A GENERAL ALGORITHM For Selecting operations improvement tools

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Healthcare Operations Management presents an array of techniques, tools, and methods for achieving operational excellence. How does the practitioner choose from this broad selection? As in clinical care, there is a mix of art and science in choosing the best approach.

A general algorithm for selecting tools is presented below. This algorithm will be helpful in selecting tools, but the success of any operations improvement project is dependent on the practitioner’s skill in tool use and an environment that is supportive of change and strives for operational excellence.

This tool can be used in one of two ways. Either go directly to the tool logic mapand trace the appropriate logic to determine the best tool or navigate the text below. Your answers to questions asked at points in the text will direct you to another section via hyperlinks. These decision points are indicated with the process-mapping symbol for decisions—the diamond.

Eventually, the best set of tools will be determined and references will be given to the appropriate chapter and section in Healthcare Operations Management.

A. Issue Formulation

First, formulate the issue you wish to address. Determine the current state and the desired state. For example:

  • Competitors have taken 5 percent of our market share in obstetrics, and we want to recapture the market.
  • The pediatric clinic lost $100,000 last year, and we want to break even next year.
  • Public rankings for our diabetes care put our clinic below the median, and we want to be the in top quartile.

Frame the problem correctly to ensure that the outcome is the right answer to the right question rather than the right answer to the wrong question. Consult all relevant stakeholders.

You can use a number of effective decision-making and problem-solving tools to:

  • frame the question or problem;
  • analyze the problem and various solutions to the problem; and
  • implement those solutions.

The tools and techniques identified below provide a basis for tackling difficult, complicated problems (see Chapter 6).

  • The decision-making process: a generic decision process used for any type of process improvement or problem solving (Plan-do-check-act [PDCA], define-measure-analyze-improve-control [DMAIC], and project management all follow this same basic outline.)

—Framing: Use to ensure that the “correct” problem or issue is being addressed.

—Gathering intelligence: Find and organize the information needed to address the issue (data collection).

—Concluding: Determine the “solution” to the problem (data analyses).

—Learning from feedback: Ensure that learning is not lost and that the solution works (holds the gains).

  • Mapping tools

—Mind mapping: Use to help formulate and understand the problem or issue.

—Process mapping, activity mapping, and service blueprinting: Use to picture the system and process steps.

  • Root-cause analysis (RCA) tools

—Five whys technique and fishbone diagrams: Use to identify causes and root causes of problems and determine how to eliminate those problems.

—Failure mode and effects analysis (FMEA): Use this more detailed root cause-type analysis to identify and plan for possible and actual failures.

  • Data analysis:All of the following tools, techniques, and methodologies require data and data analysis (see Chapter 7).

—Data collection techniques: use to ensure that valid data are collected for further analysis.

—Graphic display of data: use to “see” the data.

—Mathematic descriptions of data: use to compare sets of data and for simulation.

—Statistical tests: use to determine whether differences in data exist.

—Regression analyses: use to investigate and define relationships among variables.

—Forecasting: use to predict future values of random variables.

B. Strategic or Operational Issue

Next, decide whether the issue is strategic (e.g., major resources and high-level staff will be involved) or part of ongoing operations.

If the issue is strategic, go to step C. If it is operational and has a large size and scope, go to step D.Otherwise, go directly to step E.

C. The Balanced Scorecard for Strategic Issues

To implement a major strategyeffectively, develop a Balanced Scorecard to link initiatives and measure progress (see Chapter 4).The Balanced Scorecard should include the following elements:

  • Strategy map: use to link initiatives or projects to achieve the desired state.
  • Four perspectives: initiatives and projects that span the four main perspectives of the Balanced Scorecard: financial, customer/patient, operations, and employee learning and growth.
  • Metrics: use to measure progress; include both leading (predictive) and lagging (results).

If the Balanced Scorecard contains a major initiative, go to step D, project management; otherwise, go to step E, basic performance improvement tools. If the Balanced Scorecard approach significantly resolves the issue, go step J, holding the gains.

