The New Face of Quality in Office and Service Environments

The New Face of Quality in
Office and Service Processes
American Society for Quality
World Conference on Quality and Improvement
May 25, 2010

Company

LOGO

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.

© 2010 Karen Martin & Associates

2

Potential Impact of Poor Quality
Customer




Death or injury
Slow delivery
Lost market share

Financial





Excessive expenses
Missed performance
bonuses
Cash flow

Legal / Regulatory



Staff








Non-compliance
Litigation
Interpersonal &
interdepartmental
tension
Stress & frustration
Turnover / absenteeism
Poor morale
Inability to attract talent
4

Cost of Poor Quality
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
Prevention Order entered correctly
Inspection Error detected by billing dept
Failure Error detected by customer
Big Failure Cost of customers telling others

Cost
$1
$ 10
$ 100
???
5

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

Customer

Step 1


Step 2

Step 3

Step 4

7

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

Customer
%C&A = 50%

Step 1

Step 2

Step 3

Step 4

%C&A =
70%

%C&A =
85%

%C&A =
25%

%C&A =
80%


10

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

Customer
%C&A = 50%

Step 1

Step 2

Step 3

Step 4

%C&A =
70%

%C&A =
85%

%C&A =
25%

%C&A =
80%

Rolled First Pass Yield = 6%

12

Reasons for Office / Service Errors
Lack of effective training Hardware / software
issues
Non-standardized work
Environmental
Excessive complexity
 Interruptions
Time delays between
 Noise, odor, lighting
input and output
Ambiguous information
Multi-tasking
 Unclear instruction
Rushing
 Poor handwriting
Poor knowledge re:
 Blurry images
internal customer
(technology-related
requirements

13

Quality:
People
aren’t the
problem.

14

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
Supplies Purchasing - Current State VSM
Purchasing — Non-repetitive purchases less than $5,000
Inititate Req.

1

Originator
31
PT = 10 mins.
C&A = 10%
Supplies
Hard Copy

Form File

File Maker

Quicken

Vendor
Website

Excel

ERP

Data Entry

Review
Budget

2

Review Req.

Finance
PT = 5 mins.
C&A = 60%

0.25 days

4 hrs.

PT = 5 mins.
C&A = 95%

0.5 days
5 mins.

20 Reqs

Review 4
Requisition

40 hrs.

PT = 5 mins.
C&A = 90%

8 hrs.

PT = 5 mins.
C&A = 100%

1 days
5 mins.

8 hrs.

7

10 Reqs

1

PT = 10 mins.
C&A = 95%

4 hrs.

PT = 15 mins.
C&A = 98%

0.5 days
10 mins.

Approve in
ERP

24 hrs.

PT = 5 mins.
C&A = 90%

3 days
15 mins.

Submit PO
to Supplier

8
63 Reqs

9

10
External
Supplier

Corp Purchasing
Manager
1

Admin Asst

Financial Mgr
1

1 days
5 mins.

Enter
Requisition

Review 6
Requisition

IS Manager
1

1

5 days
5 mins.

Review 5
Requisition

Sys Engineer

Supervisor
2

6
2 hrs.

3

Corp Purchasing
6
56 hrs.

PT = 15 mins.
C&A = 98%

7 days
5 mins.

80 hrs.

PT = 20 mins.

10 days
15 mins.

LT = 28.4 days
PT = 65 mins.
AR = 0.477%
RFPY = 4.2%

Customer Demand:
615 requisitions per y ear

PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activ ity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Y ield

Future State Value Stream Map
Supplies Purchasing - Future State VSM
Purchasing — Non-repetitive purchases less than $5,000
Additional
IT access
Enter Req.
in ERP
Integrate Form
File with File
Maker

1

Originator
31
PT=30 mins.
C&A = 85%
Supplies
Requisition
Checklist
Vendor
Websites

File Maker

Cross
Training

Approval

Additional
IT access

2

4 hrs.

6 hrs.

0.75 days
5 mins.

Place
Order

3

4

5
External
Supplier

6

PT=20 mins.

80 hrs.

PT=20 mins.
C&A = 98%

1 days
5 mins.

Dedicated
Buyers

Corp Purchasing
8 hrs.

