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”?