ITEM NO:     7b_supp 
MEETING DATE: January 26, 2016 

Strategic Initiatives Briefing 

Strategic Initiatives 
January 26, 2015

Strategic Initiatives? 
It is about helping staff 
Achieve Century Goals in the next 10 years 
Builds economic development 
Enables the Port staff to be more
productive/effective 

Achieving the Port's goals 
2

Strategic Initiatives (SI) 
Why? 
Tremendous Opportunity to advance the Century Agenda 
Talented Organization 
Strong Financial Resources and Economic Tailwinds 
Challenges 
Rules Bound Organization 
Heavily Siloed 
Slow at times to Market 
Are 
Holding back a Talented team from addressing key opportunities and maximum performance 
Strategic Initiatives Mission 
Help change the culture and results 
Move the needle very quickly 
Speed; Capacity; Reach 
By 
Operations Excellence 
Procurement Excellence 
Long Range Plan (LRP) to operationalize the Century Agenda 
Lean Training and Activities 
Working cross functionally to achieve the Port's goals 
3

Procurement Excellence 


Strategic Initiatives 
January 26, 2016

Overview of Procurement Excellence 
Introduction &      Why Procurement Excellence 
Current State       New Way of Working 

Standardize Work - Best Practice Frameworks 
Future State 
Improve Capability Delivery 

Diagnostic 
Approach        Implementation 
Payout 


5

Why Procurement Excellence? 
With upcoming capital expenditures, Procurement Excellence will
lead to improved delivery time (speed) and results. 
Current Situation 
Procurement a critical lever for the Port of Seattle's financial
stewardship >$280M spend (2015 est.) 
Complicating Factors 
Key Questions 
Best approach 
Value potential 
Which capabilities have sustainable value 
An outside 3rd Party assessment of procurement, will identify
opportunities for improving performance and capability resulting in a
comprehensive improvement roadmap 

Procurement excellence will better support the organization and region 
6

Procurement Excellence = A New Way of Working 
Streamlined Processes 
Faster end-to-end deliveries 
Optimized Structure 
Cross functional team lead by CPO to drive strategy and spend 
A New Way of Working Spend Analytics 
Improved negotiations 
Highly Trained Personnel 
Building in house competency in key areas 

Financial Stewardship            Century Agenda Goals 
Cost Savings and Avoidance               Small Business Goals (incl. WMBE) 
$20M - $30M annual savings              Environmental Goals 
2% YOY reduction on ongoing spend 

This represents the future impact of procurement by the Port 
7

Overview of Procurement Excellence 
Introduction &      New Way of Working 
Current State       Current Situation 

Future State 
Future State        Best Practice Frameworks 
Capability Delivery Pillars 

Diagnostic 
Approach        Implementation 
Payout 


8

Port needs an approach that builds capability AND value delivery 
Future State 
Preferred
Position 
Integrated Approach 
Makes required changes
and improvement 
actions tangible 
Value                                      Maximizes probability of
transformational success 



Capability 
A combined value-capability approach maximizes benefits to the Port 
9

Procurement Strategy 
Procurement Org. Structure 
Best Practice Framework   People, Metrics 
Strategic Sourcing 
Relationship 
Business Intelligence 

Procurement can select key elements of a best practice framework to
optimize 
10

Build & sustain capability, 
leading to a New Way of Working 
Strategy & Performance 
Capability Delivery Pillars  Process & Tools 
Organization & Governance 
Information & Infrastructure 
Performance & Savings 
Building increased capability is the key step in procurement
excellence 
11

Overview of Procurement Excellence 
Introduction &      New Way of Working 
Current State       Current Situation 

Future State 
Future State        Best Practice Frameworks 
Capability Delivery Pillars 

Diagnostic 
Approach        Implementation 
Payout 


12

Two Phased Approach 
1. Diagnostic Assessment 
2. Implementation Phase 
Seek Commission authorization to move into
implementation phase. 


