the new face of quality in office and service environments

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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


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


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

6


Measuring Process Quality

7

Customer

Step 1 Step 2 Step 3 Step 4


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

8


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.

9


Measuring Step-Specific Quality

10

Customer


%C&A =

70%

%C&A = 50%

%C&A =

85%

%C&A =

25%

%C&A =

80%


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).

11


Measuring Step-Specific Quality

12

Customer


%C&A =

70%

%C&A = 50%

%C&A =

85%

%C&A =

25%

%C&A =

80%

Rolled First Pass Yield = 6%


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

13

14

Quality:

People

aren’t the

problem.


Poor Input Quality Causes

Unnecessary Tension

Poorly designed processes are typically

behind interpersonal and interdepartmental

tension – not personalities.


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

16

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%

31

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%

6

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%

31

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%

6

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


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


(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

7

Mapping Team

Order Entry

Account Manager

Sales Rep

Customer

Seconds

Minutes

Hours

Days

Seconds

Minutes

Hours

Days


Summary Metrics

23


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


You can’t

inspect in

quality.


Inspection in the Office

Reviews

Approvals

Audits

Signatures

Improvement goal: Eliminate the NEED

for inspection.

26


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!

27

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


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.

30

Error-Proofing (Poka Yoke) Data Entry


“No Impact” Error


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


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


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

Standard Work Job Aids

CRITERIA:

•Simple

• Visual

• Physical

• Posted at

point of use

• Created by

people who

do the work

and tested

by others


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


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)


% 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)


% C&A = 90 %

2

Check-in

Patient(Imaging)


% C&A = 98 %

3

Read/Dictate

Exam(Radiologist)


% C&A = 95 %

2

Review / Sign

Report

(Radiologist)


% C&A = 95 %

2

Print

Reports(Imaging)


% 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%


You Can Influence Customer

Behavior

Standard work

designed for

and with the

customer

Refer Patient

(Physician)

% C&A = 85 %

Patient

Send

Reports

(Imaging)


% C&A = 90 %

6

Future State Value Stream Map

Outpatient Imaging Services

Schedule appt

Pre-register



% 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 = 5 days

Prep Patient,

Conduct Exam,

Transmit Images

(Tech)


% C&A = 90 %

2

Check-in

Patient

(Imaging)


% C&A = 98 %

3

Read/Dictate

Exam

(Radiologist)


% C&A = 95 %

2

Review

/Sign

(Radiologist)


% C&A = 95 %

2

Print

Reports

(Imaging)


% 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%


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


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


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


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

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

http://www.amazon.com/gp/product/1563273802?ie=UTF8&tag=karmarass-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1563273802

http://www.amazon.com/gp/product/1563273519?ie=UTF8&tag=karmarass-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1563273519


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


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


Karen Martin, Principal

7770 Regents Road #635

San Diego, CA 92122

858.677.6799

[email protected]

For Further Questions

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