Written by Business leaders in Grand Rapids challenged Mayor George Heartwell about his use of Lean to manage a large budget. He asked his Chief Deputy Officer Eric DeLong to come up with a plan.
They started with 3 value streams:
- Purchasing
- Engineering
- Library Book Returns
They received support from St. Mary’s Hospital to accelerate their progress. After the VSMs, they looked for more effective and scalable approaches, and adopted the A3 problem solving approach to tackle more specific issues.
The great recession really challenged the city financially, and it required the city to truly embrace Lean as a way of life in order to reduce their projected $33M deficit. They embarked on a transformation plan, going after 76 value streams with assigned process owners using temporary funds approved by the voters to invest in the transformation. Combining Lean with their 5-year budgeting process enabled them to improve their long term planning and thinking. For all capital investments, they used the A3 template to evaluate each project.
As a result of the transformation, they reduced their projected deficit from $33M in 2009 to a $30M reserve in 2016. In addition, they were able to develop people to embrace a new way of thinking instead of convincing people of changes.
That led to phase 2 of their plan, sustainable asset management based on lifecycle costs to support streets and sidewalks.
Phase 3 was focused on housing and policing, along with internal operations improvement.
They stressed the importance of upper management support, committing to the long term (not flavor of the month), being willing to self-examine, and being patient with the process.
You can watch the first video in the series at https://www.gembaacademy.com/gemba-live/at-the-gemba-government/the-city-of-grand-rapids/city-of-grand-rapids-mi-why-lean