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Lean Management and the Cards Payable Shift

Lean Management and the Cards Payable Shift. City of Roanoke Amelia Merchant, Dept. of Mgt and Budget Mary Ratcliffe , Dept. of Finance. Roanoke, VA. A little background. Roanoke – from …. to. High Tech. Railroad Town. Diverse & Welcoming Community. More to Life, both Inside….

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Lean Management and the Cards Payable Shift

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  1. Lean Management and the Cards Payable Shift City of Roanoke Amelia Merchant, Dept. of Mgt and Budget Mary Ratcliffe, Dept. of Finance

  2. Roanoke, VA A little background

  3. Roanoke – from… to High Tech Railroad Town

  4. Diverse & Welcoming Community

  5. More to Life, both Inside…

  6. ….and Out!

  7. The challenges Roanoke has faced Declining local tax revenue Massive cuts in funds from State of Virginia Increasing capital and operational needs (general fund and school division) Reduced budget $28 million in last 5-6 years Reduced number of positions by 10% in last two years Affordable Care Act requirements Retirement contribution for employees Compensation increases

  8. The art of leadership in today’s world involves orchestrating the inevitable conflict, chaos, and confusion of change so that the disturbance is productive rather than destructive Harvard Business Review July-August 09

  9. Getting the organization’s attention

  10. Why do we have to change the way we do business? Why do we have to change the way we do business?

  11. We responded by • Reduced capital plan by over 40% • Maintained capital infrastructure • Limited growth of new ongoing expenditures • Built adequate reserves • Invested in neighborhoods and economic development • Budgeting for Outcomes

  12. Why do we have to change the way we do business? Budgeting for Outcomes isn’t enough…..

  13. We have to Change the Culture to Change the Game Accountability, Diversity, Customer Service Young professionals Resiliency approach Shift culture to sense of individual responsibility and empowerment Equip all employees with tools needed to make change happen

  14. What is Lean? Delivering the most value to the customer in the most efficient way

  15. Lean Goals • Improve quality • Eliminate waste • Minimize cost • Reduce time • Improve services Remove activities that don’t add value Continual improvement

  16. Our Approach to Lean Thus Far • Two-Pronged Approach • Senior Design Projects • Virginia Tech – Blacksburg • City Departments • Greater Roanoke Transit Company (GRTC) • Roanoke City Public Schools • Management and Budget • Internal Education Plan • Virginia Tech – Roanoke Center • City Departments • Human Resources • Department of Management and Budget

  17. VT Senior Design Projects = FREE LABOR!!!!

  18. VT Senior Design Projects • Collaboration with Virginia Tech • Trained senior ISE students with faculty advisors • Internal staff development – overseeing projects • Free up internal staff time

  19. VT Senior Design Projects • Address an actual client issue applicable to consulting assistance • Have a design component that requires data analysis • Technically challenging and complex enough for a 4 person team • Require approximately 650 person hours of consulting time across several months • Be related to one or preferably more areas of industrial and/or systems engineering

  20. Senior Design Technical Areas • Business process improvement • Capacity planning • Data management • Ergonomics of human factors engineering • Facilities planning and/or design • Lean methods • Logistics • Materials handling • Product design or development • Quality or reliability • Scheduling • Supply chain • Training design or redesign

  21. Senior Design Projects • Police • *Civilian Employee Workflow Analysis • Crime Analysis Unit and Administrative Staff Review • *E-Summons Workflow Analysis and Implementation • *Technology Analysis • Social Services • Streamlining Intake Services

  22. Senior Design Projects (cont’d) • Planning, Building and Development • E-Submissions – Paperless Permitting Application • Comprehensive Development Review plan review • Transportation • Right of Way Mowing • GRTC • Inventory Control • Roanoke City Public Schools • *Grounds Inventory Management

