by Dr Leo De Bakker of Dutch Alimony Agency (lbio) shown at the Lean Service Summit on 23rd June 2004 ran by the Lean Enterprise Academy

1. Changing a public sector agency:
The Dutch Alimony Agency (LBIO)
By: Mr. Leo D. de Bakker RA
Director of LBIO
Drs. René L.M.C. Aernoudts
Sentary Coaching & Consulting
Wednesday, June 23, 2004
Lean Service Summit, Noordwijk aan Zee

2. Biography
Leo D. de Bakker RA (1958)
Registered accountant
In central government since 1980
Tax authorities and Customs
control
Since 1997 Director of the LBIO
Started to work with Lean in 2000
Leading question: are we able to succeed to
introduce a lean approach into a governmental
organisation?

3. In this presentation
What is the LBIO - The National Alimony Agency
A bit of history…
What to do? LEAN!
What where the problems faced: the first map
Introduction of Lean principles
The chosen way of transformation
The Lean Development Process
Results

4. The Dutch Alimony Agency (LBIO)
LBIO was founded in 1993 by the
Ministry of Justice and the Ministry
of Social Affairs
Located in Gouda, 75 full time
equivalents
Independent Governmental Office
Tasks:
1. Collection of child support
(alimony)
2. Decide and collect contribution in case of placing a child in care
3. International collection of child support
4. A possible new task: establishing the amount of alimony that has
to be paid

5. 1.Collection of child support
When child support (also called alimony) has
been decided (by court) LBIO can collect the
amount when someone doesn’t pay his support.
We do this by writing a letter asking for payment
voluntarily. People can pay directly to their ex
partner or via LBIO (they pay 10% extra). If
someone is not willing to cooperate, we can go to
their employer and collect the money there. If this
is not possible we can seize goods or take
someone hostage...
65% of the people pay voluntarily to their ex
partner after the first letter they get from us,
without LBIO taking further action
Amounts in 2003: 6.736 requests
Collected in 2003: € 10.3 million
Processing application
Agreement on payments
Execution:
distraint on wages
Execution:
Bailiff-actions
Imprisonment-procedure
Termination

6. 2. Contribution in case of outplacement
When a child is placed outside the home in case of child
aid the parents have to pay for that care. The LBIO
decides the amount that has to be paid and collects it for
the Ministry of Justice or the Ministry of Social Care.
Amounts in 2003 : 12.428 requests
Collected in 2003: € 8.6 million

7. 3. International collection
When one parent lives abroad the LBIO can still collect child
support and alimony for the ex partner. This has mainly been
arranged internationally in the Trade of New York of 1956.
Amounts in 2003 : 242 requests
Collected in 2003: € 0.5 million (in the Netherlands)

8. 4. Establish the amount of alimony
Thanks to the good work of recent years we might
now get an extra task by the Ministries of Justice and
Social Care
We used all the knowledge of recent years in setting
up a lean work process where we can deliver the new
product within just a few days (instead of 2 to 3
months it used to be) at a low cost
We can do this new task with 15 people instead of
100 it used to take
We thus save € 10 million per year

9. So dear audience…
How many Dutchman do you think we know as
our customer???

10. So dear audience…
How many Dutchman do you think we know as
our customer?!?!?!

11. A bit of history: foundation of the LBIO
Untill 1993 there were 19 financial departments at 19 regional
offices of the Child Care and Protection Board
Process of centralisation went very slowly and was accompanied
by altering law and regulations
This resulted in unmotivated employees, ICT-problems and growing
backlogs (running up to 10 months!)
In 1997 we started a privatisation process which also included a
reorganisation aimed to improve clarity on tasks, powers,
responsibilities
Product process in a single department and set up of a staff
department (43/120 FTEs)
Conditions of employment remained

