Improving Efficiency

What is the #1 way to improve Efficiency

Measure performanceIdentify consistency

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Exercise• What are simple ways to identify

your effort?

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Edward Deming

Statistical Theory

• “Students are not warned in classes nor in the books that for analytic purposes (such as to improve a process), distributions and calculations of mean, mode, standard deviation, chi-square, t-test, etc. serve no useful purpose for improvement of a process unless the data were produced in a state of statistical control.” (312)

• “A distribution (histogram) only presents accumulated history of performance of a process, nothing about its capability. As we shall learn, a process has a capability only if it is stable.” (314)

• “Statistical theory (theory of probability) as taught in the books for the theory of sampling and theory of distributions applies in the use of random numbers, but not in the experiences of life. Once statistical control is established , then a distribution exists, and is predictable.” (353)

Statistical Control (1)

Statistical Control a state of random variation, stable in the sense that the limits of variation are predictable (340):

– The process has an identity; its performance is predictable. It has a measurable, communicable capability.

– Productivity is at a maximum (costs at a minimum) under present system.

– Costs diminish as quality improves– The effects of change in the system can be measured with greater

speed and reliability. – Regularity of output

Statistical Control (2)• “Statistical control of a process is not an end in itself.

Once statistical control is established, serious work to improve quality and economy of production can commence.” (354)

• “Every problem is different from every other, and no general rule should be attempted.” (354)

• “….A production worker, when he has reached statistical control, has put into the process all that he has to offer. It is up to management to provide better uniformity in incoming materials, better uniformity in previous operations, better setting of the machine, better maintenance, change in the process, etc.” (404-405)

System

• All resources and process make up a system.

• “I find in my experience that few people in industry know what constitutes a system. Many people think of machinery and data processing when I mention system. Few of them know that recruitment, training, supervision, and aids to production workers are part of the system.” (366)

• “Test of components in stages of development can not provide (a) assurance that they will work together satisfactorily as a system in service; nor (b) the average run between failures of the system; nor (c) the type and cost of maintenance that will be required in service.” (476)

Two Causes for Failure

• Deming estimates that most troubles and most possibilities for improvement add up to proportions of around: 94% belong to the system and 6% special. (315)

• “Confusion between common causes and special causes leads to frustration of everyone, and leads to greater variability and to higher costs, exactly contrary to what is needed.” (315)

• “It is a hazard to use judgment to distinguish between special causes and common causes. Judgment has been wrong every time.” (320)

• “No amount of care or skill in workmanship can overcome fundamental faults in the system.” (315)

Special Causes – Failure due to special event or a specific person (314)

Common Causes – Failure due to faults of the system (314)

Control Charts

• Control limits, once we have achieved a fair state of statistical control, tell us what the process is, and what it will do tomorrow. (333)

• “Action line placed on a chart by judgement, not calculated….such placement of a line, as substitute for a control limit, leads to overadjustment or to underadjustment, and perpetuates whatever troubles exist.” (357)

• “Specification limits should never be shown on a control chart.” (357)

“The control chart is the process talking to us.” (333)

InspectionThe rules for minimum average total cost turn out is either:

100% inspection or 0% inspection.

• Case 1: If the cost to inspect is more than the cost to fix the average

number of defective items than you perform 0% inspection.

• Case 2: If the cost to fix the average number of defective

items is more than the cost of inspection, then you

perform 100% inspection. (409)

“The rule for no inspection does not mean to drive in the dark

with no lights. One should take a look at all incoming material,

possibly on a skip lot basis, for information and for

comparison……” (417)

Deming on Standards “Most applications of the Dodge-Romig plans of

acceptance and of Military Standard 105D are, I fear, pro forma, merely conforming to the requirements of a contract, drawn up by people without qualifications for drawing up a plan, and carried out by another group of people equally qualified. Everybody does it, so we do too. The result is increase in cost.” (431)

Deming on Improvement

“Every appalling example in this book

turned up because I was there, on the line,

on the job, trying to be helpful by looking for

sources of improvement and wrong

practices. If I had waited for them to come

for help, I’d still be waiting.” (469)

Conclusion• Identifies that measurement is critical to

developing stability and predictability

• Identifies that all measurements are meaningless unless the measurements can be repeated to identify an average

• Statistical control is when things are stable [3 StDV]

• Identifies that creating a process or system or structure that is stable is most productive

• Track and measure to develop consistency

US Army Medical Command

PM 2 PM 3 PM 4

Procurement Officer 1 Procurement Officer 2

Director

Contractor 5

Contractor 6

Contractor 7

Contractor 8

Contractor 9

Contractor 10

Contractor 11

Contractor 12

Contractor 13

Contractor 14

Contractor 15

Contractor 16

Facility Director

FM2 FM3 FM4

Organization CommanderCOE Procurement Office1

COE Procurement Office1

COE Procurement Office1

QAQA

QAQA

PM 1

Contractor 1

Contractor 2

Contractor 3

Contractor 4

FM1

Project IntegratorProject Integrator

Project Integrators

Hospital Users

Facility Director

MEDCOM Bureaucracy

Weekly Risk Report

Risk and Deviations

Current Schedule& CostMods

Risk Management Plan (Predicting Risks and Deviations)

