Efficiency program rooted in car business drives $33 million in government savings

An approach rooted in the profit-driven world of the auto industry is credited with saving $33 million in Ventura County government over the last 10 years. 

Ventura was the first county government in the state and one of the first in the nation to fully adopt Lean Six Sigma, said Paul Stamper, a deputy executive officer with years of experience in teaching the method.

After seeing some initial successes in agencies handling purchases, welfare payments and environmental rules, the Board of Supervisors decided to take the concept countywide around 2008.

"They said we're going to go all in," Stamper said. 

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Since then almost 5,000 county employees have been trained in Lean Six Sigma. Other public employees around the state have also come to the county government for advice and training, he said. 

The approach weds Lean, a Toyota-adopted system aimed at eliminating wasted time and resources, with the Six Sigma approach adopted by Motorola to achieve high-quality results.

"They complement each other nicely because you don't want to sacrifice quality in order to achieve speed,"  Stamper said.

Paul Grossgold, a former commanding officer of Naval Base Ventura County, brought the concept to the county government after he was hired to run the General Services Agency in the mid-2000s.

'Natural fit'

"It was something the Navy had been doing, and we were looking for some kind of formal methodology to look at our costs and processes," he said. "That seemed to be a natural fit for us."

The approach involves analyzing everything that's done to produce a product or service, then asking what value that adds to the service. If a step doesn't add any value, it is eliminated. Staff in the trenches as well as managers are involved in the task. 

"Ultimately what you're doing is streamlining the process, which saves time, which saves money," said Grossgold, who is now retired.

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Of the $33 million the county reports in savings from its Lean Six Sigma initiative, half is classified as "hard savings." Those are budgeted funds that no longer need to be spent, said Rachel Linares, who helps manage the program.

She said the rest are "soft savings," based on hours of employee time that can be redirected from duties that no longer need to be done to other tasks. The figure is calculated at a little over $49 an hour based on a countywide comparison for salary and benefits.

Time is considered a real and legitimate savings under the principles of Lean, not just savings of money, Stamper said. 

Officials say no one has been laid off from the county's workforce of 9,000 as a result of the initiative called the Service Excellence Program, but that the efficiencies mean some new positions don't have to be added. More than 10 vacant positions have been eliminated, a county report shows.

A few examples of reported savings: about $7,000 from disconnecting airport phones that were either unneeded or belonged to another agency; $51,000 with an appointments system that reduced labor costs and rates for maintenance of county vehicles; almost $400,000 annually by implementing a new system to track employee leaves of absence. 

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Some savings are arguable such as an upgrade of a flood-warning system that was done with new funds from a state grant, not revenues already in the budget. That item is being re-evaluated, officials said. 

But large amounts appear to have been saved through automation and conversion of paper processes to online systems. 

Less overtime

General Services, which manages the county government’s sprawling plant, designed a program to receive, scan and electronically route vendors’ bills for approval and payment. Managers say the move saves about $80,000 annually, speeds up the process and relieves employees of tedious tasks that had to be done by hand.

Agency employees use the system to process about 40,000 bills a year, including charges billed to General Services, county jails and the Public Health Department.  That's close to half of the 100,000 invoices sent to all county government agencies, officials said. 

The time it takes to do the final fiscal review of a bill for payment has dropped from five minutes to 30 seconds, said Brittany Stephens, senior accounting assistant.  Overtime costs have dropped by more than 80 percent annually, she said.

"We're working with any agency that has invoice processing to share the efficiency gains," said David Sasek, director of General Services.

Stamper said many improvements do not bring financial savings to the county. They are instead intended to provide better access to public services and faster turnaround. He said opening county offices in Thousand Oaks is an example of that.

After becoming General Services director in the mid-2000s, Grossgold sent a couple managers to classes at the Navy base to learn about Lean Six Sigma. 

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Confusing lingo

Rosa Ceniceros, then the county purchasing agent, tried it out.

Ceniceros was skeptical, questioning how Lean Six Sigma could translate to government. She found the lingo used in the class confusing with its meld of Lean Six and Navy acronyms. But ultimately she was sold.

 "It just clicked," she said. "It made sense."

Ceniceros and her staff applied the method to the thousands of purchase orders that county departments renewed each year.

The number of orders completed at the start of the fiscal year increased five-fold from a few hundred to 1,600 to 1,700, Ceniceros said. Workers could complete them more quickly because the number of steps they took to process the orders fell from 30 to 11. A checklist helped them avoid mistakes.

That sped up the rate at which county department managers could get their goods and payments to vendors and could be paid, she said. 

"I don't know if it saved the county money because we had the same number of people working on (them)," she said. "We just got faster and better."

Grossgold said Lean Six Sigma is more effective than expecting employees to develop improvements just in the normal course of doing their jobs.

"People are so busy doing things they need to do that they don't always look back," he said.

"The idea is to take a breath, take a step back and look at not only what we do but how we do it."

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Divided opinion

Proponents say the program has led to a host of efficiencies, generated funds that can be returned to reserves, and provided a common language, skill set and tools for making continuous improvements.

"It has been great for our county," said County Executive Officer Mike Powers.

A union official is doubtful. 

“The Lean Six Sigma program has been touted as an innovative method to reduce waste in Ventura County departments," said Gilda Valdez, chief of staff at Local 721 of the Service Employees International Union.

"In reality, these cost savings came largely the old-fashioned way: by leaving vacant positions unfilled and forcing hard-working county employees to take on more and more work to keep vital services running."

The county spends more than $300,000 annually to run the program, which is administered by Powers' office. Stamper and Linares spend 70 percent of their time working on the effort, which equates to $283,400 in salary and benefits.

An additional $16,000 is budgeted for other items such as online training tools, travel for conferences and printed materials. County departments also invest time for employees to receive the training and conduct the activities intended to lead to improved ways of doing business.