Lean Sigma Tyler

Measure Phase

The Measure Phase is the second stage in Lean Sigma methodology. During the Measure Phase, the Lean Sigma practitioner will lead his/her team in identifying areas that allow waste and variation in a process.

The Lean Sigma Black/Green Belts begin the Measure Phase by establishing a data collection plan and validating the trustworthiness of the measurement system. They then validate the stability of the process, which is important because the information that is gathered will define the baseline results for the process.

Once the measurement system has been established, the Lean Sigma Black/Green Belt will conduct a capability analysis. This capability analysis determines how proficient the process is at producing the intended product or service and the Lean Sigma practitioner is now able to identify the sigma level at which the process is operating. During the next step in the Measure Phase, the team will design a Process Map that details each step in the process. The information gathered when creating the process map is then used to complete a Fishbone Diagram, which will identify all of the potential opportunities for improvement within a process.

The team then places the opportunities identified on the Fishbone Diagram into a YX Diagram, where the opportunities for improvement are ordered based on historical data or experience. The YX Diagram is used by the team to rank the opportunities for improvement from highest to lowest, based on how much they effect the process. The XY Diagram enables the Lean Sigma Black/Green Belt to prioritize which factors to begin analyzing as major contributors to the process.

These tools that Lean Sigma practitioners use during the Measure Phase allow them to develop a deeper understanding of the process they are working to improve.

LEAN SIGMA TOOL SPOTLIGHTS

The Balanced Scorecard is a tool that is used by organizations to align their business strategies to their business goals and metrics. The Balanced Scorecard was developed by Robert Kaplan and David Norton, and focuses on four perspective areas: the customer, financial, internal business and learning and growth.

The customer perspective seeks to answer the questions, “To achieve our vision, how should we appear to our customers? What will make our organization appealing to future and current customers, and make them want to purchase our services or products?” In answering these questions, organizations will evaluate how well they are meeting customer’s expectations by looking at four broad categories: quality, timeliness, performance and service and value.

The financial perspective seeks to answer the question, “To succeed financially, how should we appear to our shareholders?” This is important because this is how an organization maintains financial health in addition to attracting and maintaining investors. This not only applies to the external shareholder but to employees and citizens as well.

The internal business perspective asks the question, “To satisfy our shareholders and customer, what business processes must we excel at? This question forces organizations to identify their strengths and how they measure them. Processes need to be measured and managed to ensure a healthy, successful organization.

The learning and growth perspective asks the question, “To achieve our vision, how will we sustain our ability to change and improve?” Without employees being skilled and educated in many complex processes, organizations will not be successful. It is vital that organizations continue educating their employees to ensure continued growth.

The Balanced Scorecard asks organizations to answer these questions and identify objectives, measures, targets and initiatives to achieve their business vision and strategy. The Balanced Scorecard evolves with the organization as the organization grows and matures.

LEAN SIGMA ARTICLE SPOTLIGHTS

Texas Budget Woes Have Only Minor Effect On City

By JACQUE HILBURN-SIMMONS
Staff Writer

Texas' budget woes might deliver only a glancing blow to Tyler, city officials say.

While other communities are bracing for job losses, service reductions and staff furloughs, city of Tyler officials say they are not under the gun to pursue those types of remedies.

They remain optimistic that cost-cutting steps taken over the past two years will be enough to deflect the financial pain.

"It's still a tough budget, but not like it was last year," Susan Guthrie, city spokeswoman said. "The last two years have been some of the toughest times we can remember. This time last year, we had 125 positions frozen -- it was brutal."

Ms. Guthrie said the positions since have been unfrozen but not all are filled.

Texas lawmakers, meanwhile, remain on the hot seat.

Comptroller Susan Combs has said the state has about $72.2 billion to spend through 2012-2013 -- that's about $26 billion short of what it needs to fulfill agency budget requests, according to economists' estimates. Texas budgets are written every two years.

The recession, coupled with declining sales tax receipts, are among the chief reasons cited for the deficits.

As members of the 82nd Legislature continue to wrangle proposals that could fill the funding void, it appears some Texas-size belt-tightening is about to begin.

