When government leaders are focused on cost reduction and they request suggestions from employees on how costs can be reduced. They will receive many valid ideas but staff reduction is not one of them. Government seams to care little about making sure all employees have a full time job and government employees are seldom fired for any reason even fraud. With this background of mismanagement of staffing this is a good place to start reducing government costs by making government efficient.
One of the biggest excuses for government not managing its staffing is the wide spread false belief that government operations is somehow different from private business. Witness the statement often made by government managers that “ We don’t make widgets”. The fact is that government provides services to the public but so do thousands of private businesses yet most of them are well managed. The blame for not properly managing employee staffing may be shared by our law makers who have never required that government operate efficiently. Another problem is that government uses what I call a Top-down budget for funding government agencies. This means that no one knows what the correct funding of an Agency should be. Each budgeted period merely adds funds to the present budget with the final increase in the budget being negotiated.
The ability to cost out the functions of an agency has always been thought to be not worth the cost of doing. Yet this is what most private businesses do they know what the functions of the business cost and they use this knowledge to manage the staffing of the business. The need to determine the cost of all functions in government and in business has become affordable using Enterprise Lean. Before Enterprise Lean the only way to find out the actual functional cost was to “time study” the function an admittedly costly operation not to mention the resentment of employees. With Enterprise Lean the entire organization’s functions are studied using trained employees in Lean Teams who meet each week for one hour. Each Lean Team studies their function to determine the most efficient and effective way to do their jobs. The old method is compared with the new method and the savings is calculated. The cost of the function is collected in a spread sheet and totaled. The result is improved methods and a bottoms-up budget for all of the agency’s functions. Note that the Bottoms-up budget does not include the overhead and management budget.
Armed with the actual cost of labor and expenses for each function the entire agency can be right sized (insuring that each employee has a full time job). The work force can be managed using a Work Plan to balance the work load of the agency insuring that all required work gets done.
The difference between Enterprise Lean, Lean Six Sigma and other Lean projects
Enterprise Lean encompasses the entire organization fixing all the functions making them efficient and provides for the development of a bottoms-up budget. All other lean projects are done on a selected project by project basis which works best on high level systems between agencies done with specially trained Lean managers and consultants.
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