PUBLIC WORKS LEAN SIX SIGMA PROJECT FLEET PURCHASING OVER $1,000

Transcription

1 PUBLIC WORKS LEAN SIX SIGMA PROJECT FLEET PURCHASING OVER $1,000 CHAMPION: Kevin Cook, Public Works Director SPONSOR: Melissa Beamon, Operations Superintendent TEAM LEAD: Evelyn Jensen, Green Belt Candidate TEAM MEMBERS: Rodney Wheeler, Fleet Manager Katherine Cheney, Inventory Control Clerk Amber Ferland, Green Belt Candidate

2 Public Works Fleet Division Project Purchasing over $1,000 Project Charter Purchasing over $1,000 Project Additional Info Problem Statement: Event Dates: 2/18/15 3/15/15 Project Mission: Preliminary Project Plan: Defective process for Fleet Division purchases exceeding $1,000. The process for the 1st quarter of FY2015 yielded 44 defects of varying nature: 1 Goods/Services over $1,000 obtained from Non Vendor of Record suppliers without quotes 2 Goods/Services over $1,000 obtained outside of Vendor of Record parameters approved by council Location: Garage Compound Solid Waste Office Improve the Fleet Purchasing Process for Good/Services over $1,000. Project Definition 2/6/15 02/17/2015 Identify Team Members Team Member Matrix 3 Goods/Services over $1,000 obtained without available funding in blanket order, no check for balance 4 Goods/Services over $1,000 Vendor payments not made within 45 day Florida Champion: Constraints: Statute Kevin Cook, Public Works Director Meeting the mission of Fleet Maintenance because of delays in obtaining quotes or purchase orders. Departments not involving Fleet in obtaining good/services for vehicles until work is done or service has been provided KICK OFF on Febraury 18 from 9:00 12:00 Set Ground Rules, Identify Roles, Review Project Sponsor: Data, Measurement Assessment, Map Process Swim Lane, Cause & Effect Analysis Fishbone Melissa Beamon, Operations Superintendent Diagram, Identify Value Added/Non Value Added, Action Item Log, Benefits and Concerns Team Lead: Assumptions: The team will be successful in assisting with solutions and owning the improvement implementation. February 25, :00 12:00 Process Boundaries: Process begins with customer request Process ends with payment of invoice Evelyn Jensen, Office Manager (Green Belt Candidate) Team Members: Rodney Wheeler, Fleet Manager Reporting: Status of implementation progress will be presented to project sponsor beginning 3/5/15 Identify Bottle Necks and Constraints, Voice of Customer Analysis, Brainstorming, Improvement Idea Log, Action Item Log, Force Field Analysis, Goal Statement: Reduce the number of defects in the purchasing process involving purchases over $1,000. Includes decreasing vendor payment complaints, decreasing internal audit issues. Katherine Cheney, Inventory Control Clerk Benefits and Concerns Amber Ferland (Green Belt Candidate) March 04, :00 12:00 Implementation Plan, Map Future Process, Action Item Review Commandments Required Team Guidelines: The team will meet for 3 hours once a week on Wednesdays for 3 weeks beginning on February 18, OUT BRIEF TBD Obtain management commitment to follow through on Team's solutions. Compliance with Purchasing Guidelines Compliance with Council approved Vendor of Record parameters Compliance with 45 day Florida Statute for Vendor Payments Coach: Facilitator:

3 Problem Statement: Defective process for Fleet Division purchases exceeding $1,000. The process for the 1st quarter of FY2015 yielded 44 defects of varying nature. Goal Statement: Reduce the number of defects in the purchasing process involving purchases over $1,000. Includes decreasing vendor payment complaints, decreasing internal audit issues. Commandments Required *Compliance with Purchasing Guidelines *Compliance with Council approved Vendor of Record parameters *Compliance with Florida Statute for vendor payments within 45 days

4 In Progress Review DEFINE PHASE HIGHLIGHTS MEASURE PHASE HIGHLIGHTS * Charter Completed Problem Defined Goal Defined Business Rules Defined Team Identified Preliminary Project Plan Completed * Reviewed all invoices over $1,000 for the 1 st Quarter of 2015 * Categorized each defective purchase * Calculated financial impact of defective purchases *Team Documents Placed on S Drive :\LEAN Team\Public Works\Fleet Purchasing Project\TEAM DOCUMENTS.PW FLEET PURCHASING * Team Documents to be updated throughout the process GATE REVIEW: Charter reviewed with Champion Received approval to proceed. GATE REVIEW: Invoice errors reviewed with Champion Received approval to continue. Looking forward to team s input toward solutions.

