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From the Desk of Jack Healy

Lean Government?

By Jack Healy, Director, Manufacturing Advancement Center, jackh@massmep.org

"Lean" and "government" are two words that do not necessarily go together in the minds of most people. Yet there are more and more examples that governments are, in fact, getting leaner. Take the New England states, for example, whose governments are facing the challenges of an increasingly aging workforce at the same time as demands for more services and greater accountability. While each state is reacting to these forces in different ways, they are reacting.

The underlying numbers tell quite a story. Overall workforce numbers, contrary to popular opinion, have not grown over the last five years.

Changes in New England State Government Full Time Equivalent Personnel, 2001 TO 2005*

State
3/2005
3/2001
Variance
 
Massachusetts
88,533
95,259
-7%
Maine
21,140
21,544
-2%
New Hampshire
19,477
18,920
3%
Connecticut
59,827
66,200
-10%
Vermont
14,353
13,666
5%
Rhode Island
19,942
20,145
-1%
 
Total N.E.
223,272
235,734
-5%

*Source: US census

While state and local governments remain the largest single group of establishments for which productivity indexes are not routinely calculated, they are finding their own ways to measure and improve performance. Take, for example, the Maine Department of Labor (MDOL).

Maine Department of Labor: Organization Profile
MDOL performs some of the oldest processes in Maine State government and its existence is tracked back to 1887.  It currently has 565 employees in four bureaus, down from 650 employees in 2004.  The bureaus are Bureau of Employment Services, Bureau of Unemployment Compensation, Bureau of Rehabilitation Services, and Bureau of Labor Standards. MDOL has 26 Career Centers and 3 Unemployment Call Centers throughout Maine and 5 office locations in the greater Augusta area.  

Situation
The Maine Department of Labor wanted to improve the quality and efficiency of the services they provide, and do so with less money. Like many state agencies, the Maine Department of Labor faces flat or reduced funding streams at a time of steady increases in operational costs. The term "Bend the Curve" relates to the effort to alter the direction of projected expenditures to bend down and meet projected revenues, in essence to eliminate a looming multi-million dollar ($13M) shortfall. 

Over 75 percent of MODL’s operating costs are people and, coincidentally, over 50% of the employees are eligible for retirement within the next 5 years. This created a situation where they knew that in order to reduce expenditures they had to reduce staff, and they preferred to do this without layoffs, taking advantage of attrition due to retirements.  This meant that the non-value added portions of their processes had to be reduced in order to do the same amount or more work with fewer employees, at the same or better quality. The reception and intake procedure at all 26 career centers was different, creating confusion for customers when visiting more than one center.

The Bureau of Rehabilitation Services had a waiting list that was over a year long. 

The Bureau of Unemployment Compensation had lost over one-third of the employees due to loss of funding and still had the same amount of work to be done, resulting in a large backlog of work.

Solution
In the June of 2004, the State of Maine implemented a system-wide initiative in the Maine Department of Labor to fundamentally change the culture and work of one agency within state government.  This initiative, entitled "Bend the Curve," combined time-tested Lean principles from the manufacturing sector with the emerging public sector strategy of "public value." The goals of this initiative were to provide the same or better customer service; shift the work of the department to match customer expectations and needs; achieve efficiencies by fundamentally changing how work gets done; improve intradepartmental collaboration and service integration; decrease expenditures by at least $9M; and significantly reduce staffing levels over three years while minimizing layoffs.

Results
In the year and a half since MDOL started their lean journey, they have realized savings of at least $1,100,000 and have identified potential savings of over $3,600,000.

Just one example is the elimination of stapling all the documents involved in an appeals request for the Unemployment Compensation Commission. This alone had a time and dollar savings with stapling and removing the staples of over $45,000.

In addition, the 26 career centers now have a standard procedure for greeting customers that is the same throughout all centers. The call centers are implementing a system that will allow identification of a client based on an ID number, no matter which center they are directed to. The employers are now able to enter the information for recruiting new employees on a web based form and the information does not have to be re-entered into the system.

The Bureau of Rehabilitation Services still has a waiting list, but it is now down to about a half year due to efficiencies gained. The Bureau of Unemployment Compensation reduced non-value added work enough to be able to do all of the original amount of work, and more, with one-third fewer employees. These are just a few examples of all of the savings found throughout MDOL.

For further details contact Arthur Davis at the Maine Department of Labor or Jon Kirsch at the MaineMEP.

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