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Total quality management in local government.

Examples of total quality management at work in a variety of communities illustrate how the customer-service ethic made famous by Japanese manufacturers is being applied to local government operations in the United States.

Japanese economic success has been driven by the production of quality products, and the magnitude of their success has meant that quality is now the defining measure of economic competitiveness. American businesses in the early 1980s recognized that if they were to compete in a quality-driven world economy, they had to adopt methods of production and management that facilitated the development of quality products.

To provide better quality service, to deal better with fiscal stress and to improve efficiency, a growing number of city and county governments have adopted quality-oriented management processes. The research upon which this article is based indicates that there are more than 100 local governments in various stages of implementing such processes and the number is growing as exposure increases.

Process and Structure

The quality-oriented management process is known by various names. The Japanese call it total quality control. Other names are: total quality process, quality improvement process and total quality. The most common designation, in both the public and private sector, is total quality management.

Total Quality Management (TQM) is an organizational philosophy that stresses meeting customer requirements and expectations the first time and every time. This philosophy is implemented through the use of a management process which: 1) identifies and corrects problems by means of data, not opinions or emotions; 2) empowers employees and uses teams to identify and solve problems; and 3) continuously seeks to improve the entire organization's ability to meet or exceed the demands of internal and external customers. A key assumption is that 85 percent of the productivity and quality improvements in any organization result from improving the work systems and processes.

Each organization has molded TQM to fit its particular circumstances and needs. The administrative structures illustrated in this article represent the more formalized and comprehensive approaches that are being implemented. Regardless of the structure adopted, each TQM process contains a majority of the following elements: * top-level support and commitment, * a customer driven orientation, * employee involvement in productivity

and quality improvement efforts, * rewards for quality and productivity

achievement, * training in methods for improving

productivity and quality,

reducing barriers to productivity and

quality improvement, * productivity and quality measures and

standards that are meaningful to the

implementing department/unit, and * written vision or mission statements

which are linked directly to team-established

targets or goals.

The most common techniques (sometimes called quality tools or statistical process control techniques) used to determine where productivity and quality improvements can be made are brain-storming and multi-vote methods, Pareto charts, flow charts, scattergarms, histograms, run charts, control charts and surveys. Because many of these techniques were developed in manufacturing or production-oriented organizations, not all are fully applicable to other situations, such as service-oriented groups and government operations.

The administrative stages which link the quality tools with improvement recommendations and management implementation are symbolized by the acronym PDCA: plan, do, check, act. In the plan stage, a product or service is selected for examination, customers are identified and the work process analyzed to determine where changes need to be made. The do stage is where change is implemented on a small scale in selected areas within the organization. The effectiveness of the change is evaluated in the check phase and any additional modifications or changes determined. In the act stage, the tested changes are standardized, communicated and implemented throughout the department or organization.

Exhibit 1 shows how the PDCA stages are linked to the quality tools. This example comes from Pacific Bell's quality training materials. The City of Fairfield, California, uses excerpts from the Pacific Bell Quality Improvement Process Handbook as part of its TQM training.

[TABULAR DATA OMITTED]

There are two important distinctions between the PDCA cycle and traditional program evaluation. The first is the use of teams to analyze problems and develop productivity and quality improvement measurements. The use of teams increases the likelihood of workers accepting the proposed changes. In addition, because the people examining the process work with it consistently, the collective experience has shown that teams often have greater understanding of problems and potential solutions.

The second distinction is continous incremental improvement, which in the private sector is called by its Japanese name, Kaizen. Having proven its value in business, Kaizen is applicable in government as well, where system changes frequently are limited by laws or financial constraints. In such cases, incremental changes linked to a continual improvement process are often more practical than massive changes.

Exhibit 2 shows the organization structure used in the City of Fort Collins, Colorado, to link the teams and teams' activities with management. The composition and functions assigned each team are outlined below.

The Quality Council, chaired by the city manager, includes the deputy city manager, service directors and quality improvement coordinator. Its purpose is to provide coordination and organizational direction to the quality improvement activities.

Service area and departmental lead teams are lead by a service director, department or division head. These teams set policy and guidelines within their area and handle overall logistics, communications and operational matters for the teams under their purview.

Division lead teams, led by division or section heads, support the quality improvement efforts of the teams at the operational level.

Operational teams may be structured to include members from a single functional area within the organization. These functional teams select the task or improvement they wish to work on. Members choose their own teams. Alternatively, cross-functional teams may include members from more than one functional area to work on improvement opportunities that cut across functional lines. Task teams, comprising members from one or more functional areas, are formed to solve a specific problem or group of problems. They thin disband. Members are assigned to the task teams because of their background and experience, and the team theme or broad task is assigned by management.

