Seven ways to save and improve

Finding appropriate ways to save and improve the system can be seen as part of a practical framework, which we will use to understand the full opportunities and ensure that we haven’t missed any. Core to our pragmatic approach are the ‘seven ways to save and improve’:

1. Shape demand: effect behavioural change in residents, reduce failure demand
2. Create economies of flow: match capacity and contact points better to demand
3. Reduce waste in the system: re-engineer processes or develop a more continuous lean whole system to reduce waste of all types
4. Optimise resources: buildings, people (better scheduling, less downtime, the right contracts and management), IT and other assets
5. Gain economies of scale: group or share activities and services
6. Optimise procurement: procure volume, shape the market, reduce or standardise specification, share services, outsource, use the third sector, or multiplying effects
7. Change policy: stop, ration, reduce eligibility, delay, or charge for a service

There is an implicit hierarchy across the first six steps. Shaping demand is the most transformational, also the most emergent and sometimes most challenging (especially for processes hidebound by legislative requirements, or ‘downstream’ from other ineffective processes). Those at the bottom risk ‘building in’ inefficiency. Optimising procurement and gaining economies of scale (for example, by outsourcing in a transactional way), can ‘lock in’ costs through poorly used resources, process waste, disrupted flow and failure demand. We are pragmatic, and will start ‘lower down’ the hierarchy where appropriate. But we always prefer to push change ‘up’ the value change, or at least try when making changes further down, to create flexibility to shape demand and create flow in the future.

Changing policy is also critical and has an impact on all the others steps, from introducing complexity and failure demand through to creating dependency.