Most of the savings presented in this website comes as a result of implementations of my Government Reform Models which are largely based on Lean. Lean provides a vehicle for generating dollar savings and quality improvement over time through improvement of the processes used and or the services delivered. These savings deliver real value in reduced expenditure and in better service to the public. It is difficult to determine just how much savings is going to be found or even when it’s going to be found (savings may continue for years from innovation) but it is known that the Lean approach can make a significant difference in a government or a private organization.
Most of the current savings data comes from the implementation of individual Lean studies made in government and industry. The main problem is that these implementations are aimed at the trees in a forest of waste which is occurring all around them But there is a second problem much of the savings is never realized because bureaucracies are reluctant to reduce the staffing identified by the Lean implementations.
The second area for savings from the General Reform Model is in using the data from the Enterprise Lean Team studies to do Work Measurement where the work performed by each Function’s processes are measured and documented. The result is the known number of hours required to do each Function which also determines the staffing required. I use a general rule of thumb to define “over staffing” as 20% of the work force in all areas where work measurement is not done. This rule has been verified by data from Alexander Proudfoot implementations which found that from 17% to 20% overstaffing occurring in private companies. I have also found that this over staffing number may be significantly higher than 20% in government.
One of the reasons for this is that work assignments in a bureaucracy are usually made to individual employees (in an organization chart) regardless of the actual time required to do the job. This means that one employee may have a task that occupies 90% and another just 30% of his time. These inequalities show up during the process of Work Measurement. This problem goes away when a Lean Team is assigned these tasks because the Team has responsibility for finding the best way to get the task completed with no time lost. These staffing problems are mostly found in government but are also found in the office and other overhead areas in private companies.
The third area where staffing is reduced is during the final step of the General Reform Model where the Bureaucratic hierarchically structured organization is changed to a Team Managed organization. In this process many managers may become redundant during the elimination of the Bureaucratic hierarchical structure of government and industry.
The above savings from process improvements and over staffing is in addition to other savings from Consolidating State Services, Streamlining Government Boards and Commissions, and through implementation of an Information Technology Data Center using Integrated Data Bases.
Enough about savings what you really want to know is the return on investment. I have said in other places that the implementation of my Reform models could be done largely by the State’s own resources. That is the training for Lean could be done by the State’s Training Department. And the determination of staffing by auditors and budget analysts. The Federal Government and some states have put in place a hiring freeze making available HR personnel for training as Lean Facilitators. My estimate for ROI is about $100 return for each $1 invested.
Rule of Thumb for estimating State Savings
The following is the minimum expected savings only from staffing reductions for each state based on 20% of state payroll data from the US census bureau. Actual savings may vary with the application of the General Reform Model and from additional savings from the Consolidation Model (for consolidating agencies).
Alabama $181,800,000
Alaska 45,460,000
Arizona 234,120,000
Arkansas 96,160,000
California 1,901,380,000
Colorado 205,960,000
Connecticut 171,580,000
Delaware 39,880,000
Florida 656,520,000
Georgia 340,800,000
Hawaii 57,580,000
Idaho 51,540,000
Illinois 518,040,000
Indiana 224,520,000
Iowa 129,700,000
Kansas 120,060,000
Kentucky 147,560,000
Louisiana 162,400,000
Maine 50,480,000
Maryland 264,420,000
Massachusetts 292,060,000
Michigan 397,280,000
Minnesota 225,260,000
Mississippi 108,260,000
Missouri 202,440,000
Montana 35,520,000
Nebraska 76,660,000
Nevada 98,780,000
New Hampshire 50,440,000
New Jersey 501,520,000
New Mexico 82,840,000
New York 1,138,220,000
North Carolina 362,580,000
North Dakota 27,360,000
Ohio 458,120,000
Oklahoma 130,220,000
Oregon 147,240,000
Pennsylvania 454,340,000
Rhode Island 47,820,000
South Carolina 158,000,000
South Dakota 26,120,000
Tennessee 208,000,000
Texas 899,380,000
Utah 92,380,000
Vermont 28,480,000
Virginia 324,666,000
Washington 298,940,000
West Virginia 60,600,000
Wisconsin 216,840,000
Wyoming 33,000,000
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