MODERN MANAGEMENT TECHNIQUES 1

Presenter : Dr. Vishal

Moderator: Dr. G K Ingle

PLAN OF PRESENTATION

• Definitions and concepts of management

• Relevance to health

• Traditional vs modern management tech.

• Classification

• Description of each technique

• Challenges in management

• References

• What is Management? “Management is getting the right things done – In right way,– In right time, – By right persons – With right amount of resources and effective use of

resources.”

• It is the efficient use of resources and to get people to work harmoniously together in order to achieve objective. ( WHO)

EFFICIENCY AND EFFECTIVENESS

Term Modern: It is a basic principle of good management to

choose methods to suits whatever resources available and to use

them in pursuit of well-chosen objectives.

“Health System Management : is defined as purposeful & efficient

use of health system resources and to get members of the health

team coordinated to work harmoniously in order to achieve the

desired common Goals and Objectives.”

Importance of management in health

Human Resource management

Time management

Material management

Financial management

Relevance of modern management technique in health

Overlapping, conflicting and competing organizations

within Health system.

Widely scattered funding mechanism with little control

over costs

Decisions on the mixture of facilities and services

without reference to population need and with no

information about those who do not use the services.

Emerged in the last few decades, since world war II.

These make increasing use of mathematical and

statistical concepts and methods.

These are the quantitative & semi-quantitative

methods which are fruitfully employed in management

of business, defense, industry and health.

It has been proved that these techniques useful in

increasing the efficiency by cost reduction as well as

ensuring better health care

Traditional vs Modern management tech.

Traditional : based on behavioural sciences eg.

Personnel selection, training & retraining, motivational

methods, leadership development, supervision etc.

Modern : based on sociology, psychology, social

psychology, educational technology, economics and

statistics

Modern management techniqueStatistical techniques

• Time trends & forecasting• Decision theory and tree

Activity analysis• Time motion studies• Work sampling and activity

analysis• Queuing theory• Gantt chart & work

schedule

Mathematical techniques• Simulation study/models• Systems analysis• Linear programming• Inventory control• Network analysis• PERT & PEP• CPM

Modern management techniquesFinancial techniques

• Monitoring expenditure• Cost accounting & analysis• DALY• Cost benefit analysis• Cost effectiveness analysis• Performance budget• PPBS• Zero base budgeting• Input output analysis• Outcome budget

Miscellaneous• Management by objective

& appraisal by results• Management by exception• Situational analysis• Current state assessment• SWOT analysis• Log frame analysis

STATISTICAL TECHNIQUES

1. Time–trends and forecasting : based on information

on occurrence of certain events, certain patterns can be

recognized eg. 1. Secular trend – increasing incidence

of CHD, accidents and cancers etc. 2. seasonal

variations of gastro-enteritis.

• Based on past experience, predictions can be made

about the expected occurrence, by using mathematical

methods eg. Demographers made projections about

population, epidemiologists anticipation of epidemic

2. Decision theory and decision tree :• A methods for determining the optimal course of action

when a number of alternatives are available and their consequences cannot be forecast with certainty

• Uses probabilistic analysis to help in the selection of remedial actions.

Types of environment:1. Decision making under certainty

– Future “states of nature” are known– Will choose the alternative that has the

highest payoff (or the smallest loss)2. Decision making under uncertainty

– Future “states of nature” are uncertain– Depends on the degree of decision maker’s

optimism3. Decision making under risk

Decision theory Applies

Decision Tree• It is a decision support tool that uses a tree-like graph of

decisions and their possible consequences ( including

chance event outcomes, resource costs, and utility)

• Commonly used in operations research, specifically

in decision analysis, to help identify a strategy most

likely to reach a goal.

• It enables people to decompose a large complex

decision problem into several smaller problems

• Symptomatic patient: »operate (risky) »medical management• If disease present at surgery, must decide whether

try for cure or palliate• Want to evaluate surgery vs. medical management

Constructing a decision tree

Three types of nodes:1. Decision node - 2. Chance node - 3. End node - • only splitting paths no converging path

• Decision theory (DT) represents a generalized approach to decision making

• Decision making is an integral part of management:– The decision maker selects one strategy (course of

action) over others depending on some criteria, like utility, sales, cost or rate of return.