5 Measurement Assessment Public Works Fleet Division Project Purchasing over $1,000 Measurement Assessment OUTPUT (y) STRATIFICATION FACTORS MEASURES Does Data Exist? Will data help to predict? Invoice Processing Errors 37 by Fleet Staff Errors/invoices by Fleet Yes Yes Invoice Processing Errors 7 by outside departments Errors/invoices from Departments Yes Yes Measurement Data 1 Obtain quotes for goods and services exceeding $1,000 A Baseline 9 B Goal 0 C Measurement Purchases over $1,000 made without quotes or BPO 2 Need to confirm with Office Manager that selected vendor meets council approved Vendor of Record defined utilization A Baseline 5 B Goal 0 C Measurement Purchases over $1,000 not meeting VOR utilization 3 Purchase order has adequate funding (if not, purchase must be postponed in order to process a change order to increase funding or verify that credit card can be used for invoice processing) A Baseline 24 B Goal 0 C Measurement Purchases over $1,000 without funding purchased outside of purchasing guidelines 7 errors by Other Departments 4 Reduction in delayed vendor payments A Baseline 6 $52,530 B Goal 0 C Measurement Invoices paid beyond 45 day Florida State Statute limitation

6 Financial Impact Financial Impact 1 Minimizes vendor complaints which require research by administrative staff 30 minutes to 1 hour per item 6 opportunities this quarter Admin 6 x.75 (avg. hrs.) = 4.5 hrs saved 2 Minimizes Purchasing and Internal Audit issues which frees Management and Administrative resources from queries and responses Management 30 minutes to 1 hour per item & Administrative Sstaff 1 to 2 hours per item 38 opportunities this quarter Mgmt 38 x.75 (avg. hrs.) = 28.5 hours saved Admin 38 x 1.5 (avg. hrs.) = 57 hours saved Quarterly Savings $1,510. Annual Savings $6,040.

7 In Progress Review ANALYZE PHASE HIGHLIGHTS Completed the Swim Lane Map to identify the driving and restricting forces converted this exercise to a Flow Chart more suited to the variation in scenarios for the purchasing process: Driving Forces Departmental Operating Needs Restraining Forces Purchasing Process too lengthy Pleasing customers (Departments and Vendors) Budget funds running low to increase BPO s for FY15 Accomplishing Mission Timely payments to vendors City policy compliance Departments taking vehicles to vendors without involving Fleet or asking for quotes If Management gives OK for repair/parts purchase staff proceeds without determination of needed BPO increase or submission of Emergency Purchase Request without following though with process Understaffing issues impede process Having a successful TEAM

8 The Swim Lane Map tool that was utilized during our 2 nd Team Meeting was not conducive to the purchasing process for Fleet because of the variation in scenarios. Please see the alternative Flow Chart Below.

