Cut waste and spending while improving productivity

Cut waste and spending while improving productivity - Doing more with less and with higher quality

As Governor and in response to the State’s significant reduction in Tax Revenues, the State of Vermont must dramatically reduce its wasteful spending. Like many other public and private sector companies, Vermont’s spending irresponsibly increased as the economy “boomed” and its now time to right-size our state and federal government budgets.

• Unfortunately as budgets are cut, false assumptions are made that quantity and quality of services will naturally be compromised. However, this couldn’t be further from the truth. Operations and processes across the state are riddled with wasteful, bureaucratic activities and tasks that have no value. Costing us, the tax payers and customers, time and money.
• Operations and processes across the state are lacking clearly defined goals, objectives, and measures. Resulting in competing “priorities” and worst yet, individuals, who don’t know or understand the state’s priorities, determining the priority of the work they will do.
• Operations and processes are managed to a “budget” and not based on measurable performance standards. Ask a state employee what would happen if the demand for their services increased 15%, they will likely respond one of three bureaucratic ways. 1. We will need more people, 2. People will have to wait, or 3. I will have to reduce the services I provide. I don’t anyone will or is expected to answer, I will find a way to make our service more productive to accommodate the demand.

Even after the “so called” tough budgets cuts are made, there will still be plenty of money to provide essential, needed services. If and only if, we have a leader in place who is experienced in boosting productivity and performance while significantly driving down costs.

If you go to our state's web site, you will find a laundry list of unprioritized "priorities" without measures of success. As Governor, I will use my deep expertise to develop a relevant, practical and pragmatic measureable strategy that includes, yes, prioritized goals, objectives, and yes specific, actionable, relevant and time bound measures that everyone can rally around and drive towards. Doing so, will immediately surface a tremendous amount waste in government. Waste that is costing us money and time which subsequently results in Vermont, people and business, dissatisfaction.

Stop telling me Lean Six Sigma is a strategic initiative

I'm sick and tired of hearing how Lean Six Sigma is a strategic initiative. What a bunch of crap! You and I know that most people have no idea of their organization's strategy. The executives of the organization have no clue.
I believe the following quotes from Gary Harpst's Six Disciplines for Excellence (and I believe the quotes actually are Kaplan and Norton's) are truer today than they have ever been.
“An astounding 90% of well formulated strategies fail due to poor execution.”
“Only 5% of employees understand their (firm’s) corporate strategy.”
“Only 3% of executives think their company is very successful at executing its strategies.”
Nearly 80% of C-level executives say their strategies are critical to success, yet are “nearly impossible to achieve.”
Approximately “75% of business improvement initiatives to solve these problems fail due to lack of sustainability.” (Refer to “Doom Loop” of Good to Great by Jim Collins.)
“The biggest problem in business is poorly executed strategies and plans” … Gary Harpst.

Give me a break, there is nothing strategic about your Lean Six Sigma initiative or projects for the vast majority of you.

What the heck does "Productivity" mean?

I'm often asked to define productivity and its algorithm. Also, I often hear productivity, production, and capacity used interchangeable. For some reason this drives me nuts because they all have different meanings.
I hope my write up below helps you understand what productivity means.

What is productivity?
Productivity is the ratio of outputs (goods and services) divided by one or more inputs (labor hours, FTEs, capital, expenses).



Improvements in productivity can be achieved by either increasing output without increasing the inputs, decreasing inputs without decreasing output, or increasing output and decreasing inputs.

Output implies production (quantity) of goods and services while input means land, labor, capital, management etc. Productivity measures the efficiency of the production system. Higher productivity means producing more from a given amount of input or producing a given amount with minimum level of inputs.
In other words, the more the output from one worker, one machine, or a piece of equipment per day per shift, the higher is the productivity (producing more output with the same resources).

In strategic operations management, productivity and production are two different terms. Productivity is the ratio between total output and the total inputs used in the production process. Production is an absolute; it refers to the volume (quantity) of output. Production volume may increase but productivity may decline as a result of inefficient use of resources. More efficient use of inputs may increase productivity but the volume of production may not increase. Production refers to the end result of production system whereas productivity reflects its efficiency.

