Modern Management Techniques

Ravi RohillaCommunity Medicine

PGIMS Rohtak

Contents

• Introduction• Classification• Various Management techniques• References

Definition

• Management is the art, or science, of achieving goals through people.

• More broadly, management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.

Objectives

• There are basically three management objectives.– Ensuring organizational goals and targets are met

with least cost and minimum waste.– The second objective is looking after health and

welfare, and safety of staff. – The third objective is protecting the machinery

and resources of the organization, including the human resources.

Classification

Management techniques are divided in following categories:

1. Statistical techniques2. Activity analysis3. Mathematical techniques4. Financial techniques5. Others(Miscellaneous)

Statistical techniques

1. Time trends and forecasting2. Decision theory and tree

Time trends and forecasting

• Time trend Analysis is the practice of collecting information and attempting to spot a pattern, or trend, in the information.

• Based on past experiences, prediction can be made about the expected occurrence, by using mathematical methods.

Time trends and forecasting

• For ex., Epidemiologist can construct endemic curves based on incidence of disease and also establish the likely limits of variations.

• If the incidence of a disease exceeds the expectation by certain limits, the occurrence of an increased incidence or epidemic can be anticipated.

Decision theory

Decision theory is the body of analytical tools, including logic and mathematical models, using probability theory and diagrammatic presentation for use in decision making.

Future events, which may affect decision making, are shown diagrammatically.

Decision tree

Decision tree is a diagram that depicts key interactions among decisions and associated chance events, as the decision maker understands them.

The base of the decision tree, drawn horizontally is the starting point denoting an event which occurs by chance.

Branching of tree into two or more branches begins at the first chance event.

Decision tree

A set of relative values for the predicted outcome of each possible decision can be made.

The highest value indicates the course most likely to produce the greatest benefit.

Poisoned Child

Identified

BPb 10-14

BPb 15-24

BPb 25

BPb 10-14

BPb 15-24

BPb 25

Recurrence

No Recurrence

Recurrence

No Recurrence

No

Enfo

rcem

ent

Envi

ronm

enta

l En

forc

emen

tGood Outcome

Good OutcomeBPb = blood lead levels μg/dlSource :Decision tree for blood lead level enforcement. (Brown MJ: Costs and benefits of enforcing housing policies to prevent childhood lead poisoning.

Poisoned Child

Identified

P=0.73

P=0.27

P=0.62

P=0.38

P=0.43

P=0.46

P=0.50

P=0.46

P=0.04

P=0.11

$74,166

$ 156,151

$ 349,660

$ 0

$ 79,093

$ 146,172

$ 305,579

$ 18,412

BPb 10-14

BPb 15-24

BPb 25

BPb 10-14

BPb 15-24

BPb 25

Recurrence

No Recurrence

Recurrence

No Recurrence

No

Enfo

rcem

ent

Envi

ronm

enta

l En

forc

emen

t

Good Outcome

Good Outcome

Source : Decision tree for blood lead level enforcement. Brown MJ: Costs and benefits of enforcing housing policies to prevent childhood lead poisoning. Med Decis Making 2002; 22: 482–92.

EC= $ 101,988

EC= $ 119,009

EC= $ 139,724

EC= $ 56,639

Contd…

• Expected cost of with no enforcement is $101,988 per child, compared with $56,639 for strict enforcement.

$101,988 per child

$56,639 per child

Enforcement reduces the cost from $101,998 to $56,639 or $45,349 per child who develops lead blood poisoning, on the average.

Activity analysis

1. Time motion studies2. Work sampling and activity analysis3. Queuing theory4. Gantt chart and work schedule

Time motion studies

• This technique consists of observing and timing by using stopwatches the physical work and movements carried out by a worker.

• The movements thus carried out are broken into segments, analyzed and redesigned so that task can be accomplished more efficiently.

In a hospital, all samples for lab investigations were taken from each ward to central lab every morning by ward class-4. In this process, many servants used to take extra ordinary time to return to ward once out of the ward. A modification of the system was adopted in which class 4 from central lab used to collect samples from each ward at specified time in

the morning, thus saving precious time. Also now each class 4 was available for duties in his respective ward.

Work sampling and activity analysis

• Work sampling is a technique for determining the proportion of time spent by workers in various defined categories of activity.

