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Success Story: Streamlining the Architectural, Engineering and Professional (AEP) Procurement Process With Kara Cuzzetto - GoLeanSixSigma.com

King County successfully creates internal partnerships to streamline procurement processes between agencies. Watch this 30 minute success story featuring Kara Cuzzetto, a Continuous Improvement Manager. She talks about a successful project and how Wastewater Treatment Division and the Financial Business Operations Division helped to reduce lead time in Procurement efforts.

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Success Story Transcript

Tracy: Hello and welcome to another Project Presentation Webinar hosted by GoLeanSixSigma.com. Project Presentation Webinars are where we share stories about successful Lean Six Sigma projects because this is where the rubber meets the road.

I’m Tracy O’Rourke, Managing Partner for GoLeanSixSigma.com. And today, we are highlighting Kara Cuzzetto from King County. And her project presentation is titled Streamlining the Architectural, Engineering and Professional Procurement Process at King County. Well, that is a mouthful.

So Kara, tell us a little bit about you.

About Our Presenter

Kara: So I’m Kara Cuzzetto. I’m a Lean Specialist here at King County. I’ve been with the county for two years now. Previously to that, I worked for a local hospital and received certification in Lean. So I’ve been a practitioner of Lean for about 15 or 16 years so far.

Tracy: Awesome. So you went from healthcare to government. What was that like?

Kara: It was actually an awesome experience. In one way, they’re very similar because they’re very regulated, right? In another way, the difference between private and public sector, things tend to move a little quicker in the private sector than they do in the public sector.

Tracy: Of course. Yes, that’s true. So you’re Speedy Gonzales now.

Kara: Sure. Sure.

Tracy: So Kara, tell us an interesting personal fact about you. Our listeners are always wanting to know a little bit about our presenters.

Kara: So I am born and raised in the Seattle-Tacoma area pretty much all my life. And I am an avid Seattle Seahawks fan. So I had seasoned tickets since 1976, went to the first Seahawks’ game in the Kingdome, and my husband and I our three children have seasoned tickets to this day and that’s what we do as a family and enjoy it very much.

Tracy: Very nice. And so, that means everyone is a Seahawks fan in your family.

Kara: Yes.

Tracy: What would happen if they decide to become like say Chargers’ fan?

Kara: Oh yeah, that would not be good. They would have to find another …

Tracy: Home.

Kara: Yes.

LEAN

Tracy: Alright. Well, thank you for sharing. So go ahead and tell us a little bit about your project. I’m really excited to hear about it.

Kara: Yes. So this was a project that we started in 2014 or early 2015. And it’s a partnership between Wastewater Division and the Procurement folks here. So we were looking at architecture and engineering contracts that are pretty lengthy in the time it takes to process those contracts. There’s a lot of information that’s involved.

Tracy: Yes.

Kara: So this was a partnership where Wastewater reached out to us. They’re in the process of working on six large capital streamlining projects. And so, they wondered if we would partner with them in this process. And we said, “Sure. Let’s go at it. Let’s have some fun.”

Tracy: That’s great.

Kara: Yeah.

Tracy: So for the layman, what – how would you explain this process to someone that doesn’t necessarily understand wastewater and procurement? How would you simplify that?

Kara: So, Wastewater identifies the need for either a building or a repair in a building or something to that nature. It needs an architecture or engineering contracting place. So they express that need to the Procurement, the contract specialists in the Procurement Department, and provide us with the information that starts that process off so that we’re able to advertise the need to the population so that they can come and bid on providing that service for the county.

Tracy: Awesome. Wonderful. Thank you. That’s great explanation.

Define Phase – Charter Elements

Kara: So in any Six Sigma project, we always start with a define phase, right? And so, as part of that, we really wanted to understand what the problem was that we were trying to solve. And what we were hearing from our customers, from Wastewater, was you know what, it takes a really long time for these contracts to go through this process. And in fact in 2010, it was upwards of 300 days to do these contracts.

Tracy: A year or almost a year.

Kara: Almost a year, yes, which that’s not right. So, we wanted to provide better service for our customers. And so what we wanted to do was really understand, OK, what’s our start point and what’s our end point, right? So it’s really important to understand your scope first.

So, we wanted to start from the time that the agency is reaching out to the contract specialists and requesting advice on a contract to the time that we have decided which contract we were going with and have had submitted that notice of selection.

Tracy: OK.

Kara: So large value stream, large process.

Tracy: Good.