Tyler could lose about $1.1 million in state and federal funds, about 1.2 percent of its $93 million total operating budget.

Roughly $722,000 is federal pass-through money, which are federal funds distributed to states and then passed on to cities.

Ms. Guthrie said the possible loss of those funds, though significant, is not expected to have a deep impact on services.

There are plenty of reasons to stay cautious, City Manager Mark McDaniel said.

He predicted another difficult fiscal year because of deflated property values and slow economic recovery.

Tyler will continue to watch expenses and search for opportunities to trim costs, McDaniel said, adding, "One of our biggest concerns at this point is potential ramifications from budget cuts at the state level."

The federal funding primarily is used for special law enforcement grants, such as Auto Theft Task Force and seat belt enforcement programs, records show.

"Additionally the state may choose to eliminate some of its funding to help balance the state budget or pass along unfunded

mandates to the local level," McDaniel said.

Unfunded mandates are programs the city is required to offer, but no funding is given to help run them.

Police Chief Gary Swindle said the potential cuts could reduce police overtime and halt participation in enforcement programs, but no jobs are in jeopardy.

McDaniel said the possibility of dealing with unfunded mandates or fees is something Tyler and other municipalities are watching closely.

"Over the last two years we have worked diligently to balance our budget and make the cuts needed to stay within our means," he said. "Mandates to continue former state programs with local resources could be devastating to city budgets."

Ms. Guthrie said the impact of unfunded mandates to a city's budget is actually double because lost federal dollars must be replaced with local funds.

More tough choices are around the corner if there is a reduction in sales tax revenue, she said.

Tyler had reported revenue in excess of $3.9 million in general sales tax and half-cent sales tax revenue for December collections, the most recent figures available due to a two-month lag in reporting and remittance.

The unaudited figures represent a cumulative 3.78 percent year-to-date increase, but audit adjustments reduce the total to 0.58 percent.

Last year, there was a 9 percent decrease in the same reporting period.

"As long as sales tax stays above zero percent, we'll make budget," Ms. Guthrie said.

DEBT & TAXES

A key reason Tyler is weathering the state's budget storm is its debt, or more specifically, a lack thereof.

Tyler has no general obligation debt, which is repaid with tax dollars.

It does carry $72.8 million in revenue bond debt, but that amount can only be paid back through the sale of water.

When times were good, many Texas cities used general obligation bonds to fund infrastructure improvements -- such as building recreation centers and roads -- and used tax dollars to repay them.

When housing values decreased, less money was collected, leaving fewer dollars to cover municipal bond debt and provide city services.

As a result, while some Texas cities are facing layoffs, work furloughs and facility closures to make ends meet, Tyler is not.

"Tyler is in a much better position than many other cities across the country," McDaniel said. "Because we have no general obligation debt and pay cash for most capital improvement projects, we are able to respond to changing financial conditions."

Tyler's tax rate also is factored into its financial outlook.

The effective rate is 20.9 cents per $100 valuation.

The figure represents an increase from the previous rate of 20.4 cents. When property values declined, the rate was adjusted upward so the city could collect the same amount of taxes as the previous year.

Ms. Guthrie said Tyler's tax rates are a good deal.

"I believe we have the lowest property tax rate for a population over 15,000," she said.

A comparison of Tyler's rates with cities of similar populations reveals that Abilene's tax rate, in dollars, is 0.6986; Allen, 0.55400; Beaumont, 0.64000; College Station, 0.44754; Denton, 0.66652; Frisco, 0.46500; Killeen, 0.74280; Lewisville, 0.44021; Longview, 0.48400; McKinney, 0.58550; Midland, 0.47285; Odessa, 0.52275; Pearland, 0.6651; Richardson, 0.62516; Round Rock, 0.41728; San Angelo, 0.81750; Sugar Land, 0.30000; Waco, 0.78623; and Wichita Falls, 0.62526.

All of the cities have debt, ranging from 0.59 in Midland to 0.433 in Pearland, recent figures show.

"We are so grateful to not have debt, but it goes beyond that," Ms. Guthrie said. "We run a really lean operation."

