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UW’s LEAN Initiative Continues to Attract National Attention

After a fall election marked by a spotlight on efficiency efforts, it’s fair to say that interest will likely continue to grow in “LEAN” management.

Since January 2010, UW’s Finance & Facilities (F2) department has been using LEAN as a comprehensive approach to improve management of people and processes, as well as delivering more efficient and effective services to campus customers.

F2’s LEAN process involves streamlining day-to-day work activities and processes, engaging the staff and encouraging them to identify and solve problems, and encourages people to continuously improve their work in a hands-on way.

Earlier this year, UW’s Creative Communications department was recognized by a national magazine for its financial turnaround, which utilized the LEAN process.

This month, the University’s LEAN initiative was recognized yet again, this time by The National Consortium for Continuous Improvement in Higher Education (NCCI).

V’Ella Warren, the UW’s Vice President of Finance and Facilities (F2) and CFO, recently hosted representatives from Cornell University, including NCCI’s President Kathy Burkgren.

The purpose of the visit was to highlight how Finance and Facilities is implementing LEAN in the area of process improvement.

In the December newsletter for the national group, Burkgren reported back on the  visit:

The University of Washington is change leadership in action and has made tremendous strides since 2009 with the introduction of process improvement which is changing their culture. Through process improvement, they are creating a culture where people feel valued, know their ideas matter, and feel they are empowered. Creativity is valued and celebrated. During our visit, I not only saw engaged staff, but highly engaged staff. I saw recognition among and between colleagues at all levels. I witnessed career development through challenging work. I saw respectful, constructive, and timely feedback happening right before my eyes among employees, managers, and senior leaders. My colleagues and I heard about how staff at all levels, by working together, eliminated backlogs of work, standardized processes, improved customer service, and significantly streamlined processes to save time and dollars. We heard testimonies of collaborations among workgroups. I saw boards with easy-to-update metrics and metrics tracked and updated daily so that monthly and quarterly metrics almost create themselves (or so it seemed). It was truly amazing. Kudos to the University of Washington!

Two examples of LEAN process improvement in action on campus:

  • Electronic Purchasing: Procurement Services’ efforts to migrate legacy system purchases to new ones have resulted in cost savings of $8.5M for the 6-month period ended September 2011, and $105M cumulative savings since July 2002.
  • Savings from UW Contracts: Purchasing Services has achieved savings of $13M for the 6 months ended September 2011, and $59M from January 2009-September 2011, via purchases made on University-wide contracts they established.

Sustainability efforts also benefit from the LEAN approach, especially as applied to improving building efficiency.

One example:

  • Smart Grid Demonstration Project: Electrical meters have been installed in all Seattle campus buildings and metering data are being collected.  Webpage “dashboards” present real-time building energy consumption information. This is expected to encourage conservation of energy by building occupants. This is part of an innovative project conducted in collaboration with the College of Engineering, Battelle, Bonneville Power Administration, McKinstry, and Seattle City Light.

Learn more by visiting Finance & Facilities LEAN webpage.

 

New Performance and Accountability Data Dashboard Released

OFM Four-Year Public Dashboard

An online dashboard launched today provides taxpayers more performance and accountability data about Washington’s public four-year colleges and universities.

The Statewide Public Four-Year Dashboard was initially created in 2011 following the passage of House Bill 1795, known as “The Higher Education Opportunity Act.”

The legislation directed Washington’s six public four-year colleges and universities to report annually on a range of metrics related to student enrollment, progression, graduation, and to display them in a centralized dashboard.

The dashboard provides an opportunity to highlight the effectiveness of Washington’s four-year institutions, and encourage data-driven discussions of higher education policy.

In addition to  better informing policy makers, students and their families, and the general public – the dashboard helps streamline various accountability efforts across multiple state agencies.

Session update

The state legislature began a 30-day special session last Monday.  Legislators continue to work on a budget compromise—currently, neither proposal makes further cuts to higher education.  However, many decisions are still in flux.  Check out the the P&B blog for up-to-date budget information.