D. Project Management

The formal project management methodology should be used for initiatives that typically last longer than six months and involve a project team (see Chapter 5). Project management includes the following tools:

  • Project charter: a document that outlines stakeholders, project sponsor, project mission and scope, change process, expected results, and estimated required resources
  • Work breakdown structure (WBS): a listing of tasks that will be undertaken to accomplish the project goals, with assigned responsibilities and estimated durations and costs
  • Schedule: linking of tasks according to precedence and relationship, and identification of the critical path that determines the overall duration of the project
  • Change control:a method of formally monitoring progress and making changes during the execution of a project
  • Risk management: an identification of project risks, and plans to mitigate each risk

If the project is primarily concerned with improving quality or reducing variation, use the project management technique and tools described in step G, quality and Six Sigma. If the operating issue is large enough for project management and primarily concerned with eliminating waste or improving flow, go to step H, Lean. If the issue relates to evaluating and managing risk or analyzing and improving flow, go to step I, simulation. If the project focuses on supply chain issues, go to step J, supply chain management. If the project focus does not encompass by Six Sigma, Lean, simulation, or supply chain management, return to step E and use the basic performance improvement tools within the larger project management system.

E. Basic Performance Improvement Tools

Basic performance improvement tools can be used to improve and optimize a process (see Chapter 6). In addition to RCA, the following tools can be helpful in moving toward more effective and efficient processes and systems.

  • Optimization using linear programming: use to determine the optimal allocation of scarce resources.
  • Theory of constraints (TOC): use to identify and manage constraints in the system. The TOC technique consists of five steps.
  • Identify the constraint (or bottleneck).
  • Exploit the constraint: determine how to maximize the performance of the constraint without major system changes or capital improvements.
  • Subordinate everything else to the constraint: synchronize other non-bottleneck resources (or steps in the process) to match the output of the constraint.
  • Elevate the constraint: do something (e.g., capital expenditure, staffing increase) to increase the capacity of the constraining resource until it is no longer the constraint. Something else will be the new constraint.
  • Repeat the process for the new constraint.
  • Force field analysis: use to identify and manage the forces working for and against change(applicable to any change initiative, including TOC, Six Sigma, and Lean).

If these tools provide an optimal solution, go step J, holding the gains. However, sometimes the operating issues are so large that they will benefit from the formal project management discipline. In this case, go to step D. If the project is relatively small and focuses on eliminating waste, go to step G, Lean, where the kaizen event tool can be used for quick improvements.

F. Quality and Six Sigma

The focus of quality initiatives and the Six Sigma methodology is on improving quality, eliminating errors, and reducing variation (see Chapter 8).

  • DMAIC: the process improvement or problem-solving technique used in Six Sigma. The DMAIC technique consists of five steps.
  • Define: define the problem or process (see step A, issue formulation).
  • Measure: determine the current state of the process (see Data and Statistics, below).
  • Analyze: analyze the collected data to determine how to fix the problem or improve the process.
  • Improve: make changes to improve the process or solve the problem.
  • Control: ensure that changes are embedded in the system (see step J, holding the gains).

Note thatat any point in the process you may need to return to a previous step. Once you complete the process, start the loop again.

  • Seven basic quality tools: use in the DMAIC process to improve the process or solve the problem.
  • Fishbone diagram: usetoanalyze and illustratethe root causes of an effect.
  • Check sheet: use this simple form to collect data.
  • Histogram: use this graph to show frequency distributions.
  • Pareto chart: a sorted histogram.
  • Flowchart: a process map.
  • Scatter plot: use this graphic technique to analyze the relationship between two variables.
  • Run chart: use to plot of a process characteristic in chronological sequence.
  • Statistical process control (SPC): an ongoing measurement of process output characteristics to ensure quality;enables the identification of a problem situation before an error occurs.
  • Process capability: a measure of whether a process is capable of producing the desired output.
  • Benchmarking: the determination of what is possible based on what others are doing;use for comparison purposes and goal setting.
  • Quality function deployment (QFD): use to match customer requirements (voice of the customer [VOC]) with process capabilities, given that trade-offs must be made.
  • Poka-yoke: mistakeproofing.

