Efficient Processes: New Employee Orientation To QI Awareness

DEFINITION SUMMARY IMPROVEMENT EXAMPLES MEASUREMENT
2-1
New Employee Orientation to QI Awareness
EFFICIENT PROCESSES

4-2
Quality Improvement Pyramid
Strategic Plans
Leaders
Trustworthy
Trusting of Others
Approachable, Inspiring
Quality Improvement System
Trained Staff Recognition Data Analysis
Customer Focus Empowered Staff Problem Solving
Teamwork Quality Processes Measurement Systems
Vision
Delighted
Customers
Efficient
Processes
Staff
Trustworthy
Trusting of Others
Collaborative, Committed
4-3
Agenda
DEFINITION
EXAMPLES
IMPROVEMENT
SUMMARY
MEASUREMENT
What is a process?
Processes
Why and how we measure
Methodology for process improvement
QI culture / environment
4-4
What is a Process?
DEFINITION
INPUT
Value
Added Tasks
OUTPUT

Materials
Goods
Supplies
Resources
Physical
Non-physical
Data
Event

Manufacturing
Service
Physical
Non-Physical

End product
Service
Performance
Physical
Non-Physical

A resource that you
will add value to:

TRANSFORMING
input to a desired output

An input after you
have added value
4-5
Defining Value Added
DEFINITION

1) The customer is willing to pay for this activity.

2) It must be done right the first time.

3) The action must somehow change the product
or service in some manner.
INPUT
Value
Added Tasks
OUTPUT
4-6
Example of Value Added
DEFINITION
Cost for a barrel of crude oil $ 82
42 gallons in a barrel 42
Estimated cost of gasoline $1.95 / gallon

Value-added activates
(eg: refinery, shipping,
service station)
Speculative purchases
by investors
Exorbitant collusion
profits among producers
INPUT
Value
Added Tasks
OUTPUT
Actual cost of gasoline $3.00 / gallon
Differential $1.05 / gallon
4-7
Examples of Value Added
DEFINITION
Purchasing vegetables at your local market versus growing
vegetables in your backyard
Buying take-out versus preparing food yourself
Watching Ichiro Suzuki play baseball
Watching Vincent Lau play baseball
Having you as a member of FM & SM
Yes
Yes
Yes
No
Yes
Scenario: Value Added?
4-8
Efficient & Effective Process
DEFINITION
Efficient is working without waste
> Minimum time
> Minimum effort
> Minimum expense

Effective means achieving the desired result
> Hitting the target
> Meeting customers needs
4-9
Efficient & Effective Process
DEFINITION
Without waste
Not achieving desired result
Without waste
Achieving desired result
With waste
Not achieving desired result
With waste
Achieving desired result
Achieving
desired result
(Effective)
Without
Waste
(Efficient)
With waste
(Inefficient)
Not achieving
desired result
(Ineffective)
4-10
Processes are dependent
DEFINITION

Your process OUTPUT is often an INPUT for another process!
Process Partners
Increasing incremental value
Final / Collective
Product
INPUT
Value
Added Tasks
OUTPUT
4-11
Example: Grant Process
EXAMPLES

How GCA Adds Value

Setup New Budgets

Apply Cash
Monitor Cost Share / FEC
Process Request to Transfer Expenditure
Generate Invoices
Collect Aged Receivables
Negotiate Recharge Center

Create Annual Reports
Reconcile Awards & Expenditures

Create Fiscal Reporting Statements
Close Budgets
Reconcile DHHS Records
GRANT IS ACTIVE
NEW
BUDGET
CLOSING BUDGET
ACCOUNTING
4-12
Other Processes
EXAMPLES
Contracts for Goods & Services
Bill & Collect Tuition
Develop Financial Management Staff
Develop & Negotiate Indirect Cost Rates
Create & Market Communication Products
Manage Financial Information Reporting
Manage Grants
Pay Bills
Pay People
Asset Management & Real Estate Services
Disburse Aid
Preservation/destruction of Records
Project Management
(Purchasing)
(SFS)
(FM)
(MAA)
(Publications)
(Financial Accounting)
(GCA)
(Financial Services)
(Payroll)
(Real Estate)
(SFS)
(Records)
(SM)
4-13
Exercise
1. Share among your table the processes that you are
responsible for.
2. Identify your value-added tasks.
3. Discuss how your processes impact others at your
table.
4. Share with the class.
INPUT
Value
Added Tasks
OUTPUT
4-14
Why Measure?
MEASUREMENT

Why Measure?

