Successfully Deploying Lean Six Sigma within Government Agencies: The Three Mandatory Elements Revealed

James Gauci
Posted: 08/08/2010

For many years now, much debate has taken place throughout the Lean Six Sigma community regarding the potential for such methodologies to be successfully deployed within government agencies. This article attempts to present a logical rationale as to why Lean Six Sigma can be successfully applied within the public sector.

First, it’s important to acknowledge that many private sector organizations throughout the world have experienced varying degrees of failure in the use of Lean Six Sigma, ranging from under realization of targeted benefits through to formal withdrawals from its use. The point here is that successful Lean and Six Sigma deployments are in no way industry, nor sector, dependent.

If we were to therefore examine the common traits of those organizations that have experienced the most successful and enduring Lean Six Sigma deployments, the following three elements are typically present:

  1. The existence of a compelling, organizational need to deploy Lean Six Sigma
  2. Genuine, executive level sponsorship and support for the deployment
  3. The presence of genuinely capable Lean Six Sigma practitioners who really know how to deploy the methodology

The absence of any of these "critical few," mandatory elements will typically result in serious Lean Six Sigma deployment issues, including failure.

Having established the critical few attributes that the world’s leading Lean Six Sigma organizations possess, it is now possible to examine whether these three elements could exist and/or be applied within public sector agencies. At the time of writing this article, the respective governments within both the United States and Australia are grappling with their respective health systems. Both have grossly underperformed for decades, and this problem will only intensify given factors such as:

  • The aging populations within these countries, with many millions of baby boomers now at the cusp of retirement age; and
  • The growing levels of obesity that are leading to further health complications.

Here’s where this problem becomes particularly compelling. With the respective health systems within these (and many other) countries already being unable to adequately meet the needs of its citizens and being far too costly to administer, these problems are forecast to intensify exponentially over the coming decades. Given that these health systems:

  1. Possess complex supply chains across decentralized networks
    • The application of Lean principles to simplify these supply chain dynamics would remove the non-value-adding and wasteful elements, thereby creating a more efficient, faster and cost effective system.
  2. Have broad and diverse procurement requirements
    • Six Sigma standardization projects could create the much needed best practice processes that will deliver best cost, just-in-time procurement capabilities, while also removing much of the variation that exists within these activities today.
  3. Experience significant process duplication, variation and waste
    • Application of Six Sigma process management and benchmarking systems will develop the capability to make these issues more transparent. For instance, an inventory management project on pharmaceutical supplies that measures and tracks the discarding of perishables will enable medical centers to identify where excessive inventory discarding is occurring. This project thus will help the medical centers to reduce waste and expenditure.
    • Application of Lean tools, such as value stream mapping, will expose low/non-value-adding activities, process duplication and failure points, thus enabling the redesign, implementation and controllership of more efficient and robust processes.
  4. Lack robust administrative coordination and controls between the various levels of government
    • The application of both Lean principles and Six Sigma methodologies would facilitate process improvement/redesign outcomes that establish clear, value adding roles and responsibilities across the various stakeholder groups. It also provides the much needed information required for effective process management controllership and governance.
  5. Involve high volume, transactional type activities
    • The application of Six Sigma methodologies can address transactional processing defects, such as health insurance claim errors that result in significant rework, as well as consequential cash flow implications.
  6. Are critically dependant upon speed and quality of service delivery
    • Six Sigma cycle time projects can improve the cycle time performance in critical areas where process speed is vital, e.g., time-to-perform heart scans.

One could therefore reasonably assume that both Lean and Six Sigma methodologies would be a powerful instrument to address at least some of the problems within these health systems. Having established that a compelling need exists to address an increasingly important and chronically worsening problem — and that Lean and Six Sigma could assist in solving at least some of these issues — a match in relation to element one appears to exist.

Both of the current U.S. and Australian governments have fundamental health reform at the forefront of their political agendas. This has been heavily publicized within the respective media of both countries. It is clear that both governments realize the significance of this problem and that it will only intensify over the coming decades. Failure to effectively address these issues will undoubtedly compromise the likelihood of future terms in office for the current administrations. Furthermore, the social consequences and implications associated with not addressing this problem are potentially disastrous. Accordingly, genuine "executive level" commitment and support for this initiative already appears to have been established.

The third element involving genuinely skilled Lean Six Sigma practitioners who know how to deploy the methodology successfully is particularly interesting. The reasons for this view point are based on the nature of the problem that these governments are actually attempting to solve, as they are multi-dimensional in nature. For instance:

  • The aging population component of this problem means that increased demand for health services are both unavoidable and inevitable. Put simply, additional capacity has to be created, either through improving efficiencies, expanding the health care system — or both.
  • Aging population aside, what is the genuine intent and purpose of the health systems for these countries? Is it to provide adequate care and attention for its citizens as and when it’s required, or is it about focusing on keeping its citizens healthier so as to minimize the demands for "avoidable" medical treatment ? Given the rising obesity levels in these countries for instance, in some respects the average health of its citizens could have actually deteriorated over the last decade or so. The costs and resources required to provide adequate health care are significantly lower when a nation’s citizens are enjoying better levels of health. Therefore, as a longer term Project Y, this represents a good example as to how a highly effective Master Black Belt could influence an executive to think slightly differently – not only about the problem he or she is tackling, but also about what a genuinely successful and sustainable outcome (solution) should look like.
  • Another approach could involve a "doing more with the same," for instance, focusing on driving costs out of "back end" administration, logistics, procurement and supply chain areas and transferring these funds into much needed, additional front line medical staff.

With countless millions of dollars having been spent on consultants to tackle the health system challenges over the years, perhaps the time is right for government agencies to consider a Lean Six Sigma approach. The three critical elements are all present and available, and one would suspect that there would be both active interest and support from other key stakeholders, such as the private health insurers, particularly considering the financial exposures they are facing over the coming decades.

One thing is for certain: The problems with these health systems will not go away on their own. If anything, they are set to intensify. A genuine and strategically targeted intervention is very much needed — and many millions of lives are becoming increasingly dependent upon that happening. The government health system example demonstrates both how and why public sector agencies can use Lean Six Sigma to help address and solve the problems that they face. It also establishes that the critical elements required for successful Lean Six Sigma deployments do in fact exist within this sector. Top notch Master Black Belts would relish the opportunity to apply their skills to such an important, challenging and worthy social cause. Perhaps the time has come for government to seriously consider such an approach.

James Gauci
Posted: 08/08/2010


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