Not Exactly News – TSA Wastes Money

While the hurdles to systemic Lean healthcare transformation are high (see the payment system challenges discussed in John Toussaint’s new book), I am generally optimistic that we can significantly improve healthcare. I am, however, very cynical about attempts to apply much “Lean government” thinking (such as ASQ’s Paul Borawski’s earnest questions about government and quality). There’s no competitive pressure in government and I’m not sure we have real leadership in government anymore.

So, this story doesn’t surprise me and it almost doesn’t even make my angry anymore… but there are some Lean lessons to discuss (or lack thereof) in this story from TechDirt (and reported in the major news outlets):Congress: The TSA Is Wasting Hundreds Of Millions In Taxpayer Dollars.”

The TSA has hundreds of millions of dollars of body scanner equipment sitting in a Texas warehouse. Now, I’m not a big fan of the new-fangled scanners and I refuse to go through the “blue box” scanners that have been banned by the EU as being unsafe. I hate seeing the government spend money on technology that is sold by former government bureaucrats who are now cashing in, equipment that wouldn’t have even detecting the newest “underwear bomb” threat.

It’s all very corrupt and just downright ineffective. I don’t like the scanners, but I also hate seeing them sit not being used… argh, which waste is worse??

So, if TSA were competent and effective (and not getting bribed to sneak drugs through at LAX), I’d forgive a little excess inventory, but that’s clearly not the case here.

From the TechDirt story:

  • As of February 15, 2012, the total value of TSA’s equipment in storage was, according to TSA officials, estimated at $184 million. However, when questioned by Committee staff, TSA’s warehouse staff and procurement officials were unable to provide the total value of equipment in storage.
  • Committee staff discovered that 85% of the approximately 5,700 major transportation security equipment currently warehoused at the TLC had been stored for longer than six months; 35% of the equipment had been stored for more than one year. One piece of equipment had been in storage more than six years – 60% of its useful life.
  • As of February 2012, Committee staff discovered that TSA had 472 Advanced Technology 2 (AT2) carry-on baggage screening machines at the TLC and that  more than 99% have remained in storage for more than nine months; 34% of AT2s have been stored for longer than one year.

That’s a lot of inventory. That’s a lot of warehouse space. There’s apparently no “just-in-time” capability at the manufacturers of these boxes (are they using Lean production methods??). TSA doesn’t even know how much stuff they have, it seems.

And the real kicker:

  • TSA knowingly purchased more Explosive Trace Detectors (ETDs) than were necessary in order to receive a bulk discount under an incorrect and baseless assumption that demand would increase. TSA management stated: “[w]e purchased more than we needed in order to get a discount.”

As TechDirt (and TV news) reported, Congressional oversight staff came to inspect the warehouses and people tried hiding the inventory by carting it out the back door of the warehouse. I heard on TV that employees were called in at 5 AM for these shenanigans and that federal law might have been violated. There’s illegal corruption (misleading Congress) and then there’s the average, everyday, run-of-the-mill corruption of former government employees cashing in as lobbyists and salespeople. Sigh.

Clearly, a Lean organization doesn’t make huge volume purchases to get a discount, just to hold stuff unused in storage. You look at the total cost of unit cost and inventory cost and you buy the right quantities (often more than 1 but less than a huge wasteful amount that far surpasses your need)… which I’m guessing the government doesn’t do much of. Was somebody rewarded (in the purchasing silo) for getting the lowest piece price (with the warehousing waste being somebody else’s problem)?

Why is “Lean government” a pipe dream? Because if the government is the old non-Lean super wasteful GM, then there isn’t a Toyota ready to swoop in and take most of their business away from them. At best, we can maybe use “Lean manufacturing” techniques and tools in a very tactical way to reduce the time spent waiting for passports or wounded veteran benefits, but I’m not expecting the government to have a “Lean culture,” ever, at least at the federal level. Cities and states might have a fighting chance, since they can’t print money to bail out their own incompetence.

Thinking back to my time at GM (mid 90s), the government doesn’t have a monopoly on hiding problems. Our engine block machining line had manufacturing hundreds of out-of-spec engine blocks. They sat on pallets for many months since management didn’t want to take the time to rework them. So the pallets kept getting moved around and, finally, hidden behind a construction curtain because some big wig executive was coming and the plant management didn’t want to be embarrassed by all of the engine blocks (many had gotten rusty cylinder bores — they were iron, while the rest of the engine was aluminum) just sitting around.

So, anyway, would privatizing the TSA help? Can we get government to wake up, get Lean, and quit wasting so much money???

Was this just a rant or are there lessons we can bring back to our workplaces? Or is the lesson to not waste time worrying about or trying to implement “lean government”?