Management System
Internal & external management system

Accountability for university resources
Decreasing state funding
Strained economic climate

Higher customer expectations

Communicates to staff and campus our
customer service level and how we
provide value

Must measure in order to benchmark
(i.e. a point of reference, process improvement)

FM, Treasury, Strategy Mgmt

Management by facts

Championed at executive level

QI Initiative
Dedicated QI Leader / Coordinators
QI training for all staff

QI resources
Employee development plan
Staff & leadership qualities
Process improvement & problem solving
training
Newsletters
Recognition programs

Balanced Score Card
(Dashboard)

4-15
Similarities to an Automotive Dashboard
MEASUREMENT

What is the purpose of a dashboard?
4-16
Dashboard
MEASUREMENT
Long-term competitiveness is best gauged via a BALANCED perspective.
For example, financial statements will not display intangible assets:
cycle-time, knowledge management, customer satisfaction, etc.

Financial Customer
(esp. important for Non-Profit)
FMs dedication to
delight customers

Internal Process

Learning & Growth

DASHBOARD
(BALANCED SCORE CARD)
4-17
Dashboard is Managing by Facts (Example Financial Management)
MEASUREMENT
Unit Balanced
Scorecard
Unit Balanced
Scorecard
Unit Balanced
Scorecard
Financial Customer
Internal Business Process Learning & Growth
Department Dashboard
Unit Balanced
Scorecard
Unit Balanced
Scorecard
4-18
Utilizing Operational Dashboards
MEASUREMENT
Communicate with campus & ourselves
Better understand processes & improve
Work with process partners
Make changes
4-19
QI Principles that Reduce Variability
IMPROVEMENT
TQM
A management style that promotes an organizations culture and attitude to continuously satisfy
the needs of their customers.

LEAN
A philosophy and practice to focus on eliminating all forms of waste in a process.
http://f2.washington.edu/lean
Question: LEAN & QI ? LEAN is QI on steroids (just do it, 30-60-90 day check-ins, waste
focus from customer view, wing to wing)

VARIANCE ANALYSIS
A philosophy, practice, and measurement system to reduce variance (eg. six sigma, statistical
process control charts)

DEMING CYCLE- PDCA
A methodology to continuously improve a process by understanding the needs of the customer.
4-20
PDCA Cycle for Process Improvement
IMPROVEMENT
W. Edwards Deming propose:
Analyze and measure for variations that cause deviation from customer requirements
Built around a continuous feedback loop to improve the process
Plan
Design or revise business
process components to
improve results
Do
Implement the plan and
measure its performance
Check
Assess the
measurements and report
the results to decision
makers
Act
Decide on changes
needed to improve the
process
4-21
Coin Exercise
INPUT Value
Added Tasks
OUTPUT
1. Ground rules provided by instructor.
2. Three rounds with equal allotted time.
3. Debrief after each round.
Plan
Do
Check
Act
4-22
PDCA Case Study: New Budget Setup
IMPROVEMENT

PLAN

DO

CHECK

ACT

July 2003 retreat
Identified New Budget Setup as critical
customer concern
Brainstormed alternatives
New Accounts reprioritized workload
Measure volume of workload
Monitored progress via dashboard
Early success only
Inconsistent performance suggest we
need further improvements
FIRST ATTEMPT
4-23
Number of Days to Setup New Budgets in GCS & GCA
Receipt of Award at GCS to P.I. Notification by GCA, 12 month Rolling Average = 14.2 Days
6
17
8
21
16
15
14
16
14
6
13
19
15
16
14
20
11
14 14
7
12 12
14
21
0
5
10
15
20
25
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N
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m
b
e
r

o
f

C
a
l
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d
a
r

D
a
y
s
GCS Days GCA Days Target = 12 Days
Good
Number of Days to Setup New Budgets in GCA only
3
10
5
6
10
5
9
7
6
3
4
5
6
4
2
4
2
3
1 1
0 0 0 0
0
2
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6
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12
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D
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y
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GCA Days (Receipt of NEA* from GCS to PI Notification by GCA) Target = 1 Day
Good
IMPROVEMENT
Plan
Do
Check
Act
4-24
IMPROVEMENT

