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City of Melbourne gets lean and keen

Melbourne GPO

By Kate Jackson

The City of Melbourne was in the spotlight following the Australasian Lean Thinking and Practice Summit, held in Melbourne in May 2013.

More than 200 people came to the Melbourne Convention and Exhibition Centre to hear Dr Jim Womack, the founder of the Lean movement, and numerous other speakers, to learn how thinking and working ‘Lean’ can improve organisational performance.

Dr Womack’s theories on Lean Thinking stemmed from observations he and his colleagues made while conducting a five-year research project for MIT on automotive manufacturing processes in the 1980s.

The results were brought together in the bestselling book, The Machine That Changed the World (1990), which juxtaposed two fundamentally different business systems: Toyota’s lean production and the mass production method pioneered by Henry Ford at General Motors.

Dr Womack saw that the two processes involved two very different ways of thinking. Where a mass market approach advocates working longer, harder and faster or adding more people and equipment, to lift production and quality, a Lean approach looks at what is known as the ‘value stream’, connecting all the horizontal processes that run across vertical organisational silos and removing all the wasteful activity that adds no value for the customer.

Due to Lean’s origins in manufacturing, the first businesses to adopt the methodology were those in production-based industries. However, Dr Womack and his Lean Enterprise Institute are adamant that Lean methodology applies to every business and every process, including service-based industries like local governments. Wherever there are customers and processes, Lean Thinking applies.

Lean and local government

In 2009 the City of Melbourne became the first local government in Australia to start implementing Lean Thinking.

It was a bold move for a local government. There are big differences between a service-oriented organisation like a city council and a production-based business like a car manufacturer, but the City of Melbourne’s new CEO, Dr Kathy Alexander, was keen to see lasting change.

“I’d seen the benefits of Lean in the healthcare sector and I was confident that with a bit of time and effort, and the requisite cultural shift, we could make the same sort of gains here at the City of Melbourne,” said Dr Alexander.

Importantly the time was right for change. Dr Alexander commenced her tenure in 2008 following an organisational efficiency review, which resulted in a significant restructure and more than 50 redundancies. With demand for services increasing in line with population growth, and less employees to meet that demand, a Lean approach made sense.

The implementation started out cautiously with a few processes examined under the Lean microscope. The City of Melbourne’s Lean Leader, Ms Denise Bennett described the first project as a great success.

“A lot of customers call to tell us that parking meters do not work, so that seemed like a good place to start,” said Ms Bennett. “By mapping and following the parking meter related processes we were able to quickly introduce improvements and within eight months, the number of calls relating to broken parking meters fell by 30 per cent. This released one staff member for other work and produced a return of $800,000.”

Other process improvement efforts yielded similar results, particularly in terms of releasing staff time for customer value-added work.

Walking the Lean way

A fundamental part of the Lean process is the ‘gemba walk’ – a term derived from the Japanese word genba, meaning ‘the real place’ – which refers to the act of going to see a process at the coal face, understanding the work, asking questions and learning about the process before any redesign, or adjustments, take place.

Following the Lean summit in Melbourne, Dr Womack and 14 delegates, including representatives from BlueScope Steel, Kraft, News Ltd, the ATO, Melbourne Health and Brisbane City Council, all took part in a gemba walk around the City of Melbourne’s streets and offices.

The first stop was the City of Melbourne’s customer call centre, which receives an average of about 1000 calls a day, many concerning things that are not working for the community, such as broken parking meters. Dr Womack listened in on a few calls and highlighted that call centres are a great place to identify problems that need to be fixed.

After the call centre the gemba walk moved onto the streets of Melbourne to see parking meter inspectors in action. The group found that parking inspectors perform many other functions in addition to their daily duties, such as providing people with directions and even restaurant recommendations. For a local government, was this time wasted, or value added?

Dr Womack acknowledged that the difficulty for local government sometimes lies in determining what the objective of a process improvement should be and identifying the key customer. In the case of parking meters, a merchant might like car parks to turnover frequently for his business, but as a ratepayer he doesn’t want to get fined if he overstays accidentally. Whose needs will the council address first? Or can both be addressed at once?

The gemba walk also visited a number of team huddles. At the combined weekly huddle of the park rangers and events teams the group heard how almost 200 issues relating to events held in the city parks had been resolved through the increased communication and visual management, greatly improving customers’ experiences.

Dr Womack was also struck by the proliferation and variety of approaches to visual management he saw on the walk. The importance of visual management lies in the democratisation of knowledge. Instead of key information and results being hidden in dense spread sheets, created and seen by a select few, visual management takes daily tasks and illustrates them in a meaningful visual format, often with a form of measurement attached to track improvements. By making the processes and the work visible, it is easier to identify waste and so increase value.

However he cautioned against taking a visual management template and copying it in each department. “Often people have a love of empty ritual,” said Dr Womack. “I’m happiest when I see people adapting it to their own needs and continuously improving it.”

In conclusion he instructed the gemba walk participants to go away and identify the top 10 customer facing processes in their businesses and to see how they perform from the perspective of their customers. Too often processes are designed to work well for the worker at the expense of the customer.

The journey continues

Now in its fifth year at the City of Melbourne the Lean Thinking program has a stronger focus on building Lean capability across the organisation.

All new starters receive an introduction to Lean Thinking principles in their induction and an in-house Lean Learning Program has been established to educate existing staff. Over half of the staff have completed basic Lean education training and more than 100 have gone on to further learning opportunities, which include finding improvement to a work area process, or solving a problem that is frustrating for customers or staff.

“Lean Thinking is also about changing our culture to one where staff feel empowered, equipped and supported to improve their work as part of their job, every day, everywhere, across the organisation,” said  Dr Alexander.

“Lean Thinking is not just about improving processes, it is about developing our people simultaneously.”

Notable outcomes for the community following Lean process improvements include:

•    More than three hundred aged care clients received an additional review visit, following the redesign of assessment processes.

•    Nurses in the municipality’s maternal child health services gained an extra 50 minutes a day each to spend with clients and appointment no-shows fell from 10 per cent to 4 per cent, following improvements to the referral and scheduling process, including SMS reminders.

•    Legislative changes that prompted a 900 per cent increase in food sample tests was achieved with no additional staff, following a process redesign.

•    Waiting times for sports and busking permits were reduced from six weeks to two weeks and ten days to three days respectively, following a process redesign.

Large organisational change at the City of Melbourne continues to be addressed through Lean Director Streams in which the CEO or directors work alongside team members to make existing organisational processes better, faster, cheaper and easier.

Overall the bottom-line savings and staff-time release achieved through Lean process improvements benefit the City of Melbourne’s residents and ratepayers, by creating more value with fewer resources. As Dr Womack observed, it’s a concept which would appeal to any organisation.

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One Response to City of Melbourne gets lean and keen

  1. Stephen Wallace March 16, 2016 at 11:02 am #

    I have come across this older article on Melbourne’s foray into Lean Thinking and am encouraged by their commitment to implement Lean in the Local Government sector. In my own small way I have begun to implement basic Lean principles in the Building and Development team that I manage (Dubbo) with increasingly real reductions in wastage. The culture of innovation has always been high but the Lean approach has added energy and focus.

    It is not easy however so always good to see and learn from industry leaders further down the path – would love to see more….!

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