And Learning TEAL Consulting Limited a a Meeting Customer Demand in Challenging Times July 2010

and Learning

TEAL Consulting Limited

aa

Meeting Customer Demand in Challenging Times

July 2010

Slide 2 © TEAL Consulting Limited 2010

Internal FactorsErrors, delays and inefficiencies – plus causes

and implications

External/Environmental FactorsWhat external constraints are imposed on the

service which affect its performance and ability to improve (e.g. economic factors, lack of customer knowledge, unrealistic customer expectations of

the service)

Customer Demand

Type, Volume, Variation, Service vs. Failure, Non-

Service Requests, Feedback & Complaints

Service Delivery Chain

Step 1 Step 2 Step 3 Step n

Service Outputs & OutcomesWhat value and

benefit do customers get from the service – what is

the impact on related services provided by the organisation?

Service Understanding


Outcomes vs Outputs

It's important to understand the difference Processes deliver – OUTPUTS

– Recruit Staff - new appointed people

OUTCOME - a level of performance or achievement– The staff may be:

• at the right time or too late for the line manager

• capable or incapable of performing their role • too many or too few


SERVICE PURPOSE

Desired Outcomes, Success Criteria, KPI’s and Targets

SERVICE EFFECTIVENESS

Customer Focused Process

Customer Outcomes, Customer Satisfaction/Dissatisfaction

CUSTOMER DEMAND

SERVICE EFFICIENCY

Service Requests, Avoidable Contact, Complaints….

Resources Needed to Satisfy All Demand


What are we trying to achieve

Quality

TimeCost

Our focus is – variation reduction

Our focus is – waste reduction Our focus is – a reduction in the amount of

calendar time consumed

+ PeopleQ

C T

People are theglue that holdorganisations

together

Our focus isempowerment


Cost of Poor Quality COPQ

Prevention Costs

External Failure Costs

Appraisal Costs

Internal Failure CostsCost of

Conformance

Cost of Non-Conformance


Understanding Customer Requirements

Gather meaningful Data on what the Customer requires–Voice of the Customer (VOC)

Analyse and Translate VOC into meaningful terms–Critical to Quality standards (CTQ)


Starting with “What is a Customer ?”

A Customer is a recipient of the Output of a Process

The Customer can be Internal or External

External Customers are not limited to end-users of the Product or Service

External Customers can also include Regulators, Monitors of Law and the Public or Community (Stakeholders)

The definition of Quality here means satisfying Customer Needs

The definition of Quality here means satisfying Customer Needs


Kano Model of Customer Expectations

Need not Fulfilled

Satisfaction

Need Fulfilled

Must Have’sDissatisfaction

Region

Satisfaction Region

Delighters

More is Better

ServicePressure

More is Better needs are generally explicit,

Must Have’s and Delighters are usually unspoken

More is Better needs are generally explicit,

Must Have’s and Delighters are usually unspoken

Dissatisfaction


VOC to CTQ : CTQ Tree

General Specific

Hard to measure Easy to measure

CUSTOMER:“Good room service"

Speed of DeliveryElapsed Time from Order to Arrival

Cost Service Charge

Compared with eating in restaurant

Taste

Presentation

Temperature

Food Quality

VOC Critical Customer Requirement CTQ

“Vague” terms Measurable items


Defining Customer CTQs

Convert customer data into Specific Requirements

Define a Requirement not a Solution

Document all the information

Ensure the Requirement is Measurable

Define the Measure

Establish meaningful Specification Limits

The acid test is whether the CTQ can be Measured

The acid test is whether the CTQ can be Measured


Runners, Repeaters & Strangers

% Vol

80%

100%

95%

% Service range

RunnersRapid flow Dedicated processesSelf managed

20%

RepeatersPartially flowShared processes Some management

StrangersOne offs Universal processesSignificant management


Consider the following 3-step process:

Input 100documents A B C Output 90

documents

Yield = 90%

Is this the whole story?

Rolled Throughput Yield

Problems in processes have a cumulative effect...


REWORK

Rework - Hidden Processing

Input 100Documents

ARFT = 94%

BRFT = 91%

CRFT = 92%

Output 90Documents

9398

SCRAP

What is the true yield (Rolled Throughput Yield) ?

6 4

2

9 4 7 4

5 3



Input 100documents

ARFT = 94%

BRFT = 91%

CRFT = 92%

Output 90documents

9398


= RFTA x RFTB x RFTC

= 0.94 x 0.91 x 0.92

= 79%

A true reflection of process performance


Overall Process Effectiveness

Element Six Big Losses Description Example

Major stops Unable to run - Major stop > 10 minutes IT failure / No staff / No work

Transition Losses Delays between activity Awaiting patients or information. Set-up

& clean down at start & end of day

Minor stops Interruptions. Minor stops < 10 minutesUnplanned distractions - Phone, email,

colleagues

Skill Losses Wrong things or wrong staff Completing unnecessary work or Dr

covering on reception

Process errors Internal failuresCorrecting data entry errors / dealing

with customer complaints

Supply errors External failuresMistakes made by others - Courier

damage / Pathology lab results

Availability

Performance

Quality

Source : Lean Toolbox for Service SystemsJohn Bicheno


Exercise Objective

– To identify the Customers of your Processes– To consider what improvement could be made in your

service effectiveness and efficiency

How – List 1 of your service processes– Identify all the Customers of this Process – Internal and

External– Consider what measures exist for your processes

Output– An understanding of what measures currently exist– An initial assessment of the effectiveness and efficiency

of your Processes


Reminder - Customer Value

Value is Generated for Customers via – Quality– Cost of Service– Delivery

In meeting Customer Needs there is benefit for the organisation in terms of

– Right first time – lower number of repeat calls– Lower Costs – Less time wasted– Satisfied customers e.g. rate payers

Reduction of Non Value Adding time is a major driver

– Minimising amounts of staff time wasted.


External Perspective

Time

Waiting time

Waiting time

Length of delivery

delay

Perceived service quality

They don’t care about

my business; it isn’t worth

the wait

B

Customer traffic


Internal Perspective

Customer SatisfactionLevel of

customer satisfaction

Length of delivery

delay

Sales

Size of service and

delivery department

We can’t afford these employees


And Finally

Understanding what outcome the service is intended to deliver - is the start

Understanding how this impacts on quality

of service delivery is critical

The effectiveness of the service has a direct impact on your costs

So jumping to be more efficient before addressing effectiveness is a short term fix – which will come back later