  23. Internal Leadership Education on Lean Management • VT Lean Process Management Program • Lean foundation and learning using Lean tools • Participants prepared to: • Conduct Lean projects in their work area • Progress to Lean Six Sigma (LSS) certification • Core Lean Team trained • Support for Lean processes and projects throughout the organization • Continual improvement with support and Lean expertise

  24. Internal Leadership Education and Lean Six Sigma Management • Second phase • Lean -> Lean Six Sigma • Voice of Customer • Process Analysis & Improvement • Employee Engagement • Statistical Root Cause Analysis • Executive

  25. Internal Leadership Education and Lean Six Sigma Management • 16 participants in 1st training cohort • 9 received certification in November 2013 • 6 received certification in October 2014 • 19 projects conducted impacting 12 departments/divisions • 16 participants in 2nd training cohort • 9 received certification in October 2014 • 21 projects impacting 13 departments/divisions

  26. Improvements • Efficiency gained (time) • Hard cost savings • Estimated salary savings • Processing times • Form efficiency • Standardization • Use of technology

  27. % Time Reduction

  28. The Lean Six Sigma Model • Lean Six Sigma training and certification • Statistical, analytical method focused on improving quality and reducing defects • Participants prepared to utilize tools and techniques focusing on customers and quality • Nationally recognized Green Belt certification • 20 participants in 3rd training cohort each beginning a project; graduation planned for spring/summer 2015

  29. LSS Organizational Structure and Support • Executive Team • City Manager • Assistant City Manager for Operations • Assistant City Manager for Community Development • Steering Committee • Constitutional Officer • Council Appointed Officer • Community Development Cluster directors • Operations Cluster directors • Human Resources staff support • Department of Management and Budget staff support

  30. LSS Support Duties • Executive Team • Vision and oversight • Steering Committee composition • Quarterly LSS SC meeting • Steering Committee • Communication • Promote collaboration • Project assignments and success tracking

  31. CARD PAYABLES

  32. The Challenge and Opportunity • Identify vendors that would accept a virtual credit card payment in lieu of a paper check or a direct EFT/ACH payment. • Modify our current system to enable those payments to be made. • Approximately $28 productivity savings, about $2 per check of “real” money, as well as an increase in our rebate program through our Purchasing Card provider.

  33. The LEAN Approach • We mapped out the process using the current check payment process to get an idea of what this may look like. • Using the Prioritization Matrices we identified the vendors that had the highest potential of accepting this form of payment. • Developed a Future State Map.

  34. Improvement Process • Make changes in Advantage (financial system) to identify either Card Payables vendors or an additional disbursement code to identify a Card Payables payment.

  35. Improvement Process (cont’d) • Create interface with 5th 3rd Bank to process payments.

  36. Improvement Process (cont’d) • Vendor payments can be sent in a safe, secure and more timely fashion.

  37. Improvement Process (cont’d) 4. Print, process and mail less paper checks.

  38. Project Savings & Lessons Learned • 22 vendors to be enrolled in Card Payables • 28 vendors changed to EFT from checks • Approximately 753 less checks per year and $1,647,973 in payments using Card Payables. • Social Services joined us converting over 130 vendors to EFT reducing more than 2,100 checks per year.

  39. Cards Payable Project$102,070 Savings LEAN gives projects order and purpose.

  40. Benefits of the Lean Six Sigma Model • Employee benefits: • Highly valued skillset • Portfolio of projects • Leadership development and project management skills • Demonstrated organizational value • Competitive skills • Career enhancement

  41. Benefits of the Lean Six Sigma Model (cont’d) • Organizational benefits: • Customer service improvements • Cost reductions and excellent ROI • Improved business processes • Success replication • Enhanced employee engagement

  42. Ultimately, the organization benefits from • Improved quality • Reliably repeatable successes • Reduction in defects • Elimination of waste • Minimized cost • Reduced time • Improved services

  43. Recommended Reading • GFOA Publication: • A Guide to Starting the Lean Journey

  44. Questions? Thank You!

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