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LSS For service in government

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  • #53250

    Ted
    Member

    First time posting here, please be patient.  I am a LSS GB working for the US Army in a Human Resources environment on an Army post in the South.  Leadership is pushing hard for cost savings as opposed to cost avoidance (at least $100k per project or don’t even begin).  The way I see it, in service, cost savings really equates to getting rid of employees.  More efficient services means less time spent providing the service which in turn means fewer employees to provide the more efficient service.  Consequently, there is not a lot of cost savings out there.   No Director wants their TDA cut because of cost savings as a result of a project.  Anyone with experience in situations like this?  You can only cut so much money from supply budgets or when trying to go paperless, etc..

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    #189270

    Lala
    Member

    Hi Ted,
    Saving cost does not mean for reducing the manpower in any segment. It is related ot improving the efficiency.
    Please elaborate a little more about the expenditures in your area so that I can help you.

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    #189289

    Ted
    Member

    We are working on projects that create an increase in efficiency when creating and issuing orders (basically paperwork, but more in depth).  Using a new database, the time required to create orders is decreased and the error rate is decreased as well.  Since the main thing decreasing is time, I see that as a cost savings directly related to employee hours.  There does not seem to be a way to show a cost savings in any other way.  Bear in mind that we are not supposed to use cost avoidance any longer, as there has been little cost savings in the past, only avoidance.

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    #189290

    meadoc
    Participant

    My role is also cost reduction.  We have similar discussions about the value of cost avoidance vs. cost reduction.  Seems they should both ‘count’.  There are ways to reduce cost in processes without headcount cuts.  Look for waste in materials, hardware, postage and freight, packaging, etc.  Try using financial statements and drilling down on allowances, SG&A, etc.  Look for pockets of spending that reflect a process, then improve that process.  You’ll find areas that have waste reflected in excess costs.

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    #189294

    Jamie
    Participant

    Ted,There are other ways. Now that you’re working more efficiently, can you now increase your capacity (process more orders per day or even take on another task). Also, what does the reduction in defects do for you – are there costs associated with a defect (follow the trail) – you will no longer be incurring those costs.Also, in working with the government – I’ve been able to justify projects on the basis of “resource recovery” – resources have been taken out through budget cuts without a corresponding reduction in work assigned – the project is justified as an enabler to allow us to recover the resources that were removed.

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    #189308

    Rhineg
    Member

    Ted,Welcome to the Rock vs. Hard Place of process improvement for cost avoidance.If your sponsors and stakeholders will only see a negative from savings leading to budget reductions, then you must justify process improvement on capability expansion. Help them to show their ability to deliver more from a flat budget. Then you can focus on redeploying freed-up resources from improvements into other value-adding activities. The scope of your projects will be a bit larger to incorporate redeployment into those new activities, so that someone outside the local budget does not decide smaller budget is better. Take care the the “other value-adding activities” are seen positively both inside and outside your local function.

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    #189327

    Schuette
    Participant

    I work in manufacturing and we are actually constantly reducing costs in all departments; however we do not waste our time thinking about who is no longer needed if we shorten our cycle times and the ovarall amount of work.  Instead we concentrate on what additional value-added work we can now do that we didn’t have the available resources to tackle before. The ultimate goal of the cost reduction should be “do more with the same number of people.”  This will demonstrate measureable performance improvement and increased efficiency such as jobs per hour, or cost per job.

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    #189328

    B2B
    Participant

    The US Army launched Lean Six Sigma in 2005.  At the iSix Sigma Live conference this year, the program manager presented the program and benefits of LSS within the entire Dept of Defense.  You can find him on this site via the Live!Home option to the left.  You can then look at events and under this year’s event, you’ll find his name.  I would contact his office for support and guidance.

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    #189329

    Tierradentro
    Participant

    You can find answers to your questions via the AKO site (ie cost estimating), the LSS Deployment Guide (Section 8 I believe), Powersteering, etc.
    In a nutshell, cost savings are dollars the senior millitary commander can reallocate to other areas.  Cost avoidance can not and to be frank, have no real financial impact at all.  Considering the recent DOD budgetary cuts (if they hold up) and the practice of paying for baseops activites out of hide or OCO dollars, it makes sense.
    Look to your MBB, get into the Army LSS Deployment Guide, Section  8.0 (via AKO), or shoot me an email.  Best of luck.

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    #189341

    Kumpar
    Participant

    You may want to also consider savings that will result downstream from your improved process. If your project  produces a central repository so that travel orders can be viewed, it will generate tremendous savings for Travel Pay etc.

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    #189362

    JADespi
    Participant

    Ted,
    You can do Value Stream Map and identify those activities that really add value. Resources allocated to those non-value add activities shall be redeployed or retired – explore all available alternatives and do marginal analysis to each.  

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