MANUSCRIPT / WORKING PAPER - 2016

The adoption of lean thinking by public procurement practitioners throughout the United States and Canada

Joseph J. Schiele, Ph.D., Associate Professor of Production Operations ManagementOakland University, School of Business Administration

Rochester, Michigan, USA, 48326 - Phone: 248 370 2821 or Email: schiele@oakland.edu

AbstractPurpose - The purpose of this research was to assess the current state of lean thinking adoption by public procurement practitioners within the United States and Canada and gain insights into any factors that may be affecting their ability to benefit from lean thinking principles.Design/methodology/approach - The authors report the findings of a survey of lean thinking practices within a sample of 1735 procurement practitioners from federal, state, provincial, and local government agencies located throughout the United States and Canada. Findings - These findings suggest that there are opportunities for increasing the contributions made by public procurement when involved in acquisition processes, and provide the basis for increasing the application of lean thinking principles.Research limitations/implications - Because survey respondents were primarily procurement practitioners, the findings discussed herein may suffer from what is known as single source bias. However, the authors felt that these respondents were still able to provide valuable insights into the extent to which they were adopting lean thinking principles.Practical implications - The authors provide a type of actionable information that could be used to improve the extent to which procurement’s knowledge and expertise is being utilized in all aspects of any acquisition process that they may be involved in, including the decision making process, leading to the best buy decision, with the objective of satisfying the immediate needs of the individual agencies involved and the longer-term needs and objectives of the public that they serve.Originality/value - Not only does this research help to address some serious gaps in the literature, it is the most complete study of its kind completed to date.Keywords - Lean thinking, public procurementPaper type - Research paper

The adoption of lean thinking by public procurement practitioners throughout the United States and Canada

1.0 IntroductionFaced with continued fiscal pressures that have increased considerably over the last half of this

decade (Holzer, Charbonneau & Kim, 2009), state and local governments are attempting to

control costs with hiring freezes, work-force reductions, and widespread cutbacks across their

respective organizations (Kim, Bae & Eger, 2009). While these approaches may create the

illusion of efficiency, operations and processes remain fundamentally unchanged. This in turn

can lead to resources that are poorly allocated, and an increase in quality related problems

(Lamothe, Lamothe & Feiock, 2008; Lamothe & Lamothe, 2009; Stone, 2009; Zafra, Lopez, &

Hernandez, 2009). Real programmatic efficiency is driven by improvement initiatives that focus

on the way that work is designed and managed, with the intention of streamlining processes,

eliminating waste, and improving upon the general effectiveness of the various tasks that are

completed as per the customer’s perspective (Womack & Jones, 1996; Liker, 2004).

When public managers are looking to effect positive change, they may want to focus their

attention on their public procurement systems. These systems in particular are an area where a

significant amount of operational costs are incurred and opportunities exist for both fiscal and

process improvement (Basheka, 2009; Miller, 2009). Unfortunately, those responsible for

making improvements within these systems face some unique challenges that can affect their

ability to take advantage of such opportunities (Thai, 2007).

Purchasers in the public sector face political scrutiny of their activities through external

audits and in-house reviews, ongoing review by the public for any indication of mismanagement

of public funds, and sudden policy changes that characterize government decision making

(Gordon, Zemansky & Sekwat, 2000; Mechling, 1995; Pettijohn & Qiao, 2000). Schiele (2007)

found that it is the very nature of these environments that can make those involved more focused

on procedural compliance rather than value for money spent. In addition, the required rules and

procedures that must be followed, which are associated with legal constraints and administrative

regulations, can also affect “efficiency” in terms of the complexities associated with selection

processes (Thai, 2007). Indeed, some of the earliest literature acknowledged how difficult it is to

manage, and make improvements to, public procurement systems (Forbes, 1929 & 1941; Liuzzo,

1967). Nonetheless, the public procurement function plays a critical role in the way that public

organizations provide services to the public that are served, and every effort should be made to

ensure that taxpayer funds are spent in the most efficient and effective manner (Thai, 2007).

Any effort aimed at increasing system efficiency and general effectiveness will need to

address concurrently issues related to accountability, transparency, and fairness (Lamothe &

Lamothe, 2009). In addition, the particularly complex nature of the public procurement process

will make coordination among those stakeholders involved critical to the successful

implementation of strategies that might promote improvement. The challenge will be to balance

the interests of the various stakeholders including politicians, government administrators,

procurement, other public departments, and the public at large. While the common goal should

be to better serve the public through the way that taxpayer funds are spent, the various

stakeholders may have very different ideas about how this should be achieved.

Indeed, the latter describes what has been called a “wicked problem.” A wicked problem

is one that is difficult or impossible to solve because of incomplete and or contradictory

information, and changes in conditions that are not easy to recognize. Moreover because of

complex interdependencies, the effort to solve one part of a wicked problem can reveal or create

other problems (Churchman, 1967; Rittel & Webber, 1973). Churchman (1967) did suggest that

a moral responsibility exists to better understand and work at addressing such problems, and

Rittel (1972) hinted at a collaborative approach to resolving such problems; one which would

attempt to actively involve those affected in the problem-solving process. More recent work

acknowledges similar challenges but suggests that adaptable approaches to change, involving

collaboration, risk taking, experimentation, incremental change, and creative problem-solving

techniques can be used to find the best possible solution for such problems. These approaches

tend to help create more understanding of a given problem’s underlying causes, and buy-in and

cooperation among key stakeholders who can affect or will be affected by the problem- solving

process and or the solutions ultimately implemented (Roberts, 2000; Camillus, 2008; Stolterman,

2008; Conklin, 2006, 2009).