12. The situation at the end of 1997
I became the Managing Director
State of the organisation:
A problematic work process
Great turmoil and uncertainty
Complete lack of professionalism
A delayed computer system
Enormous backlogs
Critics of customers, ministry,
colleagues
First actions:
Improving stability
Introduction of computer system
Tackling backlogs
Creating transparency through a
new cost price system (OPK)

13. Old organization structure 1997
Managing director
Child support Staff
team2
Int. Alimony Alimony
team 1 team 3 Admin Financeteam 1 team2 ICT
senior senior senior senior senior senior senior senior
employees
team 1

14. But…
I wasn’t satisfied…
A lot of complaints by customers
Long leadtimes
Demotivated personnel (high illness rate)
Distrust in management by personnel
High amount of work in process
Too much bureaucracy
Too much “talking about” in stead of “just doing”
Court cases and bad press (even National Television)
Seen as a badly functioning organisation
The improvements seemed to be to minor and took too long
The altered organisation structure wasn’t doing what was hoped for
Main argument from team leaders was: “we need more people”
Management wasn’t able to deal with the problems faced

15. What to do???
I spoke to my Management Team
I spoke to colleagues and Ministries
I spoke to a couple of consulting firms
This finally gave me a vision to solve the faced
problems: go LEAN!
I asked René Aernoudts (Sentary Consulting) as
my sparring partner and consultant
We made our first map
We cleared out the first problems…

16. The first map
Vivid picture
of the future
Lean Team
Illustrative examples
Key questions
Leading lean principles
?
Objectives
(measurable
results)

17. Lean Team: four
process owners,
consultant, director
How can we
improve our
processes
radically?
Leading lean
principles
?
120 to 60 fte
What is the
fitting structure?
Processing time from
15 to 2 weeks
Illustrative examples
2003
Value Stream Mapping
Eliminate waste, FLOW
Quality at source
Standardized work
5S Teams

18. Illustrative examples

19. Illustrative examples

20. Illustrative examples

21. Illustrative examples

22. Illustrative examples

23. Illustrative examples

24. Illustrative examples

25. Three years for reaching our goals…
To:
Altered work-processes and no backlogs anymore
Less work and FTEs
Altered organisation structure
Management Information System using the cost price system
With:
Input and full involvement from the employees
By:
Starting a Lean Change Process with employees as the main
change agents
Communicating and discussing about every step in the process
A new organisation structure

26. The Lean Change Process
The distrust of personnel in their team leaders and
department heads led me to involve the personnel
massively in the Lean Change Process
A Lean Team was formed, out of 4 process owners who
formed a team of colleagues themselves and consultants
(their role was transfer of lean knowledge in a supporting,
motivating role)
An advice committee was formed that supported the
developmental team in a meeting once a month
During this some of the managers decided to leave
I made some promises…

27. The Lean Change Process
Each team got the assignment to steer one developmental process,
form a group of colleagues and got help from consultants
They did all kinds of things: started with value stream mapping the
basic processes, looked for potential future state solutions at other
organisations, read books and articles, organised 5S workshops and
gave presentations and so on
After three months these groups presented their final reports to all
employees of LBIO and the Management Team
The Management Team decided within two weeks which actions
were decided on, an action plan was designed and the new
processes got implemented
Improvements: accessibility for customers by telephone, standardized
work, customer quality panel, less inventory, less transport, et cetera
After mapping the current and future state maps The Lean Team also
introduced supporting features as self steering teams, task profiles
and a new organisational structure

28. Current State Value Stream Map
Post office
Open mail
type in data
in the
system,
application in
archive
Processing
application
Check if all
data is
available
(execution
title) and
righteous
Collecting
Agreement
on
payments,
informing
parents
and filing
Archive
All files and
applications
are filed
Execution Termination
Distraint on
wages,
baillif
actions
Inform
both
parents,
close file
and filed in
archive
Parent 1 Parent
1 and 2
Employer
of parent 2
Lead time min:
416-600 days
Processing time:
75-344 minutes
5 2 9 25 8 5
5 min 3 min 12-16 min 20-180 min 25-120 min 10-20 min
4 days 3 days 3-4 months 2 months 2-3 months 6-10 months 2 weeks