Expected Approach, Activities, Deliverables

Kara: Yeah. So what you always start out with – this is the approach that we’re going to take in the define phase. We want it in our contracting or in our chartering process, we want to identify the approaches that we’re going to take and the things that we’re going to do in order to really understand the process. And that’s what we tried to do in the define phase as we really slow down. We are methodical in going out and watching the processes, getting on the Gemba, we’re doing process mapping, interviewing customers.

So, we’re really grasping a situation. We want to understand what’s going on before we even try to even talk about problem solving. You really want to understand what you’re trying to solve.

Tracy: So this is outlining the approaches and the activities that the team is going to do to try to get their arms around the current state.

Process Mapping – Define & Measure

Kara: Yes. In fact, one of the first activities we did was this process map here. So this is a classic kind of swim lane process map where on the vertical, you have the different color stickies that represent the different operators within the process. And then on the linear, you have the process going across on a timeline. So you can imagine this represents 171 days’ worth of people’s time.

Tracy: Yes.

Kara: And so, very large project. And the thing that we noticed right off the bat was that we had to break into the phases. And in any contracting process, those are kind of natural phases of that where you’re planning and then you’re advertising it to the community and then you’re evaluating those contributors and then you’re negotiating with the person that you choose to move forward in that contract and then you implement the contract so, kind of natural phases of that.

But we do – well, I’ll say the contract specialists didn’t necessarily understand the scope of that or the breadth of that until we did this process mapping exercise. And then everybody was like, “Oh my gosh!”

Tracy: Right. So I can imagine everybody has their own little piece of the process and this is probably one of the first times that they’ve seen the entire process on the wall.

Kara: Yes. And actually, in some cases, even first time that they’re having conversations about the process with each other.

Tracy: Yeah. So, never even maybe sometimes had interaction. Wow! OK. That must have been very interesting for people.

Kara: I think it was really enlightening. And the other thing that you can see on this map is the bright pink stickies are areas of opportunity. And so, we had them smattered throughout this.

And the thing that we’ve – getting this on a piece of paper, we realized the evaluation phase, which is stuck right in the middle of the process is where we want to just start which is kind of weird. But what we quickly found out was that’s going to inform us of our upstream processes and our downstream processes from that.

And the information that we’re gathering for that evaluation phase, we have the ability to make sure via external setup that we have it all throughout the process so that a process doesn’t stop because oftentimes we’re stopping and trying to go get information that we don’t have.

Tracy: OK, good.

SIPOC – Define & Measure

Kara: So of course, the SIPOC is a great tool that we use to understand the problem that we’re trying to solve. And the thing that I really, really like about this document is the fact that it talks about customer requirements. It is so important to understand the voice of the customer before you start any type of improvement. And so, this document, this tool, really drives you to really think about what do my customers want? And it forces you to ask that question.

Sometimes we make assumptions of what our customers need and want. But this process really passed down our office on the shop floor and asking those questions and understanding what we needed we to do.

Tracy: Yeah. What I love about what you’re talking about is really the ultimate – the first – one of the first principles of Lean, which is define value, right? So you’re saying, here’s the map, here’s a process. And we’re starting with defining value for the customer. And when we define value and get real clear on what customers want, that can help us identify waste of the process.

Kara: Absolutely. And also, it defines our customer for us, right? Because oftentimes, we want to improve processes for ourselves and not for our customers. And ultimately, they’re receiving our product so we really should create our processes on how we can delight them.

Tracy: Yes.

Kara: That’s why I really enjoyed and liked this tool.

Tracy: Good.

Gathered Voice of Customer and More

Kara: I think it really drives us to that. So in that light, we did a lot of gathering the voice of the customer through this process. We did what we call listening tour with the agencies. We went out and listen to what they have to say. We also did listening tours with the consultants. We listen to each other. The Project Managers and the Contract Specialists are listening to each other’s pain points. And we walk the process. Everybody who is in the process walk the process. So we all understood what was happening up and downstream.

And the first thing was the fact that we got in a room and we both – each group hated the same thing. We each have the same pain points. And so, I think that was the first aha that the larger team had was that, you know what, this process sucks for everybody.

Tracy: Yeah, the process sucks and I think probably I’ve seen that happened before where people get in the same room and go, “So the thing that causes me the pain is the same thing that is causing pain for you.” And it almost creates a unifying element, right?

Kara: Absolutely.

Tracy: It brings the team together. It makes people realized that everyone is kind of a victim of the process. And I think that is – we’ve seen that happen in process walks, you and I, Kara. And that does – it creates a lot of unification around the team as opposed to blaming, right?

