PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6e 
ACTION ITEM 
Date of Meeting     February 9, 2016 
DATE:    February 2, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Dave Caplan, Sr. Director, Office of Strategic Initiatives 
Diane Schairer, Process Improvement Program Manager 
Wesley Henrie, Process Improvement Program Manager 
SUBJECT:  Continuous  Process  Improvement  (CPI)  Lean  Consultant  Indefinite
Delivery/Indefinite Quantity (IDIQ) Contract 
Amount of This Request:            $0   Source of Funds:  Current and Future
Operating Budgets 
Est. Total Contract Value:       $3,000,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute an indefinite
delivery, indefinite quantity consulting contract to perform continuous process improvement
services with a total value of $3,000,000 and contract duration of three years plus two one-year
options for a total of five years. There is no funding request associated with this authorization. 
SYNOPSIS 
Port of Seattle leadership has challenged the organization to respond to an unprecedented rate of
growth with new levels of efficiency and effectiveness. Lean principles will help the Port meet
the challenges of rapid growth. By engaging employees in reengineering processes and reducing
waste, we can: 
1.  Streamline work and gain capacity to support growth. This is important if we are, in
many parts of our businesses, to double the size of our business without doubling our Port
employee base. 
2.  Use these efficiency gains to free up resources, which can be reinvested. 
3.  Demonstrate improved stewardship of public assets. 
In this way, as described in the attached presentation, a more aggressive application of Lean
principles in the Port will accelerate the implementation of the Long Range plans, in support of
the Century Agenda. 
The current Continuous Process Improvement (CPI) consulting firm, Honsha, completed an
assessment and identified opportunities for larger improvements than have been completed to
date. These proposed improvements are mainly in Aviation Maintenance, the largest department

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 2 of 7 
in the Port. By focusing on this one area of the Port, we can develop a model for Lean
implementation from which others can learn. Processes in Aviation Maintenance provide an
excellent opportunity to apply Lean, because the assets maintained are spread over a large area,
and are repeated monthly, quarterly and annually. It is easy for processes to accumulate
significant travel time and redundancies. Building on the progress to date, our highly skilled
workforce will apply Lean concepts to efficiently maintain assets.
The improvements are being initiated now, but full completion of this work exceeds the funding
of the current IDIQ contract. The ongoing benefit of the proposed improvements far exceeds the
initial cost. Capacity gains in Aviation Maintenance are estimated at 75,000 labor hours upon
implementation; time that can be used to maintain the growing facility. Full implementation of
this approach will help the Port respond more efficiently to expanding business needs while
building internal expertise at continuous improvement: an essential component of a high
performance organization. 
IDIQ contracts provide the Port with the flexibility to meet business requirements as they arise
by issuing individual service directives to accomplish tasks within a general, pre-defined scope
of work, on an as-needed basis, for a fixed period of time, and a maximum contract amount. The
Port's Office of Social Responsibility will assist in identifying any small business opportunities
prior to the time of public advertisement of the IDIQ contract. Funding of services under this
contract will come separately from annual operating budgets. 
BACKGROUND 
In 2011, with the support from the Commission, Port leadership established a Continuous
Process Improvement (CPI) program.  The program now consists of a Senior Director of
Strategic Initiatives, two CPI program managers as a centralized organizational resource, and 12
Lean Specialists to serve as local Lean facilitators. Of the 15 improvements completed, three
were cross-functional, leading to reduction in occupational injury rate, improved collective
bargaining agreement implementation, and reductions in time required for Airport employee
badge renewals. 
In 2013, through one improvement in Aviation Maintenance, we gained 837 hours in capacity,
annually. This improvement focused on just one asset: monthly preventive maintenance
inspections of sprinkler risers. More expansive improvements can be achieved by applying Lean
principles to entire systems. An example is servicing of all assets on passenger loading bridges,
which involves electricians, operating engineers, carpenters, and possibly related services in
Airport Operations. 
By end of June 2016, before the current contract expires, Aviation Maintenance employees will
improve two "systems": maintenance of restrooms and of baggage. This will be completed
through an intensive learning process involving four one-week "boot camps" over 16 weeks.
Both of these processes affect services that are important to the travelling public.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 3 of 7 
The services requested are for a consulting firm with demonstrated technical expertise,
exceeding the current skills and capacity at the Port, in order to continue implementation and
maintain this aggressive improvement approach. As Aviation Maintenance teams integrate
improvement into their work on an ongoing basis, this would become our demonstration area for
future Port improvements. Once completed in one area of the organization, it would be replicated
across the Port. 
The current consulting firm identified and quantified opportunities such as those described in
Aviation Maintenance in a way that would reach more employees, make improvements more
quickly, and have a stronger impact in support of strategic business targets. 
REQUEST JUSTIFICATION AND DETAILS 
The 12% year-to-date growth rate in the Airport continues a trend for demand that exceeds the
capacity of existing facilities. In response, facilities will be renovated and extended, with the
creation of the International Arrivals Facility, renovation of the North Satellite and Baggage
systems, and building described in the Sustainable Airport Master Plan. 
The Port's leadership has a vision of growing the business without an equal growth in the size of
the organization. Business trends at the Airport provide an opportunity to demonstrate how
process improvement can help the Port achieve this goal. As the facility grows, maintenance
needs will grow. When processes better support the work, capacity can be gained to address
increasing demand. 
A previous improvement in the Airport provides a snapshot of the opportunity. By improving
the preventive maintenance process for just one type of asset-- sprinkler risersrepeated trips
were reduced, cutting travel distance from 15 miles/month to 3 miles/month for one concourse
alone. The time required to inspect each asset was cut in half. This is one of thousands of types
of preventive maintenance performed by one team within the Port's largest department. 
Using Lean concepts, employees identify and improve processes that waste their time to increase
the "value proposition": increase timeliness, quality and safety, and/or decreasing cost of
operations. Consultants with extensive Lean expertise would accelerate the pace of
improvement, strengthen the skills of staff, and multiply the impact of improvement across the
organization. To achieve this level of commitment and expertise, teams would be engaged in a
schedule of training that would include designing, testing, and sustaining improvement. 
Other teams will be involved in improvement, in addition to those from Aviation Maintenance.
For example, we are currently working on Lean improvement events focused on Aviation
Landside operation: Rental Car Facility bus flow and employee bus flow. Another significant
improvement effort will focus on the processes related to capital projects, in the interest of
reducing rework and change-order costs. Aviation Operations can apply Lean concepts to
improve passenger flow in the short term, to mitigate the spike in demand until the construction
on the International Arrival Facility is competed. Our efforts will initially focus on the Airport,
due to the challenges presented by unprecedented growth, including teams from across the

