the new face of quality in office and service environments
TRANSCRIPT
Company
LOGO
The New Face of Quality in
Office and Service Processes
American Society for Quality
World Conference on Quality and Improvement
May 25, 2010
© 2010 Karen Martin & Associates
You will learn…
The key metric (%C&A) for measuring
quality in office/service settings.
Error-proofing prioritization.
Countermeasures for improving office and
service “in-process” quality.
How to translate quality improvement into
productivity gains.
2
Building a Lean Enterprise
© 2010 Karen Martin & Associates
Potential Impact of Poor Quality
Customer
Death or injury
Slow delivery
Lost market share
Financial
Excessive expenses
Missed performance
bonuses
Cash flow
Legal / Regulatory
Non-compliance
Litigation
Staff
Interpersonal &
interdepartmental
tension
Stress & frustration
Turnover / absenteeism
Poor morale
Inability to attract talent
4
© 2010 Karen Martin & Associates 5
The 1-10-100 rule states that as product
moves through a process, the cost of
correcting an error increases by a factor of 10.
Order entry example
Activity Cost
Order entered correctly $ 1
Error detected by billing dept $ 10
Error detected by customer $ 100
Cost of customers telling others ???
Cost of Poor Quality
Prevention
Inspection
Failure
Big Failure
© 2010 Karen Martin & Associates
State of Quality in Office &
Service Environments
Office & service quality rarely measured.
If measured, typically “end state” quality.
“In process” quality is a far more revealing
analytical tool, in terms of:
Determining how robust your process is
Identifying waste
Rebuilding interpersonal and interdepartmental
relationships
Capturing productivity gains
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© 2010 Karen Martin & Associates
Measuring Process Quality
7
Customer
Step 1 Step 2 Step 3 Step 4
© 2010 Karen Martin & Associates
Key Office / Service Quality Metric
Percent Complete & Accurate (%C&A)
% of occurrences where the downstream
customer can perform task without having
to rework (“CAC”) the incoming work:
Correct information or material that was
supplied
Add information that should have been
supplied
Clarify information that should or could have
been clear
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© 2010 Karen Martin & Associates
Percent Complete & Accurate
Introduced by Keyte & Locher in The Complete
Lean Enterprise (Productivity Press, 2004).
% of occurrences where the work received
(information, material or people) requires no
“rework” — “usable as is.”
Similar to First Pass Yield in manufacturing.
Metric is applied to the output step (upstream
supplier).
Typically obtained via interview.
Accuracy more important than precision.
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© 2010 Karen Martin & Associates
Measuring Step-Specific Quality
10
Customer
Step 1 Step 2 Step 3 Step 4
%C&A =
70%
%C&A = 50%
%C&A =
85%
%C&A =
25%
%C&A =
80%
© 2010 Karen Martin & Associates
Summary Quality Metric
Rolled First Pass Yield (RFPY)
The percentage of occurrences where work
passes through the process “clean,” with no
“hiccups,” no rework (CAC) required.
RFPY = %C&A x %C&A x %C&A…
Common finding = 0-15%
Multiply ALL %C&A’s, even if parallel processes
(concurrent activities).
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© 2010 Karen Martin & Associates
Measuring Step-Specific Quality
12
Customer
Step 1 Step 2 Step 3 Step 4
%C&A =
70%
%C&A = 50%
%C&A =
85%
%C&A =
25%
%C&A =
80%
Rolled First Pass Yield = 6%
© 2010 Karen Martin & Associates
Reasons for Office / Service Errors
Lack of effective training
Non-standardized work
Excessive complexity
Time delays between
input and output
Multi-tasking
Rushing
Poor knowledge re:
internal customer
requirements
Hardware / software
issues
Environmental
Interruptions
Noise, odor, lighting
Ambiguous information
Unclear instruction
Poor handwriting
Blurry images
(technology-related
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Quality:
People
aren’t the
problem.
© 2010 Karen Martin & Associates
Poor Input Quality Causes
Unnecessary Tension
Poorly designed processes are typically
behind interpersonal and interdepartmental
tension – not personalities.