The Fort Collins organization illustrates but one quality-oriented structure. Other local governments, embarking on TQM efforts, have adopted an organizational structure and emphasis which meets their specific needs. Although their reasons for implementing TQM and the problems encountered in implementation vary, there are two areas of substantive agreement. The first is that the city council or governing body views TQM as an administrative activity. The second point of consensus is that leadership is required to implement and guide the TQM process. One city manager characterizes TQM as a process of change rather than a program, a process that requires leadership skills more than management skills. The following sections exemplify how total quality management is working in a variety of local government settings.

Madison, Wisconsin

The quality improvement efforts of Madison, Wisconsin, are probably the most widely reported. The Madison quality improvement process began in 1983, when the mayor and other top administrative officials were exposed to the quality management philosophy and methods of W. Edwards Deming, an early leader in the promotion of quality management. The first team project, implemented in the First Street Garage, resulted in the reduction of the average vehicle turnaround time from nine days to three. There was also a savings of $7.15 in down time and repair for every $1 invested in preventive maintenance. The annual net savings amounted to $700,000. By 1989, the city had 30 quality improvement teams.

The biggest difficulty the city has faced in keeping the quality improvement effort on track, according to the city's organizational development and training officer, has been "the traditional para-military systems we have in place from compensation, performance evaluation, rewards and recognition, suggestions, etc. . . . Until our employees see that these systems are being changed we will not have real transformation."

The mayor who launched the quality initiative was not reelected in 1989. His replacement initiated an evaluation of the city's quality improvement process. This five-month evaluation determined that direct costs totaled $262,414 and indirect costs - time spent by city employees in training, formal projects and other related activities - amounted to $1,146,587. Agency heads estimated that the 56 improvement projects had a positive cost savings of between $1,100,000-$1,140,000. It was noted that many projects focused on improved customer satisfaction, labor/management relations, scheduling of services and streamlining of procedures, projects whose dollar savings were hard to calculate.

In the five agencies that had most completely implemented TQM - police, Madison Metro, public health, data processing and streets - the following nonquantifiable benefits were noted: * decrease in grievances; * improvement in staff morale, attitude,

cooperation and interpersonal relations; * better planning and more sensitivity to

customer needs; * improved intra-agency and inter-agency

cooperation and teamwork; and * faster turn-around time and improved

customer service.

The TQM effort has continued, but with modifications. It was determined that the process had matured from its primary emphasis on continuous improvement teams. Consequently it has shifted to a more comprehensive approach which aligns the initiative with the city's goals and strategies. In addition, a comprehensive learning system has been developed within city government which includes workplace education centers and quality improvement training and education initiatives.

In 1990, the community services department became the sixth department to integrate TQM into its training and daily worklife. Projects currently under way include: development of a database and a monitoring system for managing the city's urban forest, assessment of customer satisfaction for city water and sewer services, and improving various facets of customer services by the city's parking utility.

Phoenix, Arizona

The City of Phoenix began its total quality (TQ) process in 1989. The thrust of this city's effort was to restate the concept of "productivity." Productivity had become associated with cost reduction and budget cuts, preventing city staff from clearly communicating an emphasis on service improvement. TQ provided the desired broader platform.

The city's total quality process contains the same elements as the Malcolm Baldrige National Quality Award, an award established by Congress in 1987.(1) In addition, Phoenix highlights cycle time in order to focus attention on service and responsiveness. The major elements in the city's quality process are: customer satisfaction, continuous improvement, quality results, employee empowerment, leadership, reduced cycle time, information management and quality planning.

Phoenix has long had an employee suggestion program. Since team recommendations have been part of this employee program, the total quality process did not call for an additional emphasis to be placed in this area. Teams have been used to define TQ, to evaluate award processes and assess commitment. Teams also are being used to improve process and cycle time. At the departmental level, teams focus on those elements where they can make the most progress.

Customer satisfaction is a very important element. For instance, the office systems division places quality response cards in each center. The micrographics section attaches its surveys to all completed work. At the official records section, employees and citizens are encouraged to comment on the service received. The survey responses are deposited in a locked box on the counter. Management and employees review the responses regularly.

Another way city departments determine the quality of their performance is through a quality audit conducted by the city auditor's department. The audit survey is based on the Malcolm Baldrige Quality Award criteria. The audit recently completed for the water/waste water department include interviews with more than 300 employees. In addition, 250 walk-in water customers were interviewed in person and 200 others were interviewed by phone. The fire department is currently being audited, and the police and aviation departments have expressed interest in being audited.

Considering service as the city's primary business, the city manager sees customer-service and cycle-time data as critical. Customer satisfaction is measured through statistical surveys conducted by a private firm, while response time statistics are developed by the operating department using a variety of tools. Since 1990, operating departments have been working to identify output and outcome indicators vs. input and activity indicators, using the Service Effort and Accomplishment (SEA) research material developed by the Governmental Accounting Standards Board.

Among the problems encountered are the difficulty of focusing on TQ during difficult budget times. This is seen as a problem and an opportunity. When people are less secure, it is difficult to look ahead. On the other hand, the economic situation can only be improved by going after top performance and customer satisfaction.