9 PROCESS FLOW CHART FLEET PURCHASING OVER $1,000. Flow Chart delineating Purchasing Process Funding Not Available No Office Manager Requests Superintendent and BPO Request Sent to Purchasing (2 Purchasing Director Approves Purchasing Increases Approval Given to Service/Parts Provided Vendor Sends Invoice Inventory Control Clerk Posts Cost Office Assistant Processes Invoice for Payment If BPO Payment Payment to Vendor Purchasing Option OK'd that Office Assistant Prepare Director Approve BPO to 6 week processing time) (Depending on Amount May or Creates BPO Vendor to provide by Vendor to Job Order to Bill Department BPO or or Inventory Control Clerk, Fleet Invoices Sent to BPO Request or Increase for Request Require City Manager Service/Parts Manager or Office Mananger Pay Vendor by Accounts Payable Vendor Approval) Credit Card External Repair Fleet Manager or Inventory Control Fleet Manager or Inventory Control Office Manager Checks for Fund Fleet Manager/Inventory Control Vendor Provides Repair/Parts Inventory Control Clerk Office Assistant Processes Invoice Clerk Get Estimates Clerk Check w/office Manager for Availability for Purchase Clerk Approve Vendor Repair/Part and Sends Invoice Posts Cost to Job Order to for Payment BPO or or Inventory BPO Balance, BPO Entry or Credit Card Order Bill Department Control Clerk, Fleet Manager or Payment Office Mananger Pay Vendor by Credit Card If BPO Payment Invoices Sent Payment to Vendor to Accounts Payable Dept. Request for Inventory Control Clerk Fleet Manager Reviews Mechanic Repairs or Internal Repair Mechanic Gives Inventory Control Inventory Control Clerk Gets Estimates Inventory Control Clerk Checks Office Manager Checks for Fund Vendor Provides Repair/Parts Inventory Control Clerk Office Assistant Processes Invoice Repair Opens Job Order Assigns to Mechanic Suggests Outsourcing Clerk Order for Parts w/office Manager for BPO Balance, Availability for Purchase and Sends Invoice Posts Cost to Job Order to for Payment BPO or or Inventory Gives to Fleet Manager BPO Entry or Credit Card Payment Bill Department Control Clerk, Fleet Manager or Office Mananger Pay Vendor by Credit Card If BPO Payment Invoices Sent Payment to Vendor to Accounts Payable Dept. takes directly to Funding Not Available No Office Manager Requests Superintendent and BPO Request Sent to Purchasing (2 Purchasing Director Approves Purchasing Increases Approval Given to Service/Parts Provided Vendor Sends Invoice Inventory Control Clerk Posts Cost Office Assistant Processes Invoice for Payment If BPO Payment Payment to Vendor vendor without Purchasing Option OK'd that Office Assistant Prepare Director Approve BPO to 6 week processing time) (Depending on Amount May or Creates BPO Vendor to provide by Vendor to Job Order to Bill Department BPO or or Inventory Control Clerk, Fleet Invoices Sent to notification BPO Request or Increase for Request Require City Manager Service/Parts Manager or Office Manager Pay Vendor by Accounts Payable Vendor Approval) Credit Card

10 Completed Fishbone Diagram to assess the root cause or driving and restricting forces of the errors within the Fleet purchasing process. Identified the following causes for non compliance: * Purchasing Process for Blanket Purchase Orders usually takes 4 6 weeks * Department needs ASAP most city vehicles/equipment fall under Public Safety or Public Health categories * Lack of system/set procedures In Progress Review ANALYZE PHASE HIGHLIGHTS * When Management approves purchase, Staff not alerting Office Manager to check funding needs * Forgot just getting mission accomplished * Employee Turnover/Leave Coverage new or fill in not aware of process

11 The Fishbone Diagram tool was very effective in identifying our root causes for purchasing errors

12 In Progress Review ANALYZE PHASE HIGHLIGHTS CONTINUED Benefits and Concerns identified for moving forward and structuring our process Benefits Concerns Stakeholders gaining an understanding of the process If complying with procedures, Fleet unable to guidelines make timely repair Public Safety/Public Heath vehicles/equipment which make up most of the city s fleet inventory have extremely long downtime Departments taking vehicles to vendors without involving Fleet and not getting estimates Quick win identified Fleet Manager to communicate Fleet Repair Procedures to Departments GATE REVIEW: Champion discussed options to expedite process: 1 Utilize Emergency Purchase Order process for Public Safety and Public Health emergent repairs 2 For routine repairs, utilize the Blanket Purchase Change Order process and elevate the criteria to reflect the pending need

13 FUTURE PROJECTS Business Process for Streets/Stormwater After Hours Emergency Calls Automated payroll system for department level processing ELEVATED PROJECTS Purchasing Fast Track for Blanket Purchase Order Changes Public Safety/Public Health vehicle/equipment repairs Purchasing Fast Track processing for Emergency/Sole Source Purchase Orders QUICK WINS Fleet Staff gained better understanding of guidelines and process Fleet Manager to disseminate repair policies to Departments

14 In Progress Review SUMMARY First, I would like to Thank You for the opportunity to be a part of the City s Lean Six Sigma initiative. This 1 st project has been a new and exciting learning experience with a few bumps along the way as we put the new training to use. Lean is providing a great mechanism to grow in a positive way while fostering Staff communication to reinforce needed procedures and evaluate the unnecessary portions of the process. The TEAM approach works very well for creating buy in born of understanding why the processes are important.