Kara: Absolutely. And that’s an important piece about listening tours, right? You’re there to listen. You’re not there to defend or explain or try to smoke and mirrors it.

Tracy: Talk about what they should be doing there.

Kara: Exactly. It is really – you’re there to listen and to understand what their pain points are and what their frustrations are in the process. So we did quite a bit that. It’s difficult at first. We have to prep the people, “You know what? You’re going to go into this room and you’re going to hear things that you may not want. But it’s not our time to defend. It’s just our time to listen.” And then we have information to take back and to improve things with.

Tracy: Very nice.

Analyze

Kara: So of course, then we move into the analyze phase, right? We’re understanding the information that we’ve gathered to this point. And so, we really want to figure out where the pain points, where are our opportunities, we’re taking the measures that we did in the measure phase and to better understand what’s our target and what’s our actual and where is that gap and how do we reduce that gap.

So we really did a lot of analyzing especially when we were breaking them a bit in phases, we’re analyzing each phase so we’re understanding a lot as we’re going along.

And the first thing that we understood was the Wastewater folks wanted to get this one document submitted which we then request for advice because the perception was that they were getting in line and that gave them a place so that when they were ready, they already have their place in line. And that’s just simply not the case, right? They are assigned by operator.

And so, just even understanding that, we would get our phase that we sit for months with no work because they were thinking they were in line.

Tracy: I see.

Kara: And so, we’ve done a lot of work around …

Tracy: Trying to lift that assumption.

Kara: That assumption, yeah. There is no line.

Tracy: Yeah.

Kara: When you have your documents ready for us to go, that’s when the clock starts ticking.

Tracy: OK.

Kara: Yeah.

Tracy: Good.

Kara: And there was really no transparency in the process. Nobody knew kind of where the contract was in any phase, whose court was it sitting in, who was waiting for what information, what documents are we waiting for. There was no transparency. And so, that was one the things that we really tried to do in this process improvement was to create transparency as to where it was. Wherever in the process we could see that very transparently and who was waiting for what.

And then the process takes too long and each point, they’re thinkers of each other. You’re taking too long. No, you’re taking too long. We’re not taking too long. It’s about the process, right? The process is just broken.

Tracy: Yeah.

Kara: And so we really need to fix that. So we realized that really, really hard.

Tracy: Now, you had mentioned at the very beginning of this that it was about 300 days initially. And then on your charter, it said it was 170 days. So you’re saying that there was some improvement efforts made before this project that took out like 200 something days.

Kara: Yes. So they did …

Tracy: Or maybe not 200 days. My math is bad, 100 and something days.

Kara: A 130 days. Yeah. Yes. So there was a consultant that came in and did some procurement streamlining with the team and again, they were sitting at 300 days. And we know kind of early on in the Lean, the target is we cut it half, right? So of course, the target is 150 days. But there’s no strategy for us to how we get there, right?

And so, we have this target but there wasn’t any mechanism to identify areas for improvement. So we have this target that they never could meet. And so, that could be very discouraging.

Tracy: Sure.

Improve – Planning

Kara: So in our improvement, on the planning phase, so we did a huge amount of work around the scope of work because oftentimes what was happening, we were just receiving the last scope of work that they saved on their desktop but then they manipulated to work for this project.

So, we created a standard template for our scope of work that has – it’s almost kind of menu feel to it. So I just pick the things out of it that I need to represent my scope of work and I drop it into my document and created guidelines around that and roles and responsibilities, who should be doing what.

Before the improvement, before the template was created, there was a wide rework and back and forth around the scope of work. The Project Manager would submit it to the Contract Specialist, “You know, we need this.” And it would go back. I mean there were weeks spent on just refining the scope of work. And there could be pages and pages and pages of documentation.

So we streamlined that and we’re running about on average of 11 pages on the scope of work and reduced the rework immensely.

Tracy: How much, I’m sorry, was the original?

Kara: About 36 pages or something.

Tracy: 36 pages, OK. So 36 pages to 11.

Kara: Yeah. And then the evaluation criteria, we have this criterion that was broken down into these miniscule measurements and number scoring and percentages. I mean it was complex. It was on spreadsheet. I mean it was just so complex. And I think it had 22 kind of categories. And then each of those categories had measurements within it.

And we simplified it and we have 6 scoring criteria and it’s based on a word score and the evaluators are given the proposals prior to an evaluation meeting. They read those proposals before they come into the meeting where they come to scoring. They create a single document for that meeting.

