IDED gets taste of Lean Enterprise
The Iowa Department of Economic Development thinks it has found a way to cut in half the amount of paperwork and time it takes the agency to review an application for financial assistance, along with other ways to improve communications.
IDED developed an action plan to improve its methods of processing funding requests at a week-long Kaizen event last month coordinated by members of the Iowa Coalition for Innovation and Growth, a group that supports a collaborative structure for economic development activities in Iowa. The Kaizen technique, a business-improvement method developed by Japanese manufacturing companies, helped IDED map out its steps in the application review process and identify where changes could be made.
“The issue is the process, not the people, so you map the process, and then you look at the steps as a customer to see which steps add value and which don’t,” said Karin Peterson, the chairperson of the ICIG’s Enhance Business Development and Process team that worked with IDED and the vice president of human resources for Pella Corp.
The Kaizen process was new to IDED, but has been used successfully in both production and office environments at many Iowa companies such as Pella Corp., along with last year with the Iowa Department of Natural Resources. Tom O’Neill of the IDNR served as team leader for IDED’s recent Kaizen, and Dean Bliss from Rockwell Collins Inc. was the facilitator.
“We started with this process because it’s one of the most tangible things that we do, and it’s something that we have specific steps that we can point to, as well as something that we knew could be improved,” said Tina Hoffman, an IDED spokeswoman. “It’s very helpful to have looked at the whole process and have it mapped out. We identified and fixed problems that we hadn’t recognized before.”
IDED’s board of directors meet monthly to review applications, and with the old system, businesses waited an average of 45 days to get an answer to their funding request. A couple of things were to blame for the long wait; 90 percent of applications weren’t complete when IDED received them, and even complete ones did not contain sufficient information for evaluation.
“The old application was not as clear as it could have been,” Hoffman said. “It was 23 pages long, which was daunting in itself. We now have a user-friendly format that is half as long and covers more of the important information that we need up front.”
Before the process was evaluated, IDED staff contacted applicants an average of five times each to gather additional information for the board’s review. This caused the applications to get delayed, sometimes missing that month’s board review.
“We knew that if we could reduce the amount of calls made to the customer and waiting for them to get back to us, we could trim a lot of time out of the process and be more responsive to their need for a timely answer,” Hoffman said. “When site selection teams think about Iowa, we want them to remember how smooth our assistance application process was, and then hopefully think of us again in the future.”
In addition, IDED’s Kaizen generated a standard operating checklist for reviewing the applications, thus making the process more consistent. The agency also made plans to reduce its multiple databases from 12 down to one and developed and instituted measures to track progress toward key objectives. Hoffman said she was impressed with the magnitude of what they accomplished.
“Never having done one (Kaizen) before, you’re a little reluctant in wondering if you can achieve aggressive objectives in this manner, but once you go through it, it is really eye-opening, and you find out what you can do when you map out the process,” she said.
Bliss, a senior lean consultant with Rockwell Collins, serves on the ICIG’s Enhance Business Process hot team. Bliss said Rockwell Collins has used Lean Enterprise principles in its operations for a number of years, but some adaptations are necessary to make the production-based model work in an office environment, he said.
“The key is to make the terminology meaningful to the people in the office,” Bliss said. “When you’re looking at Lean, you’re looking at terms like yield and production lead time, which are meaningful in a manufacturing process, but not necessarily meaningful in an office.”
Although changes are implemented right away with a Kaizen, results might not be immediately measurable in an office environment, Bliss said.
“In a Kaizen, you go out and try your changes right away, but what we had to do here was simulate,” Bliss said. “We will prove our results over the next two or three months. As the actions get put in place, it might not happen on that first day, but it may happen in the first couple of months.”
Bliss said the team of people IDED brought together to work on the Kaizen put forth a good effort. “I observed firsthand, the enthusiasm of the group that we had that this can be done in government,” Bliss said. “They demonstrated enthusiasm and innovation and did a tremendous job. It was one of the smoothest events I’ve run.”
Hoffman said IDED anticipates doing similar events with the help of Rockwell Collins’ mentorship in the future.
“Success is contagious, and once you see that you can make this kind of difference in one area, it is motivation to do this wherever you can,” Hoffman said. “We have talked about what other types of events we can do and when we might be able to do it.”
MORE LEAN GOVERNMENT
The Iowa Department of Natural Resources first tried the Kaizen business improvement event about a year and a half ago with the help of Pella Corp. and the Iowa Coalition for Innovation and Growth. In 2004, the agency held seven Kaizen events and streamlined several of its processes, including reducing the time it takes to get a landfill permit from 187 days to 30 days.
The IDNR’s successes have attracted the attention of other state agencies, including the Iowa Department of Economic Development. IDED held their its Kaizen event last month, with Rockwell Collins Inc. as its mentor. Alliant Energy Co. has agreed to mentor Iowa Workforce Development in a similar way, and representatives from the IDNR have volunteered to help other state agencies get started on their path to Lean Enterprise.