www.tocpractice.

com

8th International Conference of the

TOC Practitioners Alliance - TOCPA

26-27 October 2013, Moscow

Improvements in public sector

when better leads to worse

Nerius Jasinavicius, TOC sprendimai

October 2013

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8th International Conference of the TOC Practitioners Alliance - TOCPA

History of Guarantee Fund

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Guarantee Fund
Mission: to provide a sufficient degree of
protection for employees of bankrupt companies
by payment of their outstanding claims
Staff:
9 (since 1 Sept 2010)
Distributed:
~ 72 mln. Lt. / 21 mln EUR in 2011

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Crisis came

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Influence of crisis
Applications
Approved applications

1053

342

2001
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2009
8th International Conference of the TOC Practitioners Alliance - TOCPA

Effects of crisis (end of 2009)

Number of bankrupts and accordingly
applications increased 2.5 times
16 384 employees without payments
1 year delay of payments
Lack of staff
Negative media publications
Rumours about reorganization

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8th International Conference of the TOC Practitioners Alliance - TOCPA

2010 the year of changes

Project start:
1st of September 2010
Two goals:
1. to manage reorganization process
2. to increase throughput of applications 3 times,
keeping quality

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Why ?
Applications lead time affects peoples fates
Stats on the project start
date:

Amount of people waiting

for money: 22.000

Pending money: 14.8 M EUR

Average application
lead time: 18 months

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8th International Conference of the TOC Practitioners Alliance - TOCPA

What to change?
Too long application lead time
The longest application examination and
approval term:

3 years (!!!)

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8th International Conference of the TOC Practitioners Alliance - TOCPA

What do we want ?
Increase approved applications amount to
100 per month (was 28 per month on
average in 2009)
Keep existing high accuracy (quality) of
approved applications
under the following conditions:
no investments
the same staff (2 times less than before the
reorganization) with the same competencies
no changes in legislation

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Core Dilemma
B
Ensure applications
will be without error

D
Examine
applications
in very detail

C
Ensure the shortest
lead time possible

D1
Examine
applications
without attention to
details

A
Run the
Guarantee
Fund efficiently

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8th International Conference of the TOC Practitioners Alliance - TOCPA

How ?
1. Focus on applications flow
2. Key measurement: number of applications
approved (GF: per month; Application manager:
per day)
3. We asked ourselves:

do we do tasks that matter?

do we require data that matters?
do we require accuracy that matters?
dont we make manually what could be easily
automated?
belief the throughput depends on quantity of staff.
Really?
How much space we have within the law?
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8th International Conference of the TOC Practitioners Alliance - TOCPA

Application processing (before)

Guarantee
Fund

3-21 days

300 days

7 days

Application
registration

Application
examination

Preparation for GF
Council
meeting

11 days
Decision by
GF Council
to make
payments

Decision
record

36 days

1-2

Preparation
and signing
of
agreement

Application
submitted
ready for
payments

30 days
Bankruptcy
administrator

Application
submitted

Additional
documents

Payments to
employees

Corrections

392 days
Ministry
of Finance

Payment to
Bankruptcy
administrator
(bankrupt
company)
2 days

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Application processing (after)