It took our evaluation phase from an average 68 weeks down to 2 weeks. And again, guidelines, roles and responsibilities, transparency that who should be doing what in the process, procurement schedule where high-level milestones and dates associated with it so that we can track actual to target. And so, just again, all we were really trying to do is create transparency to the process as we can.

Tracy: OK.

Planning Phase – Pilot New Process

Kara: So, this is a great infographic that we created for our highly menu process at planning phase. And so, it just walks you through very easily simple steps. And our vision is that on our website, you will be able to click any of these numbers and it will bring you the tools that you need associated with that.

Tracy: With a new step.

Kara: Yup, that step in the process.

Tracy: Nice.

Kara: So that’s our vision for this, so very simple for people to understand. And so, this is out on our webpage now and people can see this knowing where we’re going. Again, trying to create that transparency around the process and where they are at any point in time and what they can expect.

Improve – Evaluation

So again, in the evaluation phase, we’ve simplified our criteria from 22 to 6, clarified the roles and responsibilities, clear instructions on the rating system, we have timelines established. And before this, people did not want to be on these evaluations panels. I mean that was painful. We were asking people to do it on the bus, to do it on their own time and do these elaborate scoring on these 22 line items and then they would get – they would submit them to the Contract Specialist and then it would go back because we wanted to make sure that it was just right because those are title documents. So it was a lot of back and forth. And now, we document it in the meeting and it’s all done in one meeting.

Tracy: And now, people want to be at the meetings.

Kara: And people want to be …

Tracy: That’s great.

Kara: And we had one the other day and somebody said, “Hey, I need a panel member.” “I’ll be on your panel.” Awesome, right?

Tracy: Right. Yeah, as opposed to crickets.

Kara: Yeah. No.

Tracy: You know it’s painful when people don’t want to participate.

Kara: Absolutely.

Tracy: Right.

Kara: Absolutely. And in the proposal evaluation meeting itself, we’re exploring, we’re consensus scoring, we’re creating the evaluation workbook. And again, this creates a document that they can go to the proposing consultants and it tells them exactly how they were rated. And it’s a one-page, easily read document and it has – we’ve been able to do some work around the debriefs and also, it has decreased the number of times we’ve had to go to interview, which is great.

Tracy: Wonderful.

Evaluation Phase New Current State

Kara: So again, just another infographics, a simple way that we can demonstrate what’s supposed to happen in this process. Again, the vision is that we’ll be able to click on these boxes and they’ll have the tools there accessible for people to use.

Improve – Negotiation

And then in the negotiation phase, this is the longest phase within this long value stream. There are a lot of moving pieces in there. You have different consultants who are involved now because we are negotiating the details of the contract itself, level of effort, people, disciplines, all of that. It’s a very complex process.

But we created a negotiation schedule that is both project specific and work order that has the task, what the deliverable of the task is, how long we think that task should take, who is responsible for doing that task, and then we have built-in scheduling that you can put your start date and your actual date so that we can see if we are on target or off target so that we can identify more improvement.

We also created a CAM template for both project specific and work orders. We created a cost price overview document because cost price is a very complex process as well. And for the project managers to communicate that information to the consultants sometimes is not easy. So we wanted a really clear concise tool for that.

We created LOE instructions. We created email templates, the construction authorization memo, the rate sheets. We did a lot of things in this process to hopefully eliminate and again, create transparency. Where are we in the negotiation phase and whose plate is it sitting on and what deliverable and where are we? And it’s transparent to consultants, to the project managers, and to the contract specialists. So they can all see it and all take action when needed.

Negotiation Phase – Future State

Again, just a nice little infographic that hopefully will be able to again click on the boxes and have the tools right there in our fingertips.

Tracy: Yeah, that makes it looks very simple.

Kara: Yeah.

Tracy: I’m sure it’s not that simple.

Kara: Right, because you think that’s such a large process map that we had, just laying these three infographics next to each other, not so intimidating.

Tracy: Yes.

Kara: 9,000 stickies on a piece of paper.

Tracy: Different colors.

Measure Total Lead Time – 2015

Kara: A little different. So this is – before we started, some measurements before we started our improvement. Our planning phase was taking 18 days, our solicitation phase was taking 31 days, evaluation 36, and negotiation 83 days, and then contract execution was 3 days. So, a total lead time in 2015 for 171 days.

And during that timeframe, we processed 12 contracts.

Tracy: And those are based on the workload.

Kara: Yes, based on the workload.