29. Future State Value Stream Map
Post office
& Archive
Processing,
collecting &
execution
All tasks
are fulfilled
by one
employee
(digital
archive)
Termination
Inform
both
parents,
close file
and filed in
archive
Parent 1 Parent
1 and 2
Employer
of parent 2
Applications
are scanned
Lead time min:
184 – 310 days
Processing time:
41 - 216 minutes
4 hours 2 – 10 days 6 months
3-4 min 30-200 min 8-12 min
4 30 3

30. New organization structure
After redesigning the processes the Lean Team came
up with a new structure, eliminating 2 levels
MD
Production I
(spec. CS)
Production II
(spec. iA)
ICT, Admin &
Finance
Office for Management
Support
employees employees employees

31. What has changed?
Less hierarchy
Doing more with fewer people
Throughput time from 3 to 4 months to 2 weeks
One employee is responsible for one case from
beginning to end
– Selection no longer a different division
– The amount of stock has decreased and stays that way
2000 2003
Managers 16 4
Employees 100 75

32. New management
Three new MT-members
Special Lean Education Plan for new managers (one
month) where they worked in all the departments and
created current and future state maps
Value stream walkthrough for improvements
– Improving the request forms (from 40% incorrect forms to only
4%)
– Improving the letters for our clients (from 120 to 20 different
standard letters)
– More steering on time-lines
– Developing targets (for teams & individual)

33. More Lean Thinking
Team training in self management and meeting skills
We went for a one month project eliminating the total
inventory through letting every employee process 6 to 8
applications per day next to their normal job: we
achieved the result in two weeks time, what was thought
of being a problem impossible to solve
Teams are self directing
– Deciding their own daily work process and planning
– Review their teameffort, results and quality
Multiple skilled employees
– Employees of different work field learn each others job
– Extra support is there when needed
Pull push principal
– Production is based on need

34. Results I
From backlog of 4 months to work-in-progress of 2 weeks
Number of standard letters down from 120 to 25
Decrease of staff-FTEs (43>28) by self-management of the
teams
Decrease of number of files (15,000>10,000)
No external warehouse needed anymore
3 employees of the financial departement do the work of 7
earlier
Improved accessibility by telephone for customers from 2 hours
to 7 hours per day
Customer satisfaction is 8 out of 10
Absenteeism from 16% to currently 4%
First time right: from 40% rework at applications to under 4%

35. The new LBIO…

36. The new LBIO…

37. The new LBIO…

38. The new LBIO…

39. The new LBIO…

40. The new LBIO…

41. Results II
Indicators 2001 2003 Percentage
improvement
Cases solved after first letter 50% 66% 32%
Number of current files 15.000 10.000 -33%
Processing time 15 weeks 2 weeks -87%
Number of employees (full-time equivalents) 100 75 -25%
Number of executives 16 4 -75%
Necessary re-work on application forms 40% 4% -90%
Absenteeism 16% 9% -44% (in 2004 below 4%!)
FTEs fulfilling more than one task 5% 40% 88%
OPK-production (total) 193,757 206,93 7%
Productivity per FTE 1937 2,759 42%
Total collection results (million euro) 17.5 19.5 12%
Results per FTE 185 260 41%
Floor space required 2500 2000 -20%
Costs per euro child maintenance collected 0.21 0.17 -24%
Costs per euro parental contribution collected 0.19 0.16 -16%
Leadtime (in days) 416-600 184-310 50-56%
Processing time (in minutes) 75-344 41-216 37-45%

42. Conclusion
Transforming a civil-service type organisation into a
decisive, flat and customer oriented organisation by
means of ‘lean thinking principles’ IS POSSIBLE!
But: you really have to believe in it yourself and give
the opportunity to employees to explore and
redesign… they know it better!
Remarks and Questions?
THANK YOU!