PLAN

DO

CHECK

ACT

July 2003 retreat
Identified New Budget Setup as
critical customer concern
Brainstormed alternatives
December 2003
Reviewed why First-Attempt not
successful
Identified inconsistent interpretation of
priorities
New Accounts reprioritized workload
Measure volume of workload
Inventory new account processes and
workload
Defined setting up new budget as
number one priority above all else
Early success only
Success evident in February 2004
Also implemented email notification
Inconsistent performance suggest we
need further improvements
New process now widely adopted
New Accounts now consistently
exceeds ambitious 1 day turn-around
(i.e. same-day turn around).
FIRST ATTEMPT SECOND ATTEMPT
4-25
Number of Days to Setup New Budgets in GCS & GCA
Receipt of Award at GCS to P.I. Notification by GCA, 12 month Rolling Average = 14.2 Days
6
17
8
21
16
15
14
16
14
6
13
19
15
16
14
20
11
14 14
7
12 12
14
21
0
5
10
15
20
25
Aug-
02
Sep-
02
Oct-
02
Nov-
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Dec-
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Jan-
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N
u
m
b
e
r

o
f

C
a
l
e
n
d
a
r

D
a
y
s
GCS Days GCA Days Target = 12 Days
Good
Number of Days to Setup New Budgets in GCA only
3
10
5
6
10
5
9
7
6
3
4
5
6
4
2
4
2
3
1 1
0 0 0 0
0
2
4
6
8
10
12
Aug-
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N
u
m
b
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o
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C
a
l
e
n
d
a
r

D
a
y
s
GCA Days (Receipt of NEA* from GCS to PI Notification by GCA) Target = 1 Day
Good
IMPROVEMENT
Plan
Do
Check
Act
Plan
Do
Check
Act
4-26
Segmenting Data
IMPROVEMENT
4-27
Data Variability
IMPROVEMENT
GCA New Budget Setup Time Oct06 - Dec06
0
5
10
15
20
25
0 5 10 15 20 25 30 35 40 45 50
Data Sample
D
a
y
s
Team 1 Team 2 Team 3 Team 4 Team 5 Team 6
4-28
Complex (Judgment) Process Measure
IMPROVEMENT
4-29
Industry Benchmark
IMPROVEMENT
$3.63
$3.15
$3.01
$2.56
$1.77
$1.68
$1.58
$1.54
$1.29
$1.00
Berkeley
Riverside
Santa Cruz
San Francisco
San Diego
Davis
Los Angeles
Irvine
Santa Barbara
Washington
Good
Target = 2.25
Average cost per paycheck for displayed
California schools
85%
99%
2006 2008
Payroll Customer Satisfaction rating
4-30
IMPROVEMENT
Dashboard
4-31
IMPROVEMENT
Questions
How to apply quality improvement to everyday process?
Are Targets met? What is the problem?
Why not? Baseline/benchmark/trend.
Root cause analysis.
Pareto analysis. PDCA
Check your data (manage by facts)

What happens when a process goes away? Do you still
measure?
Has the process evolved to something else (e.g. manual
transactions converting to eCommerce)
When do you measure a process?
dashboard = core processes
scorecard = strategy/change
measure if you want to process improve)

4-32
IMPROVEMENT
Setting Targets
Customer
Expectations
Compliance
Law requirement

Industry Benchmark
Best Practices
Stretch
Four ways to set targets:
Plan
Design or revise
business process
components to improve
results
Do
Implement the plan
and measure its
performance
Check
Assess the
measurements and
report the results to
decision makers
Act
Decide on changes
needed to improve
the process
Applying PDCA
SUMMARY
INPUT
Value
Added Tasks
OUTPUT
How does your department
and your process add value
to FM and the customer?
4-33

Efficient Processes: New Employee Orientation To QI Awareness

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DEFINITION SUMMARY IMPROVEMENT EXAMPLES MEASUREMENT

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