ozcan: chapter 6 reengineering (overview) dr. joan burtner, certified quality engineer associate...

Ozcan: Chapter 6 Reengineering Ozcan: Chapter 6 Reengineering (Overview)(Overview)

Dr. Joan Burtner, Certified Quality Engineer

Associate Professor of

Industrial Engineering and Industrial Management

Ozcan Ch. 6ISE 491 Fall 2009 Dr. Burtner Slide 2

Chapter 6 Topics

Work Design in Health Care Organizations Work Design Job Design

Work Measurement-Standard Times Stopwatch Time Studies Standard and Predetermined Times

Work Measurement Using Work Sampling Determination of Sample Size

Work Simplification Flow Chart Work Distribution Chart Flow Process Chart

Worker Compensation


What is Reengineering (Ozcan Interpretation)?

Reengineering is a methodology intended to overcome the difficulty in realizing TQM/CQI performance over a long duration, as well as the myopic conduct of organizational change, restructuring and downsizing.

To reengineer the system, healthcare managers must be able to understand work-design, jobs, job measurement, process activities, and reward systems – all well known concepts of industrial engineering. With that knowledge, they can recognize the bottlenecks in the old system, identify unnecessary and repetitive tasks, and eliminate them.


Importance of Work Design

Human resources (manpower) represents over 40% of healthcare facility budgets

Human resource management issues Productivity and satisfaction of staff involves an

understanding of the work environment Work must be designed so that employees are

happy, organizational productivity is high, and costs are minimized


Work Design- A Systems Perspective

Work Design

WorkMeasurement•Time Study•Predetermined Standard•Work Sampling

Job Design•Who?•How?

•Where?

Job Simplification

WorkerCompensation

•Time Based•Output Based•Incentive Plans

ExternalFactors

Source: Ozcan Figure 6.1


Frederick Winslow Taylor

Developed scientific management approach

Focused on time studies Asserted that conflicts between labor and

management occurred because management had no idea how long jobs actually took


Socio-technical School Approach

Efficiency School(Technical Focus)

Behavioral School(Human Focus)

Socio-technical School


How can jobs be improved? – Behavioral School

Job enlargement-- give workers a larger portion of the total task (horizontal loading-- additional work at same level of skill and responsibility)

Job enrichment-- increasing responsibility for planning and coordinating tasks (vertical loading)

Job rotation-- workers periodically exchange jobs (limited applicability in healthcare)


Work Measurement Using Time Standards

Time standards are important in establishing productivity measures, determining staffing level and schedules, estimating labor costs, budgeting, and designing incentive systems

A time standard represents the amount of time needed for the average worker to do a specific job working under typical conditions


Standard Time Development

The amount of time it should take a qualifiedworker to complete a specified task, working at a sustainable rate, using given methods and equipment, raw materials, and workplacearrangements is called a standard time.

Standard time can be developed through:•Stop-watch studies•Historical times•Predetermined data•Work sampling


Stopwatch Time Studies

Take time over a number of trials (cycles) Workers should be educated regarding the process

to avoid suspicion and avoid the Hawthorne Effect Number of cycles to time (i.e., sample size)

variability in observed times desired accuracy desired level of confidence for the estimate


Desired Confidence Z-value 90 1.65 95 1.96 98 2.33 99 2.58

Determining Sample Size

Accuracy desired may be explained by the percentage of the mean of the observed time. For instance, the goalmay be to achieve an estimate within 10 percent of theactual mean. The sample size is then determined by:

where:z = number of std. dev.

needed for desired confidence

s = sample std. dev.a = desired accuracyx = sample mean

2

*

*

xa

szn


An Alternative Formula

Desired accuracy may be expressed as an amount (e.g.,within one minute of the true mean). The formula for sample size becomes:

wheree = Accuracy or

maximum error acceptable

To make an initial estimate of sample size, you shouldtake a small number of observations and then compute the mean and std. dev. to use in the formula for n.

2*

e

szn


Example 6.1

414.414.6*10.

1.2*96.12

orn

A heath care analyst wishes to estimate the time required to perform a certain job. A preliminary stopwatch study yielded a mean of 6.4 minutes and a standard deviation of 2.1 min. The desired confidence level is 95 percent. How manyobservations will be needed (including those already taken)if the desired maximum error is:

a) +/- 10 percent?b) one-half minute?

a)

b) 688.675.

1.2*96.12

orn


Determining the Standard TimeDetermining the Standard Time – Normal Time – Normal Time

Observed Time-- average of observed times OT = xi/n

Normal Time-- observed time adjusted for worker performance NT = OT * PR (where PR = performance standard measured

for the entire job) NT = (Ej*PRj) (where PR is measured element by element)

PR equals 1 for the average worker; PR< 1 is for a slower worker


Allowance Factor

Standard time equals normal time multiplied by an allowance factor ST = NT * AF

Allowance Factor accounts for personal delays, unavoidable delays,

and/or rest breaks AFjob = 1+A, where A= allowance percentage based

on job time AFday = 1/(1-A), where A = allowance percentage

based on work day


Table 6.1 Typical Allowance Percentages for Varying Healthcare Delivery Working Conditions

Allowance Level Percent

1. Basic-low (personal, fatigue, standing) 11

2. Basic-moderate (basic-low and mental strain) 12

3. Basic-high (basic-moderate and slightly uncomfortable heat/cold or humidity

14

4. Medium-low (basic high and awkward position) 16

5. Medium-moderate (medium-low and lifting requirements up to 20 lbs.) 19

6. Medium-high (medium-moderate and loud noise) 21

7. Extensive-low (medium-high and tedious nature of work) 23

8. Extensive-medium (extensive-low and with complex mental strain) 26

9. Extensive-high (extensive-medium and lifting requirement up to 30 lbs.) 28

Source: Adapted from B.W. Niebel, 1988.


