Reducing Costs and Increasing Productivity Through Lean

August 12, 2020
Reducing Costs and Increasing Productivity Through Lean
Lean is well-known within the manufacturing world. It has spread into many other industries that are heavy on administration with little to no manufacturing.

Healthcare is one example that has benefited from implementing Lean principles to reduce administration. In this article, we see how municipalities can apply Lean IT to reduce administration within a municipal environment.

What Is Lean IT?

Lean has been around for decades. Think back to when Henry Ford began producing Model Ts on an assembly line. Lean became popular when Toyota developed a specific implementation of Lean called the Toyota Production System (TPS).

Lean is not a specific tool or product. It is a methodology that focuses on organizational culture. Lean reduces production waste where demand is stable. Waste is work that doesn’t contribute value to the end product or service. Because waste is removed, value passes directly to the customer.

Lean IT is a Lean principle applied in an IT environment. The end result of delivering direct value to the customer is also the central goal of Lean IT. Elimination of waste is done systematically. The system is improved incrementally as well, so that progress can be carefully measured and tracked.

Lean Municipality applies the principles of Lean to the municipal environment. We’ll see how Lean IT creates a significant impact within municipalities by increasing overall productivity and team capacity without being capital intensive.

Operating Practices

Procurement and approvals within a municipality can take months and sometimes years to complete. It’s certainly a slow process. With many municipalities using paper through their procurement and application processes, errors are a fact of life. Errors occur during the transfer from paper to digital documents.

Digitizing more of the application and procurement process are cost-effective methods that can reduce the number of errors. Eliminating errors from the transfer process also eliminates waste.

How does the above translate into direct customer value? It surfaces in a couple of ways. With digital forms, customers have easy access to them on the web from anywhere. The value that customers receive from digital forms is added convenience.

Because transfer from paper to digital is no longer needed, there are no transfer errors to correct. Fully digital forms mean customer applications can be processed quicker.

With more efficient operating practices, municipalities reduce cost and increase customer (i.e., citizens) satisfaction.

There are many areas that municipalities can apply Lean. Rather than allocating funds to departments, they can be allocated by initiative or outcome. Instead of focusing on next year’s spending, focus on next year’s goals. As you can see, Lean is an outcome-oriented mindset.

Management Systems

Lean management ensures that lean principles are correctly applied within an organization. In a municipality, there is no manufacturing of products to measure and improve. Instead, management focuses on the trail of paperwork and time involved to complete workflows.

Lean IT doesn’t benefit just those who continually use it in their day-to-day tasks; it also benefits new hires. Because the system has been thoroughly analyzed and improved, new employees have a much easier time getting up to speed.

Mindsets and Behaviors

How is Lean integrated into the specific needs of a municipal environment? Municipalities aren’t known for their fast-paced ability to implement change or improvements. Change can take years as suggestions go through layers of bureaucracy. However, not all municipalities allow such restrictions to impede progress. How fast a municipality moves is often up to the members on its council. If the council wants faster change and more improvements, it will often happen. But if outside influencers have a large impact on decisions, the municipality can find itself remaining stagnant.

Lean is more about mindset rather than picking and choosing a tool to supplement Lean execution.

Lean within a municipality is no different. Board and council members have to believe that Lean can work. As mentioned earlier, Lean is applied at the organizational level, but it has to be accepted.

Organization and Capabilities

Lean IT isn’t a waterfall implementation where the mythology and related system upgrades occur all at once. It is implemented over time. The methodology first with tools following. This allows municipalities to begin seeing the benefits of Lean IT from the start.

As Lean IT spreads throughout a municipality, it should find that more applications and requests can be processed in a shorter amount of time. Many of these activities are revenue-based. Meaning, the municipality can see revenue growth from more efficient workflows through Lean IT.

Municipality can see revenue growth from more efficient workflows through Lean IT.

Applying Lean principles within municipalities requires management that believes in Lean and will fully implement its principles. Management must be willing to monitor and measure workflows so they can be systematically improved.

How do municipalities get started with Lean IT? They can do it on their own or hire a Lean consultant. Municipalities should also consider having management certify in Lean, whether that be Six Sigma or some other training. Staff should commit to regular Lean training as well. Such investments will pay dividends in new ideas and keeping staff engaged in applying Lean principles.

Acknowledgement: Sources are provided for informational and reference purposes only. DeWitt has no vendor affiliations, offers no products, and has no conflicts of interest.
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