City of St. Louis Reduces Bid Tab Creation Cycle Time By 22% With GLSS
Home » Case Study » City of St. Louis Reduces Bid Tab Creation Cycle Time By 22% With GLSS
Missouri
Government
Finance
22%
Think it’s impossible to make a significant change in government? Well, it’s not easy, but GoLeanSixSigma.com Black Belt Pamela Kuehling made a real difference from the inside. She overturned countless “honest wrong beliefs” with facts and data by modeling the Lean Six Sigma approach in her work and won over the doubters.
Initially the overall procurement process was the focus, but when that proved to be too big, she scoped it down to a more manageable project that can now be the basis for an expanded improvement. Her improvement was meaningful, but a bigger victory was in bringing critical and logical thinking into an environment often impacted by less scientific influences!
– Bill Eureka, GoLeanSixSigma.com Master Black Belt Coach
Why Government Efficiency Is NOT An Oxymoron
First Steps to Lean Procurement in the City of St. Louis
Pamela Kuehling, Director of Procurement / Supply Commissioner
Most people think of local government as a monolith, not as a conglomeration of many distinct components performing different functions. While many areas are public facing, such as Parks, Health, and Fire, many are not. One such function is procurement. Someone needs to buy all the trash trucks, the lawn mowers, runway deicer, medical supplies, food, and all of the other thousands of items of equipment and supplies that City Departments need.
This procurement has to be done on a timely basis, so that trash does not pile up in alleys, parks do not become overgrown, the airport can function in inclement weather, and jail inmates can have dinner.
Purchasing also has to be done in a cost effective manner. The City of St. Louis spends approximately $115 million annually on non-construction products and services. A 2% savings in the purchasing of these items means savings of over $2 million—a significant amount of money for a cash-strapped city.
The City of St. Louis procurement function serves over 60 Departments, Divisions and Agencies. Approximately 76% of the dollars we spend, and 37% of the purchase orders generated are via individual bids, rather than on contract. We use individual bids for more expensive, infrequently requested items that have complex or constantly changing specifications. In 2018, these totaled about 4,800 individual bids generated by a “green screen” Cobol-based system from the early 1980’s, and Excel.
The Mission of the Procurement Division is “to ethically, efficiently, and cost effectively source products and services that departments need in order to service the citizens of the City of St. Louis.”
Having worked in the corporate, not-for-profit and governmental worlds, I have seen many opportunities for improvement (OFI’s) in workflows. When I came to the City as Director of Procurement/Supply Commissioner under newly elected Mayor Lyda Krewson, I found some of what I expected—outmoded technology, lack of understanding of big picture processes, silos and lots of inefficiency. However, I also found employees who wanted change and improvement, not just for themselves, but for the citizens as well. They needed the tools, direction, and leadership buy-in to implement strategic, resilient change.
Project Storyboard
Government can actually become more efficient within the limits of the laws, restrictions, transparency needs, lack of funding, hiring difficulties and other problems. Private companies may have more flexibility to make swift decisions, or more financial options. Public companies with shareholders, and government entities, however, face higher or additional hurdles. Corporate Social Responsibility, and the role of government as a resource for its Citizens, often engender “non-productive” uses of resources to benefit the “greater good.” We must appreciate this distinction.
Fortunately, the City’s Director of Operations gave me the mandate to use what he referred to as my “newfangled” theories (the Baldrige Criteria and Lean Six Sigma), as tools to improve our understanding of the voice of the customer, and become more effective in meeting their needs.
Our internal customers are the departments such as Streets, Refuse, Health, Human Services, and entities such as the Airport and Water Division. External customers, in our case, are the vendors who want to sell goods and services to the City.
Procurement is complex because the Procurement Division does not control most of the processes. Why? This is due in part to legal requirements from the City Charter and Ordinances that are very difficult to modernize. It is also a result of lack of funding to replace outdated technology using overnight batch processing. Finally, we face redundant approval processes that my predecessors created to assure compliance with the Charter. Many of these processes do not add value, and create delays and roadblocks.
Delays in procurement cause:
- Department frustration and dissatisfaction
- Avoidance of proper procurement procedures (non-compliance)
- Wasted time and taxpayer money
- Possible legal exposure from disgruntled vendors
- Most importantly, delays of service to the citizens of the City of St. Louis
For this project, we created a CQI (Continuous Quality Improvement) Team consisting of the Director of Procurement (Pam), Deputy Commissioner (Lynn), Buyer (Dotlyn), Contract Specialist (Rico) and the Director of Operations for the City (Todd) was our Sponsor. Other Department and Division employees provided input for their subject matter expertise.
