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Success Story: Improving the Purchasing Process for Supplies With Angie Grabiec - GoLeanSixSigma.com

How does something as simple as changing the Supply Purchasing process pave the way for a new Day Care Center? Watch this 30 minute success story webinar to find out how Angie Grabiec of Cape Cod Child Development applied Lean Six Sigma in the nonprofit world of Child Care.

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Success Story Transcript

Elisabeth Swan: Hello! And welcome to our Success Story series hosted by GoLeanSixSigma.com. My name is Elisabeth Swan and I’m the Managing Partner and Executive Advisor at GoLeanSixSigma.com.

We are very excited to have this offering for our audience because this is where the rubber meets the road. This is where we highlight people who have actually completed real projects that have been implemented within their organizations and we get to share their stories with you.

And today, we are highlighting a project success story that comes from Cape Cod Child Development. This is a nonprofit based on Cape Cod, Massachusetts. And for those of you unfamiliar with Cape Cod, this organization also covers Martha’s Vineyard, Nantucket, and some outlying areas around the Cape.

The mission of this nonprofit is to provide world-class child and family-focused programs that nurture each child’s full potential. And their vision is taking care of Cape Cod’s children and their families.

About Our Presenter

Our presenter today is Angie Grabiec. Let me tell you a little bit about Angie before we get started. Angie is the Executive Administrative Manager. As far as I can tell, Angie runs this ship and everything inside of it very well. Angie helped me set up all of my – all of these success webinars.

Angie, before she came here, she has been here for two years, before that, Angie was at University of Massachusetts Amherst for 14 years and she was the Office Manager there for their Development Office. So Angie has a long history of running a show as far as I can tell.

A little fact about Angie, she loves taking big cruises. She has got a great one coming up but she says, “There’s no point in going anywhere cold. These cruises all go someplace warm.” And when she’s not planning a cruise somewhere nice and warm, she is on her own boat with her husband and her two boys.

So Angie, thanks for joining us today and thanks for sharing your success story. So let’s go and find out about your project.

Define Phase

Angie Grabiec: Thank you, Liz. So I’m here to discuss improving the purchasing process for supplies. And this is the Define Phase.

Project Charter

My project charter starts discussing what the problems are, the business case, and the goal statement.

Basically, spending an average of $2,500 a month on supplies is not really not necessary for our folks here at Cape Cod Child Development. I would like to provide outstanding products with less cost which will improve revenue and bettering the facilities for our children and families.

I would like to reduce the amount of the average monthly cost by 20%, from $2,500 to $2,000 a month.

The timeline is to have it done by December 30th and I would like to make sure when people put in their order that is to me via email and I have the packing slips from everybody to send off to our Finance Department.

I am a one-person show and my sponsor is Anne Colwell, my CEO.

Voice of the Customer Translation Matrix

The Voice of the Customer Translation Matrix basically, employees do not want to be controlled for purchasing, they feel they are responsible enough to do it. They asked many why questions. Why I can’t take order myself? Why are you ordering something that’s not named brand? Why do you get to decide how many supplies I have? And the chemicals make me sick.

So after gathering much information, I realized that the customer really doesn’t want to lose control. They’ve never been asked about doing this before. Hoarding makes them comfortable. And nothing is wrong with what they had, why do we need to change it?

Elisabeth Swan: You ran into some classic…

Angie Grabiec: I did.

Elisabeth Swan: …voice of internal customer there.

Angie Grabiec: The ability to order without supervision would be the preference of the customer. They want to be trusted the ability to order their preferred product. They want to have just in case supply so that if they decide they want to have a project, they always want to feel comfortable that everything is there. And stop trying to fix what they think is not broken.

Elisabeth Swan: So in the face of the business, trying to reduce some supply cost, you’ve got a whole host of voices telling you, “But don’t change anything.”

Angie Grabiec: That is correct. We have over 14 sites, Lis, and trying to keep all the teachers happy as well as all the administrative staff is not easy.

Elisabeth Swan: So you’ve got a big constituent there, a big, huge, group.