– Is used whenever an organization or an individual faces a problem of decision making or dissatisfied with the existing decisions or when alternative selection is specified

Solution steps to any decision problem

1. Identify the problem2. Specify objectives and the decision

criteria for choosing a solution3. Develop alternatives4. Analyze and compare alternatives5. Select the best alternative6. Implement the chosen alternative7. Verify that desired results are achieved

Advantages of decision trees• Are simple to understand and interpret• Useful to analyze the possible outcomes of

complex decisions.• Possible scenarios can be added• Most rational decision is taken in terms of

resource and effectiveness.• Worst, best and expected values can be determined

for different scenarios• For example : to study alternative health strategies

in disease screening, immunization etc.

ACTIVITY ANALYSIS TECHNIQUE

1. Time motion studies : it consists of observing and timing

by using stopwatches the physical work & movements carried

out by worker.

• 1) a complex task is broken into small & simple steps,

• 2) the sequence of movements taken by the employee in

performing those steps is carefully observed and analyzed to

detect & eliminate redundant and wasteful motion,

• 3) precise time taken for each correct movement is measured.

ADVANTAGES: • Reduction of physical effort• Time saving and• Increase productivity

• Eg. From each ward lab samples used to sent with a servant to central path lab. Servants take excessive time to return.

• Modification :- one servant from the central lab goes to different ward with trolley at predetermined time. Reports delivered in same way

2. WORK SAMPLING AND ACTIVITY ANALYSIS Work sampling : is a commonly used industrial engineering

technique designed to measure how resources such as people, machines, facilities, or equipments are utilized.

• The method consist of making observation at random for appropriate length of time and recording the utilization of equipment or activities of a people during these periods.

• sample statistical method total activity

• Work sampling is used to estimate the proportion of workers' time that is devoted to different elements of work activity.

• The idle time of machines and equipment can be calculated

• Observed activities are grouped into either of two main classifications: working or nonworking.

• The working classification can be subdivided into desirable or undesirable.

Advantages:• work sampling is a low cost alternative to continuous

monitoring, just as sampling in the audit context is a low cost alternative to 100 percent evaluation of an account.

• Better and proper utilization of time

• Example: Observations among nurses : 21 % of time spent on bed side nursing.33 % of time spent on clerical activities in the ward

• PHC staff: 15 % of time on direct services, 34 % on administration, 21 % on travel, 30 % on non productive activities.

3. Queuing Theory

Queuing theory is basically a mathematical approach applied to the analysis of waiting lines.eg.  emergency room, OPD setting, pharmacy, for emergency and disaster management preparedness etc.

Goal of queuing analysis: to minimize costs

Costs of waiting lines or queue: 1. Cost associated with patients having to wait for service Loss of business to HCO Costs incurred by society Decreased patient satisfaction and quality of care

2. Cost of providing the services (capacity cost) Salaries paid to employees. Salaries paid to employees or servers while they wait for

service from other server, for eg. waiting for the pathology report, radiology report, labs, etc.

Fixed costs – cost of waiting space, facilities, equipments, and supplies.

• It is extremely useful in predicting and evaluating performance• Excessive queuing can quickly erode customer loyalty. • How to minimize the time spent by customers standing in a

queue• What is the trade-off between the time customers spend

queuing and the cost of additional capital to reduce queuing times?

Answer is Queuing analysis• Queuing theory involves the analysis of what is known as a

queuing system, which is composed of a server; a stream of customers, who demand service; and a queue, or line of customers waiting to be served

Characteristics• Arrival Process

– The probability density distribution that determines the customer arrivals in the system.