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 4 of 7 
organization would also be selected to participate. For example, improvement concepts can also
be applied to Marine Maintenance processes. Once skills are built and we have more internal
capacity, a focused improvement approach would spread to other areas of the organization. 
Schedule 
It is estimated that this IDIQ contract will be executed in the first quarter of 2016 with a threeyear
base and two one-year options. 
FINANCIAL IMPLICATIONS 
There is no funding request associated with this authorization. The total estimated cost for the
CPI IDIQ contract will not exceed $3,000,000. No work is guaranteed to the consultant and the
Port is not obligated to pay the consultant until a service directive is executed.
In return for this investment, an estimated $6,000,000 could be saved through capacity gains,
annually, once all the identified improvements are completed. Because the purpose of this
activity is to build improvement capability in the Port, it is expected that the employees involved
will continue to find and quantify improvements to worker safety, cost, and timeliness of
services at the Port. 
STRATEGIES AND OBJECTIVES 
When carefully implemented, CPI is a powerful methodology and management philosophy that
helps an organization meet strategies and objectives in a timely and efficient manner. One of the
primary functions of the consultant is to assist Port leadership with the alignment of Port-wide
and division strategies/objectives with CPI efforts.  For example, the current assessment
identified processes that, when improved, can support the Aviation Division's objectives to
"manage Airport assets to minimize long-term cost of ownership" and "keep airline costs as low
as possible without compromising operational and capital needs." By learning to apply Lean
thinking while improving these identified processes, leaders and their teams can experience the
satisfaction of employee engagement in improved business results, while demonstrating the
impact of continuous improvement to the rest of the Port. 
TRIPLE BOTTOM LINE 
Economic Development 
Through improving processes across the organization, the Port will demonstrate financial
stewardship. Rate of the Port's business growth will support the region's economy without a
linear increase in the size of the Port, itself.
Environmental Responsibility 
Processes will be more efficient in part due to a reduction in travel. Aviation Maintenance
workers currently drive repeated trips around the Airport runways; Marine Maintenance workers
cover 17 miles of waterfront. A reduction in this kind of travel not only saves time; it also
reduces use of fossil fuels on a daily basis

