Enterprise Productivity Measurement in Services by OMAX (Objective Matrix) Method and An Application with Turkish Emergency Service

Dursun BALKAN
Productivity Expert, Department of Research and Productivity MeasuringMonitoring, National Productivity Centre of Turkey Since it is seen that the studies about the rapidly evolving and growing service sector and service sector productivity measurement are inadequate; this study aims to be a guide to the employees of the sector and to the researchers interested in the area. This study focuses on productivity measurement in service sector at enterprise level. In this context, the methodology of OMAX (Objectives Matrix) model is discussed and reinterpreted in detail. For measurement at enterprise level, the productivity of the Turkish Emergency Service, which is operating in health sector, was measured using the OMAX method.

1.

The OMAX (Objectives Matrix) Method

Productivity has traditionally been defined simply as the ratio between output and input. There is an abundance of research on productivity measurement in manufacturing operations (Hannula, 1999; Banker; Datar; Kaplan, 1989), whereas service productivity has been studied much less. Many challenges in the measurement of public service productivity have been identified. For example, the intangible nature of services and the complexity of service outputs have been regarded as key reasons for the lack of appropriate productivity measures (Jskelinen, 2009, 447). There are several productivity measurement methods in the literature at enterprise level although the application of the productivity concept in service organisations seems to be a rather complicated task. The Objectives Matrix

method is one of them. This method is often used on measuring of service systems. Numerous original applications of OMAX in a variety of contexts are associated with the work of the late James L. Riggs, founder and first director of the Oregon Productivity Center in the early 1980s. Since then, additional applications have been carried out or suggested by others, including Carl Thor at the American Productivity and Quality Center, John Parsons at the National Productivity Institute in South Africa, and elsewhere (Dervitsiots, 1995, 564). OMAX is a performance measurement method which evaluates several productivity criteria by weighting to obtain a total productivity index. The model proposes the development of productivity at the level of activity. Riggss OMAX method is important for ease of application. Method is also useful for particularly projects and service functions, which is difficult to measure productivity (Riggs, 1986;Ba; Artar, 1991; Akal, 2005). Flow chart for the model is shown in Figure 1.

Figure 1: Flow-Chart for the OMAX (Objectives Matrix) Model

Determination of measurement objectives is the first step like the general productivity analysis approach. Then, it is necessary to determine appropriate criteria for each objective. After determining the two main stages, it is important to get managers idea about objectives and criteria. Because the part of computation will be started after this stage of the model. After approval of management, scale and weights of these criteria will be determined. Then, as a result of the calculations, the total productivity index can be obtained. General form of the OMAX method is shown below in Table1.

Criteria-1 Scores

Table1: Calculation Table of the Total Productivity Index (adapted from Riggs, 1986)

Criteria-2

Criteria-3

Criteria-4

Criteria-5

Criteria-6

Productivity Criteria Performance

10 9 8 7 6 5 4 3 2 1 0

Performance Scale

Score Weight Value Total Productivity Index

2.

Productivity Measurement at Turkish Emergency Service by using the OMAX Method

OMAX method implementation carried out within the Ministry of Health, Branch of Emergency Health Services. In Turkish health system the name of this service is called 112 Emergency Service, because the telephone number of this service is 112 and it is always emphasized with the service name.

2.1.

Determination of Productivity Measurement Objectives

As a result of investigations, it is seen that there are not any study or project about performance and productivity measurement of emergency service. Therefore, this project is the first productivity measurement study in Turkish Emergency Service system. In this context, emergency services of all 81 provinces is compared in the four year period (2006-2009). Productivity analysis in this study has two dimensions: The first analysis is the time dimension which evaluates the level of emergency services of the provinces. Productivity index means of the provinces is determined annually and the annual means are compared. The second analysis is the spatial dimension which evaluates the level of emergency services of four years. Productivity index means of the each province in the four year period has been assessed and comparision of the provinces has been done. After determining the necessary qualifications of measurement, the criteria used in the model are studied. First step in determining the criteria is the determination of the objectives of the system. As a result of the meetings and briefings of the relevant managers and experts on emergency service subjects, the expected objectives and criteria of the emergency services used for the measurement in Table 2 are summarized. Objectives
Quick Reaching the Incident Best Efforts to Intervention the Incident Cultivating incident to the hospital the Best Efforts Referral to the Nearby Ambulance to the Incident Putting the best Service with Minimum Number of Ambulance Putting the best Service with Minimum Number of Staff Putting the best Service with Minimum Number of Ambulance Station Covering The Maximum Population at Ambulance Station Level Minimizing the Number of Ambulance Accident Minimizing the Patient Complaints Minimizing Costs Replying to the Receiving Calls to Short Duration

