Posted by: Knightbird | September 20, 2015

Improving A Government Benefit Assistance Process Through Lean

Administrative processes are difficult to see. If you go to the Gemba in an administrative process, the elements of a successful system are generally hidden. But we can generalize that all administrative processes have similarities, as follows:

INTAKE: When you fill out an application, it has to be accepted into the system at some point. We generally have 2 pathways to deal with at this early stage. Is the application COMPLETE or INCOMPLETE? A COMPLETE application is ready to move to the next step. An INCOMPLETE application has to loop back for completion. This is classified as a DEFECT and the reason for it examined and removed. LOOPING BACK costs time and can be quantified.

ELIGIBILITY DETERMINATION: Based on the information presented, the application has to be acted on. The pathway is either YES or NO. If the determination is objective, then the answers to questions in the application determine eligibility and this step is one that could be automated. If some of the information is requires a subjective determination, then people need to make that determination. Whether OBJECTIVE or SUBJECTIVE, a YES answer moves the application forward and a NO stops the process, with a NOTIFICATION of denial sent to the applicant, along with all required notifications about appeal rights.

BENEFIT DETERMINATION: YES then leads to a determination of the level and frequency of benefits. This step is dependent on the information provided. When it is calculated, the next step is NOTIFICATION of benefits and inputting the information into the periodical delivery of benefits procedure.

Improving an administrative process can take place once you know what the steps are, the sequence they are performed, the number of opportunities you have in a period of time (work day) and the current cycle time.

In the terms I use, which are adopted from Art Byrnes description of the improvement process, we determine Takt Time (number of opportunities in a period of time) then move to examine flow. Our goal is to make flow as continuous as we can by eliminating various wastes (8 Wastes). We strive to eliminate any batching in the system. We also operate a FIFI (First In, First Out) system. If we have different types of applications with different processing requirements, we may interject a “Heijunka Wheel” to allocate the workload among all workers in the process. This also helps us allocate work complexities to those workers who are trained to process them.

Any Pull Systems called upon during Process Flow are also examined to ensure they are available when the application calls for it.

When we arrive at a good plan for a FUTURE STATE, we work towards implementation record STANDARD WORK. WORKERS write out STANDARD WORK, and every new WORKER is taught the STANDARD WORK before stepping into the process. In the improvement process, we always substantially reduce the CYCLE TIME and end up completing each administrative process with considerable time savings. If we process 10,000 applications with a CYCLE TIME of 60 minutes in a CURRENT STATE, and reduce CYCLE TIME to 40 minutes in the FUTURE STATE, we save approximately 1.6 FTE’s on an annual basis.

Using data, 10,000 applications annually, if distributed equally by days, is 40 applications a day in an organization that has 250 work day. I always perform this type of calculation to visualize how busy the system is. TAKT TIME for 40 applications in a day, with 480 minutes available for work, requires clearing 1 application every 12 minutes. If CYCLE TIME is 60 minutes, we need 5 WORKERS to clear 40 applications and not start the next day with a backlog. When we reduce CYCLE TIME to 40 minutes, we need 3 1/3rd  WORKERS to clear the applications. We calculate a 33% improvement in our capacity. In a Lean Kaizen, this level of improvement is achievable without great effort.

The State of Washington DSHS applied Lean Improvement methods to its SNAP (Supplemental Nutrition Assistance Program) with amazing results. It freed up the equivalent of 400 FTE’s out of a total workforce of 17,000 (a 2.4% reduction of effort). If we assume a total employee cost of $80,000 annually (Salary, Benefits, Cost of Space, Tools and Supplies), the savings accrued add up to $32 million annually.

And SNAP is just one program of many. At this point, I mention the concept of “Aggregation” to demonstrate the cumulative impact of applying Lean Methods to multiple Programs. If we can achieve similar results from 10 programs in one department, we have $320 million in savings. Imagine the impact on a state budget with that level of improvement. And what’s even more impressive is the level of quality that Lean brings to a process. When you eliminate defects, you have fewer complaints and loops. There is little need to oversight because you have built into the workplace. And families suffer less because they receive what they need quickly and efficiently.

This is why I am so driven in trying to bring Lean to Alaska State Government.

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