Get Ahead of Outsourcing

Stave off privatization with a lean, mean library management machine

January 19, 2011


How will politicians and library leaders respond to the challenges of shrinking budgets, increased community expectations, and ever aggressive competition?

One approach is to replace current library management teams with private profit-driven companies whose first strategy is to attack labor cost.

In a September 26 New York Times article titled “Anger as a Private Company Takes Over Libraries,” David Streitfeld states: “A private company in Maryland has taken over public libraries in ailing cities in California, Oregon, Tennessee, and Texas, growing into the country’s fifth-largest library system.”

He goes on to say that even relatively healthy cities are pursuing the management outsourcing option; cities such as Santa Clarita, California.

However, ALA’s governing Council voted in 2001 to adopt the following policy statement concerning privatization: “ALA affirms that publicly funded libraries should remain directly accountable to the publics they serve. Therefore, the American Library Association opposes the shifting of policy making and management oversight of library services from the public to the private for-profit sector.”

Under extreme budget pressure, city managers and politicians across the country are desperate to find ways to reduce costs. The underlying assumption of this approach is that current library leadership teams and their staff are incapable of successfully responding to the challenges they face.

Since the early 1980s I have served as a management consultant, assisting for-profit companies in their fight to survive the overseas outsourcing juggernaut. I have learned invaluable lessons from this battle for survival. Over the past 10 years I have applied this experience to the library world assisting public libraries across the country in improving services and reducing costs. This includes the New York Public Library, Carnegie Library of Pittsburgh, Youngstown/ Mahoning County (Ohio) Library, Johnson County (Kans.) Library, and Tulsa (Okla.) City-County Library, to mention a few. My experience has taught me that libraries can achieve dramatic service and cost improvements by embracing lessons learned from for-profit manufacturing and distribution businesses, especially those in a battle to survive. The manufacturing and distribution industry call this survival strategy Lean Manufacturing.

In the library environments I have worked, library teams have discovered many opportunities for improvement: improvement in lead-times, material handling and process flows, ergonomics, capacity management, collection management, cataloging, service desk performance, and logistics. By applying the concepts of Lean to their libraries, these teams, made up of a cross section of library managers and staff, have dramatically improved service as well as reduced cost.

Lean in concept is very simple. It states that you should constantly strive to reduce the distance between you and your customer by eliminating all the waste in your service delivery cycle. It accomplishes this by attacking the waste that lies hidden behind poorly designed process flows, outdated business models, ineffectual organizational structures, inflexible software systems, poorly applied automation, and stagnant procedures. Waste is defined by any delay or nonvalued activity in the process. Reduce this waste, and the distance between you and your customer is reduced; as a result, costs go down. Specifically, by eliminating wasteful delays and nonvalue activities in your service cycle, the speed, accuracy, and quality of service to your customers will dramatically improve. Therefore, Lean provides a vehicle to improve customer service and at the same time reduce costs.

The following are some of the Lean survival lessons we have successfully adapted and applied to the library environment.

  1. To survive, libraries must change. While obvious, this is not as simple as it seems.
  2. Libraries should recognize they have stiff competition and should respond in kind.
  3. Labor cost is a secondary issue; success does not come from blindly cutting staff.
  4. Libraries should not be seen as departments, but as service delivery chains.
  5. Eliminating wasteful activities in the service delivery chain will result in improved customer service.
  6. Improved customer service will lead to significant cost reduction.
  7. Budget reductions are a negative motivator. Budgets should not be the driving factor used by management to reduce cost; budgets will be reduced because service is improved.
  8. Performance measures must be implemented to guide the service improvement effort.
  9. Labor unions and/or staff must have ownership of the process to eliminate waste. As waste is eliminated, unions and staff must be flexible and adaptive to changing job descriptions and responsibilities.
  10. Delivery lead-times have a direct correlation to your purchasing budget. Reduce delivery times and your purchasing budget can be reduced as well.
  11. Digital content provides great opportunities for delivery service improvement and therefore cost improvement.

City and county councilors and politicians are correct about one thing. Libraries must look for new solutions to lower costs. The concepts of Library Lean provide this path. However city and county managers should not send the message “work harder for less pay”; instead, they should send the message “better service with less waste.”

Typical savings from a Lean Library effort can include:

  • 50%–75% reduction in new book delivery lead-time/backlog;
  • 50%–75% reduction in customer reserves delivery lead-time;
  • 20%–45% reduction in service delivery costs;
  • 25%–40% improvement in book service days available;
  • 10%–80% reduction in overtime;
  • 25%–90% reduction in injury-related tasks;
  • 25%–90% reduction in internal book damage;
  • 10%–20% reduction in materials budget allocation.

It’s a win-win opportunity. Improve customer service by reducing waste. Reduce waste and you reduce costs. In these tough economic times, Lean is the solution libraries are looking for; a solution that will allow your city and county leaders to have confidence in their library leadership teams and staff. The question remains: Can library management teams look within to embrace and deploy new competitive concepts in order to improve service and reduce cost? My experience tells me, yes.

JOHN HUBER of J. Huber and Associates has dedicated his career to helping organizations improve their customer service and cost performance. He is the author of Lean Library Management: Eleven Strategies for Reducing Costs and Improving Services (Neal-Schuman Publishers, 2010).