Guarantee
Fund

1 day
3-21 days

45 days
300 days

1 day
7

Application
registration

Application
examination

Preparation for GF
Council
meeting

3 days
11 days
Decision by
GF Council
to make
payments

Decision
record

1 day
36 days

1 day
1-2

Preparation
and signing
of
agreement

Application
submitted
ready for
payments

9 days
30 days
Bankruptcy
administrator

Application
submitted

Additional
documents

Payments to
employees

Corrections

392 days
Ministry
of Finance

63 days

Payment to
Bankruptcy
administrator
(bankrupt
company)
2 days

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Before changes
Month

Employees
Applications approved
received
per AM
payments

Applications
approved

Staff

Money
distributed,
mln. LT

01/09

0.5

0.01

02/09

27

6.8

344

1.1

03/09

32

8.0

537

1.6

04/09

27

6.8

442

1.8

05/09

20

5.0

314

1.0

06/09

13

3.3

100

0.6

07/09

29

7.3

730

2.4

08/09

18

4.5

184

0.5

09/09

39

7.8

518

1.6

10/09

39

7.8

653

2.0

11/09

38

7.6

962

3.4

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12/09
5

58

8th International Conference

Alliance
1795
5.9- TOCPA
11.6 of the TOC Practitioners

2010 m.
Month

Applications
approved

Staff

Applications approved
per AM

Employees
received
payments

Money
distributed,
mln. LT

01/10

58

11.6

1113

3.2

02/10

54

6.8

1889

3.0

03/10

52

6.5

813

2.2

04/10

71

8.9

977

3.4

05/10

111

12.3

1503

5.4

06/10

10

2002

6.7

07/10

10

121
Start of the changes!12.1
12.0
120

2500

8.1

08/10

10

225

22.5

4544

14.2

09/10

74

18.5

1203

3.6

10/10

4,5

92

20.4

1737

6.3

11/10

4,5

115

25.6

2158

6.4

12/10

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Goal of 100
applications
achieved
! Practitioners Alliance - TOCPA
8th International
Conference
of the TOC

Results 2011 m.
Applications
approved

Month Staff

Applications approved
per AM

Employees
received
payments

Money
distributed,
mln. LT

01/11

4,5

96

21.3

1696

5.2

02/11

4,5

22.2

4,5

22.7

1764
2103

5.1

03/11

100
102

04/11

4,5

130

28.9

1814

5.2

05/11

4,5

132

29.3

2732

6.9

06/11

4,5

144

32.0

2928

8.1

07/11

4,5

175

38.9

2454

5.8

08/11

4,5

194

43.1

2787

6.2

09/11

4,5

145

32.2

1779

4.3

10/11

4,5

212

47.1

2326

5.9

11/11

4,5

212

47.1

2878

6.7

12/11

4,5

183

40.7

2839

6.7

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Record !

6.3

8th International Conference of the TOC Practitioners Alliance - TOCPA

Results
Start of the project

2000
1800
1600
1400
1200
1000
800
600

Bankrupts in Lithuania
Applications received
Applications approved

400
200
0
If we work old way

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Progress
1825

Applications
Approved applications

1128

2001
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2009

2011

8th International Conference of the TOC Practitioners Alliance - TOCPA

Applications
Approved applications

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4,5 4,5

8th International Conference of the TOC Practitioners Alliance - TOCPA

Guarantee Fund
case story on TOCICO 2012

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8th International Conference of the TOC Practitioners Alliance - TOCPA

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8th International Conference of the TOC Practitioners Alliance - TOCPA

Happy end ?

www.TOC.lt

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8th

International Conference of the TOC Practitioners Alliance - TOCPA

Houston,
we have a problem!

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8th

International Conference of the TOC Practitioners Alliance - TOCPA

Problems
Cash-flow disbalance
Payouts increase 3-4 times
Inflow decreased by 10%
Significant drop in funds

Resources standing idle in the organization

Cleared backlog
Inflow of new applications less than capacity

www.TOC.lt

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8th

International Conference of the TOC Practitioners Alliance - TOCPA

Courts system
Major reasons for work load increase for
courts:
Increase in amount of people
Increase in juridical literacy of citizens
Lead-time of court cases

Strong reservations of people from system:

It is impossible significantly improve situation,
because either demand will increase or capacity
will be reduced
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8th International Conference of the TOC Practitioners Alliance - TOCPA

Nerius Jasinavicius

Founder of TOC sprendimai

Founding Member of TOCPA
Consultant for unique clients
TOCICO certified SC, TP
Certified Management
Consultant

nerius@toc.lt

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Alliance
TOCPA
8th8 International
Conference
of the
TOC Practitioners
- TOCPA