Over the past couple weeks I’ve been contemplating the concept of "self-contained waste." Wasteful processes that have no inputs or outputs that cross the external boundaries of the wasteful process itself. This intrusive and rather annoying thought arose from a conversation I had with an Ops VP at a major midwestern equipment manufacturing, who was frustrated in his attempts to find waste.
This guy, who we’ll call "Bob Evans" out of respect for the midwestern culture, was taking his organization through both high level and low level value stream mapping exercises to identify process waste. Lots of improvements were made, and time from customer order to delivery was cut by almost 90%. Lots of cash dropped to the bottom line in terms of one-time inventory reductions and ongoing efficiency. But his experience with companies of that size told him that there was more… but where was it?
So he went walking. He wandered around his factories and office areas trying to find out what people did. He noted with pleasure the new metrics on the walls, A3 reports, and other signs of lean. Until he came to one office area that had none of those tell-tale signs. He asked them what the did, and the answer was create a series of reports. Where did the reports go, he asked? They didn’t know. He asked for the distribution list, contacted the recipients, and every one of them said they immediately tossed the report.
That department created no value, and since no other department even looked at their output, they were not identified as part of any other organization’s value stream. Hence they were not even identified as waste. Self-contained waste. A by-product unto themselves, you could say. He continued his walking tours and found a few other examples, on and off the factory floor.
To test the fact that those departments created no value, he immediately shut them down… but without laying anyone off. For the most part there was no impact, although a couple departments created previously unseen value. Then as best he could and in the spirit of lean manufacturing, Bob redeployed as many people as he could onto other value-creating activities. But the root of the problem continued to nag at him, and he was nice enough to then convey that nagging to me, creating my intrusive thoughts.
Investor’s Business Daily proposed a similar solution to a similar problem, albeit on a much larger scale… government functions.
The Politico reported this week that Blunt, House minority whip from Missouri, said a shutdown over the 2008 budget is "inevitable" because Democrats in Congress want to spend more than President Bush is willing. Here’s a suggestion: Many government departments, agencies and offices should be closed for good.
We then get a bit of a history lesson on the growth of government.
When the government quit Philadelphia for the new capital in Washington in 1800, not much effort was needed. It took a single buggy to transport all federal records and paperwork. The entirety of the post office’s records, furniture and supplies were taken south in two wagons.
In 1800, the government needed a mere 3,000 employees and $1 million a year to do its job. In those days, lawmakers knew well the meaning of "limited." Today, federal civilian employees number nearly 2 million. Another 10 million or more are federal contractors or grant recipients. The yearly budget of this runaway train is soaring toward $3 trillion.
And a few suggestions on where to start the "multiple bureau-ectomy" as they call it… shutting down whole sections of government that apparently create no value. Such as…
Start with the Education Department, created in 1979 by the Carter administration despite the fact there is no constitutional authorization for its existence. In addition to its meddling, the department is spending nearly $70 billion a year in taxpayers’ dollars. By all accounts, public education in this country is worse off than it was when the Education Department opened. It’s hard to make an argument that those 5,000 employees are contributing anything.
Next on the block should be the Energy Department, another monster wrought by Jimmy Carter, this one in 1977. There’s no real job this department has that cannot be done by other parts of the government. Two-thirds of its $23 billion annual budget is spent on nuclear weapons, which it loans to the Defense Department, and nuclear cleanup. Only a small slice — less than 5% — is spent on genuine energy activities.
I know I know, fat chance. But still an interesting, albeit ballsy, tactic for the business world. If you come across a process that doesn’t seem to be adding value, and they can’t explain what value they add, perhaps try sending everyone on paid vacation for a couple weeks. If there’s no business disruption, redeploy them to where they can add value… remembering that they probably have considerable collective knowledge and experience worth more than the dollars they’re paid.