Making Government More Efficient - A Lesson From BMW

As our national debt levels have skyrocketed, most rational and knowledgeable Americans in the country realize that something has to be done to get our government spending and budget under control before we bankrupt the country. This blog has previously suggested any number of ways to start the downsizing process:

• Bring home the hundreds of thousands of U.S. troops we have deployed all over the world in deployments that serve another time and another era but which no longer serve any military or diplomatic purpose, saving hundreds of billions of dollars a year in defense costs.
• Aggressively address, track, and prosecute those that defraud government programs such as Medicare and Medicaid or who do not pay their fair share of income taxes. The Obama administration has conceded that almost $100 billion is lost every year in government medical programs through fraud and criminal activity.
• Eliminate all earmarks, which only serve as a deceptive way of financing incumbents' re-election campaigns, saving almost $20 billion a year.
• The Cato Institute has been working on a long term project where they have been going through the Federal budget line by line and have already identified places and programs that can be cut or scaled back to save over $600 billion a year.

Thus, there are many obvious ways to get our government growth under control. However, an article in the October 10, 2010 edition of the St. Petersburg Times provided some insight from BMW that could be used by the Federal government to wring additional savings and efficiencies out of the Federal government bureaucracy. According to the article, by 2007 BMW was faced with an aging work force and declining productivity. Older workers tended to call in sick longer than the younger employees and they had to work harder to keep up with the demands of their work. To combat the increasing inefficiency of an aging workforce, the company put together a pilot production line, staffed by older workers, and let the workers make whatever changes they felt were necessary to keep this production line productive and efficient. This experimental production line resulted in the following accomplishments: 

• The older workers came up with 70 process improvements to their work.
• These changes included using larger fonts on their computer monitors and installing wooden floors to make standing easier on older knees and legs.
• They adapted their tools to larger handles and started using orthopedic footwear to make standing and working easier and less painful.
• Workers were rotated between more physically and less physically stressful jobs during the same shift to keep them fresh and installed adjustable chairs which allowed workers to sit for at least part of their shift.

What was the result of instituting these worker-identified changes? Productivity went up 7%, absenteeism dropped to 2%, which was lower than the overall plant average, and the line achieved zero defects. The cost for all of these wonderful, money saving performance improvements was only $50,000 which included both the cost of new equipment and additional training.

The lesson to be learned form this BMW success story is that there is much to be learned by the people that do the real job everyday. They can see where efficiencies and savings can be found, if only you give them the chance. This phenomenon was suggested under Step 1 in "Love My Country, Loathe My Government."  Step 1 calls for an annual 10% downsizing of government for five years in order to wring out waste, fraud, and redundancy. A major process envisioned under Step 1 was to set up a procedure where Federal employees could easily suggest ways to improve the operating processes of the Federal government by either identifying waste or suggesting new ways of doing things.

As an incentive for looking for changes in operations, a lottery system would be set up where Federal employees would have a chance to receive a monetary reward if their suggestions were actually implemented. It is pretty obvious from watching any Congressional hearing that members of the political class sitting on those committees are quite clueless when it comes to understanding how the intricacies of how government functions work. They would never be able to identify the small ways to save taxpayer money without sacrificing functionality or quality. If you find enough ways to save a small amount of money, you eventually end up saving a lot of taxpayer money. As Senator Everett Dirksen once said: " A billion dollars here, a billion dollars there. Before you know it we are talking about real money."

Let's do some math. Obama's current budget is $3.5 TRILLION. If you could repeat the experience of BMW, where they used their line workers to identify cost and time savings, and get a 7% increase in productivity of the Federal government, you could cut the Federal budget by about $245 billion ($3.5 TRILLION times 7%) without sacrificing any quality or service. $245 billion and we are all of a sudden in Dirksen territory. That comes down to an equivalent of more than $1,200 per U.S. family per year. For the first time in our history, you would have the Federal government doing more with less, a mantra that has driven the private sector of our economy from day one.

Thus, reducing the size of government needs to be attacked at both the macro and micro level. At the macro level, we need to do the big changes such as bringing our troops home, eliminating earmarks, and prosecuting fraud. At he micro level, we need to exploit the knowledge and insights that our veteran Federal workers can bring to the table to fine tune the government so that it acts and looks more like a lean, mean fighting machine and less like an overblown Jabba The Hutt.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit these other sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010/