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 5 of 7 
Community Benefits 
The project manager will coordinate with the small business team to maximize small business
opportunities associated with this contract, including subcontracting opportunities per resolution
#3618, and exploring unbundling and set-asides for qualified small business firms. 
In addition, it is typical for public agencies to become more responsive as they improve
processes. Our business partners, including small businesses, will find it easier to partner with
the Port when the processes they use are streamlined. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do not use a Lean consulting firm. 
Pros: 
Does not require additional investment: avoids cost of $3,000,000. 
There is a foundation on which to build. 
Cons: 
Selection of this alternative supports incremental improvement in discrete areas. The
Port does not have the depth of experience and the capacity to support
transformational change. At the outset of Lean implementation, significant
investment and heavy engagement from a Lean consulting firm is needed to firmly
establish a culture of continuous improvement in the organization. To date, the Port
has not utilized Lean consulting firms to this extent. 
Financial Impact: 
By dedicating the Port's two person CPI staff to facilitate focused improvement
efforts, the Port could expect:
o  Eight to twelve discrete improvements completed annually; 
o  Gain capacity of 6,000 labor hours, annually ($312,000) 
o  If we are able to maintain the improvement at that rate, over 5 years the Port
would gain 30,000 hours in capacity ($1,560,000) that could be used for
incoming work. 
The CPI staff would have limited ability to develop others at the Port. Growth of the
program would not keep up with demand. 
This is not the recommended alternative.
Alternative 2)  Hire a consulting firm for a more limited engagement of $750,000 for one year. 
Pros: 
This would complete the initial implementation in Aviation Maintenance, and would
begin implementation into Aviation Operations.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 6 of 7 
It would provide an orientation for our leadership. This level of commitment is
necessary to support a sustained focus on continuous improvement. 
It would build internal understanding at a more moderate pace. 
Cons: 
We would not have the resources to benefit from the investment in Aviation
Maintenance. Acceleration into a high performing organization, through application
of Lean concepts, would be limited to one area of the organization. 
This pace of improvement does not adequately support the cultural transformation
and business impact that is currently expected from CPI.
Financial Impact: 
An investment of $750,000 for one year, would gain an estimated 16,000 hours in
capacity (estimated $832,000) through 16 improvements. 
Staff in Aviation Maintenance would have the understanding to develop. This
resource, and the pace of improvement, could not be maintained at the same level... 
This is not the recommended alternative. 
Alternative 3)  Hire an experienced, Lean-focused consulting firm. Proposed investment:
$3,000,000 over 3-5 years. 
Top notch Lean consulting firms have the credibility, experience, depth, and resources to guide
and mentor all levels within an organization  from the executive team to the ground level. 
Pros: 
The pace of improvement described in Alternative 2 would be maintained and spread
across the organization. In Aviation Maintenance, an estimated 77,000 hours could be
redeployed as the business grows. 
This provides for both immediate improvement and builds internal capability to
sustain improvement across the Port. 
Best practice organizations use this level of support because it yields the biggest
return on investment. 
Cons: 
This option requires the largest initial investment. 
Financial Impact: 
The amount of benefit is estimated, based on what is typical across various industries
including state agencies. 
Lean "10% Capacity Rule" 
Multi-year, intense engagement with a top Lean consulting firm results in a 10% capacity
gain for the organization in 5-7 years. Potential capacity gains in Port Maintenance

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
February 2, 2016 
Page 7 of 7 
Operations, alone, are estimated at $6 Million. 
Department/Division   2015 Salaries/Wages/Benefits   10% Capacity Gain 
Aviation Maintenance   $45M               $4.5M 
Marine Maintenance   $14.5M             $1.45M 
In addition to direct impact on Port finances, process improvement can accelerate the
implementation of the Century Agenda, to the benefit of the region. Opportunities
exist but cannot yet be quantified to 
Improve passenger throughput for international arrivals 
Improve efficiency of air cargo space usage 
This is the recommended alternative. 

ATTACHMENTS TO THIS REQUEST 
Presentation: Continuous Process Improvement Briefing 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 10, 2013  The Commission approved a second CPI IDIQ contract. 
November 13, 2012  The Commission was briefed on the Metrics and CPI Initiatives. 
July 15, 2011  The Commission approved a CPI IDIQ contract.