© 2010 Karen Martin & Associates
Two Ways to Measure
Value Stream Mapping
Holistic, macro view of process
Strategic planning tool
Metrics-Based Process Mapping
Micro view of process
Tactical design tool
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Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000 Supplies Purchasing - Current State VSM
Finance
Review
Budget
PT = 5 mins.
C&A = 60%
6
Corp Purchasing
Manager
Approve in
ERP
PT = 5 mins.
C&A = 90%
1
0.25 days
5 mins.
0.5 days
5 mins.
5 days
5 mins.
1 days
5 mins.
1 days
10 mins.
0.5 days
15 mins.
3 days
5 mins.
7 days
15 mins.
10 days LT = 28.4 days
PT = 65 mins.
AR = 0.477%
Supervisor
Review Req.
PT = 5 mins.
C&A = 95%
2
Sys Engineer
Review
Requisition
PT = 5 mins.
C&A = 90%
1
IS Manager
Review
Requisition
PT = 5 mins.
C&A = 100%
1Financial Mgr
Review
Requisition
PT = 10 mins.
C&A = 95%
1
Admin Asst
Enter
Requisition
PT = 15 mins.
C&A = 98%
1
4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.
Originator
Inititate Req.
PT = 10 mins.
C&A = 10%
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2 hrs.
Form File
File Maker
ERP
Quicken
Vendor
Website
Excel
4 hrs.
Customer Demand:
615 requisitions per y ear
20 ReqsExternal
Supplier
PT = 20 mins.
Hard CopySupplies
Data Entry
Corp Purchasing
Submit PO
to Supplier
PT = 15 mins.
C&A = 98%
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10 Reqs 63 Reqs
1
2 3 4 5 6 7 8 9 10
RFPY = 4.2%
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activ ity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Y ield
80 hrs.
Supplies Purchasing - Future State VSM
Customer Demand:
615 requistions per year
Dept.
Manager
Approve
in ERP
PT=5 mins.
C&A = 90%
1
0.5 days
5 mins.
0.75 days
5 mins.
1 days
20 mins.
10 days LT = 12.3 days
PT = 30 mins.
AR = 0.508%
Supervisor
Review
Req.
PT=5 mins.
C&A = 95%
28 hrs.
Originator
Enter Req.
in ERP
PT=30 mins.
C&A = 85%
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File Maker
ERP
Vendor
Websites
6 hrs.
Standard
Work for
review
Additional
IT access
Requisition
Checklist
Cross
Training
Additional
IT access
External
Supplier
PT=20 mins.
Supplies
4 hrs.
Auto Notify
Integrate Form
File with File
Maker
Use budget in place
of Quicken
Dedicated
Buyers
Corp Purchasing
Place
Order
PT=20 mins.
C&A = 98%
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Approval
1
2 3 4 5
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield
RFPY = 71%
80 hrs.
Future State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
© 2010 Karen Martin & Associates
Metric
Current
State
Projected
Future State
%
Improvement
Lead Time 28.4 days 12.3 days 56.7%
Process Time 65 mins 30 mins 53.8%
% Activity 0.48% 0.51% 6.3%
Rolled First
Pass Yield 4.2% 71.0% 1,590%
# Handoffs 10 5 50%
# IT Systems 6 3 50%
Freed capacity 2.1 FTEs 10%
Purchasing Process
Projected Results
Metrics-Based Process Mapping
(MBPM)
MBPM Post-it Conventions
# Staff
(if relevant)
Barriers to flow
(if relevant)
PT (process time)
LT (Lead time) % Complete &
Accurate
Step #
Activity
(Verb / Noun)
Function that
performs the
task
Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT
Approve PO 15 240 100%Fax PO to
Account Manager5 20 100%
Notify customer
when they can
expect delivery
15 300 95%
Review and
approve PO; send
to Order Entry
5 240 100%
Enter order into
SAP10 240
Step # ? 986
Finance / Credit
Function /
Department
LT UnitsHours Worked per Day
37,500
Paul Dampier
Occurrences per Year
Current State Metrics-Based Process Map
26-Nov-07
8
Sam Parks
Date Mapped Michael Prichard
Order FulfillmentProcess Name
Specific Conditions Domestic orders through sales force
PT Units Process Details
Mary TownsendSean Michaels
Ryan AustinDianne O'Shea
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Mapping Team
Order Entry
Account Manager
Sales Rep
Customer
Seconds
Minutes
Hours
Days
Seconds
Minutes
Hours
Days
Metrics-Based Process Mapping
Summary Metrics
23
© 2010 Karen Martin & Associates
Error Proofing
Goals:
First, avoid making errors.