One such approach, known as lean thinking, may have potential as a means to help

improve the way that public procurement systems are designed and managed, and the way that

wicked problems are addressed. Lean thinking as a collaborative approach to process

improvement is focused on improving the way that goods and services are provided while

balancing the needs of the varying stakeholders involved. In addition, while lean thinking

includes a set of lean tools and techniques aimed at the elimination of waste through root-cause

problem-solving approaches, a series of goals and related process measures used to monitor and

control results, and standardized yet flexible processes that set the stage for process improvement

efforts, lean thinking is more importantly a thinking and belief system that is focused on

improving processes solely from a customer’s perspective (Flinchbaugh, Carlino & Pawley,

2006; Womack & Jones, 1996). Research has identified several improvements that have been

achieved through lean thinking initiatives including reduced processing and service delivery

times, improved work routines, increased teamwork and collaboration, quality improvements,

and lower costs, just to name a few (Hines, Lodge & Bamford, 2008; Kollberg, Dahlgaard &

Brehmer, 2007; McPherson & Mitchell, 2005; Motwani, 2003; Swank, 2003, Womack & Jones,

1996; Zayko & Broughman, 1997). Many of these improvements were achieved by both private

and public organizations, and within a wide variety of operating environments, and under

varying conditions. Why, therefore, would lean thinking, as an adaptable approach to process

improvement, not be applicable to public procurement systems as well? Can lean thinking offer

an effective way to minimize the challenges that public purchasers face when making

improvements to their processes? These are important questions that require further study and

are included as part of a research agendum that is proposed within this paper.

While a significant amount of research has focused on lean thinking as it applies to

private sector organizations and especially those in the manufacturing industries, it is only

recently that research has begun to look at the general concept as it applies to the public sector

specifically. For public procurement research in particular, the concept remains largely

unexamined (Piercy & Rich, 2009). Loader (2009) stated further that while many public

procurement officers are aware of the lean thinking concept and are willing to embrace the idea,

there is a need for more research that examines the practical implications of lean thinking and its

application to public procurement activities.

With the intention of addressing some of the gaps that have been identified within the

literature, this paper begins by discussing in practical terms, how lean thinking, both as a

philosophy and a collaborative approach to system design and improvement, can be used to

overcome some of the aforementioned concerns that face many government purchasing agencies

as they attempt to reduce operating costs and improve service quality levels. This paper then uses

the extant literature concerning lean thinking to identify a number of preconditions that are

required to successfully deploy lean principles, tools, and techniques. Salient preconditions are

organized into categories that provide the basis for a framework that can be used to assess public

procurement’s ability to adopt lean thinking and aid in its implementation within these public

sector environments. The paper concludes with a number of questions suggested to guide future

research and an approach that can be used to facilitate this work.

2.0 Literature review2.1 Lean production versus lean thinking

The concept of lean is not necessarily a new way of looking at the optimal production of goods

and or services by removing waste and improving the flow of activities through the entire value-

stream. Lean production as it is now formally known can trace some of its roots to the

automotive pioneer Henry Ford when in the early 1900s he developed a production system that

focused on high output, continual, optimized work flow, and the elimination of waste (Liker,

2004). Following the conclusion of World War II, Toyota engineers Taiichi Ohno and Shigeo

Shingo built upon Henry Ford’s earlier work by developing what is now known as the Toyota

Production System (Ohno, 1978).

Although the Toyota Production System evolved from Henry Ford’s production system,

it involves a fundamentally different approach to process management. While Ford focused on

producing millions of Model T cars at dozens of assembly plants around the world in exactly the

same fashion, Ohno and Shingo created a series of production processes that were flexible, right-

sized, and capable of quick changeovers. These newly developed production processes were

capable of efficiently producing small batches of a variety of different automobile models just in

time, as needed, without the overproduction (waste) associated with the Ford production system.

So the early Toyota Production System can be seen as the birthplace of what has now become

known as the lean production system (Womack, Jones & Roos, 1990). The core principles of

lean production include (a) specifying the value defined by the ultimate customers; (b)

identifying the value stream which comprise all actions required to produce a specific product or

service; (c) having the product or service flow continuously; (d) introducing pull between the

steps where continuous flow is not available; and (e) managing towards perfection as there is no

end to reducing effort, time, space, cost, and mistakes while offering customers the products or

services they really want (Womack, Jones & Roos, 1990). Lean thinking on the other hand is

generally considered a different way to view the management approach first introduced as the

Toyota Production System. Womack and Jones (1996) posited that while very similar in the way

that both approaches seek out and banish waste, lean thinking involves a central mindset held by

those within a system that is focused on creating more value as seen by the customer through the

waste elimination process. Lean thinkers are big picture thinkers at heart, focused on doing more

with less (less human time, less equipment, fewer activities, and fewer materials), while moving

closer and closer to providing the customer with exactly what they want, when they want it.

Further, the resources that are freed up through this waste elimination process are typically

redeployed to value-adding activities as far as the customer is concerned. This has the effect of

improving both process efficiency and effectiveness as seen in the eyes of the customer

(Womack, 2002). Lean thinking should therefore be seen as a core philosophy that functions as a

guide to cost savings and quality improvement, not as a quick fix to any ongoing problems that

may occur (Bhasin & Burcher, 2006). Flinchbaugh, Carlino and Pawley (2006), conceptualized

this idea in a model where “lean thinking and beliefs” are at the center and support all aspects of

the lean thinking approach. These researchers note that, in order for lean thinking to be properly

applied and sustainable over time, it must start with and be held together by a lean thinking belief

system focused on the customer. In doing so, people within this system do nothing without

thinking about how their work affects the customer and how they can improve the general

effectiveness and efficiency of the processes they use to meet customer needs. This is much

different from more project-based, fad like improvement efforts. Lean thinking, when applied in

this way, under-pins an organization's culture and its employees’ way of viewing the work that

they do from day to day (Dahlgaard & Dahlgaard, 2005; Hines, Holwe & Rich, 2004).