Decision to invest in implementation phase ensures alignment of Port Goals 
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Results 
Increase contracting opportunities for
small businesses 
Improve environmental purchasing 
Improved contractor performance 
Speed up procurement time 
Anticipate 5 times return on 
initial investment 

14

Thank you! 
Questions? 
15

Long Range Plan Update 

Commission Public Meeting 
January 26, 2016

Long Range Plan Update 
LRP Background 
LRP Overview      Mapping LRP to Century Agenda 

Strategic Review and Methodology 
LRP Deliverables     LRP Document and Draft TOC 

Performance to Plan Process 
Next Steps 
Timelines & Next Steps 


17

Long Range Plan Overview 



Port wide collaborative process to develop a LRP that would operationalize the
Port wide collaborative process to develop a LRP that will operationalize the Century Agenda
Century Agenda
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Mapping LRP to Century Agenda Strategic Goals 
Linking LRP Team Outputs to the CA Strategies and Objectives 

S3: Use
S2: Advance                                      S4: Be
CENTURY AGENDA      S1: Position                         influence to
region as                                         greenest and
Puget Sound                                 promote small
leading tourism                                       most energy
as premier                                       business
destination and                                       efficient port
international                                          growth &
business                                       in North
logistics hub                                          workforce
gateway                                        America 
development 
LONG RANGE PLANS                               Small         Workforce
Aviation                Maritime                                                        Environment 
Business Dev.              Dev. 

High Performance Organization 
(Operational Excellence & Organizational Alignment) 

LRP will be the foundation for tracking the Port's Century Agenda progress 
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Example of Aviation LRP integrated 
with Strategic Alignment Map 

Century Agenda Scope 
S1  Position  Puget  Sound  as  premier 
international logistics hub 
S2  Advance  region  as  leading  tourism 
destination and business gateway 
Strategic Alignment Map*                                                     S3 Use  influence  to  promote  small 
business   growth   &   workforce 
development 
S4 Be   greenest   and   most   energy 
efficient port in NA 
S1 O3 Triple air cargo volume to
750,000 metric tons 
S1 O3 M1 Volume (Metric Tons) 
S1 O3 M1 T1 Triple by 2025? 
LRP Teams 
LRP Teams 
Long Range Plan Scope 
S1 O3 Actions A1  A5 
S1 O3 A1 Tasks T1  T10 

Focused on the logical Actions and Tasks that drive the CA Strategies and Objectives 
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*Strategic Alignment Map facilitated by Kristal Roberts and Marlene Slugay

Long Range Plan (LRP) Background 
Office of Strategic Initiatives partnering with teams Port-wide 
2015     JUNE          AUGUST         DECEMBER   2016     MARCH 
2 additional LRP Teams formed                 Present LRP to
Aviation                          Commission for review 
Maritime 

5 LRP Teams formed            x3 Strategic Planning Program Managers hired 
Small Bus Development          Facilitation of LRP Teams 
Workforce Development          Production of LRP document 
Environment                Stakeholder engagement 
Operational Excellence 
Organizational Alignment 
Designed to strengthen Port wide participation/ownership
and operationalize the Century Agenda 
21

Long Range Plan Update 
LRP Background 
LRP Overview      Mapping LRP to Century Agenda 

Strategic Review and Methodology 
LRP Deliverables     LRP Document and Draft TOC 

Performance to Plan Process 
Next Steps       Timelines & Next Steps 


22

LRP Strategic Review & Methodology 
A   10 Key Strategic Assessments                  B   Detailed Action Plans
per Objective                                     with SMART goals 



C 
Long Range Plan 

Together, the 10 Key Strategic Assessments and Actions Plans for each Century
Agenda Strategy and Objective form an integrated Long Range Plan 
23

LRP Strategic Review & Methodology 
A   Each Objective is evaluated utilizing
the 10 Key Strategic Assessments 

10 



Focused on thorough review and data driven Actions 
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Example with Maritime LRP Team 
A                                                 Recommended
Actions 
CA Strategies and Objectives                                                            What are the 
10 Key Strategic Assessment 
S1: Position Puget Sound as Premier Intn'l Logistics                                          Top 3-5 Actions 
Hub                                        1. Background & Overview                per Objective? 
O1 Grow seaport annual container volume to more than         How will Maritime units advance the Century Agenda? 
3.5 million TEUs                              2. Market /Sector Review 
What is the market/sector/customer data supporting the strategy? 
O2 Structure relationship with WA ports to optimize 
3. Policy & Regulatory Review 
infrastructure investments & financial returns 
How have we considered the applicable policy framework? 
O4 Triple the value of our outbound (sea) cargo to over       4. Strategic Review 
$50 billion 
What is our "go out and bring them in" growth strategy? 
O5 Double the economic value of the fishing and             What is our "build it because they will come" enabling strategy? 
maritime cluster industries                           What is our "raise the bar" innovation strategy? 
S2: Leading Tourism Destination and Business Gateway         Who else has done similar "game changing" transformative strategies? 
O4 Double the economic value of cruise traffic             5. Options Review 
to Washington state                              What are alternative options we have considered? 
6. Risk Review 
How have we analyzed risks and provided mitigations? 
LRP Teams:                            7. Integration and Synergies 
What are synergies with Econ Dev (Real Estate, Tourism)? 
Conduct a 3-5 page review of the 10 Key           How can we integrate across Small Bus, Workforce Dev, Environ, etc.? 
Strategy Assessment that support their            What are key constraints, tradeoffs, prioritizations, win-wins? 
CA Strategy Objectives                    8. Partnerships & Linkages 
How can we develop partnerships that support the CA strategies? 
Identify the top 3-5 Actions that             9. Cost Benefit Analysis 
optimally achieves each Objective                What are the costs vs benefits? 
10. Economic and Environmental Impact 
What are the economic impact/benefits/mitigations? 
Applying a systematic and consistent mini-"business case" unpacking of each
Objective into its enabling Actions 
25

