DNREC Goes Lean

By Larry Nagengast

Lean thinking isn’t just for manufacturing. And it’s not just for the private sector either. For an example, just look at Delaware’s Department of Natural Resources and Environmental Control (DNREC), where a cumbersome process for approving air-quality permits was slowing down businesses that wanted to make operational changes and was diverting the department’s experts away from monitoring air quality.

The system was “incredibly duplicative and wasteful,” DNREC Secretary John A. Hughes says.

Permit applicants didn’t have a clear idea of what information they were supposed to provide DNREC, and internal reviewers sometimes tended to focus on “nickel-and-dime matters” like missing signatures and misplaced pages rather than whether the applicant’s information satisfied the department’s technical criteria, Hughes says.

With DNREC’s new system, paperwork moves as smoothly as a new Pontiac Solstice moves down the General Motors assembly line. Photo provided by General Motors.

Then, after representatives of Delaware’s auto and chemical industries raised some of these issues through the Delaware Economic Development Office in 2005, DNREC turned to the Delaware Manufacturing Extension Partnership (DEMEP). With the help of training sessions and ongoing coaching by DEMEP and input from businesses that are subject to the permit process, the DNREC staff was able to identify where the review system was bogging down – and why. Using Value Stream Mapping and Lean manufacturing concepts to eliminate nonvalue added activities, they were able to develop a streamlined system – adding easy-to-understand forms and instructions and removing wasteful and redundant steps – that cut processing time in half.

As a result, DNREC has learned how to move paperwork from desk to desk as smoothly as a new car glides down a General Motors or Chrysler assembly line.

In addition, with assistance from DEMEP, DNREC is implementing similar procedures for virtually all its permit categories, including brownfields, wetlands, underground storage tanks and storm water, giving staff more time to work on higher-value activities more directly linked to environmental protection.

None of the changes in processing applications has any impact on federal or state environmental-protection standards, says DNREC manager Bob Zimmerman, who coordinated the Value Stream Mapping project. In fact, he says, DNREC didn’t jump into Value Stream Mapping until it had checked with its counterparts in Michigan, where the Michigan office of the Manufacturing Extension Partnership, known as MMTC, and GM had previously suggested that environmental regulators use mapping principles to improve their procedures.

“Anytime you talk about permitting process, there’s a fair amount of suspicion or skepticism, fear that integrity of the process would be compromised,” Zimmerman says. But the Michigan regulators were enthusiastic about how the effort turned out, and assured Delaware that streamlining wouldn’t give industry an opportunity to skirt environmental standards.

The DNREC mapping effort charted every step in the permit process – from the applicant completing the forms through final approval of the application. Each step was analyzed: what was done, how long it took and how much time was wasted between steps.

The project involved two separate work groups, DNREC engineer Amy Mann explains. The internal applications group included managers who reviewed the permit requests; the external applications group included representatives from the industries that filed the applications.

The groups identified numerous problems, but two stand out. First, Mann said, only 1 percent of the air quality applications DNREC was receiving were complete when they were filed. Second, DNREC managers didn’t have a clear understanding of responsibilities at each step in the review, so virtually every application was being kicked back somewhere in the process to someone who had already handled it.

To solve the first problem, DNREC created a new application form as well as a checklist that helps applicants understand exactly what they need before their paperwork is submitted.

“An applicant needs to know what we’re looking for and what we think is important,” Hughes says. “And, if you’re a dry cleaner in Laurel, you don’t need to fill out the same forms as an oil refinery.”

That, of course, is what they were doing before. Now, instead of a one-size-fits-all form, the application consists of a series of “building blocks [that applicants] can put together like a set of Legos,” Mann says. Operators of dry cleaning plants and auto body shops no longer have to wade through complex forms that chemical manufacturers must complete.

These improvements have eliminated much of the preliminary back-and-forth of DNREC managers prodding applicants to supply missing information. The result: about 60 days saved in the process.

As for the internal review issues, Zimmerman says the study helped managers identify where staffers were counting on others to resolve matters they could have been handling themselves – a wasteful “upward delegation” of responsibility.

Industry representatives like what they’ve seen of the new procedures.

“The application is more user-friendly, DNREC is now talking with companies before the applications are submitted, and they’re coming in technically complete,” says John Peronti, a senior environmental engineer at GM’s Boxwood Road plant near Wilmington. Faster processing of permits, he adds, will make it easier to make adjustments at the plant when market conditions dictate.

Lou Graham, an environmental, health and safety operator at Dow Reichhold Specialty Latex LLC in Dover, said he learned a lot about DNREC procedures and the concerns of other industries as he participated in the external applications work group. And he’s pleased that he helped create new forms that are “easier to use and a lot more intuitive.”

