Ch. 2 Slidesedited_clean
Content
Healthcare Operations Management
Chapter 2. History of Performance Improvement
Daniel B. McLaughlin Julie M. Hays
Chapter 2
History of Performance Improvement
• Knowledge Based Management (KBM) • Scientific Management
- Mass Production - Frederick Taylor - Frank and Lillian Gilbreth
• Quality
- Quality Gurus
• • • •
TQM, CQI, Six Sigma ISO 9000, Baldrige Award Lean Service Typologies
Copyright 2008 Health Administration Press. All rights reserved.
2-2
Operations Management
• What is operations management? Operations management is the design, operation, and improvement of the processes and systems that create and deliver the organization’s products and services. The goal of operations management is to more effectively and efficiently produce and deliver the organization’s products and services.
Copyright 2008 Health Administration Press. All rights reserved. 2-3
Operations Management in Healthcare Organizations
• Cost and level of healthcare is increasing
- 1987 11% of US economy for healthcare - 2004 15% of US economy
• Control costs • Improve level of service • Improve quality
Copyright 2008 Health Administration Press. All rights reserved.
2-4
Systems View
INPUT
Labor Material Machines
Management Capital
Transformation Process
Feedback
OUTPUT
Goods or Services
Copyright 2008 Health Administration Press. All rights reserved.
2-5
Knowledge Hierarchy
Importance
Wisdom Morals Understanding Knowledge Information Data Patterns Principles
Relationships
Learning
2-6
Copyright 2008 Health Administration Press. All rights reserved.
Mass Production
Two men assembling ca Ford factory
Two men use hammers on Ford factory assembly line
Men work on Ford on assembly line and
2-7
Copyright 2008 Health Administration Press. All rights reserved.
Frederick Taylor
• The Principles of Scientific Management (1911) • “Wasted” human effort • One best way • Four principles
Standard work Training Cooperation Planning
2-8
Copyright 2008 Health Administration Press. All rights reserved.
Frank and Lillian Gilbreth
• One best way • Time and motion studies • Cheaper by the Dozen
Copyright 2008 Health Administration Press. All rights reserved.
2-9
Project Management
• Gantt chart (early 1900s) • Program Evaluation and Review Technique (1950s)
- U.S. Navy - Beta distribution for task times
• Critical Path Method (1950s)
- DuPont and Remington Rand
Copyright 2008 Health Administration Press. All rights reserved.
2-10
Quality Gurus
• Walter Shewhart
- SPC and PDCA Do Plan PDCA Cycle Act Check
• W. Edwards Deming • Joseph M. Juran
Copyright 2008 Health Administration Press. All rights reserved.
2-11
W. Edwards Deming
• • • • • Father of the quality revolution 1970s energy crisis Common cause versus special variation 14 points System of profound knowledge
Appreciation for a system Knowledge about variation Theory of knowledge Knowledge of psychology
2-12
Copyright 2008 Health Administration Press. All rights reserved.
Joseph M. Juran
• Quality trilogy
- Quality planning - Control - Improvement
Copyright 2008 Health Administration Press. All rights reserved.
2-13
TQM (CQI) → Six Sigma
• TQM less codified than Six Sigma • Based on the teachings of Shewhart, Deming, Juran • Top management support and leadership • Continuous improvement • DMAIC, PDCA • Six Sigma goal of 3.4 DPMO
Copyright 2008 Health Administration Press. All rights reserved.
2-14
Quality Certification and Awards
• ISO 9000
- To be certified, an organization must demonstrate compliance with the standards - Standards are concerned with the processes of insuring quality
• Baldrige Award
- Based on organizational excellence in seven categories - Dissemination of best practices - 2005 winners
Copyright 2008 Health Administration Press. All rights reserved. 2-15
JIT → Lean → Agile
• Just In Time (JIT)
- Inventory management strategy aimed at reducing inventory
• Lean
- Philosophy of eliminating waste
• Agile
- Ability to respond quickly to changing conditions
Copyright 2008 Health Administration Press. All rights reserved.
2-16
Service Process Matrix
Relative Throughput Time
Low
Service shop
Service factory
Professional service
High High
Mass service
Low
Degree of Variation Customer Interaction and Service Customization
Adapted from Schmenner, R. W. 2004. "Service Businesses and Productivity." Decision Sciences 35 (3): 333–347. Copyright 2008 Health Administration Press. All rights reserved. 2-17
Supply Chain Management
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.
Copyright 2008 Health Administration Press. All rights reserved. 2-18
Important Events in Performance Improvement
Copyright 2008 Health Administration Press. All rights reserved.
2-19
Performance Improvement
Improve the quality, safety, efficiency, and effectiveness of healthcare using knowledge-based tools, techniques, and programs for system improvement.
Copyright 2008 Health Administration Press. All rights reserved.