2.2 Lean thinking as a part of procurement

While lean thinking evolved out of lean production approaches, applied mostly within

manufacturing settings, other sectors – public and private, including firms involved in the

provision of services – have adapted and successfully deployed lean thinking approaches

(Hasenjager, 2006; Radnor & Walley, 2008). Within the public sector, health care organizations

have been most frequently using lean thinking (Hines, Lodge & Bamford, 2008; Kelly, Bryant,

Lox & Jolley, 2007). Hospitals for example have implemented a variety of tools and techniques

derived from the Toyota Production System to extensively improve workflow and the quality

and efficiency of all types of hospital services (Chetkovich & Frumkin, 2003). Some of these

tools and techniques included rapid improvement events, standardizing systems, value-stream

mapping, and root-cause analysis (Silvester, Lenden, Bevan, Steyn & Walley, 2004; Weber,

2006; Wysocki, 2004). By using rapid improvement events, such as value-stream mapping, and

every-day lean, and other lean tools, the Virginia Mason Medical Center, an acute care hospital

in Seattle, Washington, reduced staff walking distance by 38 percent, inventory by 50 percent,

and patient waiting time by 53 percent (Weber, 2006).

In addition, case studies involving government agencies in Scotland found that the

implementation of lean tools and techniques contributed to several positive outcomes (Radnor &

Walley, 2008). These outcomes appeared in a variety of aspects, including waste reduction,

improvement of customer satisfaction, decrease in employee turnover rate from twenty-five to

thirty percent to about four percent, and a reduction of customer acknowledgement time from

between fourteen and twenty days to three days. In an extensive study of public sector

organizations, Radnor, Walley, Stephens and Bucci (2006) concluded that the application of lean

thinking and lean practices is transferable to public organizations. Their research found that lean

thinking approaches can be used to develop more seamless processes, improve flow, reduce

waste, and develop an understanding of customer value. However, Radnor et al. (2006) noted

that to implement lean thinking within public sector agencies, people must first be aware of the

need to improve processes and then be willing to accept any changes that may be needed. They

also noted that the number of lean tools that were being applied were somewhat limited.

Research suggests that this may be because those working within public agencies have yet to

understand the true value, relevance, or purpose of these tools and techniques, and how they may

be used specifically when making improvements to the work that they do (Bagley & Lewis,

2008; Loader, 2009).

The opportunities for improvement discussed in the aforementioned studies may also

exist for public procurement. Public purchasing departments have similar operational targets and

missions, such as those related to cost savings, improved service quality, and process efficiency

and effectiveness. In addition, as an adaptable, collaborative approach to process improvement

and change, lean thinking focuses on the way that work is designed and managed so that targets

and missions can be achieved, no matter what type of value stream is being considered. Lean

thinking should therefore be considered as an integral part of an organization’s public

procurement strategy (Karlsson & Ahlstrom, 1997; Motwani, 2003). Puschmann and Alt (2005)

and Mohammed and Shankar (2008) concurred with this notion seeing lean procurement as

having an important role in an organization’s ability to operate effectively. The importance of

this function is clear, and thus every attempt should be made to ensure that this function operates

in the most efficient and effective manner.

2.3 Research hypotheses and assessing procurement’s ability to adopt lean thinking

As part of this research, a framework was developed that could be used to capture the unique

nature of public agencies’ operating environments and to assess procurement’s ability to adopt

lean thinking. The extant literature was used to identify several preconditions that should be in

place when attempting to adopt lean thinking as an approach to process improvement. Some of

the more salient preconditions were then organized into key categories.

Questions were then developed to assess the extent to which preconditions are being met.

The questions were written using simple language, as recommended by Converse and Presser

(1986) and then presented as “Likert” type statements, where respondents could answer with

agreement or disagreement (Likert, 1932). As part of validating the questions/statements and

ensuring their relevance to public procurement specifically, they were forwarded to several

experts for review, including academics that specialize in public procurement and supply

management and public procurement practitioners. Validating the content of statements used as

part of an assessment tool by using experts and other relevant stakeholders is a process that can

significantly improve the usefulness of such a tool and should be considered an essential step

when developing such instruments (Judd, Smith & Kidder, 1991). The following is a discussion

of each of the key categories, related statements that could be used for assessment purposes, and

a number of testable research hypotheses that were developed to guide our work.

Customer focus

Getting started as a lean thinker involves thinking about work in a very different way than non-

lean thinkers. Lean thinkers do nothing without thinking about how their work processes affects

their customers and how they can make improvements to those processes so that customers are

better served (Liker, 2004; Womack & Jones, 1996). For public procurement this means thinking

continually about how to better serve those that they help with making individual purchase

decisions, while simultaneously meeting the goals and objectives of the organization that they

are a part of. The following statements relate to whether an individual or group is focused on its

customers. These statements highlight certain activities that would naturally show that the

customer and their needs are at the forefront of purchasing related activities that are performed:

The purchasing department is involved in the planning activities of its customer

departments.

Key customer requirements are known and understood by the purchasing department

prior to engaging in a particular purchasing process with a customer department.

The purchasing department’s improvement efforts are proactive and focused on

increasing customer satisfaction.