“As Is” Swimlane Map

Angie Grabiec: Absolutely. As you can see on my “As Is” Swimlane Map, we were all over the map. Some employees ordering items on their own. There’s no way of tracking for their costs. So they would just go up to store, find something on sale, purchase it themselves. Not think about the tax exempt that they had to put into it and expect to have payment back as well as getting paid the taxes back because we’re nonprofit. That’s a big no-no.

As well as the packing slips would get lost. The receipts would get lost. The shipping places wouldn’t happen and I would not be able to get the final product to Finance to pay the bills.

So, we would like to reduce the size of the swim lane map and make it much easier for people to follow the process.

Elisabeth Swan: All right.

Measure Phase

Angie Grabiec: So now, we’re going to move on the Measure Phase. The baseline run chart basically – my takeaway was there is a variation of costs due to new sites opening and renovations to current buildings.

So beginning at the end of December of 2015, we were up and down, up and down. And then we had a real big high on August 16th and we had actually opened a new site there so we had to buy all the furniture plus educational supplies. We started coming back down and then we reached at the administrative area and so there’s remodeling happening and we finally got rid of 40-year-old plus desks and that’s what we are averaging over $2,500 a month.

Elisabeth Swan: So one of your challenge is I think early on you talked about was the place is growing. And since I worked with you, you went through five mergers and acquisitions. So new sites, new costs. So part of your challenge is to control it while allowing for growth.

Angie Grabiec: That’s correct. And as you can see though, December 16th, when I really had a hold of it because when I first started here, I was not doing all the purchasing. And by December 16th, I had it all under my thumb.

Analyze Phase

So we’re going to move on to the Analyze Phase.

Fishbone Diagram

So here in my Fishbone Diagram, it’s all body of the fish based off the cost of products. The biggest issue was staff was ordering and shopping again on their own, no policy have been set in place for purchasing. So my start biggest issue was staff dislikes change, that is basically across the board and there’s no set policy in place for ordering. So because they didn’t have a policy, they did not feel like they had to change.

We had multiple vendors. We’re trying to get better prices. And basically, it’s just trying to stop them from using their credit card and asking for reimbursement and having one person streamline.

Elisabeth Swan: So you inherited a process where really kind of …

Angie Grabiec: There was no process.

Elisabeth Swan: Anything went.

Root Cause Hypotheses

Angie Grabiec: Yes. So my Root Cause Hypotheses, you cannot count on the price of a vendor for an extended period of time. The price changes frequently. So many times, Lis, when I’d go in to order a product, I would have a list from the staff member of what they want. They would put a price in there. I would go back and to purchase it and the price had gone up. Very rarely going down.

So, I would receive invoices or I would see the product I ordered for them. The price was different. They find that walking through stores during their free time and purchasing without the tax ID, they should get all the reimbursement and Finance would say no. And so, they are kind of back in asking, “Why can’t I have this? I paid for it.”

They also order a lot more products than they need and we have no place to store them. We have very minimal storage. And the existing vendor was really expensive and nobody was going out and taking a look at, “Geez, can we cut this price with another vendor?”

Elisabeth Swan: Yeah, I haven’t thought about that but you’re definitely limited on storage. Any space you have, you really want to use it for the kids and …

Angie Grabiec: Exactly.

Price Comparison of WB Mason and Geriatric Medical Chart

So my price comparison of WB Mason versus Geriatric Medical, which is our two leading vendors in the area, you can see that there is a big difference in our most used products. The darker blue being Geriatric Medical and the lighter blue being WB Mason. WB Mason was higher on every single product that we were purchasing at this time.

Elisabeth Swan: So it was a big discovery.

Angie Grabiec: Yes.

Elisabeth Swan: And I don’t know if our listeners can hear the kids in the background which is kind of nice because that’s what Cape Cod Child Development is all about is kids.

Angie Grabiec: Yeah.

Improve Phase

So we’re moving on to the Improve Phase. And I did have a quick win.

Quick Win

I also took over the Verizon cell phones after I started. As of – when I did my project, the current cell phone bill was approximately $1,900 a month. Prior to taking it over, we were at about $2,700 a month.

I did look through all the data to find out what and why the cost was that high. We have WIFI sticks for all of our services. And I looked at the data over three months and they were not being used.

Elisabeth Swan: It’s a surface aid computer.

