Cutting Budgets - the Benefits of Using Lean Six Sigma in the Public Sector
By Rita Green Catalyst Consulting
This is neither the time nor the place to rehearse the rights and wrongs of the government policy of austerity, but it is probably worth pointing out one rather salient fact; it seems to be here to stay.
This is neither the time nor the place to rehearse the rights and wrongs of the government policy of austerity, but it is probably worth pointing out one rather salient fact; it seems to be here to stay. There may have been a time when austerity – in simple terms the government spending less and less public money on a wider and wider range of services and activities – was presented and generally thought of as being a temporary solution to a severe but particular crisis. That time appears to have passed. With the Chancellor shortly due to unveil a spending review prefaced by a request for unprotected departments to draw up plans for cuts of 40%, the withdrawal of public cash from broad swathes of life looks set to continue. Not only will this have an immediate impact, but it will also entrench the effects of lower spending on a more or less permanent basis, even allowing for the possible change in the political complexion of any future government.
Bearing all of this in mind it seems to be imperative that vital public services get to grips with this changed and difficult environment as quickly as possible, and nowhere is this more the case than in the realm of local government. The Local Government Association (LGA), in a submission made as part of the forthcoming spending review, has predicted that councils around the country will face a shortfall of almost £10bn by 2020 due to a variety of factors and before any further cuts are even made. Once the cuts begin to bite, it’s feared that this figure might rise as high as £20bn.
Given that the LGA is a bi-partisan umbrella organisation, chaired by Conservative Lord Gary Porter, it can be assumed that the comments they make regarding the impact of funding shortfalls are, at least, not aimed at political point scoring. When the LGA warns that councils could stop providing refuse collection and recycling, road maintenance, arts and leisure services, subsidised bus services, trading standards oversight, parks maintenance, street cleaning and street lighting and still not cover the looming funding shortfall, it’s a claim which simply has to be taken as more than the standard scaremongering of a lobbying group.
The wider point of the situation is that this isn’t simply an issue affecting those directly involved. The people who run, work for and access local government services will feel the full force of any funding shortfalls, clearly, but the impact will resonate throughout society as a whole. To take a small example, the longer waiting times often experienced at hospital accident and emergency departments can be directly traced to the phenomenon of ‘bed blocking’ – the situation which arises when people, often older people, having completed their course of treatment, can’t be released from hospital and free up a bed because of a lack of services in the wider community. These services, often something as simple as fitting a handrail to allow a person to access their own front door, are provided through local government funding, and the fewer such services there are, the longer people have to wait in their local hospital. This is despite the fact that spending on the NHS is, nominally at least, protected from cuts.
The question which arises, therefore, is how exactly local government and other public services can survive or even flourish in an age of austerity, and what processes can be utilised to minimise the wider effects of increasing and ongoing funding cuts. The answer to these questions, or at least a very large part of that answer, is provided by the Lean Six Sigma methodology, and promoting the use of Lean Six Sigma methods and practices throughout the realm of local government is something which would reap benefits for all concerned.
Put simply, Lean Six Sigma is a means via which the workings of an organisation can be broken down into their component parts, and then each of these component parts examined in depth and through statistical analysis with the intention of maximising efficiency. It should be noted that ‘efficiency’, in terms of Lean Six Sigma, is always looked at through the prism of value as it is perceived by the end user. It might not, therefore, always be more ‘efficient’ to simply do things more quickly, even though Lean Six Sigma is targeted at stripping away any wasteful activity or process. Whatever is most efficient is whatever delivers the most value to the end user, and as far as possible, anything which gets in the way of this will be identified and eliminated. This is often most easily understood in terms of a manufacturing process embodied by the traditional production line and a physical product moving through the various stages. The same principles, however, can just as easily be applied to a public body such as a council, with the services provided being broken down into individual steps, from procurement or commissioning to delivery – from a service user making a phone call, to a hand rail being fitted by a front door – and each step analysed to see if it is both truly necessary and being delivered in the most efficient and effective manner possible.
The process utilised to revamp this ‘production line’ is known as DMAIC, standing for Define, Measure, Analyse, Improve and Control. Define and Measure involves identifying the problem hindering service delivery, and doing so through a careful analysis of all available statistics and the transparent and open input of staff involved at all levels of that delivery. The Analysis which then takes place is the thorough examination of exactly why the things which go wrong are going wrong, and this is followed by Improvement, which is when solutions to the problems are crafted. Control, the final process, involves setting up frameworks through which improvements can be implemented, measured and monitored in the future. This last phase is vital in that it embeds change in a permanent manner, rather than simply creating a temporary spike in efficiency.
Lean Six Sigma and DMAIC are being utilised by North Ayrshire Council. One of their improvement projects centred upon the provision of Occupational Therapy equipment, a vital service and one which was experiencing long delays of a kind which impacted negatively on service users’ quality of life. The results of the project – which involved workshops, data collection and focussed input from the team responsible for delivery – were hugely impressive. Benefits included the following:
? The average lead time was reduced from 34.5 days to 1.5 days
? 76% of priority requests were receiving equipment within a day, 100% within 2 days
? Communication with service users was increased and improved
? 95% of all requests were met within a period of 7 days
? The steps involved in the process of service delivery were taken from 57 to just 30
Indeed, the results of the project were so striking that the Quality Scotland Awards for Business Excellence 2015 awarded it the prize for best Lean Six Sigma project.
The sheer size and culture of local government makes it the ideal sector for the implementation of Lean Six Sigma. Within a council as a whole and the individual departments which comprise it, processes will have developed over years of incremental change and amidst the culture of an organisation constantly working at crisis point. With management too busy firefighting to step back
and take an overview and staff too busy coping with limited resources to take the time to share their valuable experience of life at the ‘coal face’, the chances of analysing and improving performance are naturally strictly limited. Until, that is, the framework, discipline and focus of Lean Six Sigma is imposed.
To tackle a body as large as the average local council as a whole would require a full transformation programme requiring complete buy-in from the leadership and staff. It might be therefore that the North Ayrshire approach signposts the way forward. By dealing with individual departments, a council will not only gradually introduce the principles of Lean Six Sigma but it will also have a success story to point to and a culture of good practice to share. Some people involved in local government may well be wary of a process which promises ‘efficiency’, due to the fact that the word has often been used as political spin for funding cutbacks. It’s all the more important, therefore, to ensure that the nature of efficiency as it applies to Lean Six Sigma is clearly understood and that every member of staff involved is fully on board. Only by truly engaging staff will councils gain the insight needed to develop the right solutions and the sense of ownership required to deliver those solutions. Councils hesitant to embrace the principles of Lean Six Sigma should be reassured that it is not primarily about saving money as an end in itself; rather, it is about instilling an ethos of everyday operational excellence in a manner which will, almost by default, result in less money being spent on the delivery of better services, to the benefit of both the council and the wider community.