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MAXIMIZING THE CAPACITY
OF THE CONSTRAINT
Greg Gardner, Director of Operational Excellence Governor’s Office of Management and Budget
Rod McDaniels, Statewide Program Manager
Utah Department of Transportation
Travis K. Wegkamp, Director of Captive Insurance
Utah Department of Insurance
September 7-8, 2017
PRESENT: BUILDING ON SUCCESS 2017
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What Is A Constraint?
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What Is A Constraint?
A constraint is anything that limits a system from achieving more of its goal—it causes bottlenecks and interrupts the flow of work.
A constraint is like the weak link on a chain. No matter how strong the chain is, if you pull on both ends hard enough it will always break at the weakest link. If you want to make the chain stronger, you must focus on the weak link.
• Provides focus to leverage big gains in
improvement
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What Is A Constraint?
From a management perspective, constraints have a very positive (rather than a negative) connotation. They are the key indicator of where to focus improvement efforts and are the leverage point for seeing the biggest results with the fewest changes possible.
Increasing the capacity of the constraint will improve the overall flow of work and increase the performance of the entire system.
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Constraints Are Everywhere
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Five Focusing Steps-Maximize Capacity
Five Focusing Steps:
1. Identify the constraint
2. Maximize the constraint
3. Subordinate all other functions to the
constraint
4. Elevate the constraint
1. Focus (don’t let inertia take over)
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Blue Light Story
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Patient
Check in
Treatment
plan and
check-out
Patient
Pull File
Patient
Prep
Diagnose
and Treat
Treated
Patient
Testing
This is why we visit the
doctor’s office
Doctor’s Office Example
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Interference Diagram
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Gap Analysis
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MAXIMIZING THE CAPACITY
OF THE CONSTRAINT
Rod McDaniels, Statewide Program Manager
Utah Department of Transportation
PRESENT: BUILDING ON SUCCESS 2017
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Statewide Access Management Program
Access management is the coordinated planning, regulation, and design of access between roadways and adjacent land development.
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Benefits of Reducing Conflict Points
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Less Can = More
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Travel Speed & Market Trade Area
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The Tricky Balancing Act
Safety Access
Management
Beneficial
Land Use
Mobility
QUICK FACTS
4.5 Million = Minimum projected State of Utah Population by 2040. 16,000 = Current number of lane miles maintained by UDOT. Travel demand will grow in proportion to state population.
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Our SUCCESS Story begins with…
“I am challenging my cabinet, and all state employees, through improving quality and reducing costs, to improve their operational efficiency by 25% over the next four years”
-Governor Gary Herbert 2013 State of the State address
GOVERNOR’S CHALLENGE
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Where We Started…
Category Interference
Resource
Inputs
•Lack of access to technical experts
•Lack of software programming resources
Technical
Issues
•Lack of consistent business processes
•Convoluted workflow
•Online Permit System interface mismatch
•Inconsistent performance metrics
Customer
Education
•Poor instructions
•No statewide application checklist
•No pre-app meeting notes to customer
•Seriously deficient web content
•Inconsistent applicant experience
•Reviewers gathering info (not reviewing)
Interference & Blue Light Analysis
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Identifying the Workflow Constraints
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Tactics & Strategy (subordinating to constraint)
Improve Applicant Education
Website Redesign Overhaul Guidance Documents
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Core process development for key review functions
Formalized Variance Redesigned Permit Application Checklist
Tactics & Strategy (subordinating to constraint)
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Online Permits System Update
Original Online System Redesigned Customer Interface
Tactics & Strategy (subordinating to constraint)
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QUANTITATIVE RESULTS
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QUANTITATIVE RESULTS
$3,008.35
$1,448.02
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
De
c-1
3
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
De
c-1
4
Jan
-15
Feb
-15
Mar
-15
Ap
r-1
5
May
-15
Jun
-15
Jul-
15
Au
g-1
5
Sep
-15
Oct
-15
No
v-1
5
De
c-1
5
Jan
-16
Feb
-16
Mar
-16
Ap
r-1
6
May
-16
Jun
-16
Jul-
16
Au
g-1
6
Sep
-16
Oct
-16
UDOT Conditional Access Permits Average Cost (OE) Per Timely Permit (QT) (Average savings are $1,560 for each timely permit)
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Essential SUCCESS Drivers!
• Statewide Permitting Operations Team • UDOT’s Supportive Leadership & Innovative Culture • GOMB’s Professional Program Mentors
2 3
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MAXIMIZING THE CAPACITY
OF THE CONSTRAINT
Travis K. Wegkamp, Director of Captive Insurance
Utah Department of Insurance
PRESENT: BUILDING ON SUCCESS 2017
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Insurance as Risk Management
Risk Management, what is it?
• Recognition of potential risks and/or loss to business • How can I protect against risk? • How do I pay for loss?
o Insurance o Loss mitigation
• Risk management is much more than insurance o Retain good employees o Protection of business assets –
physical, intellectual, reputational o Loss of business – interruption,
key supplier, key customer o What you may determine as a risk to your business
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Risk Management Strategies
Alternative: Traditional:
• Buy commercial insurance o Many limitations and exclusions o Every dollar goes to insurance
company o Important coverages may not
be available
• Set aside cash in a “Rainy Day Fund” o Subject to Creditors o Piggy-Bank Results o Funded with After Tax (non-
deductible) Dollars
• “Captive Insurance” as an alternative risk management strategy o Insure those limitations
and exclusions o Every premium dollar goes
to your own insurance company
o Important coverages can be insured
o Solid Investment results o Potentially funded with
Pre-Tax (deductible dollars)
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What is Captive Insurance?
• A Captive Insurance Company is a formal way to do self insurance.
• The principal insureds of a Captive Insurance Company are its owners, and they control the business.
• A Captive Insurance Company may insure parent company and its affiliates or related-parties.
Why use a Captive?
• Customize coverages/policies to your needs. • Incentive to maximize risk mitigation strategies (cost
savings and positive results of underwriting translate to your gains)
• Control over investments • Tax advantages (timing of claims expensing, premium
deductibility, etc.) • Access to reinsurance markets.
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Utah Captive Insurance industry
Historical growth of Utah domiciled Captive Insurance Companies
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Utah Captive Industry
Captive industry economic benefit to the State
• Utah Related Payroll & Expenditures $13,953,066
• Annual Fees paid to Utah Insurance Dept. $2,150,770
• Total Cash & Invested Assets held in Utah Financial Institutions $796,329,837
• Hotel room nights in Utah $1,841
Utah
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SUCCESS Analysis
• Three primary functions identified and combined for SUCCESS measures:
1. Licensing 2. Financial Analysis 3. Examination
• Significant and continued year over year growth created a dilemma; how do we handle it?
• Projections based on number of captive insurance companies needing regulatory oversight estimated a workforce of around 30+ Analysts/Examiners needed to handle the workload predicted for the near future, and the growth issues currently faced.
Licensing
Financial Analysis
Examination
Growth SUCCESS
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SUCCESS Solutions
• Through SUCCESS discussions we identified our “blue light” as Analysts being able to dedicate their time to actual licensing, analysis and examination duties.
• Three key steps taken to maximize an Analyst’s “blue light”, and alleviate bottlenecks:
1. Development and implementation of IT resources.
2. Hiring of an Administrative Assistant. 3. Creation of Assistant Director position.
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SUCCESS results
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MAXIMIZING THE CAPACITY
OF THE CONSTRAINT
QUESTIONS? PRESENT: BUILDING ON SUCCESS 2017