PT=5 mins.
C&A = 90%

PT=5 mins.
C&A = 95%

0.5 days

Approve
in ERP
Dept.
Manager
1

Supervisor
2

Use budget in place
of Quicken

Auto Notify

Standard
Work for
review

Review
Req.

ERP

10 days
20 mins.

LT = 12.3 days
PT = 30 mins.
AR = 0.508%

Customer Demand:
615 requistions per year

PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield

RFPY = 71%

Purchasing Process
Projected Results

Metric
Lead Time
Process Time
% Activity
Rolled First
Pass Yield
# Handoffs
# IT Systems
Freed capacity

Current
State

Projected
Future State

%
Improvement

28.4 days

12.3 days

56.7%

65 mins
0.48%

30 mins
0.51%

53.8%
6.3%

4.2%

71.0%

1,590%

10
6

5
3

50%
50%

2.1 FTEs

10%

Metrics-Based Process Mapping
(MBPM)

MBPM Post-it Conventions
Step #
Activity
(Verb / Noun)

Function that
performs the
task
# Staff
(if relevant)
Barriers to flow
(if relevant)

% Complete &
Accurate

PT (process time)
LT (Lead time)

Current State Metrics-Based Process Map
PT Units
Seconds

Hours

Minutes

Days

LT Units
Seconds

Hours

Minutes

Days

Process Details
Specific Conditions Domestic orders through sales force
Occurrences per Year 37,500
Hours Worked per Day 8
Date Mapped 26-Nov-07

Step # ?
Function /
Department

Mapping Team
Dianne O'Shea
Sean Michaels
Sam Parks
Paul Dampier
Michael Prichard

Process Name Order Fulfillment

6

7

Ryan Austin
Mary Townsend

8

9

Activity

PT

LT

%C&A

Activity

PT

LT

%C&A

Activity

PT

LT

%C&A

Approve PO

15

240

100%

Fax PO to
Account Manager

5

20

100%

Notify customer
when they can
expect delivery

15

300

95%

Review and
approve PO; send
to Order Entry

5

240

Activity

PT

LT

100%

Enter order into
SAP

10

240

Customer

Sales Rep

Account Manager

Order Entry

Finance / Credit

Metrics-Based Process Mapping
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.


25

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
Cause-and-Effect Diagram

5 Why’s

People

Material / Info

Lack of experience

Budgets
Submitted Late
Forecast in other system
Manual vs. PC
System avail.

Quality issue requiring
rework
Staffing/absenteeism
Order entry error
Changing customer
requirements w/ no
adjustment to expected
delivery
Equipment failure

Tally
||||| ||
|||||
|||
||||| |||||
||||| ||||| |||

|

No standard work
Email vs. FedEx

Check Sheets Quantify Occurrences
Material shortage

Changing schedule
Input rec’d late

No sense of import

Machine

Reason

No stnd spread sheet

Time availability

Why?
Why?
Why?
Why?
Why?

Method

No milestones
$ vs. units

Measurement

Weather delays
Dispersed sales force

Environment

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


32

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
Environment-related










Information
enhancement
Audible or visual
warnings
Physical workspace
Reduce noise, smells,
interruptions
Adequate breaks
Rethink production
standards


People-related






Effective training!
Grouping data /
cadence
Reading aloud
Time for selfinspection

34

Ways to Error-Proof Data Entry
(continued)

Process-related


Standardized work
 Proper sequencing
(logical order of work)
 Job aids & visual
reminders
 Checklists
 Verbalize information
 Repeat orders



Measurement &
feedback


System-related


Software
 Drop-down menus instead of
free text field
 Required fields
 Pop-up warnings
 Programming / macros



Hardware
 Dual monitors
 Ergonomic considerations

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


38

The Power of Checklists
New Employee Onboarding Checklist
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)

39

Improving the Quality of Customer
Requests
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”).


Customer Demand:
15 patients per Day
(Takt Time = 32 minutes)
8 hours per day

Current State Value Stream Map
Outpatient Imaging Services

CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate

%C&A = 65%
Pre-register
Patient

5

Schedule
Appointment

4

3

6

Lead T ime = 990 mins.

Cycle T ime = 30 mins.
% C&A = 100 %

Refer Patient
(Physician) 2


% C&A = 98 %

Patient
2

1

% C&A = 65 %

Auto Fax 50%
Us Mail 25%
MD Mailbox 25%

Symposium

E Pay

Excel

ADS

Internet

Meditech

Waiting Room
Management
System

Fax Order
Solutions

Rework Loop
via Fax 25% of
the time

PACS

Lead T ime = 10 days

Check-in
Patient
(Admitting)

Check-in
Patient
(Imaging)

5 mins.
5

5

5 mins.