Angie Grabiec: Surface aid computer. It is like a laptop of a smaller version. And these WiFi sticks were for our folks when they are out visiting children and families to make sure that they had WiFi. And because WiFi is so apparent everywhere now, I don’t think anybody really needs them anymore. So we were paying $29.99 a month for these WiFi sticks that were not being used.

So I returned those as well as nobody had ever checked the Verizon invoice to see if people had left to take them off the billing and cancel their phones. So now that I removed all the folks that don’t work here anymore, I’ve taken away all the WiFi sticks of people who were not using them, the cost savings through Verizon is approximately $15,000 a year.

So to better make sure that this process continues to go smoothly, I’ve had a meeting with the Human Resources Department and they have agreed to let me know when an individual has been terminated from our establishment and I’ll get their phone shut off immediately and get their phone returned to me.

Elisabeth Swan: So one process changed and that has been taken care of, which is great.

Angie Grabiec: Yes.

Elisabeth Swan: That’s a nice win. And you said the result of that savings allowed you to I think get the mortgage on another building. Was that right?

Angie Grabiec: That is correct, Lis. We actually just acquired a new administrative building because we’re busting at the seams where we are right now. And we want to have more places for children so we’re going to turn the old administrative area into classrooms, which we desperately need. And we’re going to move into a new administration building. And this $15,000 a year plus all of the other savings through our educational supplies and our administrative supplies is enough to pay for a mortgage payment.

Elisabeth Swan: So fascinating with this quick win and it’s all about phones and WIFI sticks but it completely supported your mission.

Angie Grabiec: Absolutely. So to finish up my quick win, this is my run chart for the Verizon cell phones. As you can see, you can tell where I right took over in February of 2017 and where we are as of April 2017. The average cost a month with the Verizon bills being much lower comes out to be the average of a mortgage payment as you said.

Impact Effort Matrix

So here we are at the Impact Effort Matrix. Controlling the spending saves money and it saves time for staff. We changed vendors. We purchased products just once a week. Every invoice has been checked over by myself for every vendor. We had gone back to using our dishwashers at every facility opposed to buying paper products, which was a small hit for the dishes that are the institutional plastic school type dishes opposed to buying paper products every month.

I’ve restricted prime accounts and I am the only person who is able to get …

Elisabeth Swan: That’s an Amazon Prime?

Angie Grabiec: The Amazon Prime, correct. And we had PO boxes for a lot of our sites that we had no idea that we had because we do receive all of our mail at our main hub. So there is no reason to be paying for PO boxes that only had trash in them.

And we discontinued the paper products like I said.

Elisabeth Swan: So you said there was the one-time cost of outfitting every place with a dishwasher and also the plates and dishes. But now, you have completely eliminated that monthly cost of I think – how many did you save there?

Angie Grabiec: We have – well, the cost it felt, Lis, is about $1,500 a month in paper products.

Elisabeth Swan: That’s just wild.

Angie Grabiec: Yeah.

Elisabeth Swan: And think of all the dishwashers you got just by stopping that.

Angie Grabiec: That is correct. We did have some. We had a few inside that were sitting there not being used. So now, we’ve gone to that and also so much friendlier for our planet to not be wasting all these paper products.

Elisabeth Swan: You hit it on all fronts. So a lot of improvements. You have such a robust list here of switching out the vendors once you saw the price differences. Turning into a once a week product purchase then you got rid of all that inventory and the need for all that storage because you’re saying you’re getting it more frequently so people don’t have to hoard. You’re trying o combat that hoarding.

You changed the process. So you go and review the invoices. These are just great. They’re such a robust list. You did a lot of work here.

Angie Grabiec: Thank you.

To Be Map

So now, as you can see, this is To Be Swim Map. We went from that all over the crazy place swim map to this one. And the most important changes for this process were to eliminate excessive paper flow and people touching the orders.

The main situation that I think helped with this is that the Lead Teacher would give their order to the person in charge of Head Start for organization which is the main, one of the head people.

Elisabeth Swan: And just for the audience, Head Start is a form of preschool.

Angie Grabiec: Correct.

Elisabeth Swan: It’s a preschool program. Keep going.

