Case Study

Cost reduction at a government organization

A focus on tools, behaviors, and metrics led to cultural change in a government organization and projected cost savings of $50 million

A large government organization with manufacturing, storage, and distribution operations was struggling with inefficiency and high cost levels. It had recently made a number of changes at headquarters, resulting in positive cultural changes. However, these changes failed to flow down to the facilities within their operations group. They partnered with WP&C to driver further cultural changes through the operations organization, resulting in improved performance costs.

After years of unchecked growth, the organization’s overhead levels had grown to the point that it was no longer cost-competitive. There was little focus on continuous improvement, and in many cases, leadership was failing to understand and respond to the need for change. Productivity targets at facilities had remained stagnant for decades. There was little accountability coming down from HQ. As the much of the workforce approached retirement, critical skills, and experience were missing to fill the gaps in the supervisor ranks. The organization attempted to develop their senior leaders through the regular rotation of HQ management through the facilities. However, the high turnover in leadership presented a challenge for a sustained focus on improvement. 

To address this situation, WP&C focused on putting in place a sustainable system-wide set of solutions that would endure, independent of the leadership rotation. We assessed the individual sites and then responded with a three-element solution:

  1.  The right tools to understand and control performance
  2.  The right behaviors to focus on improvement
  3.  The right performance metrics to drive accountability

Using any of these elements alone would not have led to lasting improvement, but together they created a cohesive system.

The WP&C team designed comprehensive plans incorporating the three elements and partnered with a client team to implement improvements, including:

  • A system for managing operations: WP&C developed a set of tools that used both existing and newly captured operational data. Using the organization’s existing ERP system in conjunction with a newly-created operations database, more than ten new tools and reports were created for each facility to improve capacity utilization, identify performance variances, increase efficiency, and find and correct problems.
  • Shifting culture and behaviors: WP&C helped shift the organization’s culture through a new focus on reinforcing behaviors. The initial effort began with developing senior leadership buy-in at headquarters and then spread throughout the organization. The entire organization recognized and agreed upon on a common structure for completing work. Supervisors participated in training sessions that aligned them with the cultural pillars and behaviors. Additionally, WP&C provided training and one-on-one coaching to supervisors on effective communication and follow-up within their workforce and areas of responsibility.
  • Overhauled performance measurements: Through numerous assessments and interviews, WP&C determined true measures of operational health for the organization. We worked with leadership to define and track a new set of standard measurements to use across the organization. These new measurements aligned incentives and exposed the true drivers of efficiency and effectiveness.

Through this approach, the culture has seen a dramatic transformation—now one of accountability supported by tools to improve and control performance, culture, and behaviors for continuous improvement, and measurements to understand performance and highlight improvements. Measurable improvements include:

  • Projected reduction of overtime expenses by more than $50 million over three years
  • Labor standard hours reduced by 20% on average across all activities
  • Overtime hours within facilities decreased by an average of 16%

After years of unchecked growth, the organization’s overhead levels had grown to the point that it was no longer cost-competitive. There was little focus on continuous improvement, and in many cases, leadership was failing to understand and respond to the need for change. Productivity targets at facilities had remained stagnant for decades. There was little accountability coming down from HQ. As the much of the workforce approached retirement, critical skills, and experience were missing to fill the gaps in the supervisor ranks. The organization attempted to develop their senior leaders through the regular rotation of HQ management through the facilities. However, the high turnover in leadership presented a challenge for a sustained focus on improvement. 

To address this situation, WP&C focused on putting in place a sustainable system-wide set of solutions that would endure, independent of the leadership rotation. We assessed the individual sites and then responded with a three-element solution:

  1.  The right tools to understand and control performance
  2.  The right behaviors to focus on improvement
  3.  The right performance metrics to drive accountability

Using any of these elements alone would not have led to lasting improvement, but together they created a cohesive system.

The WP&C team designed comprehensive plans incorporating the three elements and partnered with a client team to implement improvements, including:

  • A system for managing operations: WP&C developed a set of tools that used both existing and newly captured operational data. Using the organization’s existing ERP system in conjunction with a newly-created operations database, more than ten new tools and reports were created for each facility to improve capacity utilization, identify performance variances, increase efficiency, and find and correct problems.
  • Shifting culture and behaviors: WP&C helped shift the organization’s culture through a new focus on reinforcing behaviors. The initial effort began with developing senior leadership buy-in at headquarters and then spread throughout the organization. The entire organization recognized and agreed upon on a common structure for completing work. Supervisors participated in training sessions that aligned them with the cultural pillars and behaviors. Additionally, WP&C provided training and one-on-one coaching to supervisors on effective communication and follow-up within their workforce and areas of responsibility.
  • Overhauled performance measurements: Through numerous assessments and interviews, WP&C determined true measures of operational health for the organization. We worked with leadership to define and track a new set of standard measurements to use across the organization. These new measurements aligned incentives and exposed the true drivers of efficiency and effectiveness.

Through this approach, the culture has seen a dramatic transformation—now one of accountability supported by tools to improve and control performance, culture, and behaviors for continuous improvement, and measurements to understand performance and highlight improvements. Measurable improvements include:

  • Projected reduction of overtime expenses by more than $50 million over three years
  • Labor standard hours reduced by 20% on average across all activities
  • Overtime hours within facilities decreased by an average of 16%

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