% C&A = 90 %

0.0833 hrs.

3

80 mins.

6

% C&A = 98 %

0.0833 hrs.
2 mins.

7

2

248 mins.

2

9

365 mins.

% C&A = 95 %

4.13 hrs.
28 mins.

8

960 mins.
2

% C&A = 75 %

6.08 hrs.
15 mins.

10

110 mins.

2

1.83 hrs.
1 mins.

11

Send
Reports
(Imaging)

120 mins.

% C&A = 99 %

% C&A = 95 %
16 hrs.

5 mins.

Print
Reports
(Imaging)

Review / Sign
Report
(Radiologist)

T ranscribe Report
(MDI)

% C&A = 90 %

1.33 hrs.
1 mins.

Read/Dictate
Exam
(Radiologist)

Prep Patient, Conduct
Exam, T ransmit
Images (T ech)

6

12

% C&A = 90 %

2 hrs.
1 mins.

LT = 32.5 hrs.
3 mins.

CT = 56 mins.
CT /LT Ratio = 2.87%

Value Stream Champion: Paul Scanner
Created July 19, 2005

RFPY = 30%

Rolled First Pass
yield = 30%

You Can Influence Customer
Behavior

Standard work
designed for
and with the
customer


Future State Value Stream Map
Outpatient Imaging Services
Customer Demand:
15 patients per Day
(Takt Time = 32 minutes)
8 hours per day

%C&A = 85%

Cross
Training

Standard
Work

CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate

Work
Balance

Co-locate
Schedule appt
Pre-register

Patient
Refer Patient
(Physician)

3

6

% C&A = 98 %

% C&A = 85 %

Standard
Work

Lead T ime = 5 days

Risk
Reduction
(Joint Commision)

Symposium

E Pay

Remove
Redundant
Check-in

Excel

Meditech

Set-up
Reduction

Standard
Work

Prep Patient,
Conduct Exam,
T ransmit Images
(T ech)

Check-in
Patient
(Imaging)
5 mins.

3

4

60 mins.

0.0833 hrs.

5

2

% C&A = 98 %

120 mins.

PACS

Continuous
Flow

6

420 mins.

5S

2

7

Standard
Work

Print
Reports
(Imaging)

2 mins.

% C&A = 95 %

7 hrs.
15 mins.

Rework Loop
via Fax 10% of
the time

Batch
Reductions

Review
/Sign
(Radiologist)

% C&A = 95 %

2 hrs.
28 mins.

Fax Order
Solutions

Waiting Room
Management
System

Visual
Workplace

2

Us Mail 15%

Voice
Recognition

Read/Dictate
Exam
(Radiologist)

% C&A = 90 %
1 hrs.

1 mins.

Internet

Auto Fax 80%
MD Mailbox 5%

Value Stream
Alignment

Pull System
(Supplies
Kanban)

Reduce Data
Entry
Requirements

1

2


2

Send
Reports
(Imaging)

8

30 mins.

% C&A = 99 %

0.0333 hrs.

6

0.5 hrs.

1 mins.

9

% C&A = 90 %

1 mins.

LT = 11.4 hrs.
3 mins.

CT = 49 mins.
CT /LT Ratio = 7.14%

Value Stream Champion: Paul Scanner
Created July 20, 2005

RFPY = 59%

Rolled First Pass
yield = 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


44

Measuring Productivity Gains:
Freed Capacity

Labor Effort
# FTEs

=

Total PT (in hrs) x # occurrences/year
Available work hrs/year/employee

Freed
= Current State FTEs – Future State FTEs
Capacity

Note: Improvement can be expressed as Freed
Capacity (FTEs), Time, or Labor Expense (or all)
# FTEs = Full Time Equivalents; 2 half-time people = 1 FTE

45

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


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

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

For Further Questions

Karen Martin, Principal
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
To receive monthly newsletter: www.ksmartin.com/subscribe
To register for webinars: www.ksmartin.com/webinars
Twitter: www.twitter.com/karenmartinopex

52

The New Face of Quality in Office and Service Environments

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