Second, avoid passing errors to downstream internal customer.
Third, avoid passing errors to external customer.
Typical solution – Inspection!
24
© 2010 Karen Martin & Associates 25
You can’t
inspect in
quality.
© 2010 Karen Martin & Associates
Inspection in the Office
Reviews
Approvals
Audits
Signatures
Improvement goal: Eliminate the NEED
for inspection.
26
© 2010 Karen Martin & Associates
Types of Inspection
Self-inspection (point of
origin inspection) – most
desirable
Downstream inspection –
less desirable (we’re less
diligent)
3rd party inspection before it
reaches an external
customer – adds excess cost
3rd party inspection after the
fact – NO!
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Root Cause Analysis: 4 Key Tools
CauseCause--andand--Effect DiagramEffect Diagram
Machine Measurement Environment
People Material / Info Method
Budgets
Submitted Late
Lack of experience
Time availability
No sense of import
No stnd spread sheet
Email vs. FedEx
No standard work
Input rec’d late
Forecast in other system
Manual vs. PC
System avail.
No milestones
$ vs. units
Weather delays
Dispersed sales force
Changing schedule
Machine Measurement Environment
People Material / Info Method
Budgets
Submitted Late
Lack of experience
Time availability
No sense of import
No stnd spread sheet
Email vs. FedEx
No standard work
Input rec’d late
Forecast in other system
Manual vs. PC
System avail.
No milestones
$ vs. units
Weather delays
Dispersed sales force
Changing schedule
5 Why’s
Why?
Why?
Why?
Why?
Why?
Check Sheets Quantify Occurrences
|Equipment failure
|||||||||||||Changing customer
requirements w/ no
adjustment to expected
delivery
||||||||||Order entry error
|||Staffing/absenteeism
|||||Quality issue requiring
rework
|||||||Material shortage
Tally Reason
|Equipment failure
|||||||||||||Changing customer
requirements w/ no
adjustment to expected
delivery
||||||||||Order entry error
|||Staffing/absenteeism
|||||Quality issue requiring
rework
|||||||Material shortage
Tally Reason
Building a Lean Enterprise
© 2010 Karen Martin & Associates
Error-Proofing Priorities
1. Prevention Make it impossible to make the error.
Make it difficult to make the error.
2. Detection Make it obvious the error has occurred.
3. No Impact Make it a “no impact” error.
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Error-Proofing (Poka Yoke) Data Entry
© 2010 Karen Martin & Associates 32
“No Impact” Error
© 2010 Karen Martin & Associates
Elements of Quality-at-the-Source
Standardize work.
Make problems visual.
The work stops immediately when an error
is detected!
Cross-trained workers are better at
detecting errors.
Eliminate or minimize reliance on
inspection.
33
© 2010 Karen Martin & Associates
Ways to Error-Proof Data Entry
People-related
Effective training!
Grouping data /
cadence
Reading aloud
Time for self-
inspection
34
Environment-related
Information
enhancement
Audible or visual
warnings
Physical workspace
Reduce noise, smells,
interruptions
Adequate breaks
Rethink production
standards
© 2010 Karen Martin & Associates
Ways to Error-Proof Data Entry
(continued)
System-related
Software
Drop-down menus instead of
free text field
Required fields
Pop-up warnings
Programming / macros
Hardware
Dual monitors
Ergonomic considerations
Process-related
Standardized work Proper sequencing
(logical order of work)
Job aids & visual
reminders
Checklists
Verbalize information
Repeat orders
Measurement &
feedback
35
Building a Lean Enterprise
Standard Work Job Aids
CRITERIA:
•Simple
• Visual
• Physical
• Posted at
point of use
• Created by
people who
do the work
and tested
by others
© 2009 Karen Martin & Associates 38
Standardize
The Power of Checklists
39
Before Employee Arrival
Ensure workplace readiness (Location, office supplies, computer, phones, etc.)