LRP Strategic Review & Methodology 
B    Detailed Action Plans with
SMART goals 




The review against 10 Key Strategic Assessments generates robust 
Action Plans with SMART goals 
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B    Example with Environmental Development LRP Team 
3-5 Top Actions per Objective 

In terms of duration, the LRP is a 5 year rolling plan that spans 
10 years until 2025 
Higher (quarterly) granularity Years 1-2 as actions ramp up 
Biannual granularity in Years 3-5 as steady state approaches
Annual granularity in Years 6-10 over the long term 
Each   Action   has 
Measures and Targets 

Each Action would be a 
"mini-project plan" with 
about 7-10 Tasks 
with timelines 
color  coded  status 
of progress, and 
responsibilities 

Each  Action  also  has 
Resources  Required, 
Partnerships, and Risk 
Management 
Each LRP Team to populate 
an Excel Sheet per Action 
Drilling down into Actions and Tasks i.e. "mini-project plans" enables the Port
to track progress and metrics at a higher level of granularity 
27

LRP Strategic Review & Methodology 
C 
Long Range 
Plan 

Together, the 10 Key Strategic Assessments and Actions Plans for each Century
Agenda Strategy and Objective form an integrated One-Port Long Range Plan 
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Proposed Contents for LRP Document for Commission 
DRAFT TABLE OF CONTENTS 
SECTION A  EXECUTIVE SUMMARY 
SECTION B  INTRODUCTION 
B1  Background 
B2 Century Agenda 
B3 Strategic Alignment Map 
B4 POS Organizational Structure 
SECTION C  KEY STRATEGIC AREAS 
C1 CA Strategy S1: Position Puget Sound as Premier Intn'l Logistics Hub 
C2 CA Strategy S2: Leading Tourism Destination and Business Gateway 
C3 CA Strategy S3: Promote Small Business Growth and Workforce
Development  C4 CA Strategy S4: Greenest and Most Energy Efficient Port in NA 
SECTION D  INTERNAL STRATEGIES 
D1 High Performance Organization 
SECTION E  SUPPORTING/ENABLING STRATEGIES 
E1  Economic Development Strategy 
E2  Partnership Strategy 
E3  Innovation Strategy 
E4  Others? 
SECTION G  SUMMARY LONG RANGE PLANS 
G1 Action Plans 
SECTION F   REPORTING FORMAT 
F1  Triple Bottom Line, Balanced Scorecard? 
SECTION I   CONCLUSION 
SECTION J   APPENDICES 
J1 Detailed Long Range Plans 
Planning against a common format and consistent templates
achieves an integrated, One-Port LRP 
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Long Range Plan Update 
LRP Background 
LRP Overview      Mapping LRP to Century Agenda 

Strategic Review and Methodology 
LRP Deliverables     LRP Document and Draft TOC 

Performance to Plan Process 
Next Steps       Timelines & Next Steps 


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Performance to Plan 
Approved Long Range Plan     Executive dashboard and recurring
Port Leadership review 