Customers participate in the development of purchasing department improvement

strategies.

The purchasing department is positioned to design, produce, and deliver a wide variety of

services for its customers.

The purchasing department collaborates with external suppliers, working together to

improve customer satisfaction levels.

Those involved in lean thinking have to think like a customer, not like a gatekeeper, or

“sentry at the tax exit gate” (Forbes, 1941); lean thinking, therefore requires looking at the action

from the customer's perspective (McQuade, 2008; Papadopoulos & Merali, 2008). Procurement

specialists must look at their processes from the outside in. By understanding the value adding

process from the customer's view, they can discover what customers are seeing and feeling. With

this knowledge, procurement specialists would be better able to identify areas where they can

add more value through improvement from a customers’ perspective (Lasa, Labura & Vila,

2008).

Top management support

In a special issue of Public Money and Management (Vol. 28, No. 1, 2008) that was devoted to

discussion of the application of lean thinking within public sector organizations, several factors

that affect lean thinking success were discussed. These included leadership styles, management

support, buy-in of staff, understanding of process and customer requirements, organizational

culture, lack of clear customer focus, staff suffering from silo-affects, and the lack of systems

thinking (Esain, Williams & Massey, 2008; Hines & Lethbridge, 2008; Hines, Martins & Beale,

2008; Hines, Lodge & Bamford, 2008; McQuade, 2008, Papadopoulos & Merali, 2008; Radnor

& Walley, 2008; Scorsone, 2008). A common factor discussed in most of these works was the

need for top management support. Prior to engaging in any lean transformation effort within an

organization or group, it is recommended that top-management support be established.

Invariably, lean transformation involves change. Potentially, this includes changes to the core

values and beliefs held by members of an organization or group, long established processes,

policies that guide decision-making, and the way that people work together within a particular

system. To facilitate these types of changes, top-level management must be fully supportive of

any lean transformation efforts. This includes setting a clear vision for the organization or group

that is focused on lean transformation, providing those involved with the time needed to learn

about lean thinking and make incremental change, celebrating successes, being tolerant of

failures, creating an organizational culture that supports experimentation, and providing

resources needed for training and development of those employees involved in making lean

happen (Esain et al., 2008; Hines & Lethbridge, 2008; Hines, Lodge & Bamford, 2008) In short,

management must be committed to providing opportunities and incentives for employees to

focus their talents and energies on satisfying customers.

Another factor of particular concern was the highly bureaucratic processes that can be

associated with public settings that would naturally impede change efforts (Morgan, 1986;

Nonaka & Takeuchi, 1995; Senge, 1990; Wierdsma & Swieringa, 2002). Therefore, management

should also be focused on removing any barriers that would prevent learning from occurring, and

that would prevent individuals from adapting organizational practices that are no longer effective

(Schimmel & Muntslag, 2009). Accordingly, statements were developed to assess the existence

of top management’s support. These statements identify specific activities or attitudes that would

help to assess whether top management is in place and fully supportive of any lean

transformation efforts. These activities or attitudes are critical if lean thinking is to occur within

the public procurement function are as follows:

There is a clear vision for improvement focused on customer departments.

Management is aware of the gaps that may exist between current and best practices

associated with the services that the purchasing department offers.

Management sets clear expectations for improvement.

Management has identified opportunities for improving customer satisfaction.

Management has clearly defined the value stream related to the services that it is

responsible for providing and its issues or related problems.

Management is committed to improvement efforts.

Additional resources and skills have been defined for improvement efforts.

Management walks the walk and talks the talk and champions improvement efforts.

Management helps remove barriers to change.

Management empowers workers so that they have the authority to make changes that

may be needed.

Management encourages teamwork and collaboration.

Management encourages out of the box thinking, risk taking, and mistake making as part

of the improvement process.

Management recognizes and rewards people for improvements made to processes.

Performer-level commitment

Once top-management support is in place and barriers to change eliminated, efforts involving the

application of lean thinking can focus on the development of performer-level commitment.

People create results. Lean thinking will therefore not occur unless those responsible for doing

the work are committed to making lean happen. To develop this commitment a clear

understanding of any levels or existence of resistance should be established. Because individual

employees can be driven by self-enhancement strategies, establishing any links between these

strategies and any related resistance is important if resistance is to be addressed (van Dijk & van

Dick, 2009). In addition to employee resistance, it is also important to understand the individual

personalities involved including the relationships that exist between the people involved in the

procurement process for doing so would help to improve the success of any change management

efforts (Price & Harrison, 2009). The following statements provide a basis to measure the extent

that individuals believe that lean thinking can benefit them or their departments, and the extent

which they feel they are prepared and willing to learn more about adopting such practices. These

statements are intended to measure the extent to which performer-level commitment exists

within an individual involved in procurement.

I believe that I could benefit from the adoption of lean thinking.

My purchasing department could benefit generally from the adoption of lean thinking.

I am prepared to adopt lean thinking when it comes to the work that I do.

I believe that my purchasing department is prepared to adopt lean thinking.

I want to learn more about lean thinking and the potential benefits that it may have to

offer.

Training and development

To further develop performer-level commitment, namely, employee readiness, understanding,

and general dedication to lean thinking, training those employees involved about the philosophy

of lean thinking and the related tools and techniques prior to moving forward with the

implementation of any change efforts is important (Neves, 2009). Once this basis of

understanding is established, it is important to quickly deploy those people so that they may go

to work on processes that they are responsible for managing to demonstrate how lean thinking

works and become more aware of the type of benefits that are possible. This would involve

identifying the value stream associated with a particular purchasing process, seeking out waste,

and identifying opportunities for value creation, moving forward with rapid improvement events,

and the use of a measurement and control system to establish longer-term sustainability. This in

turn increases employee commitment and causes those involved to see lean thinking not as

another quality program fad, but as a sustainable way of managing the work that they do on a

day-to-day basis (Bateman & Rich, 2003; Bhatia & Drew, 2006; Nonaka & Takeuchi, 1995).

