A program to improve productivity and fiscal integrity for the Department of Fiscal Services of a state’s worker’s compensation insurance fund. The Cash and Banking Services Manager and the Fiscal Services Manager were the primary contacts for this engagement. 

Project Overview

The charter for this engagement included a variety of deliverables: 

• Development of a process flow chart documenting all banking and cash manage­ment activities of the Home Office Departments.
• Creation of desk level procedures for all Banking Services positions and activities.
• Automation of two related, but separate, systems within Banking:  Stop Payments and Cancellations and Unclaimed Property.
• Implementation of a new data base system for managing Un­claimed Property, Stop Payments, and Cancellations.
• Automation of the annual escheatage to the State Controller.
• Streamlining of Banking processes in preparation for the desired installation of a network of personal computers.
• Conversion of Bank Reconciliation-related spreadsheets from one obsolete format to Lotus 1-2-3 and, later, to Microsoft Excel.
• Significant hands-on training in the new systems, processes, and procedures.

 The objective was to improve the client’s banking-related processes. The scope included all areas of bank reconciliation, stop payments and cancellations, escheatage of unclaimed property to the State Controller, and communications with the twenty-four field offices, the Home Office Departments, and the three primary banks. 

Project Results

The development of the process flow chart(s) and the desk level procedures was critical to the immediate and future automation efforts. They served as a basis for not only training current and future staff but also for identifying process improvement opportu­nities, including automation. The flow chart and the procedures were each updated as changes were implemented during the project. 

The automation and streamlining efforts were directed at minimizing redundant data entry, eliminating keying errors, automating report creation, and enabling reconciliation of banking documents with general ledger documents. These areas included:

• converting spreadsheet formats to data base formats to enable on-line status of stopped, cancelled, and unclaimed items;
• develop­ing detailed archive systems which could be main­tained to provide an audit trail;
• coordinating with the two primary banks so that the client could be provided banking data via FTP rather than on paper (to eliminate manual keying and reduce cycle time by 67%);
• generating bank transmittals from the systems’ new data bases rather than relying on manual preparation of these transmit­tals (reducing the cycle time from days to minutes and eliminating several days monthly of manual labor); and
• creating a annual magnetic tape transmittal of Unclaimed Property to the State Controller’s Office from the new Unclaimed Property system rather than relying on the State Controller’s system (which required re-keying of data with an associated cost of several man-weeks annually).

Results included the ability to balance unclaimed property items to general ledger accounts; a foundation for future implementation of a local area network and for magnetic transfer of data between the client and its banks; and more timely reconciliation of bank accounts and production of banking-related reports.

Creation and review of written procedures resulted in significant operational changes for improved control, efficiency, and effec­tiveness. 

The most immediate impact was in the area of fiscal integrity. However, the automation and streamlining allowed Fiscal Services management to implement and consider area staffing reductions of almost twenty percent with a budgeted dollar impact of approximate­ly $150,000 annually.

The Medical Examiner provides pathology services within the county. The project’s goal was to develop and implement specific recommen­dations for productivity improvement. A primary objective was conservation of cash during a time of revenue shortfalls and budget reductions. National accreditation requirements provided perspec­tive.

Work flows and task definitions were established for all department employees. Work schedules for professional staff were analyzed for possible coverage issues. Benchmarking of departmental performance and methods was done with the San Diego County (CA) Office of the Medical Examiner. Staff also analyzed organizational structure and span of control issues.

A staffing model based on measurable work volumes enabled staffing adjustments in both the office administra­tion and the forensic assistant group (where adjustment occurred on all three shifts). An analysis of supervisory span of control revealed an opportunity to improve span of control from 4.25 to 5.67 through the con­solidation of two supervisory positions in the administrative area. A detailed task analysis provided an audit-worthy basis for a new fee structure, increasing potential departmental revenues. Implemented recommenda­tions reduced net county expenditures per unit of service provided.

During a four-month productivity improvement program for the Department of Environmen­tal Services of a major Western U.S. county, the Organizational Development staff received individual coaching and training in work measurement, supervisory span of control, and in proven techniques for work simplification and methods improvement. Similar training on an individual and classroom basis was provided to the managers and supervisors within the Divisions of Environmen­tal Health, Air Pollution Control, and Water and Waste Management. 

 Department Overview

 Environmen­tal Services inspects and licenses food establishments, promotes travel reduction through ride-sharing and similar programs, monitors air quality, attempts to control vector populations, and manages water quality and waste disposal in the county. The Department is organized into four operating entities:  the Division of Environ­mental Health, the Division of Water and Waste Manage­ment, the Bureau of Vector Control, and the Air Pollution Control Division. 

Project Overview

The primary focus was to establish baselines or benchmarks from which improvement could emanate. Organizational structure was assessed from a functional and span of control perspective. Statistical Process Control techniques were introduced to allow Environmental Health personnel to identify improvement opportuni­ties. Focus Groups were used to identify strategies for addressing customer complaints and other issues. Coaching in the development of strategic plans was provided. All activities and processes were scrutinized as to necessity, time requirements, and frequencies. Key Volume Indicators were established to provide management with tools for staffing based on measurable work volumes for major process­es.