TRIMMING WASTE

Tyler started an intensive re-examination of its priorities before the 2008 economic meltdown, and later implemented programs to identify and whittle inefficiencies.

The efforts follow earlier projects that guide its fiscal roadmap: the Blueprint, adopted in 1997, and Tyler 21, now in its fourth year.

Three relatively new programs, City University, Called to SERVE and Lean Sigma, empower employees to help identify problems and create solutions.

"This initiative has taken Tyler's Blueprint focus on continuous improvement to the next level," McDaniel said. "The program is reaching all levels of the organization through project teams so improvements are driven by those involved in the process."

Guillermo Garcia leads the city's new Lean Sigma program, which applies a business methodology to educate and empower employees to implement solutions. He joined the city less than two years ago after working years in the automotive industry.

"We wanted this to be a culture shift," he said. "To me, you can never get it perfect, but you can improve the process little by little."

Garcia kicked off Lean Sigma phase one with 10 employees as students. Employees learned to identify and analyze problems then work with peers to address them.

Solid waste foreman Drew Brown, a 21-year city employee, applied techniques to his department to figure out why some houses on certain routes were frequently missed on collection day.

The oversight problem was years in the making, he said, but adopting a solution took just five months. Solid Waste ultimately updated its geographic tracking software to reflect every turn, street closure and collection site.

"We knew there were a lot of areas we could improve, but we just didn't know how to go about it," Brown said. "I was skeptical in the beginning, but the further we went into the process I realized how to put improvements in place."

Efficiencies are creating significant savings in man hours. Complaints have all but stopped.

"If they aren't calling they're happy," Brown said.

Savings are stacking up in other departments as well -- police streamlined evidence processing, the water department improved response times, the fire department adopted predictive maintenance techniques.

Ms. Guthrie said the savings comes primarily in man hours spared, about 2,500 hours or $149,599 in the first year alone.

Working more efficiently allows employees to accomplish more tasks in less time, she said.

By the end of the second phase, Lean Sigma and other programs are expected to save the city a cumulative total of $922,000 in time saved, officials predict.

At the state level, finding ways to cut without pain won't be so easy.

Hundreds of public educators may be without jobs. Some social services would disappear.

Other options to generate extra cash include draining Texas' "rainy day" emergency fund, passing a personal income tax and approving casino gambling

http://tylerpaper.com/article/20110220/NEWS08/302209959

TRAINING EVENTS

Blue Belt Training:

Black Belt Training:
March 28 to April 1, 2011
May 2 to 6, 2011

Green Belt Training:

October 4 to 8, 2010
November 1 to 5, 2010
December 13 to 14, 2010
January 17 to 21, 2011

SPECIAL EVENTS

To empower the City of Tyler’s organization by enhancing the effectiveness of the Blueprint goals to
S-E-R-V-E through the use of Lean Sigma methodologies.

The City of Tyler is in the process of launching a City-wide Lean Sigma program aimed at eliminating waste, reducing cycle times and decreasing defects in City processes. The City’s Lean Sigma deployment plan is one of several proactive steps the City is taking in response to changing economic conditions.

CITY MANAGER

“It is incumbent upon us to do everything we can to be prepared in the event of budget shortfalls in both the short and long run by doing more with less,” said City Manager Mark McDaniel. “Tyler has a culture of delivering quality services in a cost-conscious manner. As the next phase of the “Blueprint”, the use of Lean Sigma tools will take the City to the next level of efficiency and quality.”

Open Projects:
1. Improve Audit & Collateral Material Proecess
2. Improve New Employee Requisition
3. Improve Property Storage Tracking and Disposition
4. Improve Trash Pick Up on Route 11
5. Warrant Processing (Stage 2)
6. Improve Forecast Accuracy of 1/2 cent sales tax
7. Improve Chemical Dosage Process

Closed Projects:
1. Improve Dispatch Process
2. Improve Initial Processing of Property
3. Improve New Employee Orientation
4. Improve the Form and Function of Storage
5. Improve Warrant Issue Process
6. Improve Residential Plan Review
7. Improve Opinion Response Time
8. Fire House 5S Project
9. Improved Tracking of PPE