Once these tools have produced satisfactory results, proceed to step J, holding the gains.

G. Lean

Lean initiatives typically focus on eliminating waste and improving flow in the system or process (see Chapter 9).

  • Kaizen philosophy: the process improvement technique used in Lean. The kaizen technique consists of the following steps.
  • Specify value: identify activities that provide value from the customer’s perspective.
  • Map and improve the value stream: determine the sequence of activities or the current state of the process and the desired future state. Eliminate non-value-added steps and other waste.
  • Flow: enable the process to flow as smoothly and quickly as possible.
  • Pull: enable the customer to pull products or services.
  • Perfection: repeat the cycle to ensure a focus on continuous improvement.
  • Value stream mapping: use to define the process and determine where waste is occurring.
  • Takt time: a measure of time needed for the process based on customer demand.
  • Throughput time: a measure of the actual time needed in the process.
  • Five Ss: a technique fororganizing the workplace.
  • Spaghetti diagram: a mapping technique thatshows the movement of customers (patients), workers, equipment, and so on.
  • Kaizen blitz or event: use to improve the process quickly, when project management is not needed.
  • Standardized work:written documentation of the precise way every step in a process should be performed;ameans of ensuring that things are done the same way every time in an efficient manner.
  • Jidoka and andon: techniques or tools used to ensure that things are “done right the first time.”
  • Kanban:use this scheduling tool to pull rather than push work.
  • Single-minute exchange of die (SMED): a techniquefor increasing the speed of changeover.
  • Heijunka: leveling production (or workload) so that the system or process can flow without interuption.

Once these tools have produced satisfactory results, proceed to step J, holding the gains.

H. Simulation

Simulation is used to evaluate “what if” situations. Usually it is less expensive and speedier than changing the real system and evaluating the effects of those changes (see chapters 10 and 11).

  • The simulation process consists of the following steps.
  • Model development: develop a model of the process or situation of interest.
  • Model validation: ensure that the model accurately represents reality.
  • Simulation and analysis of output: run the simulation and analyze the output to determine the answers to the questions asked, optimize the process, or manage risk.
  • Monte Carlo simulation: typically used to evaluate and manage the risks associated with various decisions based on random variables.
  • Discrete event simulation (DES): based on queuing theory;use to model system flows to improve the system.

Once these tools have produced satisfactory results, proceed to step J, holding the gains.

I. Supply Chain Management

Supply chain management (SCM) focuses on all the processes involved in getting supplies and equipment from the manufacturer to use for patient care (see Chapter 13). SCM is the management of all activities and processes related to both upstream vendors and downstream customers in the value chain. Effective and efficient management of the supply chain requires an understanding of all the following:

  • Tools for tracking and managing inventory
  • Forecasting
  • Inventory models
  • Inventory systems
  • Procurement and vendor relationship management
  • Strategic SCM

Once these tools have produced satisfactory results, proceed to step J, holding the gains.

J. Holding the Gains

Once successful operational improvements have been completed, three tools can be used to ensure that these changes will endure:

  1. HR planning: a plan to use employees in new ways after an improvement project is completed
  2. Managerial accounting: a study of the expected financial consequences and gain after an operations improvement project has been implemented
  3. Control systems: sets of tools for monitoring the performance of a new process, and methods for taking corrective action if desired results are not achieved


Visual Algorithm for Use of the Tools, Techniques, and Methodologies in Healthcare Operations Management[J2]

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(Note to Webmaster: This can be one page or a number of linked pages. This document contains bookmarks to indicate the linking. All red reference should be linked to the other appropriate pages on the companion web site. Any additional “tool” type graphics sprinkled throughout this page(es) would be a nice addition)

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