Movement from Silo Reporting

Continual Performance Documentation

Ability to Compare Performance

TOP 10 RISK RANKING PROJECTS 1/15/2010

No. Project Location Risk # Contractor # Weeks on Top 10 NTP of Project

1 Addition to Third Floor Womans Health Care Suite Ft. Lewis, WA (MAMC) 42.63 CON A 56 10/18/2007

2 Bathroom Conversions, Bldg 9200 Ft Benning, GA 35.10 CON A 14 9/19/2008

3 WP/Rpl Surgical Supply Cartlifts Ft. Stewart, GA (WACH) 14.23 CON A 8 9/30/2008

4 Renew Health Clinic, Building 990 Yuma Proving Grounds, AZ 13.53 CON A 9 9/11/2007

5 Misc. Medical Repair Projects '08 Ft. Bragg, NC (WAMC) 13.10 CON I 2 9/29/2008

6 Rep,Reconf for TBI Program Schofield Barracks, HI 12.73 CON A 40 10/7/2008

7 Convert Constant Volume to VAV Forest Glenn, MD (WRAIR) 11.46 CON D 6 10/29/2006

8 Replace Elevators Ft. Belvoir, VA (DACH) 10.46 CON E 8 5/2/2008

9 Repair Budge Dental Clinic Ft. Sam Houston, TX (BAMC) 10.34 CON D 2 9/30/2007

10 Expand Patient Administration Division Ft. Lewis, WA (MAMC) 9.12 CON A 5 10/15/2009

Ability to Track Performance Over Time

Completed Projects Overview NTP 2006 NTP 2007 NTP 2008 Progress

Total Awarded Budget $ 127,556,208.07 $ 76,544,713.43 $ 52,753,624.33 -

No of Projects 84 86 70 -

% Projects On Time 31% 28% 40% 29%

% Projects On Budget 40% 57% 56% 40%

Completed Projects Overview NTP 2006 NTP 2007 NTP 2008 Progress

Total % Over Budget 7.1% 7.5% 5.5% 23.3%

% over budget due to Owner 4.8% 5.2% 4.9% -

% over budget due to Contractor 0.1% 0.2% 0.0% 84.7%

% over budget due to Unforseen 5.2% 2.1% 0.6% 88.7%

Total % Delayed 42.3% 38.7% 27.7% 34.4%

% delayed due to Owner 24.5% 27.6% 20.8% 15.0%

% delayed due to Contractor 5.7% 5.3% 2.8% 50.5%

% delayed due to Unforseen 13.3% 5.6% 5.0% 62.1%

% of projects with RMP 0.0% 10.5% 54.3% 54%

% of Accurate Weekly Reports 0% 0% 50% 50%

# of QA's 57 53 38 -

% of projects/QA 1.47 1.62 1.84 25%

 Data Total MEDCOM COE Facility Contractor Unforeseen Unknown

# of risks 109 1 23 42 12 26 5

# of days delayed 3512 0 1009 1773 181 310 239

% of days delayed 100% 0% 29% 50% 5% 9% 5%

# Over Budget $ 1,364,465 $0.00 $0 $1,194,908 $0.00 $169,560 $0.00

% Over Budget100% 0% 0% 87% 0% 12% 0%

• The Facility accounts for 87% of all cost deviations and 50% of all time deviations

• The COE accounts for 30% of all time deviations.

• All other entities have minimal impact to cost and time.

Ability to Track Source of Risks

Ability to Identify Risk Re-Occurring

No. Common Risks

2008 2009

% Risk Occurance % Risk Occurrence

1 Scope & Design Change 34% 53%

2 Approval/ response/ review / NTP 37% 15%

3 Site Conditions/Constructibility 12% 1%

4 Contractor 2% 9%

5 MISC and Unknown 15% 21%

No. Common Risks

2008 2009 2008 2009

Impact on Days

Impact on Days

% Impact(risk days)

% Impact(risk days)

1 Scope & Design Change 4987 13670 25.4% 58.9%

2 Approval/ response/ review / NTP 7586 2080 38.6% 8.96%

3 Site Conditions/Constructability 1810 804 9.2% 3.46%

4 Contractor 1536 980 7.8% 4.22%

5 MISC and Unknown 3717 5674 18.9% 24.4%

No. Common Risks2008 2009 2008 2009

Impact in $$ Impact in $$% Impact(risk $

$)% Impact(risk $

$)