The following statements can be used to assess the extent to which the purchasing department

supports and or provides training related to lean thinking. In addition, measures have been

included to assess action-based learning related to teaching people how to deploy some of the

philosophies, tools and techniques connected to lean thinking as a means to improve processes

that they themselves are responsible for performing. These types of action-based approaches

underpin a type of organizational development: an organized, top-down, organization-wide effort

to increase an organization's effectiveness and health (Beckhard, 1969). Organizational

development is achieved through interventions in an organization's processes, using a complex

strategy intended to change the beliefs, attitudes, values, and structures of organizations, and the

people that operate within them so that they can better adapt to new approaches (Lau & Ngo,

2001). If people are involved in the crafting of strategies that affect them, they will be more

likely to adopt new ways of doing things (French & Bell, 1973).

Procurement fosters and supports an environment that is focused on learning and a

professional development environment.

Procurement training programs focus on process improvement.

Training is focused on improving customer satisfaction levels.

Procurement training programs include topics related to lean thinking.

Teamwork is encouraged and supported with training focused on improving the way that

people work together to solve problems.

Educational programs have included real life problem-solving projects.

Education and training have been focused on teaching people how to use the lean tools

that are available to aid in improvement efforts (such as…Value Stream Mapping,

Kaizen, Lean, Six Sigma, 5Why, Fishbone-Root Cause Analysis, Brain-storming, etc.).

Procurement evaluates its various training programs regularly and makes the necessary

changes to improve the effectiveness of its training efforts.

Education and training conducted by procurement officials is effective in developing

people’s ability to correctly apply various improvement methodologies.

Education and training conducted by the procurement division is effective in developing

people’s ability to correctly mentor and lead improvement teams.

People within procurement departments are given time to improve and develop their

problem-solving skills.

Understanding the value stream and ability to identify waste

Those involved in public procurement should have a clear understanding of the value streams

associated with individual purchase decisions. A value stream includes the specific activities

performed to design, order, and provide a specific product or service from concept to launch, or

from order to delivery, or from raw materials into delivering the product into customers’ hands

(Womack & Jones, 1996). For public procurement this value stream would be related to the

various stages of the purchasing process and could start with early involvement in the planning

activities of other departments for upcoming purchase decisions, through need identification,

request for proposal development, solicitation of tenders, evaluation of bids, and eventual

purchase decisions, execution of required documentation, and any other follow-up activities that

may be required of procurement.

In addition, those involved should also have the ability to identify the various sources of

waste that may exist. Ohno (1978) identified seven sources of waste that can exist throughout

any value stream; they include defects (for procurement this might involve mistakes made during

the service delivery or purchasing process); overproduction (of procurement services provided to

the customer that are not needed to satisfy their needs); excess inventories (of items used in the

procurement process that are awaiting further processing); unnecessary processing (of any

paperwork needed to complete a purchasing process); unnecessary movement (of people);

unnecessary transport (of materials or procurement paperwork); and waiting (by employees for

other work to be completed so they may do theirs). Womack and Jones (1996) added one other

source of waste that included a design for a product or service that ultimately does not meet the

needs of a customer (for procurement this could be a process that is inflexible or incapable of

performing the key stages of the purchasing process as required, such as one that does not have a

mechanism in place for conflict resolution or feedback).

While it is important to seek out and eliminate waste throughout a particular value

stream, it is as important to identify ways to redeploy those wasted resources to other more

value-added activities. This in turn is what differentiates lean thinking from other

improvement/waste-management programs. For public procurement for example, instead of

spending time managing redundant or repetitive documentary type activities that take up

valuable time, procurement could automate or simplify such processes so that more time could

be spent on activities that were regarded as being more meaningful (Schiele & McCue, 2006).

This would have the effect of improving the efficiency of the purchasing process from a time-

savings perspective, which is arguably very important to those involved in making purchase

decisions, while simultaneously shifting attention to elements of the purchasing process that can

more positively affect customer satisfaction levels. The following statements relate to

procurement officials ability to both understand the value stream associated with decisions that

they make along with their ability to identify the different types of waste that may also exist:

Procurement officials understand the importance of the value stream and its key

components and inefficiencies.

There are several initiatives aimed at reducing service delivery time, increasing

responsiveness, and eliminating value stream inefficiencies.

The procurement department views it customers, the department, and its suppliers as one

entity or system.

People within the purchasing department are focused on the value stream.

The value stream within the purchasing department is well understood.

Processes followed by procurement are repeatable and measurable.

The procurement department embraces the idea that all customers are not the same and

designs processes so that they can serve various customers in various ways.

Processes are standardized so that they can be more easily understood and followed by

others.

The procurement department embraces the idea that process quality and perfection can

exist in every aspect of the total value stream.

Process improvement initiatives are used to improve customer satisfaction levels.

People responsible for procurement have a business process focus and place more

emphasis on process versus individual performance.

Employees think and act as process improvement owners.

