Republicans, Try Going LEAN!!!

After spending 18 years in the manufacturing sector of industry, concepts such as productivity, efficiency and LEAN principles come rather naturally to me. For those who may not be familiar with LEAN principles, this is basically a concept that is applied for the purpose of creating more value for customers with fewer resources”. The manufacturing sector has been implementing LEAN principles for many years, but implementation of these principles is only now being developed in other sectors of industry, primarily service industries such as healthcare, restaurants, hospitality, etc.

In the dynamics of the relationship between the US Government and the citizens of this country, we the people are not only the customers of the services provided by our government. A significant number of us are also the investors in the processes that are used by that government. We provide the funds through our taxes that are used for various public expenditures.

In the latest Federal Government Long-Term Fiscal Outlook report posted by GAO on March 18, 2011, the following information was stated:

GAO’s long-term simulations show that even as the economy recovers and policies to stimulate the economy wind down, the outlook is for large and growing deficits. Absent policy changes, budget deficits decline slightly under GAO’s Alternative simulation before returning to recent highs in little over 10 years and increasing continually thereafter. In both simulations, the accumulation of large budget deficits leads to an unsustainable increase in debt over the long term. In GAO’s Alternative simulation, for instance, debt held by the public exceeds the post-World War II high of 109 percent of GDP by 2021 and continues to grow thereafter.

This report presents a daunting image of what our future will be like in this country in a relatively short period of time, doesn’t it? It is imperative that action takes place now!!!

As thing currently stand, we have one political party that believes increasing taxes is the means by which situations such as the one described above will be averted. Any increase in taxes places greater financial demands on investors, namely we the people. We have an opposing political party that claims to want to reduce the burden of financial demands on its investors but has been reticent to do so out of a fear that it could generate an election outcome similar to the one that occurred after the government was shutdown in 1995.

Implementation of LEAN principles is a means by which costs could be reduced without fear of shutting down the government. Recent reports by the GAO provide evidence of this.

Report released from Government Accountability Office on March 1, 2011

Report Description: This report presents a broad overview by the GAO that identified how it might be possible to reduce government (and the spending associated with government operations) by “(1) identifying and possibly eliminating duplicate functions between agencies, (2) increasing productivity and efficiency within the operations of various agencies, and (3) updating IT services in many agency operations by centralizing data information functions”.

An updated GAO report posted on its website on March 18, 2011

Report Description: This second reports focuses on nine areas that “contain hundreds of government programs that are fragmented across multiple agencies or, in some cases, within the same agency or department”. Further information is provided that lists functions of the programs in each of these nine areas and provides funding information that has been obtained. (The details of what is being referenced in the GAO’s most recent report can be found here.)

By streamlining and consolidating operations, the functions currently in operation within our government would still remain. They aren’t being shut down, only consolidated. The costs would be reduced, keeping investors happy, and the processes would become more efficient, keeping customers happy. What’s more, by reducing the size and overhead costs of duplicate agencies, we reduce any future appropriations in yearly budgets for these operations.

So how about it, Republicans? Ready to go LEAN?

In closing, I am going to offer that we the people should put ourselves into the role not only of consumers but also investors. What kind of questions should we be asking about these duplicate agency functions?

I’ll start…

Question #1:

Suppose there are five different agencies that perform the same function. Part of the function of each agency involves providing grants for urban development projects. Suppose a developer presents a project that will cost $3 million to complete. The developer applies to each of these five agencies for a $1 million grant and receives those grants, for a total of $5 million. How well do these agencies communicate with each other? Do they have a system in place that insures that a developer would not exceed the amount needed for a project? How can those preventive measures be implemented?  What would it take for this to happen?

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