Measurement Criteria
Reach Time / Number of Incident Intervention Time / Number of Incident Access time to hospital / Number of Incident Distance Traveled by Ambulance / Number of Incident Number of Ambulances / Number of Incident Number of Staff / Number of Incident Number of Ambulance Station / Number of Incident Number of Ambulance Station / Population Covered by the station Number of Ambulance Accident / Number of Incident Number of Patient Complaints / Number of Incident Total Costs / Number of Incident Receiving Calls Time / Number of Call

Table 2: The Expected Objectives and Measurement Criteria of Emergency Services,

At the management process, improving the conditions of emergency services are closely associated with determining the relation between purposes and functions properly. Because, the better defined relationships the more effective improvements in the system. Therefore, the model has to tend main objectives for a basis of emergency services. The purposes, which are important in terms of quality of service and productivity of the emergency services, are examined by the idea of The Simple is The Best. These main objectives are: Quick Reaching the Incident, Effective Use of Resources, Maximum Population Coverage

2.2.

Determination of Appropriate Criteria for Each Objective

The step after determining the main objectives of productivity measurement, is determining criteria appropriate to these objectives. According to the main objectives of the emergency services, most appropriate criteria are introduced as follows: Criteria-1: Quick Reaching the Incident (percentage of the incident within 10 minutes to reach) Reach Time (minutes) / 10 minutes Criteria -2: Providing Maximum Level of Service with Minimum Number of Ambulances Number of Ambulances / Number of Incident Criteria -3: Covering The Maximum Population at Ambulance Station Level Number of Ambulance Station / Number of Provincial Population

2.3.

Determination of Scale Related to the Criteria

Determining the scale related to the criteria, largest and smallest performance value belonging to all provinces and all years of each criteria are considered. Because, while determining the best values about scale, reachable targets are needed. The biggest and smallest values of each province in each year determine upper and lower values of scale of a criteria. For example, about criteria-1, the biggest value of all provinces in all years is 100 and the lowest is 80. So, scale is created by using these values. This is shown in Table 3. 5

Criteria-1 Criteria-2 Maximum Value Minimum Value 100 80

Criteria-3

0,0194004 0,0001084 0,0005878 0,0000074

Table 3: Maximum and Minimum Value of The Criteria

When the criteria are examined in detail, the first criteria about reaching what percentage of ambulances to the incident within 10 minutes. This criteria is considered as a percentage and the bigger percentages are desired so this criteria is considered as a maximization problem. The second criteria based on the effective use of resources is about more benefit from lower source. Therefore, this criteria is considered as a minimization problem. The third criteria is considered as a maximization problem for measuring the ratio of ambulance stations per capita. By these criteria, the scaled matrix is formed in Table 4. In scaling the matrix, red colored parts designates upper values, green colored parts designates lower values of criteria.
Criteria-1 100 Criteria-2 Criteria-3

Productivity Criteria Performance

0,0005878 0,0001084

Scores

80

0,0194004 0,0000074

10 9 8 7 6 5 4 3 2 1 0

Performance Scale

Score Weight Value Total Productivity Index

Table 4: Scaled Matrix

In scaling process, the biggest point (10) corresponds to the biggest value of criteria-1 (100). The smallest point (0) corresponds to the smallest value of criteria-1 (80) hence criteria-1 is a maximization criteria in performance scale.

Because criteria-3 is a maximization problem same process is done. For criteria2, is a minimization problem, contrary to criteria-1 and criteria-3, the biggest point (10) corresponds to the smallest value of criteria-2 (0,0005878). The smallest point (0) corresponds to the biggest value of criteria-2 (0,0194004).

2.4.