Lean tools and techniques

Value creation through waste elimination does not occur without the proper application of tools

and techniques aimed at identifying root causes for the problems identified and better ways to

complete the work that needs to be done. Although the tools and techniques associated with lean

thinking were first developed for use primarily within manufacturing settings, they can be

adapted for other settings as well. Rapid improvement events, also called a Kaizen Blitz, are an

effective way to bring about small, quickly introduced changes in a targeted area (Radnor et al.,

2006; Suarez-Barraza & Lingham, 2008). Although, these events tend to focus more on short-

term outcomes rather than long-term development and should be seen as a starting point for

longer-term lean transformation, they can be used to show lean success and escalate employee

buy-in.

In addition to rapid improvement events, other lean approaches associated with the

Toyota Production System can also be adapted for use within public sector settings (Collins &

Muthusamy, 2007; Krings, Levine & Wall, 2006; Weber, 2006). Some of these approaches that

have been successfully applied within these environments include total quality management and

lean six sigma (Furterer & Elshennawy, 2005; Proudlove, Moxhad & Boaden, 2008; Ung,

Bonsall, Wall & Wang, 2007), Kaizen (McNichols, Hassinger & Bapst, 1999, Suarez-Barraza,

and Lingham, 2008), just-in-time management (Yasin, Wafa & Small, 2001), the 5S

methodologies (Hirano, 1995; Womack & Jones, 1996), and value stream mapping (Barber &

Tietje, 2008; Collins & Muthusamy, 2007; Lodge & Bamford, 2008). The following statements

are intended to be used to assess the degree to which individuals involved in lean thinking are

aware of the tools and techniques available for use and whether these tools and techniques are

being used by procurement to make process improvements:

People are aware of the full spectrum of lean tools and techniques that are available to aid

in improvement efforts (Value Stream Mapping, Kaizen, Lean, Six Sigma, 5Why,

Fishbone-Root Cause Analysis, Brain-storming, etc.).

People understand how to use the full spectrum of lean tools and techniques that are

available to aid in improvement efforts (Value Stream Mapping, Kaizen, Lean, Six

Sigma, 5Why, Fishbone-Root Cause Analysis, Brain-storming, etc.).

People are focused on solving problems, not just on applying or using tools.

People view improvement tools as a means to a better understanding of a particular

problem and its root causes.

Teamwork is encouraged and focused on process improvement.

Teams know how to deploy a broad spectrum of improvement tools.

People deploy the right tools correctly and to the right opportunities for improvement to

achieve tangible, customer-focused results.

Problem solving is focused on identifying and eliminating root causes to problems that

occur.

Measurement and improvement

While rapid improvement events and other tools and techniques related to making process

improvements seem to be an effective way to begin lean transformation efforts, they should be

considered a starting point, aimed at developing a better understanding of what lean thinking

really entails and establishing individual employee buy-in and commitment (Bateman, 2005). If

lean thinking is to be adopted as a true mindset and a sustainable system-wide approach to

process improvement, it has to be seen as a never ending journey involving a continual pursuit of

perfection (Bateman & Rich, 2003; McNichols et al., 1999; Suarez-Barraza & Lingham, 2008).

A note of caution: those involved in “fixing” a particular process may believe that they, having

‘perfected’ it, should then standardize and freeze that process.

What is unique with services and procurement particularly is that while a process might

be exactly what is called for to meet a customer’s needs and expectations in an efficient and

effective manner for that moment, those needs can vary considerably and change quickly and

therefore have to be continually monitored and the related processes improved as needed. For

procurement these changes, as far as customer needs and expectations are concerned, could

involve changes to the goals, objectives, or strategies of the departments that procurement is

involved with, changing market conditions including availability or capability of suppliers,

public preferences, and or changes to the regulatory environment, just to name a few. As an aid

to monitoring these changes, the development of a measurement and control system aimed at

helping process owners identify opportunities for improvement are needed. Measures should be

both customer- and process-based. Further, these measures should be directly linked so that

process owners understand what part of any given process is responsible for fulfilling any given

customer need (Ohno, 1978; Weber, 2006; Wierdsma & Swieringa, 2002). Without customer-

based measures, when needs and expectations change, there is not an immediate signal to process

owners that this has happened. Even if process owners do know about a particular change,

without directly linked process-based measures, process owners would not know what specific

part of a process had to be improved to make it more efficient, or effective in the eyes of

customers. Therefore, measurements and controls that link customer needs with specific

activities along a particular value stream help to ensure that changes made to a particular

procurement process have a positive effect on customer satisfaction levels (Bateman, 2005). The

following statements relate to the way that procurement officials use measurement as a means for

process improvement and the extent of their engagement in these activities:

Procurement officers regularly conduct thorough self-assessment diagnostics and

understand its strengths and needs for improvement.

Improvement goals are aligned with customer requirements and revised as requirements

change.

Improvement goals and objectives are discussed openly and frequently.

Everyone involved in procurement understands key improvement goals.

Improvement goals are concise, quantitative, and measurable.

Roles and responsibilities for improvement are defined.

Improvement goals are part of the formal performance review process.

Plans for improving the value stream are based on data, facts, and impact on customer

satisfaction levels.

Both process efficiency and customer satisfaction are measured and linked to

improvement strategies.

When customer satisfaction levels vary from targeted goals, process measures help to

define and focus on the areas that are responsible for the variation.

Communication and awareness

An awareness of the need for change, and an understanding of what needs to be changed are

important preconditions that should be in place if lean thinking is to occur. In addition, a

communication system that facilitates this type of understanding and helps to enable those

involved as they learn about and make improvements to their lean thinking approaches is also

important. (Chen & Thurmaier, 2009). Accordingly, the following statements provide a basis for

measuring the extent to which employees are aware of the need for change, what needs to be

changed, and whether there is a system in place to facilitate this understanding:

Procurement officers are aware of the need to improve and change.

