Roanoke Uses Lean/Six Sigma to Save Money and Improve Efficiency

Wednesday, August 5, 2015

Facing a number of challenges – including declining tax revenues, state funding cuts, changes in retirement contributions, and a need for increased capital funding – the City of Roanoke, Virginia, looked to its employees to change the city’s culture and find frontline solutions to everyday problems. It created an atmosphere of individual responsibility and empowerment by equipping employees with the tools needed to effect change in their work spaces. The transition was rooted in a simple question: What must be done to deliver the most value to citizens in the most efficient way? And thus, Roanoke’s Lean/Six Sigma journey began.

Steered in part by the guidance of nearby Virginia Tech, the city sprang into action with an internal education plan aimed at equipping Roanoke city staff in departments including human resources and management and budget to address actual citizen issues. Using statistical root cause analysis and process analysis, and emphasizing the voice of the citizen, city workers were able to reduce processing times, bolster the use of technology, and increase standardization, which led to fewer errors. These steps made a big difference in improving overall efficiency and creating quantifiable cost savings.

Perhaps most significant among these efforts was an accounts payable department project targeted at increasing the number of vendors paid via virtual credit card payment – a better method than paper checks or direct EFT/ACH payments. The city switched 22 vendors to card payables and 28 from paper checks to EFT, resulting in roughly 753 fewer checks per year. The move prompted the social services department to follow suit, converting more than 130 vendors to EFT and eliminating more than 2,100 paper checks per year. With savings of approximately $28 in productivity and $2 of tangible cost per check, the cards payable project yielded $82,737 in time savings and $18,406 in hard cost savings, totaling $102,070 of first-year savings. The increased virtual credit card payment activity also produced gains through the rebate program offered by the purchasing card provider.

With like this as a starting point, it should perhaps come as no surprise that Roanoke’s Lean management initiative was recently recognized as part of the 2015 Bright Ideas program by the Ash Center for Democratic Governance and Innovation at the John F. Kennedy School of Government, Harvard University.

For more information about Lean/ Six Sigma in the City of Roanoke, please visit the city's website.

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