2-20
Chapter 2. History of Performance Improvement
Daniel B. McLaughlin Julie M. Hays
Chapter 2
History of Performance Improvement
• Knowledge Based Management (KBM) • Scientific Management
- Mass Production - Frederick Taylor - Frank and Lillian Gilbreth
• Quality
- Quality Gurus
• • • •
TQM, CQI, Six Sigma ISO 9000, Baldrige Award Lean Service Typologies
Copyright 2008 Health Administration Press. All rights reserved.
2-2
Operations Management
• What is operations management? Operations management is the design, operation, and improvement of the processes and systems that create and deliver the organization’s products and services. The goal of operations management is to more effectively and efficiently produce and deliver the organization’s products and services.
Copyright 2008 Health Administration Press. All rights reserved. 2-3
Operations Management in Healthcare Organizations
• Cost and level of healthcare is increasing
- 1987 11% of US economy for healthcare - 2004 15% of US economy
• Control costs • Improve level of service • Improve quality
Copyright 2008 Health Administration Press. All rights reserved.
2-4
Systems View
INPUT
Labor Material Machines
Management Capital
Transformation Process
Feedback
OUTPUT
Goods or Services
Copyright 2008 Health Administration Press. All rights reserved.
2-5
Knowledge Hierarchy
Importance
Wisdom Morals Understanding Knowledge Information Data Patterns Principles
Relationships
Learning
2-6
Copyright 2008 Health Administration Press. All rights reserved.
Mass Production
Two men assembling ca Ford factory
Two men use hammers on Ford factory assembly line
Men work on Ford on assembly line and
2-7
Copyright 2008 Health Administration Press. All rights reserved.
Frederick Taylor
• The Principles of Scientific Management (1911) • “Wasted” human effort • One best way • Four principles
Standard work Training Cooperation Planning
2-8
Copyright 2008 Health Administration Press. All rights reserved.
Frank and Lillian Gilbreth
• One best way • Time and motion studies • Cheaper by the Dozen
Copyright 2008 Health Administration Press. All rights reserved.
2-9
Project Management
• Gantt chart (early 1900s) • Program Evaluation and Review Technique (1950s)
- U.S. Navy - Beta distribution for task times
• Critical Path Method (1950s)
- DuPont and Remington Rand
Copyright 2008 Health Administration Press. All rights reserved.
2-10
Quality Gurus
• Walter Shewhart
- SPC and PDCA Do Plan PDCA Cycle Act Check
• W. Edwards Deming • Joseph M. Juran
Copyright 2008 Health Administration Press. All rights reserved.
2-11
W. Edwards Deming
• • • • • Father of the quality revolution 1970s energy crisis Common cause versus special variation 14 points System of profound knowledge
Appreciation for a system Knowledge about variation Theory of knowledge Knowledge of psychology
2-12
Copyright 2008 Health Administration Press. All rights reserved.
Joseph M. Juran
• Quality trilogy
- Quality planning - Control - Improvement
Copyright 2008 Health Administration Press. All rights reserved.
2-13
TQM (CQI) → Six Sigma
• TQM less codified than Six Sigma • Based on the teachings of Shewhart, Deming, Juran • Top management support and leadership • Continuous improvement • DMAIC, PDCA • Six Sigma goal of 3.4 DPMO
Copyright 2008 Health Administration Press. All rights reserved.
2-14
Quality Certification and Awards
• ISO 9000
- To be certified, an organization must demonstrate compliance with the standards - Standards are concerned with the processes of insuring quality
• Baldrige Award
- Based on organizational excellence in seven categories - Dissemination of best practices - 2005 winners
Copyright 2008 Health Administration Press. All rights reserved. 2-15
JIT → Lean → Agile
• Just In Time (JIT)
- Inventory management strategy aimed at reducing inventory
• Lean
- Philosophy of eliminating waste
• Agile
- Ability to respond quickly to changing conditions
Copyright 2008 Health Administration Press. All rights reserved.
2-16
Service Process Matrix
Relative Throughput Time
Low
Service shop
Service factory
Professional service
High High
Mass service
Low
Degree of Variation Customer Interaction and Service Customization
Adapted from Schmenner, R. W. 2004. "Service Businesses and Productivity." Decision Sciences 35 (3): 333–347. Copyright 2008 Health Administration Press. All rights reserved. 2-17
Supply Chain Management
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.
Copyright 2008 Health Administration Press. All rights reserved. 2-18
Important Events in Performance Improvement
Copyright 2008 Health Administration Press. All rights reserved.
2-19
Performance Improvement
Improve the quality, safety, efficiency, and effectiveness of healthcare using knowledge-based tools, techniques, and programs for system improvement.
Copyright 2008 Health Administration Press. All rights reserved.
2-20