Procurement officers understand what needs to be improved and changed.

Procurement officers understand how the purchasing department will change.

Procurement officers understand and accept their role in the change process.

A uniform improvement message is communicated to those responsible for procurement.

Two-way, formal communication systems exist to facilitate understanding and

awareness.

Procurement officers’ conduct improvement broadcasts with updates on goals, status, and

planned improvement activities.

Employees regularly meet to discuss improvement goals and progress.

A real-time data warehouse or information system exists to support improvement efforts.

3.0 Methods3.1 Research purpose and approach

Survey Methodology

Survey Conducted by: The National Institute of Governmental Purchasing, Inc. (NIGP)

Survey Funded by: NIGP/LES Foundation

Survey Method: SurveyMonkey.com on-line survey

Invitation method: E-mails through SurveyMoneky.com

Target Group: NIGP Agency members (representatives and support) and Individual members

(US and Canada)

Number of Invitations: 8,549

Number of Responses: 1,735

Opted Out: 97

Returned as Undeliverable: 462

Total 2294

Response rate: 27%

An online, web-based survey was used to meet the objectives of this study. These types

of surveys have gained increasing acceptance and have been noted as both an effective and

moreover efficient way to conduct empirical research (Ben-Ur and Newman, 2010; Davidov and

Depner, 2011). The survey instrument that was used was based on previous research. Details

concerning the survey can be found in the Appendix.

3.2 Measurement Items

The survey was divided into four parts. Part one contained background information concerning

the survey including an invitation to participate and instructions on how to proceed. Part two

contained measurement items that allowed survey respondents to assess the various factors that

they felt affected the adoption of lean thinking by procurement. Part four contained questions

intended to collect information concerning the background of respondents. To test for

comprehension, relevance, and completeness, the survey was pre-tested with study informants

and reviewed by a number of leading academics and practitioners in the public procurement

field. No major difficulties were encountered; only minor modifications were made for

clarification purposes.

3.3 Sample

The membership list of the National Institute of Governmental Purchasers (NIGP) was used as

the sample frame for the study. The NIGP is a national, membership based, not for profit

organization that provides support to professionals within the public procurement profession.

The NIGP is composed of 73 affiliate chapters and more than 2,300 agency members

representing federal, state, provincial, and local government levels throughout the United States

and Canada. These agencies represented over 13,500 individual members that served the public

procurement community. The membership list included the names and background information

(title, organization, and contact details) for all members and is considered to be the most

complete list available of public procurement practitioners throughout the United States and

Canada.

3.4 Data collection

Once the sampling frame was selected the web-based survey was administered online during a

six-week period. A total of 8549 email invitations were sent to NIGP members asking them to

participate in the study. The email invitation first asked recipients to respond to whether or not

procurement was involved in purchase decisions related to consulting services and if so, they

were then asked to complete the online survey. Following suggestions made by Munoz-leiva et

al. (2010), three personalized reminder emails were sent at two, three, and four-week intervals to

non-respondents as way of increasing response rates. Each email contained an embedded link to

the survey and a further invitation to participate in the study.

A total of 1735 responses were received, for a response rate of 27%. Job titles of

respondents represented the range of possible titles for individual members. Further, these

respondents were drawn from a cross section of public agencies. Most respondents were located

in the United States with a small percentage from Canada. Related statistics concerning

informants are contained in Table 1 and can be found in the Appendix.

3.5 Data analysis

Data analysis proceeded with the use of a statistical software package known as SPSS Version

(20). SPSS is a computer program used for survey authoring and deployment (IBM SPSS Data

Collection), data mining (IBM SPSS Modeler), text analytics, statistical analysis, and

collaboration and deployment (batch and automated scoring services). SPSS (originally,

Statistical Package for the Social Sciences) was released in its first version in 1968 and has now

become one of the most widely used and accepted programs for statistical analysis in social

science research.

3.5 Testing for non-response bias and measurement quality

Non-response bias can alter the sample frame and can lead to a sample that does not represent

the population, and as such could limit the generalizability of any research results (Forza, 2002).

In order to examine the existence of non-response bias within our study, we compared

characteristics of non-respondents to the characteristics of those that chose to participate in our

study. This test yielded no significant differences between the two groups. In addition, a test was

also conducted to see if there were differences between early respondents and late respondents in

terms of the variables relevant to the research hypotheses. The average values found by the

survey instruments of the first ten percent of respondents were compared to the last ten percent

of respondents using a t-test. Results also showed no statistical significance between the two

groups and thus indicated further that non-response bias does not seem to be a significant

problem with associated with this study.

With the goal of assessing the measurement quality of our study we assessed both the

reliability of measurement that is concerned with stability and consistency of measurement,

along with the validity of our constructs. A description of these testing procedures along with the

results of these tests is as follows:

4.0 Results4.1 Introduction

4.2 The adoption of lean thinking by public procurement

4.3 Implications for public procurement

4.4 Limitations

In practice, to achieve the same types of cost-savings and quality improvements within a public

sector environment the lean tools and techniques used in the manufacturing industry may have to

be adapted according to varying conditions that may exist within public sector environments

before they can be adopted (Radnor & Walley, 2008). Scorsone (2008) cautioned that when

transferring lean tools and techniques from the private sector to the public sector, public

managers must consider two key factors that may constrain improvement initiatives. First,

administrative law includes procedural requirements that must be followed, and can limit the

types of changes that can occur. And second, management-labor relations in government

agencies are based on differing principles from those in the private sector, and thus may also

affect the way that work can be reorganized or changed. Nonetheless, Radnor et al. (2006) and

Bagley and Lewis (2008) concluded that there is little doubt that lean approaches can be

successfully applied within a public setting. Some of the more frequently applied lean tools, and

techniques that have been used successfully in public sector environments include rapid

improvement events (McNichols, et al., 1999; Radnor & Walley, 2008), value-stream mapping

(Hines & Rich, 1997; Weber, 2006), and the Six Sigma approach to root-cause problem-solving

(Proudlove, et al., 2008).

