Best Practices Methodology

Private sector organizations recognize that in order to survive, they have to undertake major changes to make themselves more productive and to reduce costs. Today, many federal agencies face that same reality. The Defense Department (DOD) is a prime example of an agency facing the challenge of streamlining for efficiency and lower costs while maintaining quality. DOD has accomplished that goal in several areas. For example, the Defense Logistics Agency (DLA) has since 1992 had private sector vendors supply personnel items directly to military facilities in lieu of the traditional military supply system. As a result, DLA expects a 53-percent reduction in its 1992 inventory level of these items by 1997. What is behind these improvements? In large measure, these organizations have benefitted from GAO studies highlighting "best practices"--processes, practices, and systems--that organizations have adopted in a particular area, such as inventory management. These best practices provide a model for other organizations with similar missions. Frequently, benchmarking is used to gather information on these practices from several organizations, which is then applied to improving operations. The best practices approach need not be confined to defense issues, however. This report explains how others could go about using the same principles and techniques to promote and implement improved processes.

GAO found that: (1) best management practices refer to the processes, practices, and systems identified in public and private organizations that performed exceptionally well and are widely recognized as improving an organization's performance and efficiency in specific areas; (2) successfully identifying and applying best practices can reduce business expenses and improve organizational efficiency; (3) best practices GAO has identified in its work resulting in recommendations to the defense community include: (a) relying on established commercial networks to manage, store, and directly deliver defense electronic items more efficiently; (b) using private sector food distributors to supply food to the military community faster and cheaper; and (c) adopting the use of supplier parks to reduce maintenance and repair activities; (4) deciding to use a best practices approach involves considering a number of factors and several questions can serve as a guide in making the decision, including: (a) Have the acknowledged problem areas been reported on before and to what extent has there been attempts to make the process work as designed? (b) Is there a process with similar requirements that can be compared to the one being examined but is implemented in a way that provides significantly better results? and (c) Do the areas being considered have an established counterpart in the private or public sector that will provide evidence of the benefits of a new process? (5) a best practices review can be applied to a variety of processes such as payroll, travel administration, employee training, accounting and budget systems, procurement, transportation, maintenance services, repair services, and distribution; (6) the decision to use a best practices review should be made in a larger context that considers the strategic objectives of the organization and then look at the processes and operating units that contribute to those objectives asking questions like: what drives the costs in a particular process; and is the process effective in achieving its goals; (7) it is important that the entire process be considered rather than just part of the process; (8) failing to capture the entire process may push costs into another section of the process or create an improvement that is inhibited by trying to marry old ways with new ways that are in conflict with each other; and (9) not everything can be looked at so, at least initially, a process which is about ready to accept change should be selected.