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

8 Comments on "Not Exactly News – TSA Wastes Money"

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  1. Great thoughts Mark. Like you, I’m not surprised by the information about waste at the Federal Government level but I think all problems can be fixed. Yes, I’m an optimist that lean thinking in government can work but it will certainly be an extremely difficult journey.

    The thinking behind buying excess to get a bulk discount reminds me of a purchasing manager who thought the same way years ago. He booked a substantial piece part savings of over 50% on one metal component and was publically praised and promoted for his effort. Only thing, he had to buy 46 years worth of inventory. True Story! No thought of holding costs, rusting issues, quality issues or future design changes.

    As you pointed out, we need to think total cost and purchase accordingly.

  2. Christina Kach
    Twitter:
    says:

    Mark,

    Tell us how you REALLY feel?

    I’m kidding. I really liked this article. I’ve read quite a few things in regards to a “lean government” Something needs to be done to get us truly out of debt. Hopeful president elects chirping about reform? Let’s be honest, we know it will not materialize once they hit the oval office. Too many silos & red tape in Government to have ideas and processes flow towards improvement. Time is spent haphazardly (and unsuccessfully) attempting remedying our current problems. Gorvernement should baseline where we are now, create a vision for our nation’s future and ACTUALLY START ACTIONING on it.

    Maybe my two cents right there will help that national debt. *groan*

    • Mark Graban
      Twitter:
      says:

      Part of where the discussion gets out of control (as I have seen on LinkedIn before stopping all email notifications from my groups) is that one party’s “waste” is another party’s “critical program.”

      The question of WHAT we do is always going to be political. But I’d like to see Lean applied to HOW we do it… even if the program shouldn’t exist (in my political opinion), we should aim for the best quality/service and lowest cost.

      But I’m told time and time again by those who HAVE gone to the D.C. gemba is that “cost savings” don’t turn into real budget reductions because of politics, power (the size of your budget), etc.

      I’m happy to keep out of it… and hold my nose and vote when I can.

  3. Brian Buck
    Twitter:
    says:

    Let’s hope someone doesn’t get the idea to use the already purchased scanners and make use of them in stores, parks, busses, schools!

    Lean in government can work but it will not be a quick fix. Just like hospital and other leaders, it is a very difficult thing to ask people to change many years of behavior to what makes lean successful. I agree local government would be an easier place to start then federal.

  4. John Huner
    Twitter:
    says:

    The security theater TSA practices in airports the last few years is extremely annoying. The waste and $ cost of corruption is miniscule in comparison to the trampling of liberty they are engaged in.

    As you say their on political decisions about what the government should do. Those decisions have very little to do with providing those services effectively. Outright corruption is involved when pure waste is hidden and tolerate. Normally the political decision should never stop eliminating real waste (it gets a bit tricky because those against the policy will call somethings waste that are really effective just at doing something other than what the person calling it waste wants). But pure waste (hiding that equipment isn’t used… is just corruption).

    Government actually has many advantage, as well as disadvantages when it comes to the potential for success using management improvement methods. The lack of constancy of purpose (even worse in the last 20 years is a problem – drastic changes in some policies haphazardly/politically). But the truth is much of what the government manages shouldn’t be affected (unless real corruption exists). The SSA being customer focused, delivering checks, answering questions, providing information is largely not political (though at the fringes even this can be).

    I see a huge problem today is that the “leaders” politicians are so completely far removed from the gemba is is extremely harmful. They are nearly entirely focused on beating up those they disagree with. Having the government do effectively what has been agreed to is just not something they put almost any effort into. Such disengaged leaders of any organization will cause huge problems.

    http://management.curiouscatblog.net/2009/01/15/federal-government-chief-performance-officer/

    http://management.curiouscatblog.net/2006/01/07/the-public-sector-and-deming/

  5. Mark Graban
    Twitter:
    says:

    Update on this post – the TSA is removing the Rapiscan machines from airports by June because Rapiscan could NOT come up with software fixes to display generic images of passengers instead of nude images.

    http://www.usatoday.com/story/travel/flights/2013/01/18/naked-airport-scanners/1845851/

    There will finally be a National Academies of Science study about the safety of said machines:

    http://www.theatlantic.com/technology/archive/2012/12/finally-an-independent-study-of-the-health-effects-of-airport-scanners/266406/

    And this TSA blog post says the machines, including those in storage, will be saved for some other nefarious (my word, not theirs) purpose:

    http://blog.tsa.gov/2013/01/rapiscan-backscatter-contract.html

    All Rapiscan AIT units currently operational at checkpoints around the country, as well as those stored at the TSA Logistics Center, will be removed by Rapiscan at their expense and stored until they can be redeployed to other mission priorities within the government.

    “Logistics Center” = Warehouse

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