Arrange email and other software access
Secure computer (desktop or laptop), printer designation and phone/voicemail setup
Order business cards/stationary if applicable
Set up introductory/orientation meetings for new employee with key people with whom they will be working
Assign an Ambassador to serve as a go-to resource
First Days
Provide an overview of the department policies (vacation, sick leave, holidays, dress code, etc.)
Review job schedule and hours
Review initial job assignments and training plans
Review job description and performance expectations
Tour facility (break room, printer/copier area, supply area, mailbox, restrooms, and emergency exits)
Make initial introductions (team, support, liaison, internal customers, etc.) in person or by email as appropriate
Ensure employee badge is activated
Familiarize new employee with email, intranet, etc.
Explain telephone and voicemail system
Coordinate Division Manager Welcome Meeting
Onboarding Follow-ups
Conduct 90 day follow-up meeting (discuss employee's performance, development plans, and engagement)
Conduct 5-month follow-up meeting (discuss employee's performance, development plans, and engagement)
New Employee Onboarding Checklist
© 2010 Karen Martin & Associates
Our “sphere of influence” is
typically greater than we
believe.
We absolutely can influence
customer behavior!
Rethink your true sphere of
influence when when scoping
improvement activities and
selecting teams.
Avoid victim thinking (“we can’t
do anything about that”).
Improving the Quality of Customer
Requests
Transcribe Report
(MDI)
Lead Time = 5 mins.
% C&A = 75 %
Customer Demand:
15 patients per Day
(Takt Time = 32 minutes)
8 hours per day
Check-in
Patient(Admitting)
Cycle Time = 2 mins.
% C&A = 90 %
5
Send
Reports(Imaging)
Cycle Time = 3 mins.
% C&A = 90 %
6
Current State Value Stream Map
Outpatient Imaging Services
Schedule
Appointment
Cycle Time = 11 mins.Lead Time = 12 mins.
% C&A = 98 %
6
Pre-register
Patient
Cycle Time = 30 mins.Lead Time = 990 mins.
% C&A = 100 %
5
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
0.0833 hrs.
2 mins.
0.0833 hrs.
1 mins.
1.33 hrs.
28 mins.
4.13 hrs.
15 mins.
6.08 hrs.
5 mins.
16 hrs.
1 mins.
1.83 hrs.
1 mins.
2 hrs.
3 mins.
LT = 32.5 hrs.
CT = 56 mins.
CT/LT Ratio = 2.87%
Lead Time = 990 mins.
Prep Patient, Conduct
Exam, Transmit
Images (Tech)
Cycle Time = 28 mins.
% C&A = 90 %
2
Check-in
Patient(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Read/Dictate
Exam(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Review / Sign
Report
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
2365 mins. 960 mins. 110 mins. 120 mins.80 mins.
E Pay
Excel
ADS
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
PACS
5 mins.
Lead Time = 10 days
Meditech
234
5 6 78 9
1011 12
Auto Fax 50%
Us Mail 25%
MD Mailbox 25%
Rework Loop
via Fax 25% of
the time
Rolled First Pass
yield = 30%
Patient
1
Value Stream Champion: Paul Scanner
Created July 19, 2005
Refer Patient
(Physician)
% C&A = 65 %
Lead Time = 12 mins. 2
5 mins.248 mins.
%C&A = 65%
RFPY = 30%
© 2010 Karen Martin & Associates
You Can Influence Customer
Behavior
Standard work
designed for
and with the
customer
Refer Patient
(Physician)
% C&A = 85 %
Patient
Send
Reports
(Imaging)
Cycle Time = 3 mins.
% C&A = 90 %
6
Future State Value Stream Map
Outpatient Imaging Services
Schedule appt
Pre-register
Cycle Time = 11 mins.
Lead Time = 45 mins.
% C&A = 98 %
6
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
0.0833 hrs.
1 mins.
1 hrs.
28 mins.
2 hrs.
15 mins.
7 hrs.
1 mins.
0.0333 hrs.
1 mins.
0.5 hrs.
3 mins.