The scope of the project was narrowed to advertised bids of products over $5,000, which had the highest level of internal customer complaints. Reducing cycle time was the main objective. Using Fishbone Diagrams, brainstorming sessions, etc. the Team determined that the controllable root causes for most of our delays are:
- No formal backup plan for sick or vacation time
- Buyers face more volume than they can handle with existing technology (need > staff)
- Buyers don’t report roadblocks to management for help in removal of those roadblocks
- Lack of Excel training
- Buyers possibly using conflicting priorities to plan work schedules
Technology and training were out of scope due to budgetary constraints. However, the City of St. Louis does plan to purchase a new ERP (Enterprise Resource Planning) system that should offer many solutions in a few years.
At this time, many of the other roadblocks not listed are outside the control of the Procurement division. For example:
- Mandatory advertising period of 3 weeks (most other Cities use 2 weeks)
- Charter provisions requiring a total of 6 signature approvals before a Purchase Order can be issued
- Sealed bid process for awards done manually on paper / no electronic submissions allowed
- Department approvals/changes can take a long time
- Corrections needed due to poorly written specifications or missing specifications from the requesting Department of Division
- Some specifications are very complex/technical based on the product needed
- Vendors not submitting required paperwork or incorrectly filing paperwork
- Addition of new Departments and inability to access cooperative purchasing agreements increased volume while capacity remained constant. Volume is up over 15% in the past fiscal year alone
A few quick fixes were implemented. I immediately created and implemented a formal backup plan for sick and vacation days. In addition, I asked for more staff and Excel training in the FY 2020 budget and received funding for both options. These should have a big impact on cycle time in FY 2020 and beyond.
Of the other processes that we could control at this time, the Team looked at the bid tabulation (bid tab) process. Bid tabs are created after product bids are received from the vendors, and the results are entered in an Excel spreadsheet, so that the Buyers and Requesting Department can see an “apples to apples” comparison of the bids. This format helps the Departments make better selection decisions for which product they want and who is the winning vendor.
Bid Tab creation cycle time is the number of days from when the Buyer received a bid for a particular Requisition until he or she sends the completed spreadsheet to the Department for review and approvals.
Bid complexity is a major factor in causing delays in bid tab creation, but we don’t control what Departments choose to buy. For example, fire truck specifications and bid responses can be hundreds of pages long. The Team decided to focus on management assistance in removal of roadblocks. The City is a hierarchical structure, rigidly enforced by both the Civil Service system and internal “command and control” structures in the Police and Fire departments. A follow up call from the Director will usually get a quicker response than a call from a Buyer.
The goal was to decrease the time it takes to create a bid tab by 49%. Reaching this goal would immediately impact customer satisfaction and alignment with our mission. Data showed the current process could not meet customer requirements. The mean number of days for bid tab creation was 2.9 with a standard deviation of 4.2 and a range of same day to 24 days. The sample of 116 data points used data from the prior 5 fiscal years. The p value of 0.00 verified what the graphic said—the data was non-normal.
Using the 5 Whys, we found out that Buyers were not bringing roadblocks to Management attention because they were not aware that the delays were so long, and that they did not want to get the cause of the roadblock in trouble by having “bosses” get involved. A test was conducted over 21 days in which the Buyers came to Management on the third day of a bid tab not being complete so that roadblocks could be removed.
It worked.
April 2018 vs. April 2019

2013-2018 Historical Data vs. New Process Data from April 2019

Using a sample t-Test, we found that there was improvement vs. last year for the same time period, and even more improvement versus the 5 year historical data. Versus last years for the same month, the mean decreased by 15%, range decreased 11% and the standard deviation went down 7%. Even more striking, using data from 2013-2018, we saw a 54% decrease in average days, 48% decline in standard deviation and a 67% reduction in the cycle time range. The CQI Team and Management were happy with these results.
Based on the test, the Team helped craft a new policy and charted the new workflows. We also generated a bid tab creation Monitoring, Control and Response plan. As long as the Buyers keep to the new “3 Day Plan,” the City should continue to see improved cycle times.
Lessons Learned
- You don’t own as much of your process as you think you do. Process charting and workflow analysis made this very clear to our team.
- Defining the Process is the hardest part, but it must be done correctly to improve.
- Small, incremental change can have a big impact on performance. Quick, small wins motivate the team and the stakeholders.
- Stakeholders need sound communication to be more willing to embrace change.
- Visual communication must be used in conjunction with verbal to ensure understanding.
- The process of removing roadblocks improves trust in both management and the processes themselves.
- Most importantly: You can use Lean Six Sigma techniques and the lessons from the Baldrige Criteria to improve the customer experience in Government!