• Service Process– The probability density distribution that determines the customer service

times in the system.• Number of Servers

– Number of servers available to service the customers.• Number of Channels

– Single channel – Multi channels

• Number of Phases/Stages– Single Queue – Series or Tandem – Cyclic -Network

• Queue Discipline -Selection for Service– First com first served (FCFS or FIFO) – Last in First out (LIFO)

-Random -Priority

Assessing the parameters• Customer arrival rate

– The number of customers entering the system per unit time

• Customer service rate– The number of customers the system serves per unit

time

• Average number of customers in the system– The number of customers either waiting in queue or

receiving service• Average delay per customer

– The time a customer spends waiting plus the service time

Little’s Law• Example: the average number of customers (N) can be

determined from the following equation:• N= T• lambda - is the average customer arrival rate and • T - is the average service time for a customer.• Let N = the number of people seated (say 200)• Let T = mean amount of time a person stays seated (say 90 min)• Conclusion

– Avg . Customer arrival rate = 200/90 = 2.22 persons per minute• Wait time

– If 100 people are waiting, you could estimate that you will need to wait 100/2.22 = 45 min

4. Gantt ChartA Gantt chart is a graphical representation of the duration of tasks against the progression of time.

It is a type of bar chart that illustrates a project schedule. allow to assess how long a project should take.

Gantt charts monitor progress.

It can immediately see what should have been achieved at a point in time.

Gantt charts allow to see how remedial action may bring the project back on course.

Henry Laurence Gantt (1861-1919)

How to make Gantt chart• Can be created with simple tools like Excel, but

specialised tools like Microsoft Project make it easier

• Step 1 – list the tasks in the project

• Step 2 – add task durations

• Step 3 – add dependencies (which tasks cannot start

before another task finishes)

• Step 4 – lay out all of the bars on the graph

Choose research area

Preliminary research

Decide research topic

Decide methodology

Submit/present proposal

Finalise methodology

Conduct research

Analyse data

Write up

Submit assignment

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Fig. Simple research project Gantt chart

Tasks

Duration

• Characteristics:– The bar in each row identifies the corresponding task– The horizontal position of the bar identifies start and end times

of the task– Bar length represents the duration of the task– Task durations can be compared easily– Good for allocating resources and re-scheduling– Precedence relationships can be represented using arrows– Critical activities are usually highlighted– Slack times are represented using bars with doted lines– The bar of each activity begins at the activity earliest start time

(ES)– The bar of each activity ends at the activity latest finish time

(LF).

AdvantagesSimpleGood visual communication to othersTask durations can be compared easilyGood for scheduling resources

DisadvantagesDependencies are more difficult to visualiseMinor changes in data can cause major changes in the

chart

1. Simulation Studies/Model• Use of mathematical models to calculate

results by means of simulation of a real situation.

• Impact of inputs and changes on the output can also be estimated

• Objective : to forecast the probable effects of measures in terms of relative cost and benefit.

Mathematical techniques

2. Systems Analysis• System : An

arrangement and set of relationships among multiple parts functioning as a whole.

• Systems Analysis: Study of inter relationships operating in the various components within a system and also between a system and other systems.

• Systems: Hospital, Community health centre, dispensary,

Steps• Set of objectives to be achieved is

defined and alternatives to achieve these is formulated.

• Alternatives are evaluated in terms of cost-effectiveness.

• Mathematical models may be used.

3. Linear Programming• Mathematical tool

Components of a system and its constraints are depicted In a linear equation and the desirable combination of activitiesWith regard to certain given set of objectives and constraints is arrived at.

linear programming (LP) problems are optimization problems in which the objective function and the constraints are all linear.

• It is a useful tool for deciding the course of action for a problem in which there are competing alternatives uses for limited resources.

4. Inventory Control• Method of

maintaining of stock at a level at which purchasing and storing costs are the lowest possible without interference with supply

Why needed? If drugs purchased in large quantity Adv: the risk of out of stock avoided Disadv:

locking up money in maintaining huge stock large storage space require staff to store and handle various items chances of expiry, pilferage

Objective : maintaining optimum stock

TechniquesABC analysisVED analysisFSN analysisSDE analysis

Category % Of item % of Invest

A 10-15 70-80

B 20-25 15-20

C 60-70 5-15

Analysis of store items based on their cost

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CUMMULATIVE CUMMULATIVE COST COST [Rs.]

ANNUAL COST ANNUAL COST [Rs.]ITEMITEM COST %COST %ITEM %ITEM %

70 %70 %

20 %20 %

10 %10 %

10 %10 %

20 %20 %

70 %70 %

ABCANALYSIS

WORKSHEET

• A items : small in no. , but consume large amount of resources

• Must have• Tight control• Rigid estimate of requirement• Strict & closer watch• Low safety stock• Managed by top management

• C items : larger in no. but consume lesser amount of resources

• Must have• Ordinary control measures• Purchase based on usage estimates• High safety stocks

VED Analysis : based on criticality in pt. care

• VED Analysis V=10% E=39%D=51%

• V =Vital life saving drugs. Absence of which cannot be tolerated.

