When the local school district is in financial trouble the routine message to the community is that the tax levy must be passed or they will be forced to discontinue the football team, the marching band, cancel the prom and the homecoming dance - the extracurriculars that are popular with both the students and the community. What you won't hear is a threat to eliminate the assistant superintendent job, or even the assistant superintendent's personal administrative assistant, or get rid of a few curriculum coordinators. In fact, it is a rare school district that spends more than 60% of its money in the classroom - on teachers, books, desks and the like. The popular extracurriculars are usually a minor contributor to the 40% in spending on activities that add little or no value to the education of kids - the non-value adding waste.
More disingenuous is the threat to cut teacher pay, but that is the historical manufacturing outlook, isn't it? The problem isn't the bloated headquarters staff - it's the hourly pay of the people actually making stuff. But the 'cost problem' in education can't be solved by automation or outsourcing teaching to China.
The same situation is true of health care. While lean principles are expanding rapidly in the health care arena, the fact is that the overwhelming majority of doctor's offices, clinics and hospitals are far from lean. We are told the high cost of health care revolves around the wages to pay doctors and nurses - not that it is to pay the enormous paper processing staff. Same thing with government and public services - very little lean thinking. Pass taxes or we will get rid of/cut the pay for cops and fire fighters, rather than pass the tax or we will have to get rid of paper pushers and bureaucrats.
Steven Pearlstein of the Washington Post writes a pretty good summary of the latest rationalization for throwing more money at services, rather than demand lean-driven management. In his desription of a book called "The Cost Disease: Why Computers Get Cheaper and Health Care Doesn't" Pearlstein describes the excuses offered up by an economist by the name of William Baumol for the high costs of education and health care.
" In the goods sector, new machinery and production techniques have made it possible to produce each bushel of wheat, car, computer and suit with many fewer hours of labor. Because of these huge gains in productivity, the inflation-adjusted price of goods falls, leading to increases in consumption and production. ... Meanwhile, it still takes as many teachers and nurses and police officers and accountants to provide the economy with services as it always did — that’s Baumol’s disease. Despite no gains in productivity, however, the pay of these service workers rises — after all, if it didn’t, over time all those service workers would be lured to the higher-paying goods sector."
Put another way, manufacturing folks can and often have been replaced by robots and the like so the labor efficiency gains have offset the rising cost of labor. You can't replace a teacher with automation, however, so the cost just has to go up - period. The increasing availability and quality of on line education belies that theory at the college level, anyway, and the Bill Gates backed Khan Academy make a pretty good case for computers at lower education levels. but let's assume it to be true for education in general.
The US Department of Education spends some $70 billion a year, and has 5,000 or so employees - about $1,500 for every school age kid in America. Whether all or any of it is needed is completely unknown and completely unknowable for the simple reason that it is virtually all spent on a push basis, rather than demand pull.
Case in point: My daughter taught in a lower middle class area high school in Phoenix for a number of years. All of the teachers were pulled out of their classrooms for two days of training on how to use tens of thousands of dollars of electronic white boards being 'given' to the school. No one at the school asked for either the training or the white boards. Neither were optional. They were the product of an effort conceived, funded and mandated by the DOE. At the same time the school was sending letters to the parents telling them they would have to provide pens, pencils and paper for the kids - the school district couldn't afford them. The teachers were pulling a demand for a few thousand dollars worth of pencils and paper - instead the bureaucrats pushed far more expensive 'improvement' of their own design.
For that matter, as my daughter pointed out, the bureaucrats still think it is important to put computers into classrooms to prepare kids for the digital age; which leads to wondering if the non-value adding folks are even vaguely aware of the fact that it is a rare teenager in the USA that does not have a Facebook account, or would wonder how these 'digitally ignorant' kids access those accounts. Teachers in classrooms know that - staffers in far away capitals often don't.
If the federal, state and local adminstrators responded to classroom pull, rather than projects they dream up on their own, we would soon find out just how many - or few - of them are needed.
The services are in exactly the same boat as manufacturing, and in exactly the same need of lean thinking. A first grade teacher still needs the same twelve minutes to read Green Eggs and Ham, all right. But the parents of the kids hearing her read don't need to pay for another twelve minutes for people to plan, document, measure and train her on how to do it.
Original: http://www.idatix.com/manufacturing-leadership/obesity-leads-to-cost-disease/