LT = 11.4 hrs.
CT = 49 mins.
CT/LT Ratio = 7.14%
Lead Time = 45 mins.
Lead Time = 5 days
Prep Patient,
Conduct Exam,
Transmit Images
(Tech)
Cycle Time = 28 mins.
% C&A = 90 %
2
Check-in
Patient
(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Read/Dictate
Exam
(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Review
/Sign
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports
(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
22 mins. 30 mins.60 mins.
E Pay
Excel
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
PACS
5 mins.
Set-up
Reduction
Remove
Redundant
Check-in
Standard
Work
Pull System
(Supplies
Kanban)
Visual
Workplace
Voice
Recognition
Batch
Reductions
5S
Co-locate
Standard
Work
Work
Balance
Continuous
Flow
Value Stream
Alignment
Auto Fax 80%
Us Mail 15%
MD Mailbox 5%
Rolled First Pass
yield = 59%
Rework Loop
via Fax 10% of
the time
Customer Demand:
15 patients per Day
(Takt Time = 32 minutes)
8 hours per day
23
4 56 7 8 9
Risk
Reduction
(Joint Commision)
Meditech
420 mins.
1
Value Stream Champion: Paul Scanner
Created July 20, 2005
120 mins.
Reduce Data
Entry
Requirements
Standard
Work
Cross
Training
Standard
Work
%C&A = 85%
RFPY = 59%
© 2010 Karen Martin & Associates 44
Key Metrics: Time
Process time (PT)
The time it takes to actually perform the work, if one is
able to work on it uninterrupted
Includes task-specific doing, talking, and thinking
aka “touch time,” work time, cycle time
Lead time (LT)
The elapsed time from the time work is made available
until it’s completed and passed on to the next person or
department in the chain
aka throughput time, turnaround time, elapsed time
© 2010 Karen Martin & Associates
Measuring Productivity Gains:
Freed Capacity
Labor Effort
45
Available work hrs/year/employee
Freed
Capacity = Current State FTEs – Future State FTEs
Note: Improvement can be expressed as Freed
Capacity (FTEs), Time, or Labor Expense (or all)
Total PT (in hrs) x # occurrences/year
# FTEs =
# FTEs = Full Time Equivalents; 2 half-time people = 1 FTE
© 2010 Karen Martin & Associates
What do you do with freed capacity?
Absorb additional work without increasing staff
Reduce paid overtime
Better work/life balance
Slow down & think
Innovate – create new revenue streams
Conduct ongoing continuous improvement activities
Do a better job with fewer errors and higher safety
Get to know your customers; build stronger supplier relationships
Mentor staff to create career growth opportunities
Provide additional workforce development; cross-training
Do the things you haven’t been able to get to; get caught up
Collaborate with other areas
Reduce payroll through natural attrition
46
© 2010 Karen Martin & Associates
Establishing a Quality Culture
Remove all obstacles to an employee’s success
Adequate time for quality work
Pressure-free
Effective training
Robust processes
Automation
Make problems visible
Stop “the line” / fix problems immediately
Honesty is honored; Blame-free
Improvement-oriented
Inspection is a last resort, not the first solution. 47
© 2010 Karen Martin & Associates 48
Mapping Resources
The Complete Lean
Enterprise, Beau Keyte &
Drew Locher
(Value Stream Mapping)
The Kaizen Event Planner,
Karen Martin & Mike
Osterling
(Ch 12 – Metrics-Based
Process Mapping)
Metrics-Based Process
Mapping: An Excel Tool,
Karen Martin & Mike
Osterling
© 2010 Karen Martin & Associates
You will learn…
The key metric (%C&A) for measuring
quality in office/service settings.
Error-proofing prioritization.
Countermeasures for improving office and
service “in-process” quality.
How to translate quality improvement into
productivity gains.
50
© 2010 Karen Martin & Associates
Questions / Discussion
What challenges do you have in measuring
or improving quality in your work
environment?
Do you have any questions about how to go
about measuring the output quality at each
handoff?
Do you have any questions about linking
office/service quality improvement to
productivity gains?
51
© 2010 Karen Martin & Associates 52
Karen Martin, Principal
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
For Further Questions
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