Angie Grabiec: Yes. And she reviews her order, puts it on an Excel spreadsheet, sends it off to me. I put the order in. I choose the vendor. I find the best price and off we go. The orders come in. And as soon as I – and then everybody is doing a fantastic job of getting me their packing slips, off to Finance. We pay the bill. We’re moving forward.

Elisabeth Swan: The process is working.

Angie Grabiec: Absolutely.

Elisabeth Swan: It looks a lot cleaner.

Angie Grabiec: A lot cleaner.

Implementation Plan

So my Implementation Plan is savings is apparent now that the process for order of supplies has been streamlined. I follow up with the Site Managers about hoarding supplies. I follow up with the vendors for price comparison. Continue to educate employees about savings and why we’re saving. And monitor expenses and review monthly statements.

So this run chart was from January 16 to September 17. So we’re still ordering some paper products. We just started now with the plastics. So since I finished my project, we’re now doing the plastic.

Everything as you can see stayed steady. It was in one particular slot. You need to have all the up-down, up-down, and now we’re just going straight ahead forward. And if I was to do any more of these run charts now, Lis, you would see a large dip.

Elisabeth Swan: I think there is more to come.

Angie Grabiec: Yes.

Box Plot

So this is my Box Plot. As you can see by the variation of cost after implementing the purchasing policy to one person can handle centralized purchasing is the most important factor in this.

Elisabeth Swan: Yeah, cleaning up that process.

Control Phase

Angie Grabiec: Control Phase.

Lessons Learned

So we do have Lessons Learned. And I think this is very important, Lis. As you and i discussed, you have to have the explanation of why you’re doing this. You need to have everybody on board because everybody needs to be happy to make the company mover forward and explain to them why we changed different products. We went from one particular cleaning product to a different one that was much cheaper. I checked in to everything possible with this cleaning product before purchasing it to make sure it was safe for our children.

They still complained that it smelled bad and that it was not safe. So I actually physically took this cleaning product, poured some on the table. I watched to see how long it would dissipate. It dissipated within 15 seconds so you do not have any residue or any time that this product is sitting there for a child to possibly get into.

Next, I wanted to see if it really did have any horrible smell or skin irritation. I put the cleaning bottle up to my nose. I could not smell anything but a little bit of alcohol which is normal in a cleaning product. I poured some on my hand. I rubbed them together. There was no redness. There was no pain. There was no anything. I put it up to my face. I actually put a little bit on my cheeks, around my nose to see if that would actually irritate my skin, if the scent was horrible. There was nothing there. Absolutely nothing wrong with this product.

They actually use it in a NICU unit which is for the premature babies in hospitals. And if they can use it there then it’s obviously safe for our children.

Elisabeth Swan: And what happened when you told people that you had done this amount of research?

Angie Grabiec: They actually sat back and went, “Oh, OK. Thank you for doing that.” So I think that they realized that I stopped – I heard what they were saying. I took the time to investigate it and I had an end result for them, which I thought was very imperative to do.

What the cost savings can do this past holiday season, we were able to give out gift cards for the first time ever in the organization’s history.

Elisabeth Swan: And that’s a 50-year history.

Angie Grabiec: That’s a 50-year history. We gave every single employee which we have over 250 of them a $25 Amazon gift card. We were also being able to give raises. The folks that work here have never seen a raise.

Elisabeth Swan: Never.

Angie Grabiec: Never. So we were able to give raises. Just by changing vendors, by investigating the Verizon bill. And that also gave us money for that mortgage payment as we discussed so that children will have bigger and better places to come to.

The end result is explaining the information regarding the safety, the cleaning product, make the staff know that there is a connection by having you take the time to work with them. Most importantly, the staff knowing that their concerns were heard and will continue to be heard. Vendor choices about spending is another thing we looked into.

So I highly suggest to folks to take time and explain to your co-workers, to your staff, your family, whomever you’re working with because that is what makes this project come alive.

Elisabeth Swan: And I think I remember you had the pushback because you were as you said, walking into a process where there were no controls, there wasn’t any policy saying that people had to go through. They were going around you. They were finding their own Amazon prime accounts. They were finding ways to get what they wanted and when they want.