Determination of Weights Related to the Criteria

In OMAX method, determining the weights of the criteria is an important issue for this some interviews with relevant managers of ministry have been held and weights have determined. Weight-1: One of the most important objectives of emergency services is to reach in10 minutes after incident, so the highest weight of these criteria is given as 40%. Weight-2: Emergency services costs are not more important than in other criteria into the health care services. Therefore, the weight of this criteria is 25%. Weight-3: This criteria focuses on determining the number of stations, which ambulances reach more quickly to the incident in population. This criteria is as important as at least the first criteria so the weight of this criteria is 35%, respectively. The matrix, which has all the weights of the criteria, is in Table 5.
Criteria-1 100 Criteria-2 Criteria-3

Productivity Criteria Performance

0,0005878 0,0001084

Scores

80

0,0194004 0,0000074

10 9 8 7 6 5 4 3 2 1 0

Performance Scale

40

25

35

Score Weight Value Total Productivity Index

Table 5: Weighted Matrix

2.5.

Calculation of Performance Results Related to the Criteria

At this stage, performing to obtain the necessary data for calculating the performance rates. In the study, 81 provinces in Turkey in years 2006, 2007, 2008 and 2009 analyzed; data were collected from the emergency services. Performance ratios were calculated by using these data, which cases for the purpose of reaching quick to the incident criteria-1, for the effective use of resources criteria-2 and to cover the maximum population criteria-3, from 81 provinces on the basis.

2.6.

Calculation of the Total Productivity Index

Objectives were designated towards the measurement and the criteria were determined corresponding by the objectives. Scale and weights were also determined corresponding by the criteria. The scores found from the scale. Then weighted values determined by multiplying these scores and values. After these, the performance scores were calculated for all years and provinces. Productivity analysis performed at two different levels. The first analysis, which evaluates emergency services integrated in order to assess,performed by the level of the years (2006, 2007, 2008 and 2009). The second analysis,which includes all 81 provinces to process of individual and collective assessment , performed at the provincial level.

2.6.1. Empirical Findings by Level of the Years

As a result of the analysis on the basis of the years, the results are shown in Figure 2. These results are analyzed in comparison, the Ministry of Health has made a positive impact of the work related to emergency services, the efficiency increased in a linear manner.

Figure 2: The results of the productivity analysis on the basis of the years

Productivity analysis of this level, average of annual performance rate of all provinces realized that taking into account. As an example, for year 2009 OMAX results are given in Table 6.
Criteria-1 96 2009 100 98 96 94 92 90 88 86 84 82 80 8 40 320 0,0005878 0,0024691 0,0043503 0,0062316 0,0081128 0,0099941 0,0118753 0,0137566 0,0156378 0,0175191 0,0194004 9 25 225 0,0001084 0,0000983 0,0000882 0,0000781 0,0000680 0,0000579 0,0000478 0,0000377 0,0000276 0,0000175 0,0000074 2 35 70 615 10 9 8 7 6 5 4 3 2 1 0 Criteria-2 0,0019547 Criteria-3 0,0000275 Productivity Criteria Performance

Scores

Performance Scale

Score Weight Value Total Productivity Index

Table 6: Productivity index of the year 2009

2.6.2. Empirical Findings by Level of the Provinces

In this section, the model developed by taking all the data of the level of the provinces. As an example, Ankaras OMAX results are given in Table 7.
Criteria-1 97 Ankara 100 98 96 94 92 90 88 86 84 82 80 8 40 320 0,0005878 0,0024691 0,0043503 0,0062316 0,0081128 0,0099941 0,0118753 0,0137566 0,0156378 0,0175191 0,0194004 10 25 250 0,0001084 0,0000983 0,0000882 0,0000781 0,0000680 0,0000579 0,0000478 0,0000377 0,0000276 0,0000175 0,0000074 1 35 35 605 10 9 8 7 6 5 4 3 2 1 0 Criteria-2 0,0008945 Criteria-3 0,0000168 Productivity Criteria Performance