Three priority bills passed during the regular session.

  • House Bill 2585 provides colleges and universities more operational flexibility in order to improve efficiency.  It would give the UW administrative and operational flexibility for purchasing, procurement, human resources and reporting.  It is estimated the UW could save over $1 million annually.  HB 2585 awaits Governor Gregoire’s signature.
  • SJR8223 and SB 6468 would allow investment diversification of UW and WSU operating investments. These measures could eventually generate $10-20M additional revenue annually for the UW without raising taxes.  The State Investment Board, which currently manages the state’s pension system, would have management and oversight authority over new investments.  SB 6468 awaits Governor Gregoire’s signature, while SJR 8223 will appear on the November ballot.

President Young’s statement on the Senate budget

UW President Michael Young released this statement regarding the Senate’s budget proposal:

“The Senate budget proposal released today puts a halt to four years of public disinvestment in higher education.  The Senate is to be commended to taking this bold stance.  Investing in students and their futures charts a course towards sustainable economic recovery and is the best possible form of securing our economic future.  Higher education sets people on the path that provides a lifetime of benefits for themselves, their families, and our communities.  The Legislature needs to adopt this budget for higher education.”

State revenue forecast shows improvement

The February revenue forecast shows a turn upward for the next biennium.  The forecast for expected revenue for 2011-13 is up by $95.7 million with a total expected revenue of about $30.3 billion.  While this revenue increase of 0.3 percent represents a modest boost for the current biennium, this is the first positive forecast since June 2010.

The forecast for the 2013-15 biennium is predicted to be about $32.3 billion, an increase of about 6.6 percent from the current biennium.  This is the first forecast adopted by the Washington State Economic and Revenue Forecast Council for the next biennium.

Read more analysis from the Office of Planning and Budgeting.

Flexibility measures move forward

The operational flexibility proposals introduced in Olympia this session moved forward on Tuesday. February 14 was the cutoff for non-budget legislation to pass out the chamber of origin.

HB 2585 passed in the House with 98 yea votes to move to the Senate.  The bill amends contract rules for institutions of higher learning in order to improve efficiency.  It would provide the University of Washington administrative and operational flexibility in areas of purchasing and procurement, capital projects, human resources and information technology.  As a result, the university would save over $1 million annually.

SB 6468 and SJR 8223 were passed out of the Senate on Monday. These bills will allow diversification of the University of Washington and Washington State University operating investments.  Since 1889, UW operating fund investments have been restricted to government-backed securities.  This restriction limits the ability to diversify university assets and reduce risk.  Annual returns have been negatively impacted by 0.8% annually over the last twenty years – approximately $11 million per year (at the current fund level).  Investment diversification would reduce the concentration of risk in a single investment instrument and allow the UW to react in a more timely way to opportunity and risk in the global economy.  It would also provide the university with an opportunity to raise additional revenue overtime, which would make available additional funding for UW’s education mission without raising taxes.  SB 6468 and SJR 8223 were referred to the House Higher Education committee and are scheduled for a hearing on Thursday.

SB 5576 would permit local management of capital fee resources – building fees, timber revenues and the metro tract – which are currently appropriated by the legislature for maintenance projects.  The current management system creates inefficiencies in the UW’s maintenance programs.  This affects the university’s ability to leverage its own bond capacity in a strategic way.  Allowing local management would create a more nimble, cost-effective maintenance program, provide the UW with additional local bonding authority to improve our credit worthiness, reduce the state’s cost of borrowing and complete capital projects.  SB 5576 passed the Senate on Saturday.

Washington presidents discuss higher education funding at public forum

On Wednesday night presidents of Washington’s six public colleges and universities gathered to discuss funding for higher education.  Among the concerns expressed by the presidents was the ability to retain faculty and providing access to low and middle-income students.  Business leaders from REI, Boeing and Microsoft also spoke about their concern about the future of Washington’s workforce – if the state does not have the capacity to educate its citizens, companies may be forced to search elsewhere for educated workers.

Video of the forum is available from TVW.