• In a work sampling study, – A large number of observations are made of the

workers over an extended period of time.– The observations must be taken at random times

during the period of study, and – The period must be representative of the types of

activities performed by the subjects.

• For example: In a study done on PHCs nurses in Punjab revealed that – 15% of time was spent on the direct services

including actual treatment, – 34% of time was spent on supportive services like

administration, record keeping, maintenance, supervision, etc.;

– 21% of time was spent on travel and – 30% time was spent on personal non productive

activities unrelated to work responsibilities.Such analysis thus enables not only a scrutiny of activites undertaken but also suggests possible modifications.

Queuing theory

• Queuing theory is the mathematical study of waiting lines, or queues.

• The theory enables mathematical analysis of several related processes, including arriving at the queue, waiting in the queue, and being served at the front of the queue.

Queuing theory

• Queuing theory has applications in telecommunications, traffic engineering, computing and the design of factories, shops, offices and hospitals.

For example: In a OPD patients have to go to registration clerk for registration and go to doctor for examination and then go to dispensary for drugs. If a patient spends three time the time with a Doctor for examination as he does with a registration clerk, there will be queue of patients waiting for examination by the doctor. If the number of registration clerks is only one third the number of Doctors then there will be smooth flow of patients.

Gantt chart and work schedule

• Developed by Frenchman Henry L. Gantt.• Gantt chart is a graphical representation of

the duration of tasks against the progression of time. Gantt chart is a type of bar chart that illustrates a project schedule.

• It is a useful tool for planning and scheduling projects.

Gantt chart for a Hospital construction project

GANTT CHART

Mathematical techniques

1. Simulation study/models2. Systems analysis3. Linear programming4. Inventory control5. Precedence and arrow diagramming6. Network analysis7. PERT8. CPM

Model/simulation study

Basic concept of management science in which there is symbolic representation of idealized situation.

This is an aid to understand how the factors in a situation affect one another.

This method has been used for planning and evaluation of immunization and sanitation programmes for control of typhoid fever.(Bull World Health Organ. 1971; 45(1): 53–75.)

Model/simulation study

An epidemiological model of typhoid fever was made to study transmission of infection at different levels.

Numerical values based on known evidence were assigned to parameters.

Changes were introduced in some parameters to study the effect of mass vaccination and improvement in general health and sanitation on incidence of typhoid.

System analysis

System is defined as an arrangement and set of relationships among multiple parts functioning as a whole.

System analysis is the study of inter- relationships operating in the various components within a system and also between a system and other system.

System analysis

This is used in decision making in public administration.

The technique is used to study different factors in totality and also to study changes necessary for improvement.

Inventory control

• Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.

• Various types of items are required in manufacturing industry and the right item must be available in required quantity when needed.

• The solution to avoid such “out of stock” position will be to keep a large stock of all items available all the time which is associated with high cost of carrying the inventory.

• Inventory control– Helps in maintaining an optimum level of the all

resource at least possible cost.– Determine appropriate levels of holding

inventories, ordering sequence & the quantities, so that the total costs incurred are minimized.

Inventory control

• ABC analysis• VED analysis• Ordering cost• Inventory carrying cost• Economic order quantity• Lead time• Safety stock• Reorder level• Stock turnover.

Inventory control methods

Precedence and arrow diagram

• The precedence diagram method is a tool for scheduling activities in a project plan.

• It is a method of constructing a project schedule network diagram that uses boxes, referred to as nodes to represent activities and connects them with arrows that show the dependencies.

Precedence diagram

• Activity-on-node (AON)– Nodes represent activities, and arrows show

precedence relationships

13

24

48

31 5

161

71Start

Design house and obtain financing Order and receive

materialsSelect paint

Select carpet

Lay foundations Build house

Finish work

AON Project Network for House

Arrow diagram

• Arrow diagram method consists of constructing a project network diagram using arrows to represent the activities and connecting them at nodes to show the dependencies. Known as activity on arrow.

34 0

18

1 111 2 4 6 7

3

5

Lay foundation

Design house and obtain financing

Order and receive materials

DummyFinish work

Select carpet

Select paint

Build house

AOA Project Network for House

Network analysis

• It is a general name given to certain specific techniques which can be used for the planning, management and control of projects.