• E= Essential items. Absence can be tolerated for a short time period.

• D=Desirable. Non availability can be tolerated for a longer period.

Combination of ABC &VED Analysis

V E D

A AV AE AD CAT I 15%

B BV BE BD CAT II 40%

C CV CE CD CAT III 45%

Cat 1 : needs close monitoring & controlCat 2 : moderate control Cat 3 : no need for control

SDE ANALYISBased on availability

ScarceManaged by top level managementMaintain big safety stocks

DifficultMaintain sufficient safety stocks

Easily availableMinimum safety stocks FSN ANALYSIS

Based on utilization.Fast moving.Slow moving.Non-moving.Non-moving items must be periodically reviewed to prevent expiry & obsolescence

5. Network analysisA technique whereby objectives are identified, activities and tasks involved in attaining the objectives

are determined and their interrelationships are presented graphically in the form of network and used as a basis of determining sequence of activities and allocation of resources.

Planning and monitoring the progress of large no. of different interrelated activities necessary for the completion of project with minimum time & cost.

• AdvantagesSimple to understandWell defined in practical termsApplies to any project where activities

can be described sequentially. InexpensiveDoes not need very highly qualified

specialists.

• Two types :Programme Evaluation Review

Technique (PERT)Critical Path Method (CPM)

PERT• Programme Evaluation Review Technique : Shows

diagrammatically the logical sequence in which different events between the start and end of the project need to take place

Plan service

Staffrecruited

Equipment ordered

Staff trained

Equipmentinstalled Start providing

service

2 months

4 mnths

2 months

1 months

1 months

10 months

• PERT involves planning, monitoring and controlling of projects where time taken for each activity in the project is not known

• PERT is classically used in long-term projects like construction of hospitals, ships, roadways and buildings, in planning & launching of new health programs, products & services, in publication of books etc where exact time for each phase is not known with certainty.

• PERT uses probabilistic and linear programming methods to assist a manager in planning schedules & costs, determining time & cost status, forecasting skill requirements,

• Under PERT, three time-estimates are made, 1. Most Likely Time is the time taken most

frequently in completing a particular activity.2. Optimistic Time is time in which an activity can

be completed, if all goes as per the pre-determined plan.

3. Pessimistic Time is the time taken to complete an activity under most adverse conditions. This is thus the longest possible time taken to complete a project.

• Calculation of activity timeActivity Time= Optimistic time + 4 X( likely expected time)

+Pessimistic time 650 % chance (Probability of correct estimate of time)

• Advantages of PERT

Aids in planning, scheduling and monitoring the project

Provision for better communication

Identifies potential problems

Furnishes continuous timely progress report

Enables evaluation and feedback

• Disadvantage of PERT

Overemphasis on time & almost no attention to cost

Critical Path Method (CPM)• Longest path in the method.• The process cannot end before the critical

pathway ends.• Reduction in time of a project is only

possible if there is a reduction in the time taken the critical path.

• Reduction in time may be brought about by increase in the resources keeping cost factor in mind.

Determining the Critical Path for Project X

EMERGING CHALLENGES FOR MANAGEMENT

• Globalilization: Managers need to think globally and act locally.

• Technology: Management will need to manage changing technology effectively.

• Quality: Quality assurance is getting important. • Social responsibility: Management will pursue long term

goals that are good for society. • Empowerment: To empower worker is a challenge to

management. • Human resource management: Management needs to deal

with diversified work force, requires visionary leadership on the part of management

• Organization design: Organization will be lean flat and less hierarchical

References• Modern management methods and

organization of health services. WHO.pdf• Park’s Textbook of Preventive and social

Medicine. 22nd ed.• P. V. Sathe’s textbook of Epidemiology and

management for health care for all. 3rd edition

• Reetu Mehandiratta. Applications of queuing theory in health care. IJCBR. May 2011. VOL2 N2.P9