Allowance Factor Computations

Compute the allowance factor if: The allowance is 20 percent of job time. The allowance is 20 percent of work day.

A) AF = 1 + A = 1.20, or 120%

B) AF = 1/(1-A) = 1/(1-.2) = 1.25 = 125%


What are the problems with time studies?

Subjective performance ratings and allowances

Only observable jobs can be studied Highly costly -- best for repetitive tasks Disrupts worker routine May cause worker resentment


Other Methods

Historical/Standard Elemental Times Firms collect data on standard job elements Put these data together to determine job times Less costly and disruptive Limited applications in healthcare

Predetermined Standards Obtained from trade publications Need no performance of allowance factor Operations are not interrupted


Technique for estimating the proportion of time that a worker or machine spends on various activities

Observers make brief observations of a worker or a machine at random intervals over a period of time and simply note the nature of the activity

Purpose: To estimate percentage of unproductive or idle time for

repetitive jobs To estimate the percentage of time spent on various tasks

for non-repetitive jobs

Work Measurement Using Work Sampling


Work Sampling Steps

1) 1) Determine the sample size

2) Train the observers,

3) Develop random sample schedule

4) Take observations, and re-compute the

desired sample size several times if initial

estimates are not reliable

5) Determine the estimated proportion of time

spent on specified activity


Estimating Required Sample Size

CI = confidence interval,e = error,z = number of standard deviations needed to achieve desired confidence, sample proportion (number of occurrences divided by sample size), n = sample size.

epCI ˆ

nppze /))ˆ1(*ˆ(

)ˆ1(ˆ)/( 2 ppezn

The goal of work sampling is to obtain an estimate that provides a specified confidence not differing from the true value by more than a specified error

p̂


Advantages of Work Sampling

Observations less susceptible to short term fluctuations

Little or no work disruption Workers are less resentful Less costly and time-consuming Many studies can be conducted

simultaneously Useful for non-repetitive tasks


Disadvantages of Work Sampling

Less detail on elements/tasks of a job Workers may alter patterns Often no record of method used by worker Observers may fail to adhere to random

observation schedule Not useful for short, repetitive tasks Much time required to move from observation

area to observation area to ensure randomness


Work Simplification

Work Simplification-- process of changing work methods: Eliminate unnecessary parts of work Combine and rearrange parts of work Simplify work when possible

Work Simplification Tools Flow Chart Work Distribution Chart Flow Process Chart Layout Chart


Process

Decision

Start/Terminate

Preparation

DocumentManual

Operation

Figure 6.4 Commonly Used Flow Chart Symbols

Off page connector

On page connector


PatientEntry

Figure 6.5 Flow Chart for Emergency Room Specimen Processing

Triage:need blood?

Nurse draws blood

MD orderslab

IS orderentry

Label &package

Verification

Lab

Accession &analysis

IS doubleentry

MD terminateslab order

(end)

PatientEntry

Triage:need blood?

Nurse draws blood

MD orderslab

IS entry label & package Lab

Accession &analysis

Results arrive in ER

(end)

Initial Process After Improvement

Yes

endNoendNo


The Work Distribution Chart

Shows what a department does to identify each of its major activities and to pinpoint the contribution of each employee to those activities

Spotting Trouble Which activities consume the most time? Are tasks evenly distributed? Is there under-specialization? Are employees assigned too many unrelated

tasks? Are talents utilized efficiently?


Flow Process Chart

Records a procedure in a graphic form, using a sort of shorthand to simplify and unify the record Ensures every significant detail of the work

process in its proper sequence is recorded Highlights inconsistencies and redundancies

Can eliminate, combine, change (sequence, place, person), or improve activities

Operation

Move

Inspect

Delay

Store


PPaattiieenntt EEnnttrryy Triage

RN draws blood Specimen waits for MD order Order entry

Label and package Sent to lab Accessioning process

Lab analysis VVeerriiffiiccaattiioonn bbyy llaabb//IISS eennttrryy SSeenntt ttoo EERR MMDD tteerrmmiinnaatteess llaabb oorrddeerr

OPERATION MOVE INSPECT DELAY

Figure 6.3 Flow Process Chart for Emergency Room Specimen Processing


Worker Compensation

Compensation schemes: Time based-- most common in healthcare Output based-- more difficult to operationalize, yet

pay is related to efforts Incentive Systems

Profit sharing plans-- receive % of profits Gain sharing plans-- receive a % of the value (i.e.,

cost savings) realized through increases in productivity

ozcan: chapter 6 reengineering (overview) dr. joan burtner, certified quality engineer associate...

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