1 Scope & Design Change $4,385,938 $18,674,376 23.5% 67.6%

2 Approval/ response/ review / NTP $5,189,649 $2,818,301 27.9% 10.2%

3 Site Conditions/Constructibility $1,836,616 $1,238,863 9.9% 4.5%

4 Contractor $1,261,429 $199,527 6.8% 0.7%

5 MISC and Unknown $5,959,757 $4,694,439 32.0% 17.0%

Personal Life Implementation

Issues with Measuring• Being a perfectionist

• Complexity

• Number of metrics

Hour Tracker Details

Weekly Hour Tracker Summary

# Main Categories Total Mon Tues Wed Thurs Fri Sat Sun1 Eating 9.5 1 1.5 1.5 1.5 2 1 12 Sleeping 44.5 4.5 5.5 7 7 5 8 7.53 Traveling 7.5 1 1 1 1 1.5 1.5 0.54 Inefficient Use of Time 6.5 0 0 0.5 0.5 2 3 0.55 Religion / Life / Service 27 1.5 2.5 1 1.5 6 2.5 126 Work / Profession / School 45.5 11.5 9.5 6.5 10.5 7.5 0 07 Exercise / Physical 11 1.5 1.5 2 1.5 1.5 3 08 Hygiene / Life Stuff / 16.5 2.5 2 1.5 2 1.5 5.5 1.5

168 23.5 23.5 21 25.5 27 24.5 23168

Hour Tracker Summary

Main Categories Average 9/11/2009 9/18/2009 9/21/2009 9/28/2009 10/5/2009 10/12/2009 10/19/2009 10/26/2009Eating 6.4 7 7.5 9.5 6.5 7 5.5 4.5 3.5Sleeping 50.7 51 51 44.5 52 54.5 49 52.5 51Traveling 5.3 2 6.5 7.5 5.5 6 5 4.5 5.5Inefficient Use of Time 7.7 10 11.5 6.5 4.5 11 10 2.5 5.5Religion / Life / Service 25.8 32.5 24.5 27 24.5 14.5 17.5 31.5 34.5Work / Profession / School 48.9 49.5 46 45.5 52.5 43 49 52 53.5Exercise / Physical 9.4 5.5 11 11 8 9 12 9 10Hygiene / Life Stuff 13.0 10.5 10 16.5 14.5 23 20 5 4.5

Over years…..Main Categories 2009 2010 2011 2012 DifferenceSleeping 50.7 49.2 48.62 45.29 -5.4Eating 6.3 1.9 0.06 0.00 -6.3Traveling 4.7 3.6 1.82 1.25 -3.4Inefficient Use of Time 7.2 2.1 0.82 0.11 -7.1Exercise / Physical 8.7 9.9 9.57 5.82 -2.8Work / Profession / School 51.9 52.8 51.20 47.86 -4.1

Work / Profession - - 49.58 47.86 -1.7Writing / School - - 1.62 0.00 -1.6

Religion / Life / Service 27.6 41.6 49.82 62.82 35.2Church / Service - - 17.83 10.96 -6.9Reading - - 5.32 2.82 -Religious activities - - 1.21 1.50 -Family Stuff - - 20.12 22.57 -Time with Suley - - - 16.11 -Talking with Suley - - - 4.29 -Personal Life Stuff - - 0.98 0.54 -Meditation / Prayer - - 4.37 4.04 -

Hygiene / Life Stuff 10.4 6.9 4.83 4.82 -5.6

Finance Tracker

Categories Average 2005 % 2006 % 2007 % 2008 %Eating Out 1,455.32$ 400.00$ 9% 1,360.92$ 26% 1,907.19$ 19% 2,153.17$ 20%Donations 3,019.50$ 500.00$ 11% 2,371.00$ 45% 2,840.00$ 29% 6,367.00$ 59%Other 892.90$ 164.00$ 4% 526.34$ 10% 2,745.53$ 28% 135.74$ 1%On Me 1,243.90$ 3,000.00$ 67% 80.95$ 2% 1,693.93$ 17% 200.71$ 2%Gifts 981.92$ 405.00$ 9% 883.29$ 17% 677.63$ 7% 1,961.74$ 18%Total 7,593.54$ 4,469.00$ 5,222.50$ 9,864.28$ 10,818.36$

Finance Details

Question:

Why is goal setting important if the event only happens 1 way?

Goal Setting

Goal Tracking

Improvement in Efficiency

Tracking Goals

Improvement?

Goal Units 2010 2011Get Married # of dates 6 25Research Religion # of books read 1 2.5Reading Mins/day 28.5 30Control Stress Level (1-10) 7.72 7.89Increase Listening capacity (1-10) 4.15 7.88Finish Dissertation % Complete 20% 75%Act when prompted % of times 95.90% 96.70%Keep a journal everyday % of days missed 5.70% 18%Read an uplifting article everyday % of days read 22% 55%

2010 2012

2014