Management review of plans and performance against the Triple Bottom Line 
Drives transparency and accountability 
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Air Cargo Example of LRP Review 
CA Strategy   Objectives          Status      Root Cause          Corrective Actions
S1 
O3 Triple air cargo
Renegotiate lease to
Premier       volume to 750K MT 
international                                                                   takeover additional
Development of new
logistics hub                                                                    cargo space 
cargo space
constrained by new
air service
S2 
O3: Cost effective                   construction 
Leading tourism    expansion of passenger                                     Fast track move to
destination and     and cargo service                                             relieve off airfield
business gateway                                                          cargo space on North
Side 
S3 
Promote small                                                          2016Q3 
Air Cargo Metrics 
business and                                                Target    Actual   Variance   Status   Trendline 
workforce
development                                Tonnage (MT)           400      350      % 
Efficiency Ratio (MT:Sq.Ft)      1:1       1:1.2      -20% 
S4 
Enplaned Value ($)         $ X MM    $ X MM      % 
Greenest and most
Deplaned Value ($)         $ Y MM    $ Y-1 MM      % 
energy efficient
port in NA 
Developing a Management review cadence will identify countermeasures
as needed 
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*Illustrative examples based on in progress work by LRP Air Cargo Sub team led by T om Green

Long Range Plan Schedule 
2016 
JANUARY          FEBRUARY          MARCH            APRIL 


Plans & Actions         Stakeholder Reviews        Present LRP to       Performance to Plan 
Development Period       Steering Committee     Commission for      Development and
Commission review of     review             Review & Approval      implementation of
LRP process            Commission and                          web-based
Development of LRP      Commission staff                       management
actions and document                                         dashboard 
Best practices & regional
site visits (i.e. 737 Boeing
factory tour) 

Requesting Commission Approval on March 29, 2016 
33

Thank you! 
Questions? 

34

Lean Training/Activities 

January 26, 2016

Why Lean at the Port? 
Experiencing dramatic growth in all lines of
business 
Lean creates the opportunities to streamline our
work so we have more capacity to support this
growth 
Drives Efficiency and Effectiveness to help drive
Century Agenda goals freeing up: 
Human Capital 
Financial Capital 
Lean is an Enabler accelerating Century Agenda achievement 
in an effective and efficient approach 
36

How Does Lean Benefit Port Employees? 
Input from Port Employees 
Employees identify and fix processes that frustrate them
and waste their time 
Use capacity gained for more value-added activities 
Improve health and safety of the workforce 
Principles from Leadership 
Safety and Work Conditions will not be compromised! 
Reduce or eliminate inefficient and wasteful processes 
Port employment will grow with the dramatic business
growth through a effective and efficient process 
Lean improves the work environment 
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Benefits to Stakeholders 
Customers -- Improved Service 
Taxpayers  Lower Costs 
Tenants  More Cost-Effective Solutions 
Suppliers -- Reduced Contracting and Delivery Time 
Employees  Increased Safety and Morale 

Quality, cost, delivery, safety, and morale 
38

Recent Successes 

39


Airport Rental Car Shuttles 
Focus on improved customer service: 
Previous: 12 to 18 minute wait time
during peak hours 
Target: 5 minutes 
Countermeasures: 
New standard pacing process 
Visual controls curbside: stanchions & signage 
Load and unload zones 
Results 
Consistently hitting 5 min target across all shifts 
Testing reduction in cost: 
60 day trial without curbside assist 
AV LSO RCF Video 
40

AVM Safety Solutions Team 
8-step Problem Solving: Occupational Injuries 
Focus on Safety: 
Awareness and visibility of PROBLEMS 
Root causes and countermeasures 
Employee engagement 
Spirit and excitement 
Results! 
Countermeasures: 
Hand scanners at the C60 failsafe
Partnership with Delta and Alaska on bag
hygiene 
Standardizing start of the work day with safety
huddle and pertinent communication 
Occupational Fitness vendor 
Sustain the improvements 
41

(OSHA Injury Rate) 



Employee engagement 
42

Focus in 2016 

43

AVM Systems and Assets 
Example: Passenger Loading Bridge and Potable Water Box 




Free up maintenance personnel for other tasks 
44

AVM Transportation and Worksite Organization: 
Annual Potable Water Box PM Inspection 




Reduce the wastes of transportation and motion 
45

Focus in 2016 
Aviation Maintenance 
Create a "model area" 
Largest department (360 employees) 
Maintain more than 30,000 assets 
10,000 PM inspections 
A "systems" approach i.e., restrooms, baggage, gates
Lean Champion Training for 75 employees 
Target: 10% capacity gain 
AV Capital Project Value Stream 
Starting with the Design Review process 
Reduce change order costs downstream 
Value stream transformation 
Improve Quality, Cost, Delivery, Safety, Morale and Create Capacity 
46

Thank you! 
Questions? 

47