From the Ground Up

Case_24_Mesa_AZ.pdf

Problem
The population of the city of Mesa, Arizona grew 37% from 1990 to 2000 and is expected to grow 30% over each of the next several decades. In order to attract more commercial development during this economic growth period, city government leaders wanted to cut the time it took builders to obtain a building safety permit from the city. At the time, it was taking three months, on average, from the initial application to permit issuance. Also, there was a two-month backlog. Finally, it was discovered there was a 73% first-time error rate for calculating fees based on what appeared to be an overcomplicated formula.

Approach
Government administrators first considered hiring additional people to handle the increasing volume and tackle the growing backlog. Budget constraints and the long lead-time required to train new employees forced them to look for alternatives. They eventually discovered and decided to apply Lean Six Sigma (LSS) methodology to the building permit process to identify and eliminate activities that added time and generated costs, but did not add value in the eyes of the customer.

As part of the LSS methodology, the first step was to form a multifunctional team made up of representatives from different areas of city government to analyze the problem. Representatives came from: commercial building permits, residential building permits and field inspection. The team created a “process flow diagram” during a four-day Kaizen event that captured the actual path that a building permit traveled from initial application to approval. Decision points and delay points were identified which helped everyone understand where they needed to focus their efforts. A new flow was developed and was pilot-tested several times prior to implementation.

Next, in order to maintain good service levels and minimize customer wait time, the team analyzed the incoming flow of applications. The team applied statistical and graphical tools to measure the number of incoming applications each day. Using the process flow diagram to guide its work, the team focused on a single process step where applications stalled anywhere from 15 to 50 days. The team came up with more than 120 ideas on how to improve this particular step. Each idea was analyzed and then they were grouped by impact and effort. Eventually, 17 high impact-low effort changes were identified for implementation.

Results
The building permit process was improved substantially by eliminating unnecessary and redundant activities. The number of individual steps in the process was reduced from 59 down to 21 (a 64% reduction). The average time to approve a permit was reduced from three months on average to under 22 days (a 75% reduction). Finally, the fee calculator error rate was reduced from 73% to below 12%. (1)

(1)Case Study: Reducing Building Safety Permitting Process with Lean Six Sigma, Guidon Performance Solutions, LLC, 2009