and learning teal consulting limited a a meeting customer demand in challenging times july 2010
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and Learning
TEAL Consulting Limited
aa
Meeting Customer Demand in Challenging Times
July 2010
Slide 2 © TEAL Consulting Limited 2010
Internal FactorsErrors, delays and inefficiencies – plus causes
and implications
External/Environmental FactorsWhat external constraints are imposed on the
service which affect its performance and ability to improve (e.g. economic factors, lack of customer knowledge, unrealistic customer expectations of
the service)
Customer Demand
Type, Volume, Variation, Service vs. Failure, Non-
Service Requests, Feedback & Complaints
Service Delivery Chain
Step 1 Step 2 Step 3 Step n
Service Outputs & OutcomesWhat value and
benefit do customers get from the service – what is
the impact on related services provided by the organisation?
Service Understanding
Slide 3 © TEAL Consulting Limited 2010
Outcomes vs Outputs
It's important to understand the difference Processes deliver – OUTPUTS
– Recruit Staff - new appointed people
OUTCOME - a level of performance or achievement– The staff may be:
• at the right time or too late for the line manager
• capable or incapable of performing their role • too many or too few
Slide 4 © TEAL Consulting Limited 2010
SERVICE PURPOSE
Desired Outcomes, Success Criteria, KPI’s and Targets
SERVICE EFFECTIVENESS
Customer Focused Process
Customer Outcomes, Customer Satisfaction/Dissatisfaction
CUSTOMER DEMAND
SERVICE EFFICIENCY
Service Requests, Avoidable Contact, Complaints….
Resources Needed to Satisfy All Demand
Slide 5 © TEAL Consulting Limited 2010
What are we trying to achieve
Quality
TimeCost
Our focus is – variation reduction
Our focus is – waste reduction Our focus is – a reduction in the amount of
calendar time consumed
+ PeopleQ
C T
People are theglue that holdorganisations
together
Our focus isempowerment
Slide 6 © TEAL Consulting Limited 2010
Cost of Poor Quality COPQ
Prevention Costs
External Failure Costs
Appraisal Costs
Internal Failure CostsCost of
Conformance
Cost of Non-Conformance
Slide 7 © TEAL Consulting Limited 2010
Understanding Customer Requirements
Gather meaningful Data on what the Customer requires–Voice of the Customer (VOC)
Analyse and Translate VOC into meaningful terms–Critical to Quality standards (CTQ)
Slide 8 © TEAL Consulting Limited 2010
Starting with “What is a Customer ?”
A Customer is a recipient of the Output of a Process
The Customer can be Internal or External
External Customers are not limited to end-users of the Product or Service
External Customers can also include Regulators, Monitors of Law and the Public or Community (Stakeholders)
The definition of Quality here means satisfying Customer Needs
The definition of Quality here means satisfying Customer Needs
Slide 9 © TEAL Consulting Limited 2010
Kano Model of Customer Expectations
Need not Fulfilled
Satisfaction
Need Fulfilled
Must Have’sDissatisfaction
Region
Satisfaction Region
Delighters
More is Better
ServicePressure
More is Better needs are generally explicit,
Must Have’s and Delighters are usually unspoken
More is Better needs are generally explicit,
Must Have’s and Delighters are usually unspoken
Dissatisfaction
Slide 10 © TEAL Consulting Limited 2010
VOC to CTQ : CTQ Tree
General Specific
Hard to measure Easy to measure
CUSTOMER:“Good room service"
Speed of DeliveryElapsed Time from Order to Arrival
Cost Service Charge
Compared with eating in restaurant
Taste
Presentation
Temperature
Food Quality
VOC Critical Customer Requirement CTQ
“Vague” terms Measurable items
Slide 11 © TEAL Consulting Limited 2010
Defining Customer CTQs
Convert customer data into Specific Requirements
Define a Requirement not a Solution
Document all the information
Ensure the Requirement is Measurable
Define the Measure
Establish meaningful Specification Limits
The acid test is whether the CTQ can be Measured
The acid test is whether the CTQ can be Measured
Slide 12 © TEAL Consulting Limited 2010
Runners, Repeaters & Strangers
% Vol
80%
100%
95%
% Service range
RunnersRapid flow Dedicated processesSelf managed
20%
RepeatersPartially flowShared processes Some management
StrangersOne offs Universal processesSignificant management
Slide 13 © TEAL Consulting Limited 2010
Consider the following 3-step process:
Input 100documents A B C Output 90
documents
Yield = 90%
Is this the whole story?
Rolled Throughput Yield
Problems in processes have a cumulative effect...
Slide 14 © TEAL Consulting Limited 2010
REWORK
Rework - Hidden Processing
Input 100Documents
ARFT = 94%
BRFT = 91%
CRFT = 92%
Output 90Documents
9398
SCRAP
What is the true yield (Rolled Throughput Yield) ?
6 4
2
9 4 7 4
5 3
Slide 15 © TEAL Consulting Limited 2010
Rolled Throughput Yield
Input 100documents
ARFT = 94%
BRFT = 91%
CRFT = 92%
Output 90documents
9398
Rolled Throughput Yield
= RFTA x RFTB x RFTC
= 0.94 x 0.91 x 0.92
= 79%
A true reflection of process performance
Slide 16 © TEAL Consulting Limited 2010
Overall Process Effectiveness
Element Six Big Losses Description Example
Major stops Unable to run - Major stop > 10 minutes IT failure / No staff / No work
Transition Losses Delays between activity Awaiting patients or information. Set-up
& clean down at start & end of day
Minor stops Interruptions. Minor stops < 10 minutesUnplanned distractions - Phone, email,
colleagues
Skill Losses Wrong things or wrong staff Completing unnecessary work or Dr
covering on reception
Process errors Internal failuresCorrecting data entry errors / dealing
with customer complaints
Supply errors External failuresMistakes made by others - Courier
damage / Pathology lab results
Availability
Performance
Quality
Source : Lean Toolbox for Service SystemsJohn Bicheno
Slide 17 © TEAL Consulting Limited 2010
Exercise Objective
– To identify the Customers of your Processes– To consider what improvement could be made in your
service effectiveness and efficiency
How – List 1 of your service processes– Identify all the Customers of this Process – Internal and
External– Consider what measures exist for your processes
Output– An understanding of what measures currently exist– An initial assessment of the effectiveness and efficiency
of your Processes
Slide 18 © TEAL Consulting Limited 2010
Reminder - Customer Value
Value is Generated for Customers via – Quality– Cost of Service– Delivery
In meeting Customer Needs there is benefit for the organisation in terms of
– Right first time – lower number of repeat calls– Lower Costs – Less time wasted– Satisfied customers e.g. rate payers
Reduction of Non Value Adding time is a major driver
– Minimising amounts of staff time wasted.
Slide 19 © TEAL Consulting Limited 2010
External Perspective
Time
Waiting time
Waiting time
Length of delivery
delay
Perceived service quality
They don’t care about
my business; it isn’t worth
the wait
B
Customer traffic
Slide 20 © TEAL Consulting Limited 2010
Internal Perspective
Customer SatisfactionLevel of
customer satisfaction
Length of delivery
delay
Sales
Size of service and
delivery department
We can’t afford these employees
Slide 21 © TEAL Consulting Limited 2010
And Finally
Understanding what outcome the service is intended to deliver - is the start
Understanding how this impacts on quality
of service delivery is critical
The effectiveness of the service has a direct impact on your costs
So jumping to be more efficient before addressing effectiveness is a short term fix – which will come back later
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