Tracy: OK.

Process Milestones – 2016

Kara: Yup. And so then as we moved into 2016 measurements, we reduced our planning from 18 to 13 days, solicitation went down to 22 days, evaluation 27 days, negotiation 76 days, and then contract execution 3 days for a total lead time of 151 days. So we removed 20 days.

Tracy: 20 days, awesome.

Kara: But the other great thing, along with all these process improvement work that we’re doing with this team, we also – we processed 6 more contracts in this timeframe. So it had a couple of folds. We built the capacity. We’re able to process more contracts and we also shorten the lead time.

Tracy: Wonderful. And you finally hit the 50% improvement from 300 days overall to 151 days which was the original target a few years ago.

Kara: Yes.

Tracy: Great.

Kara: Yeah, which is – the team feels much more aligned too now because we actually can see that we can make the target. And so, there’s a – and they know they can roll that out in the water going forward.

Tracy: That’s great.

Next Steps

Kara: Yeah. So the next steps, we have implementation of the new planning checklist going into production here pretty quickly. We’re also piloting the new planning email notification which is basically sets them up, tells them everything that they need to do throughout the procurement process. And again, we just want to create transparency around what the expectations are.

We have a sponsored meeting coming up where we’ll report out on these 6 taxes and then we’re going to celebrate.

Tracy: I think celebration is in order. Yeah.

Kara: And then training and moving on to the new process. So …

Tracy: Well, that is definitely an accomplishment. I mean it’s a very long process and it’s a process that really affects a lot of people in King County. Is that right?

Kara: Yes. Yes. Every agency, if they want to buy something, they have to come through Procurement.

Tracy: So I’m sure that your customers within King County are pretty happy with this too.

Kara: Yes, very much so.

Tracy: Well, thank you for doing your project presentation webinar. We always like to hear success stories about it. And our listeners are always tuning in for great examples of project presentations especially in government. That is definitely one of the places that people are always looking for ways to or good success stories in it.

So, if you have any more questions, you can contact us at [email protected] We have free tools, templates, and infographics and more.

I do have a couple of questions for you that I just wanted to ask you before we close this session. So, what do you – what was your favorite part about the project? I mean it was a long project. You were working on it for what? How long did you guys do your process improvement?

Kara: Over a year.

Tracy: Over a year. So, what was maybe either the turning point for your or your favorite thing about the project?

Kara: I think for me was at the beginning of the project, some of those aha moments from the team was discovering that they had the same pain points and the fact that right off the bat we were able to eliminate a format that had four signatures on it just by having a conversation.

Tracy: Wow!

Kara: And so, I think also the relationships that have been built between the contract specialists and the project managers through this process, they have a great working relationship now. I mean they pick up the phone and they are talking to each other all the time. And we are getting inserted into the process way earlier than we were before, which has prevented a ton of rework downstream, right? And it’s that conversation, that relationship building that I think I’ve enjoyed the most.

Tracy: That’s great. And the other question I have is so this is a very successful project in government. My hope is – I mean think about how many counties do procurement. And really, I mean hopefully there are a lot of learnings and people can really hear your presentation. So I’m really excited about it because it really has applicability in a lot of places even in private sector.

So do you have any advice for people that are getting started with process improvement? Any suggestions or advice that you want to share?

Kara: Be patient. And big ears, little mouth. I mean really, going with humility. And again, we put people in that processes. It’s not bad people. And so, going in with that frame of mind, I think is probably the best way to walk into a situation, is knowing that, “You know what? It’s not bad process.” Great people, bad process.

Tracy: People that are working hard, people that care stuck in a process that is going to bottleneck. Yeah.

Kara: People want to do good work. We are just not given the tools to do good work.

Thank you for joining us!

Tracy: That’s great. Thank you for that. So thank you, Kara, for sharing your success story. I really enjoyed hearing about it. I’m sure our listeners did too. I want to thank our listeners for tuning in as well.

And this is really where the rubber meets the road. So hopefully, you can tune into the next project presentation webinar that we have. Thanks for joining us for this presentation. And so, goodbye. Until next time.

Kara: Thank you very much.

Tracy: You’re welcome.

Tracy O'Rourke

Tracy is a Managing Partner & Executive Advisor at GoLeanSixSigma.com. She is also a Lean Six Sigma Green Belt Instructor at University of California San Diego and teaches in San Diego State University’s Lean Enterprise Program. For almost 20 years, she has helped leading organizations like Washington State, Charles Schwab and GE build problem-solving muscles.