RDs) as it needs data for running its application. This means that the amount of stored data in a RDBMS is significantly less since it is not duplicated over and over as it is in the old application programs.
Now for the innovation, the state of Colorado is in the process of developing a centralized RDMS. This is a large undertaking but it was recognized by the state’s IRM as a necessary step to simplifying and reducing the cost of its computer systems. If the federal government were to fund the development of this RDMS in Colorado or some other state the developed software could be provided to all the other states. Each state would load the new application programs and relational data bases onto its computers. Then they would copy their data form the old system into the new relational databases. The old system would be kept running until the new system is up and proven. Only then would they pull the plug on the old system. The Motor Vehicle RD would only be one of the new RDs.
This centralized state RDMS could be expanded to provide computer services for local counties and cities as well. The state of Nebraska uses its state computing capability to do just that provide computer services to local counties and cities within the state.
This RDMS can be easily integrated with the proposal I made for a centralized Customer Relationship Management (CRM) system to reduce Red Tape and simplify California’s Agencies and Commissions.
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