4.5 Future research

Additional research is needed to substantiate some of the claims made herein, and to develop

further our understanding of the lean thinking phenomenon as it applies to public procurement

specifically. With this goal in mind, researchers may want to examine whether lean approaches

are suitable for making improvements within public procurement environments and, if so,

whether there are preconditions that need to be in place in order for lean thinking to occur. In

addition, the notion that public procurement suffers from wicked problems presents an

interesting paradox; problems so difficult or impossible to solve because of their complexity, but

nonetheless need to be solved. Is lean thinking really a panacea of sorts when it comes to

addressing these types of problems? At least for the moment, there does not seem to be a

definitive answer to this question. To explore some of these issues several questions could be

used to guide future research, including the following:

Can lean thinking be applied within public procurement?

Is lean thinking more suitable for simple or less complex problems or processes, rather

than for those considered to be complex, difficult to understand, or wicked?

What are the practical implications of lean thinking within public procurement?

What preconditions need to be in place in order for lean thinking to occur?

Can an assessment of these preconditions determine a state of readiness as far as the

adoption of lean thinking is concerned?

Given the scarcity of research related to lean thinking as it applies to public procurement,

as well as the exploratory nature of the above research questions, researchers may want to first

begin with an exploratory case-based approach. This type of methodology is useful in developing

well-grounded theory and is especially helpful in explaining how and why events have occurred

(Meredith & Samson, 2001; Voss, Tsikriktsis & Frohlich, 2002; Yin, 2008). Beginning with a

case-based approach would provide a basis for the development of a number of testable

hypotheses. This would signify the second phase of theory development, which would be

founded upon the first phase that involved the exploratory case-based work. At the second stage,

frameworks can be created to define and justify relationships between variables, and then

hypotheses formed to allow future empirical study. The creation of hypotheses would help to

facilitate the adoption of a rationalist approach (Richardt & Cook, 1979) and could be used to

test empirically any theoretical claims that were made. This would likely improve our

understanding of the lean thinking phenomenon as it applies to public procurement and thus be

of interest to both academics and practitioners alike.

5.0 ConclusionsThis paper presented some strong evidence in support of the idea that lean thinking can be used

to achieve both fiscal and process improvements within public procurement. Notwithstanding,

the direct affect that improved service quality and value for money spent has on customers, any

effort that contributes to a more efficient public sector has the potential to stimulate economic

growth and deliver direct benefits to society as a whole. Therefore, the decision to move forward

with a program aimed at the development of lean thinking within public procurement would

seem to warrant some additional consideration.

That said we would be remiss if we did not discuss one final point about a concern that is

sure to arise from any attempt to implement lean-thinking approaches. This concern directly

relates to a type of performer-level resistance that is linked to a belief that the adoption of lean

thinking will result in the loss of jobs for those involved. As mentioned earlier in this paper,

individuals are driven by self-enhancement strategies and any initiative that threatens those

interests is sure to result in performer-level resistance (van Dijk & van Dick, 2009).

It is true that as processes are improved and consequentially right-sized that the wasted

resources once required to operate, will no longer be needed. Naturally, one such resource is the

time that people once spent performing non-value-added activities. However, because lean

thinking eliminates these wasted resources from an efficiency standpoint while at the same time

improves upon the overall effectiveness of a given process, it can create a situation where jobs

are created rather than eliminated (Liker, 2004; Womack & Jones, 1996). Perhaps at first glance

this is counterintuitive. However, when process efficiencies are achieved, say for example, from

a time-savings standpoint and quality improves, say from the standpoint of how effectively

customer needs are met, the demand for a given product or service can in fact increase. Consider

how this may be true for public procurement.

Research has shown that if a customer department is going to involve procurement in

their purchase decisions, the department must trust that the procurement officers have both the

ability and benevolent intentions required to assist meaningfully with the purchase decisions.

Simply mandating involvement (i.e., via formal policies and procedures) may not necessarily

mean that these departments will choose to involve procurement, and in fact, may find ways to

bypass them altogether (Schiele & McCue, 2006). If procurers are to be involved, they must

therefore ensure that others within the organization perceive them as being both benevolent

(sincerely interested in helping customer departments with meeting their purchase needs) and

technically capable of contributing to purchase decisions in an efficient and effective manner. If

they can do this, then the likelihood that they will be bypassed naturally decreases. And so, an

approach that increases the efficiency and perceived effectiveness of a particular procurement

process as seen from the customer’s perspective could have the effect of making departments

more willing to involve the procurement function and as such, actually increase the demands

placed on them for the services that they provide.

Lean thinking, when properly deployed, should have similar effects. As the demand for

their services increase, there could be a need for more resources. These additional resources

could come from the resources that may have been freed up through the application of lean

thinking approaches, or from additional resources that may be allocated based on need.

Potentially, the costs for these additional resources could be recovered from the waste that may

have been eliminated, or by the direct benefits that can be associated with meaningful

procurement involvement that would otherwise not be realized if they in fact were not involved.

Of course, the degree to which resources can be reallocated or recovered will depend on the

nature and extent of the improvements that are made and any increase in demand that may

consequentially result.

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