Managing improvement

Key concepts in quality improvement Quality models Quality in Higher Education Service improvement techniques Practice Agenda

Quality before the 1970s Conformance to specifications Engineering led; customers rarely consulted Impact of variation not recognised Everything within spec. = GOOD 95% Good (or less) was good enough Heavy dependence on inspection OK Reject

Ford’s wakeup call Identical gearboxes for the new American Escort were sourced from two plants, one in the US, and one run by Mazda Customer complaints pointed to the US gearbox “Tear downs” of US and Mazda boxes showed both sets of components to be “within spec” After further analysis, the Mazda components showed lower dimensional variation Visual examination showed the Mazda components to be “better made” “The b******* are making them with love!” Mazda Ford LSL USL

The Matsushita Rant We are going to win and the industrial west is going to lose: there’s nothing much you can do about it, because the reasons for your failure are within yourselves. Your firms are built on the Taylor model ; even worse, so are your heads. For you, the essence of management is getting the ideas out of the heads of the bosses into the hands of labour. We are beyond the Taylor model : business, we know, is now so complex and difficult, the survival of firms so hazardous in an environment increasingly unpredictable, competitive and fraught with danger, that their continued existence depends on the day-to-day mobilisation of every ounce of intelligence. For us, the core of management is precisely this art of mobilising and pulling together the intellectual resources of all employees in the service of the firm. We know that the intelligence of a handful of technocrats, however brilliant and smart they may be, is no longer enough. Only by drawing on the combined brain power of all its employees can a firm face up to the turbulence and constraints of today’s environment. - - Extract from a speech by Konosuke Matsushita of the Matsushita Electric Industrial Co. given to visiting European & American managers in 1979

Quality from 1990s to present Ideas about Value and Waste strengthen links to customer Improved Quality reduces costs Jidoka: fixing problems when and where they occur; using automation with “human intelligence” to improve quality, not just to increase output or reduce headcount Six Sigma (σ) levels of quality are defining the competitive edge (3-4 defects per million)

Key principles in quality improvement Clarity and constancy of purpose Leadership – Commitment from the top – Effective leadership at all levels Spend time on planning and design Aim for “zero defects” Statistical process control Systemic thinking Preventive, “no blame” approach

Six Sigma Fundamental objective – Implementation of a measurement based strategy that focuses on process improvement and variation reduction through projects. DMAIC process is for existing processes falling below specification and looking for incremental improvement. DMADV process is for developing new processes or products at Six Sigma quality levels Define, Measure, Analyse, Improve, Control Define, Measure, Analyse, Design, Verify

Is 99% good enough? Articles of post lost per hour Unsafe drinking water Incorrect surgical procedures per week Short or long landings at major airports Wrong drug prescriptions per year Product or Service 99% Good (3.8σ) % Good (6σ) 20,000 Seven 15 minutes/day One minute every seven months 5, Two per day One every five years 200,00068

Lean HE case studies Practice Review Agenda

Definition of lean The continuous elimination of waste from every business process with the ultimate goal of providing World-Class quality, delivery and service to our customers at the lowest possible cost

Value and waste Value is anything the Customer is prepared to pay for Waste is anything that adds cost but no value to the product or service in the eyes of the Customer

Total cycle time vs. value-added time IndustryProcessAve Cycle TimeVA Time%VA Time LifeNew Policy 72 hours 7 min. 0.16% InsuranceApplication ConsumerNew Graphic 18 days 2 hours 0.14% PackagingDesign FootwearPrototype 25 weeks 2 days 1.6% Development CommercialConsumer 24 hours 34 min. 2.4% BankLoan HospitalPatient 10 days 3 hours 3.8% Billing MotorFinancial 11 days 5 hours 5.6% VehicleEnd-of-Month EquipmentClosing

Value Adding Future Value Adding Necessary Non Value Adding Waste 4% 1% 35% 60% Manufacturing 1% 49% Non-manufacturing Source: Hines, Silvi & Bartolini Lean Profit Potential, 2002 LERC, Cardiff Business School

DEFINITION INADEQUATE UTILISATION OF THE INTELLIGENCE, SKILLS & KNOWLEDGE OF LARGE SECTIONS OF THE WORKFORCE TO SUPPORT CORPORATE GOALS AND OBJECTIVES Brain Locker Entrance Example: Failure to delegate decision-making as close as possible to the front line The eighth waste?

The Ninth Waste? Management behaviour? Command & Control thinking (JDI!) is incompatible with learning and kaizen Genschi Genbutsu is not the norm; making decisions remotely based on reports is Managers are not trained to recognise waste

The Golden Rule The Golden Rule at Toyota is Genschi Genbutsu (go and see) which helps you: – Recognise, first hand, the wastes which are degrading process capability – Reinforce the (visual) process controls developed by the Gemba (they are watching your every move) – Recognise the daily frustrations which sap enthusiasm in the Gemba – Sponsor or get involved in their kaizen efforts – You can coach their efforts, but you will also learn from them

Case Study 1: Housing benefits

What matters to customers? “I get an answer quickly so that I know whether or not I’m going to get help” “Deliver payments quickly so that I don’t get hassle from my landlord or the Council Tax department” “Make sure my benefits keeps track with changes in my situation…” “You help me through the process” “I can understand the letters & forms” “I don’t mind waiting a bit if I know it is going to be sorted”

Purpose Pay the right money to the right people as quickly as possible

Capability (how well are we meeting the purpose in customer terms?) We don’t know! – Because we don’t measure it! But … we do measure: – BVPIs & position relative to ‘similar’ authorities – Waiting time in reception – Number of cases per day in the back office

Ucl = 152 mean = 52 So what do customers experience?

Seeing the whole system Inspect Sort Scan Index Decide Allocate Notify Hand out forms Take in documents Pay 22%V 78%F 44%V 56%F 34%V 66%F 99% claims ‘dirty’ No case ownership CTax fragmentation 1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated 60% errors Rework Multiple Sorts & Checks Cases fragmented Scanning/Indexing errors 64% passed back Manage queues Letters unclear days to pay 3% visit once Handoff HO “I want to claim” Workers’ activity ‘managed’

Purpose Measures Method Pay the right people the right money fast mean = 142 mean = 12 Change thinking, improve performance Experiment: find & act on causes of variation

The systems solution: design against demand Expertise Value Work Demand “I want to claim” Obtain clean information Make a decision Notify the claimant Pay if entitled Put the claims expertise at the front end Enable assessors to pull support on demand Build Ctax expertise into the flow And measure against purpose