Lean Management and the Cards Payable Shift. City of Roanoke Amelia Merchant, Dept. of Mgt and Budget Mary Ratcliffe, Dept.
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1 Lean Management and the Cards Payable Shift City of Roanoke Amelia Merchant, Dept. of Mgt and Budget Mary Ratcliffe, Dept. of Finance
2 Roanoke, VA A little background
3 Roanoke from Railroad Town to High Tech
4 Diverse & Welcoming Community
5 More to Life, both Inside
6 .and Out!
7 The challenges Roanoke has faced Declining local tax revenue Massive cuts in funds from State of Virginia Increasing capital and operational needs (general fund and school division) Reduced budget $28 million in last 5-6 years Reduced number of positions by 10% in last two years Affordable Care Act requirements Retirement contribution for employees Compensation increases
8 The art of leadership in today s world involves orchestrating the inevitable conflict, chaos, and confusion of change so that the disturbance is productive rather than destructive Harvard Business Review July-August 09
9 Getting the organization s attention
10 Why do we have to change the way we do business? Why do we have to change the way we do business?
11
12 We responded by Reduced capital plan by over 40% Maintained capital infrastructure Limited growth of new ongoing expenditures Built adequate reserves Invested in neighborhoods and economic development Budgeting for Outcomes
13 Budgeting for Outcomes isn t enough.. Why do we have to change the way we do business?
14 We have to Change the Culture to Change the Game Accountability, Diversity, Customer Service Young professionals Resiliency approach Shift culture to sense of individual responsibility and empowerment Equip all employees with tools needed to make change happen
15 What is Lean? Delivering the most value to the customer in the most efficient way
16 Lean Goals Improve quality Eliminate waste Minimize cost Reduce time Improve services Remove activities that don t add value Continual improvement
17 Our Approach to Lean Thus Far Two-Pronged Approach Senior Design Projects Virginia Tech Blacksburg City Departments Greater Roanoke Transit Company (GRTC) Roanoke City Public Schools Management and Budget Internal Education Plan Virginia Tech Roanoke Center City Departments Human Resources Department of Management and Budget
18 VT Senior Design Projects = FREE LABOR!!!!
19 VT Senior Design Projects Collaboration with Virginia Tech Trained senior ISE students with faculty advisors Internal staff development overseeing projects Free up internal staff time
20 VT Senior Design Projects Address an actual client issue applicable to consulting assistance Have a design component that requires data analysis Technically challenging and complex enough for a 4 person team Require approximately 650 person hours of consulting time across several months Be related to one or preferably more areas of industrial and/or systems engineering
21 Senior Design Technical Areas Business process improvement Capacity planning Data management Ergonomics of human factors engineering Facilities planning and/or design Lean methods Logistics Materials handling Product design or development Quality or reliability Scheduling Supply chain Training design or redesign
22 Senior Design Projects Police *Civilian Employee Workflow Analysis Crime Analysis Unit and Administrative Staff Review *E-Summons Workflow Analysis and Implementation *Technology Analysis Social Services Streamlining Intake Services
23 Senior Design Projects (cont d) Planning, Building and Development E-Submissions Paperless Permitting Application Comprehensive Development Review plan review Transportation Right of Way Mowing GRTC Inventory Control Roanoke City Public Schools *Grounds Inventory Management
24 Internal Leadership Education on Lean Management VT Lean Process Management Program Lean foundation and learning using Lean tools Participants prepared to: Conduct Lean projects in their work area Progress to Lean Six Sigma (LSS) certification Core Lean Team trained Support for Lean processes and projects throughout the organization Continual improvement with support and Lean expertise
25 Internal Leadership Education and Lean Six Sigma Management Second phase Lean -> Lean Six Sigma Voice of Customer Process Analysis & Improvement Employee Engagement Statistical Root Cause Analysis Executive
26 Internal Leadership Education and Lean Six Sigma Management 16 participants in 1 st training cohort 9 received certification in November received certification in October projects conducted impacting 12 departments/divisions 16 participants in 2 nd training cohort 9 received certification in October projects impacting 13 departments/divisions
27 Improvements Efficiency gained (time) Hard cost savings Estimated salary savings Processing times Form efficiency Standardization Use of technology
28 % Time Reduction
29 The Lean Six Sigma Model Lean Six Sigma training and certification Statistical, analytical method focused on improving quality and reducing defects Participants prepared to utilize tools and techniques focusing on customers and quality Nationally recognized Green Belt certification 20 participants in 3 rd training cohort each beginning a project; graduation planned for spring/summer 2015
30 LSS Organizational Structure and Support Executive Team City Manager Assistant City Manager for Operations Assistant City Manager for Community Development Steering Committee Constitutional Officer Council Appointed Officer Community Development Cluster directors Operations Cluster directors Human Resources staff support Department of Management and Budget staff support
31 LSS Support Duties Executive Team Vision and oversight Steering Committee composition Quarterly LSS SC meeting Steering Committee Communication Promote collaboration Project assignments and success tracking
32 CARD PAYABLES
33 The Challenge and Opportunity Identify vendors that would accept a virtual credit card payment in lieu of a paper check or a direct EFT/ACH payment. Modify our current system to enable those payments to be made. Approximately $28 productivity savings, about $2 per check of real money, as well as an increase in our rebate program through our Purchasing Card provider.
34 The LEAN Approach We mapped out the process using the current check payment process to get an idea of what this may look like. Using the Prioritization Matrices we identified the vendors that had the highest potential of accepting this form of payment. Developed a Future State Map.
35 Improvement Process 1. Make changes in Advantage (financial system) to identify either Card Payables vendors or an additional disbursement code to identify a Card Payables payment.
36 Improvement Process (cont d) 2.Create interface with 5 th 3 rd Bank to process payments.
37 Improvement Process (cont d) 3.Vendor payments can be sent in a safe, secure and more timely fashion.
38 Improvement Process (cont d) 4. Print, process and mail less paper checks.
39 Project Savings & Lessons Learned 22 vendors to be enrolled in Card Payables 28 vendors changed to EFT from checks Approximately 753 less checks per year and $1,647,973 in payments using Card Payables. Social Services joined us converting over 130 vendors to EFT reducing more than 2,100 checks per year.
40 Cards Payable Project $102,070 Savings LEAN gives projects order and purpose.
41 Benefits of the Lean Six Sigma Model Employee benefits: Highly valued skillset Portfolio of projects Leadership development and project management skills Demonstrated organizational value Competitive skills Career enhancement
42 Benefits of the Lean Six Sigma Model (cont d) Organizational benefits: Customer service improvements Cost reductions and excellent ROI Improved business processes Success replication Enhanced employee engagement
43 Ultimately, the organization benefits from Improved quality Reliably repeatable successes Reduction in defects Elimination of waste Minimized cost Reduced time Improved services
44 Recommended Reading GFOA Publication: A Guide to Starting the Lean Journey
45 Questions? Thank You!
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