Using various flow charting and functional analysis tech­niques, opportunities were identified to reduce cycle time for permitting of air pollution sources. The combined result of the various analytical techniques used by the project team in conjunc­tion with the staffs of the three Divisions was increased productivity, reduced cycle times, and improved customer service.

This project had the stated objective of improving the productivity and profitability of a large polyester processing plant located south of Columbia, South Carolina.

The primary area of focus within the plant transformed polyester pellets into polyester fiber. Examples of the eventual use of this fiber include filling for disposable diapers and polyester fabrics and yarns. The overall process involved heating the pellets into a liquid, then extruding the liquid into various deniers of polyester filament. The filaments were then cooled and twisted together, with up to thirty-nine other filaments, to form a length of yarn. This yarn was then joined with a number of comparable lengths of yarn to be later heated and crimped and, if for fabric or disposable diapers, finally chopped into small pieces.

The project was logically divided into three working areas:  Extrusion, Processing, and Support Services (maintenance, waste recovery, and quality control). 

Extrusion

The purpose of the Extrusion area was the conversion of polymer pellets into polyester filaments through a combination of heat and pressure. Each type of filament was assigned a specific lot number. This lot number dictated the melt temperature target to be used and the size of the holes through which the polymer was to be extruded. 

During the course of the project, it became evident that the keys to productivity and profitability of the Extrusion area were as follows: 

• the weight of the polymer pellets fed into the extruders;
• the number of extruders actually operating during each shift and production run;
• the amount of time which the extruders were out of production, individually and in aggregate;
• the temperature in the extruders;
• the proportion of time during which the extruder melt temperature varied from the specified temperature;
• the number of extruder filter changes which were required during each shift; and
• the number of production changes required during the shift.

After leaving the extruders and cooling, the filaments were joined with filaments from the other extruders on the same processing line and inventoried in large metal cans. Once the entire batch of the specific lot number was processed, the batch was transferred to the Processing area.

Processing

The Processing area is responsible for the final conversion of the polyester filaments into polyester fiber.

When each batch was ready for processing, the ends of each cord-like collection of filaments in the cans mentioned above were gathered together. The filaments were washed and heated. While hot, the filaments were crimped to ensure that the polyester fiber adhered to other types of fibers and textiles when they reach the customer. After drying, the fiber for fabric or diaper filling was cut into one-to-two inch pieces and baled.

As the project progressed, the following keys to the productivity and profitability of the Processing area were identified: 

• the temperature at which the fiber was heated prior to crimping;
• the pressure at which the fiber was crimped;
• the amount of downtime experienced by the processing line;
• the speed of the processing line; and
• the quality of the filaments received from the Extrusion area as indicated primarily by the consistency of the melt temperature during the extrusion process. 

Support Services

The two production departments depended on the support areas to provide such services as product quality analysis (post-production acceptance sampling), equipment maintenance, and technical improvements to maintain product quality, productivity, and utilization.

The Quality Services Laboratory was responsible for determining, on a timely basis, whether or not finished goods and their components met quality specifications.

The key indicators in the Lab were the turnaround time of the samples and the same-sample variance.

The Maintenance Department provided equipment maintenance, modifications and repairs to the production departments. Its chief responsibilities were to keep the production equipment running smoothly and to make technical improvements as identified.

The prioritization and timely, accurate completion of assigned work orders were found to be the critical factors in the Maintenance Department’s contribution to Division productivity and profitabili­ty.

 Project Results

The premise under which the project team operated was that a primary cause of sub-optimal productivity and profitability was lack of control. Within the client organization, management felt responsible for continually seeking ways to employ its assets and resources toward the improvement of its products, its methods of production, and the profitability of its business unit. Each of the various layers of management within the organization had different resources available to it yet each had the responsibility for the proper management of those resources.

Given the premise and the degree of responsibility felt by Division management, the project team proceeded to develop tools necessary to enable each layer of management to be more effective in their work. These tools allowed plant supervision and management to not only assign work, check quality, ensure that people and equipment were “moving,” and to report results, but also to plan, organize, and schedule the work and to anticipate, prevent, identify, and reduce the impact of operating problems.

The system of tools developed to achieve this included the following:

•  the ability to correlate operating and quality problems in one department with those in another; and
• the ability to accurately pinpoint specific root causes of operating problems so that they could be systematical­ly eliminated.

Project results included the following: 

• an increase in Extrusion department attainment versus plan from 91% to 97% in less than six months;
• a reduction in Extrusion department unscheduled downtime from 6.5% to 2% in less than six months; and
• a reduction in processing line operating time by over two hundred hours per week despite an increase in average weekly production from 3.8 million pounds to 4.5 million pounds (mostly through reduction in scrap and re-work) in an operating unit that had historically experienced more demand than they could meet.

 The decreased labor was valued in excess of one million dollars annually. The increase in effective capacity was valued at approximately $700,000 weekly in revenue with no increase in raw materials and the reduction in labor.