Scores

Performance Scale

Score Weight Value Total Productivity Index

Table 7: Productivity index of the provience Ankara

Figure 3: Total productivity index map of the provinces

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Results of the provinces level productivity analysis, which shows the provinces productivity level more clearly, are shown on the map in Figure 3. The provinces on the map is divided into 5 main classes depending on the values of the total productivity index. This classification is assumed to increase the productivity index from red towards light green. The provinces, which is shown light green color on the map,shows very high level of productivity index above 700. Provinces shown in green in the range of 650-700 points with a high level of productivity index of the provinces. Provinces shown in yellow in the range of 600-650 points with a medium level of productivity index. Provinces shown in orange in the range of 550600 points with a low level of productivity index. The provinces, which shown red on the map,shows very low level of productivity index below 550. According to this classification, 2 of the provinces are evaluated in very high level, 10 of the provinces are evaluated in high level, 31 of the provinces are evaluated in middle level, 21 of the provinces are evaluated in low level and 17 of the provinces are evaluated in very low level.

3.

Conclusion

Connection between levels and the relationships are important, because productivity improvements implemented at the enterprise level is fundamental of productivity improvements of macro level. Therefore, productivity measurement at enterprise level is necessary for the purpose of understanding to reach businessefforts on productivity studies. The performance indexing is a useful approach for measurement because it can combine several diverse measures into one interrelated format. Performance indexing accomplishes this by converting the different measures into a common metric, and then weighting each score to obtain an overall performance index (Tatum; Nebeker; Young,1996, 1). The most obvious advantages of the matrix method are in managerial usage. The matrix method provides a powerful tool for the operative management of productivity. The flexibility of the method was also appreciated by the representatives of the case organisation. Components of productivity can be regularly evaluated and better measures for them can be designed (Jskelinen, 2009, 455). This study aimed to identify a suitable approach for measuring and managing productivity in public health services. For this purpose, the productivity measurement method at the enterprise level has been investigated. For the projects and service functions which has handicaps for productivity measure11

ment; OMAX, a performance indexing model which can combine several diverse measures and evaluate some productivity criteria by weighting to obtain a total productivity index has been explained in detail. In this study, the productivity of 112 Emergency Service which is within the Ministry of Health, Branch of Emergency Health Services has been measured by using OMAX method. The results of many years research have been subjected to comparisons and it has been seen that the productivity levels increased linearly. Due to the productivity analysis on province level; the provinces was divided five main class and the producitivity levels identified according to these classes. Also the main scores of provinces was calculated and according to these scores it has been executed that the provinces which has low productivity levels should improve the service of ambulances and stations to get high productivity levels.

4.

References

Akal, Z. (2005): letmelerde Performans lm ve Denetimi. Milli Prodktivite Merkezi Yaynlar 473: Ankara. Banker, R.; Datar, S.; Kaplan, R. (1989): Productivity Measurement and Management Accounting. Journal of Accounting, Auditing and Finance, Vol. 4, No. 4, pp. 528554. Ba, M.; Artar, A. (1991): letmelerde Verimlilik Denetimi: lme ve Deerlendirme Modelleri. Milli Prodktivite Merkezi Yaynlar 435: Ankara. Dervitsiotis, K. (1995): The objectives matrix as a facilitating framework for quality assessment and improvement in education. Total Quality Management & Business Excellence, 6: 5, 563-570. Hannula, M. (1999): Expedient Total Productivity Measurement. Acta Polytechnica Scandinavica, Industrial Management and Business Administration Series No. 1, Espoo. Jskelinen, A. (2009): Identifying a Suitable Approach for Measuring and Managing Public Service Productivity. Electronic Journal of Knowledge Management Volume 7 Issue 4, (pp447 - 458). Riggs, J.L. (1986): Monitoring with a matrix that motivates as it measures. The Fifth World Productivity Congress, Jakarta,Indonesia. Tatum, C.; Nebeker, D.;Young P. (1996): Using Performance Indexing to Measure Organizational Gains in White Collar Environments. Navy Personnal Research and Development Center, San Diego.

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5.
Author:

Author address

First name, surname, title(s): Dursun, BALKAN, Productivity Expert Institution: National Productivity Center of TURKEY Department: Department of Research and Productivity Measuring-Monitoring Full address: Gelibolu Street, No:5, 06690, Kavakldere, Ankara, TURKEY E-mail:dbalkan@mpm.org.tr

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