Another executive who has seen the benefit of DNREC’s value stream mapping is Bill Smith, principal of Environmental Alliance Inc., an environmental engineering firm specializing in groundwater and soil remediation projects.

In real estate development, time is money and “the certainty of time” – knowing for sure when specific parts of a project can be accomplished – is a critical element in development, Smith says. When DNREC, developers and consultants like him know what is expected of everyone involved in the permitting process, and how long each step will take, projects move ahead smoothly and efficiently, he explains.

As an example, Smith points to the work his firm is doing for an out-of-state developer who is building off-campus student housing units near the University of Delaware in Newark. Permitting for the first two phases of the project under DNREC’s old processes took longer than the most recent application, which was filed after Value Stream Mapping was initiated. “We had a largescale remediation project, and we knew we had to do it in the summer, when fewer students would be around,” he said. “With Value Stream Mapping, we knew how long the components [of the application process] would take, and we were able to complete the process and schedule the work for the first three weeks in August.”

Lean on Green

By Kelly Cofrancisco

From the private sector, to non-profits and the government, every organization is looking to streamline its processes these days. Not only can cutting waste and reducing inefficiencies lower costs, but it also can help a company become environmentally friendly.

Government, health care, manufacturing and service industries are all seeing the benefits of streamlining processes, says Steve Quindlen, executive director of the Delaware Manufacturing Extension Partnership (DEMEP). Streamlining can also affect the bottom line by speeding up revenue income.

Face the Inefficiencies
Over the past year, most organizations have downsized; lean and other ways of streamlining processes are a way to help alleviate the extra workload taken on by employees, says Quindlen. “If someone is retiring, companies are not going to replace them for cost reasons,” he says. “So how do you close the gap and still satisfy the customer?” To discover inefficiencies and reduce waste, Quindlen advises taking a close look at all the processes by which your business is run to discover value-added and non-value added processes. “Most of the time the owner or manager knows they have inefficiencies and they know they need to address them,” he says.

Sharon Ruth, a manager at Willis of Delaware, an insurance broker, says streamlining has helped her increase workflow. What once took up to nine days now only takes four. “We cut out processes that bogged down the system and were not necessary,” Ruth says, noting the company worked with DEMEP.

Ken Grant of Analtech, a manufacturer in Newark, says that going green used to be viewed as a burden, but since adopting the mindset that there is always room for improvement, the company discovered its inefficiencies through the lean process.

Analtech was able to reduce the work that normally took four people to only two people and expanded their product line while doing so. Throughout the process, Analtech was able to retain the same number of employees. The company’s largest savings came in May when it switched to a four-day work week.

Grant says less run time of the building’s heating and cooling system, as well as less time commuting, are just a few of the energy and money-saving benefits of having a four day work week.

“I don’t think that this would have ever been brought up unless we had done our lean journey,” admits Grant. Analtech took a hard look at the numbers and debated on whether it would affect their customers. Since May, the company has only seen positive effects.

The Delaware Department of Natural Resources and Environmental Control recently streamlined its permitting process for air permits. The process used to take 200 days and is now at 85 days.

Streamline Increases Bottom Line
Quindlen recommends calculating the time it takes your company to get from the beginning of a process to the end result. Think about what you can eliminate, and then put a value on that time. For example, if an employee is making five dollars an hour, and it takes them 30 minutes for a task, and you cut out that task, you can save $2.50.

Ruth says streamlining her workflow has also freed up an extra 15 to 20 percent of the company’s staff time. They were able to cut half a staff person, saving $12,000 to $15,000.

Facing Opposition
But making changes to an office culture can sometimes ruffle feathers. Ruth says that the change was not easy for her staff, although it was an easy sell to management. She recommends keeping up the momentum to stick with the new changes. Quindlen recommends involving the “do-ers,” meaning bringing all people associated with a certain process into the discussion about changing it. He confirms the end result of streamlining is a quicker process, more engaged and involved employees, better return-on-investment (ROI), and satisfied customers.

Analtech’s challenge was convincing some employees that change could be beneficial. “You had a core group here who felt like ‘Hey, we’ve been doing [the process] like this for this long, why change anything?’” says Grant. “As we started to take a hard look at the details, there were things that we could do differently.” After a thorough review of Analtech’s processes, production is up. Employees are spending less time setting up and tearing down and more time getting jobs completed. Now that the company has gone lean, the adversity to change is gone. Everyone in the company is looking for ways that they can work a little more efficiently. “It will be a while before we can do an analysis of how much energy we have actually saved, but we haven’t seen the downside yet,” he says.

Employee morale has definitely improved at Analtech, where Grant observes, “People are more refreshed on Monday morning, and their productivity is up since they know they have those four days to get the job done.”