Some of the potential benefits derived from higher productivity are as follows:
1. It helps to cut down cost per unit and thereby improve the profits.
2. Gains from productivity can be transferred to the consumers in from of lower priced products or better quality products.
3. These gains can also be shared with workers or employees by paying them at higher rate.

Danz Next Event - Building a Balanced Scorecard: "Identifying Key Performance Variables"

Date 1/17/08
Building a Balanced Scorecard: "Identifying Key Performance Variables"
Balanced Scorecard methodologies have emerged as a proven and effective tool to capture, describe, and translate organizations' strategic goals, into meaningful objectives at corporate, divisional, and individual employee levels, thereby allowing for the strategies to be successfully implemented. During this exciting event, you will learn how to create a draft scorecard for your function or process, and learn more as we discuss:
* Basic concepts of balanced scorecards and how it can be used to improve organization performance
* Key concepts behind an effective Strategy Map
* How the Balanced Scorecard methodology can be used to drive Operational Excellence and Organizational Alignment

For more information contact slick1122@comcast.net

When: Thursday, January 17^th 2008

Time: 5:30pm Registration

Place: Windjammer in South Burlington

Cost: $20 ASQ and TPC Members); $30 for non-members Buffet Dinner will be provided!

Has anyone completed Step 1?

Come on! Someone has to send me an email or a post about what they learned in step 1. After I hear from someone, I will post Step 2.

Reduce your transactional backlogs and transactional cycle times by 50% each in 45 days! Step 1

Ok, you want to want to be a Lean Six Sigma Rock Star. This is the first step in reducing your transactional backlogs and transactional cycle times by 50% each in 45 days.
Have your employees who resolve your customer issues, cases, complaints, bugs or whatever, document all the tasks they do in a month and how much time is spent doing each task. To make it easy, create a spreadsheet for them to populate.
Examples of tasks are; answering email, training, meetings, special projects and so on.
After they have done so, review the document to understand how much time they spend doing other things rather than the primary activities and tasks they were hired to do.
What are thoughts? What have you learned? What percentage of their total time is doing things they weren't hired to do?

So you want to be a Lean Six Sigma Rock Star

I will be publishing some steps you can to take to reduce your transactional backlogs and transactional cycle times by 50% each in 45 days. I know this can be done my team team has done it many, many times. Believe it or not, you don't need a lot of fancy tools or training to do so.


But first, you have to be believe.

Second, do you have the courage to face and address the bias in your facts.

Stayed tuned for more.

Sustaining the Gain

At a recent ASQ meeting we were brainstorming training programs to offer during the coming year. We got your typical training ides; Lean, Six Sigma Yellow Belt, Six Sigma Green Belt, and other standard ASQ certification primer classes. I was hoping for newer and more exciting programs.

I then asked the group this question, what issues are our members and their businesses facing? From meetings with other members and local organizations, I believed that many organizations were having difficulty sustaining the results from the projects that had been completed. I believed that we should be offering classes around sustaining gains.

I asked the team to brainstorm ideas on why some project results were not sustained. We then affinitized the results into 3 themes; Leadership commitment, Culture, and lack of process / operations acumen. No surprises here.
In the coming weeks, I will dissect each of these themes into further actionable themes.

However, at a high level, I believe leadership commitment is a result of a couple things, the leadership merry go round (leaders are in their current assignments for short periods of time and are not considering the long term implications of their short term draconian policies. The next leadership issue, is the lack of strategic planning and communication of the plan. How many of you can name the top 3 strategic imperatives for your organization and the metrics being used to monitor the progress towards the strategic imperatives.

Culture is the organizations coping mechanism to the constant change in leadership
and lack of a clear organization strategy.

Lack of process / operations acumen, I believe that they're many people in the roles of process / operations managers or leaders who don't have formal training in managing their process or operations, I believe this to be especially true in transactional functions.

What are you thoughts?