Now, that it’s under control and like you said, people don’t like change that they want to be able to give what they want when they want it. And you did this work of explaining to folks, “Hey, by saving this money, look what all we got.” And you listed not just this impact to them. They got bonuses. But that you were able to get this mortgage and increase the space for children really impacting the mission. And you said that had an impact when people heard that too.

Angie Grabiec: That’s correct. We’re all here for one mission, and that’s the children. And when they hear that they will check the children in a positive manner and that means that their job is better off as well. They are impacting the children in a more positive manner, getting new toys, getting cleaner spaces. Every penny that we saved goes to doing a better job for our children. And Lis, you know the most important thing that came out of this?

Elisabeth Swan: What?

Angie Grabiec: WB Mason came back to me and found out that I had gone through new company, they vowed to get pricing down from the new company. I gave them the shot. I gave them a list of products that we are getting from the other company at that price. They have come down over a dollar on every single price.

And now, we are going back with WB Mason at a much lower cost and what sealed the deal for me is I told them I needed all new paper towel holders and two other paper holders and we couldn’t afford to purchase all brand ones at $22.50 each. They said, “If you come back to us, we’ll give you every single one of those so that your job is easier and it’s streamlined.” And I’m working back with WB Mason now with even less of amount of money I’m spending on products.

Elisabeth Swan: You’ve caused the bidding more.

Angie Grabiec: I have.

Elisabeth Swan: For the benefit of Cape Cod Child Development.

Angie Grabiec: Absolutely.

Elisabeth Swan: It’s such a great story, Angie. It’s such a great story.

Angie Grabiec: Thank you.

Questions

Elisabeth Swan: So, a couple of questions for you, Angie. Do you have any advice for someone who wants to apply process improvement in the nonprofit world?

Angie Grabiec: I do. It is a very difficult process because a lot of people who are in the nonprofit world have been in the nonprofit world for a long time. Once you’re in, you usually stay in. And life is very different in the nonprofit world. You have to stick to your guns. You have to really work with your team and you have to explain to them why we’re doing this. And saving money is so helpful to that type of organization.

Elisabeth Swan: An incredible statement to the shareholders too or the philanthropic world, the donors. Good for them to hear. And one last question for you. What’s next for you in process improvement? You are a Certified Green Belt now, Angie. What are you going to do?

Angie Grabiec: I’m very excited. So we have been asked to try to work with another department. Take what we have learned from our Six Sigma and look at another department within our organization.

So I actually have asked to do a little work with the Development Department because prior to coming here, I worked with the Development Department at UMass Amherst. So since I have already gone in fast running, hit the ground, I had met with WB Mason and I’ve made an ask for them to adopt one of our classrooms so that they’re going to come in and donate furniture and help with a $2,000 donation towards the classroom because our classrooms are pretty tired. And I explained to them that if they’re able to donate products to us, it will be in their favor because then I can show the rest of our team how great their educational products are and then we will start with purchasing our educational products from them and not another company. So it’s two-fold.

Elisabeth Swan: You turned your supplier into a donor.

Angie Grabiec: Yes.

Elisabeth Swan: Great work. And really lovely to see you pull your experience, your past experience into play as well and turning the administrative work into development work and really pairing the two. Great. Thank you so much, Angie.

Getting Started

I’m Elisabeth Swan. And you’re listening to a GoLeanSixSigma.com’s success story highlighting Angie Grabiec. I want to thank you for joining us today, Angie.

Angie Grabiec: Thank you, Lis.

Elisabeth Swan: And for sharing your story, your success, your project.

I also want to thank our listeners for joining us today. I hope you found the success story helpful and as inspirational as I find it. If you have a success story and you’d like to share, send us a note at [email protected] Don’t forget to go to our website and view our other success stories. And please, feel free to download any of the free tools, templates, blogs, podcasts, and webinars from our website.

Until next time, thank you for joining us.


Get the inside scoop on many other successful Lean Six Sigma projects at our Super Stories of Success page. Do you have a story to tell? We’d love to hear about your own project success! Please contact us.

Elisabeth Swan

Elisabeth is a Managing Partner & Executive Advisor at GoLeanSixSigma.com. For over 25 years, she's helped leading organizations like Amazon, Charles Schwab and Starwood Hotels & Resorts build problem-solving muscles with Lean Six Sigma to achieve their goals.