• The basic principle of network analysis is to show diagrammatically the logical sequence in which different events necessary between the start and end of the project need to take place.

Network analysis

Involves 3 main stages1. Breaking down the project into a set of

individual jobs and arranging them into a logical sequence or network

2. Estimating the duration and resource requirement of each job deducing a schedule, finding which job control the completion of the project

3. Re-allocating money or other resources to improve the schedule

Network analysis - PERT

Programme Evaluation and Review TechniqueDeveloped by US navy in year 1958This is for more detailed planning and more

comprehensive supervision

PERT

Shown by an arrow diagram representing logical sequence in which events must take place.

USESTime by which each activity must be completed, can

be calculated.Critical activity can be identifiedIt aids in planning, scheduling and monitoring of the

project.Any problem which could disrupt time bound

attainment of goal can be identified and corrective action taken.

PERT

• In PERT, activities are shown as a network of precedence relationships using activity-on-arrow network construction

• Used in Project management - for non-repetitive jobs (research and development work), where the time and cost estimates tend to be quite uncertain.

CPM(critical path method)

Longest path of the network is called critical path.

If any activity along critical path is delayed, entire project will be delayed.

CPM network represent activities rather than events as done in PERT network.

CPM(critical path method)

• Activities are shown as a network of precedence relationships using activity-on-node network construction

• Used in Production Management - for the jobs of repetitive nature where the activity time estimates can be predicted with considerable certainty due to the existence of past experience

Financial techniques

1. Monitoring expenditure2. Cost accounting and analysis3. DALY4. Cost benefit analysis5. Cost effectiveness analysis6. Performance budget7. PPBS8. Zero based budgeting9. Input output analysis10. Outcome budget

Cost – accounting and analysis

Provides basic data on cost structure of any programme.

It has three important purposes in health services:Cost controlPlanning and allocation of people and financial

resources.Pricing of cost reimbursement.

Cost – accounting

Cost accounting is valuable management tool to identify inefficient services, locate wasteful use of resources, bring efficiency into health care system.

The insurance companies have to reimburse the expenditure incurred by insured persons in the medical treatment obtained from private medical practitioners and hospitals. The reasonableness of charges levied can be examined by carrying out the costing of the services.

DALY

• The disability-adjusted life year (DALY) is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death.

• Key measure employed by the World Health Organization in publications as its “Global Burden of Disease”.

DALY

• Benefits– DALYs calculated help in the prioritization of health

needs by quantifying the economic value of disease.

– Calculation of DALYs help the planner to compare the economic burden caused by two or more diseases, thus paving the way for decision on which should be taken up on an priority basis.In 1990, WHO report indicated that 5 of the 10 leading causes of disability

were psychiatric conditions. Psychiatric and neurologic conditions account for 28% of all years lived with disability, but only 1.4% of all deaths and 1.1% of years of life lost. Thus, psychiatric disorders, while traditionally not regarded as a major epidemiological problem, are shown by consideration of disability years to have a huge impact on populations.

Cost – benefit analysis

• It is an analysis of the expected balance of benefits and costs, helping predict whether the benefits of a policy outweigh its costs, and by how much.

• Benefits are expressed in monetary terms to determine whether a given programme is economically sound and to select best out of several programmes.

Cost – benefit analysis

Cost of sickness calculated from direct cost of treatment and investigations of the patient and he being the non productive member of the society.

Once the cost of disease is known, the cost of preventive measures can be compared with it.

Cost benefit analysis of intensified programme against smallpox in India during period July 1973 to December 1975 has shown net benefit of Rs 1058 million.

Cost – benefit analysis

Drawback: Benefits cannot always be expressed in

monetary terms as in health field benefits are generally in terms of reduction in mortality, morbidity and control or eradication of a disease.

Cost – effective analysis

Benefit is expressed in terms of result achieved rather than to express in monetary terms. eg. Number of lives saved.

This is a better tool than cost benefit analysis.

Cost – effective analysis

Two ways in which analysis can be done :1. A system which gives more units of

effectiveness for a given rupee is more efficient.

2. A system which enables the attainment of effectiveness at minimum cost in terms of rupees is more effective.

DDT was the cost effective method accepted for the vector control in malaria eradication programme

Planning programming budgeting system(PPBS)

This is to allocate resources so that the available resources of an organization are used in most effective way in achieving objective.