Another problem experienced in Phoenix stems from the fact that TQ is about how things are done. There is no public-sector roadmap for making the transformation from old ways to the TQ ways and "how" things are done is a difficult topic to place on an agenda dominated by critical budget questions and the demand for results.

Fort Collins, Colorado

The TQM effort in Fort Collins began in 1987 when the city manager became involved with the Northern Colorado Center for Quality Excellence, a consortium of some of the leading companies in Fort Collins, which provides TQM training to managers of Colorado businesses. The city hired a statistical process control (SPC) trainer in 1988. As this trainer's expertise was in manufacturing and the blend was not good with government operations, the city subsequently hired Florida Power & Light's consulting branch to conduct TQM training.

The vision the city hopes TQM will help realize is to be recognized by its customers as the leader in providing services of the highest quality and value to the Fort Collins community. The city chose not to compare itself with other municipalities because its perception is that its customers compare city services to the other service providers in the community, not to other cities.

The city manager's comments on the problems encountered are comprehensive and worth noting in total.

"There are several problems we have encountered in our effort to implement this. Some are common to all organizations, such as management and employee buy-in, transitional inertia, and finding time and money to train and implement. Others are common to service organizations, such as applying SPC tools to services that don't lend themselves to those tools.

"However, I believe that the public sector must face additional barriers. These include: 1) An underdeveloped concept of the customer. We have traditionally not paid too much attention to the citizen as customer, and when we have, a clear picture does not always emerge. For many of our services, there is no typical customer. . . . For other services, we may never have any contact with the customer, or when we do, it is under negative circumstance.

"[The second barrier,] springing from the first problem, is a dearth of data on the quality of our services. Governments have traditionally not sought data on the customer, beyond those issues that relate to productivity. Rarely do we go out and ask the customer what they want, or how well we are doing. Given that one of the basic tenets of TQM is data-driven decision-making, we have had a great deal of trouble developing good data.

"The short time horizon of leadership [is another problem.] City council terms are four years with elections every two years, and the members are looking for returns on their investments that occur within Chose time frames. And finally, improvements that may increase customer satisfaction, may end up costing us more. The private sector like the public, can realize cost savings through productivity improvements. Unlike the public sector however, the private sector also can gain from wisely spending money to achieve higher customer satisfaction, higher sales, greater profits and market share. For us, spending more on customer satisfaction may mean happier customers, but not necessarily more revenue."

There are currently about 50 teams looking at problems throughout the city. Some examples are a street team that is looking at the use of safety equipment in its vehicles, ensuring that the proper equipment is always present. The forestry team is concerned with reducing the mortality rate of newly planted trees, and a wastewater team is trying to match more closely the information needs of its internal customers with the lab tests it conducts.

Fort Lauderdale, Florida

In 1984 the city's top managers and elected officials declared a 10-year "Decade of Excellence" with the mission of making the city the "Best City of its size by 1994." To help reach this goal the city purchased the Florida Power & Light Company's quality improvement process, which is based upon the work of W. Edwards Deming.

All top managers, the team leaders and facilitators, were trained in 1986. The union leadership was included in the early stages of the training. Elected officials have been continuously kept aware of the progress through reports and team presentations. There are currently 55 teams in operation.

Overall, 13 teams have completed the PCDA stages. The total savings generated by the 13 teams was $157,000 the first year and $151,000 annually thereafter. The largest savings occurred in teams in the Utility Department which addressed such problems as: clogged sump pumps ($50,000 annual savings), electrified water meters ($50,000 annual savings) and property disputes relating to sewer backups and pipe leaks ($35,000 annual savings). The balance of the savings was generated by teams that simplified procedures and forms and were able to reduce the city's cost for paper, printing and postage.

Conclusion

Local governments across the country are facing the same conditions that have caused the private sector to adopt a quality orientation - fiscal stress, a desire for better services and products on the part of the taxpayer (customer) and the desire to improve organizational efficiency. An increasing number of local governments are finding that TQM provides them with a proactive way to deal with these problems. The structure and emphasis placed on the elements of the proces vary, as have the problems encountered with implementation. For some municipalities implementing TQM, the financial savings have been significant. Equally significant are the nontangible benefits of improved morale, better communications, better sensitivity to customer needs, faster turnaround time and improved customer service.

NOTES

(1) The speed with which this new philosophy and accompanying management process has spread through the private sector can be seen in the rise in interst in applications for the Malcolm Baldrige National Quality Award. In 1988, 12,000 applications were requested. The number increased to 65,000 in 1989. in 1991, more than 210,000 applications were requested.

James J. Kline is a consultant in Portland, Oregon, whose former government experience includes two years with the State of Oregon Department of Revenue, Local Government Finance Section, and six years in city and county government in Oregon, is completing work on a Ph.D. in urban studies at Portland State University.
COPYRIGHT 1992 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Kline, James J.
Publication:Government Finance Review
Date:Aug 1, 1992
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