It helps in:Defining objectivesSelection from alterative programmesAllocating resources to achieve the objectives

Planning programming budgeting system(PPBS)

In this method , budgeting is link between planning and programming covering it into annual budget format.

Zero base budgeting

• Developed by Peter Phyrr• Defined as an operating, planning and

budgeting process which requires each officer to justify his budget from zero level upwards

• Starting from a Zero base of no funds for the programme, the sanctioning of every rupee needs justification even for ongoing programmes.

Zero base budgeting

• Benefits– Efficient allocation of resources, as it is based on

needs and benefits rather than history. – Drives managers to find cost effective ways to

improve operations. – Detects inflated budgets. – Increases staff motivation by providing greater

initiative and responsibility in decision-making. – Identifies and eliminates wasteful and obsolete

operations.

Zero base budgeting

• Drawbacks– More time-consuming than incremental

budgeting.– Justifying every line item can be problematic for

departments with intangible outputs.– Requires specific training, due to increased

complexity.– In a large organization, the amount of information

backing up the budgeting process may be overwhelming.

Input – output analysis

Input-output analysis seeks to explain how one industry sector affects others in the same nation or region. The analysis illustrates that the output of one sector can in turn become an input for another sector, which results in an interlinked economic system.

An input output table shows how much of each input is needed to produce unit amount of each output.Healthcare services consumes resources(inputs) in forms of

staff, equipment etc. and produces output like treatments given, deliveries conducted.

Miscellaneous

1. Management by Objectives2. Management by exception3. Situational analysis4. Current State Assessment5. SWOT analysis6. Log Frame analysis

Management by objectives (MBO)

• Management by objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them.

• The essence of MBO is – participative goal setting, – choosing course of actions and – decision making.

Management by objectives (MBO)• Benefits

– Employees tend to have a clear understanding of the roles and responsibilities expected of them

– Subordinates tend to have a higher commitment to objectives

– Better communication and Coordination between superiors and subordinates

• Drawbacks– Setting up of targets is in reality not participatory

but top management hand down targets– Everything else is secondary except targets

For example, distribution of family welfare targets to different districts in a State considering past performance, special conditions like drought, unrest. The targets were

then distributed among several sub district units on similar lines. The same cycle repeated in subsequent year.

Management by exceptions

• Management by Exception is a "policy by which management devotes its time to investigate only those situations in which actual results differ significantly from planned results.

• The idea is that management should spend its valuable time concentrating on more important items (such as shaping the project's future strategic course).For example, the company controller may be required to

notify management of those expenses that are greater than $10,000 or 20% higher than expected.

Management by exceptions

• Benefits– It reduces the amount of financial and operational

results that management must review, which is a more efficient use of their time.

– This type of management can be powerful when it is necessary to process lots of data in order to make managerial decisions.

• Drawbacks– This policy of management result in myopic

behavior.

Situational analysis

• This method described as ‘where are we now’, is the means by which a company can identify its own strengths and weaknesses as they relate to external opportunities and threats.

• It is an integral component of the management process to find out what the existing situation is, analyze the same, identify, which aspects needs changing, and then plan accordingly.

For example, studies regarding drug prescription and consumption in different types of health facilities. The result of these studies reveal the prescribing habits of

Doctors and the need and ways for improving drug management to make them safer and economical.

SWOT analysis

• SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.

• It involves identifying the internal and external factors that are favorable and unfavorable to achieve a objective.

SWOT analysis

• Benefits– Source of information for strategic planning. – Helps in setting of objectives for strategic planning– Helps in identifying core competencies of firm

• Drawbacks– Categorizing aspects might be very subjective – It may cause organizations to view circumstances

as very simple which organizations might overlook

Logical Framework

• The Logical framework(Logframe) is a method found useful for bringing about clarity in the process of planning, monitoring and evaluation.

• It compresses the entire programme being proposed in a summary format.

• Devised by U.S DoD, used by various agencies like UNDP, UNFPA.

References

• WHO. Modern management methods and the organization of health services, public health papers

• “Epidemiology and Management for Healthcare for All” By PV Sathe

• Wikipedia.en/org

Questions/Queries?