SOM- L7_Process Improvement_stud (1)

Lecture 7Process ImprovementChapter 07

Check Do

Act Plan

Time

Qua

lity

leve

l

McGraw-Hill/IrwinService Management: Operations, Strategy, and Information Technology, 6e

Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Learning ObjectivesLearning Objectives

Quality and Productivity Improvement Process

Use quality tools for process analysis and problem solving.

Benchmarking for service improvement.

Quality improvement programs

7-2

Quality and Productivity Improvement ProcessQuality and Productivity Improvement Process

Foundations of Continuous Improvement Customer Satisfaction

Focus on satisfying your ______________________ Management by Facts

Collecting objective data for ___________________ Respect for People

Employees are given support and their ideas are solicited in an environment of mutual respect

7-3


The principal objective of continuous improvement is to eliminate the ___________of problems so they do not recur.

Focus on the process Deming’s approach – PDCA cycle

A ______________________ cycle with quality improvements

7-4


Plan-Do-Check-Act (PDCA) Cycle Plan, select and analyze the problem

(customer indicators, focus, as-is, to-be)

Do, implement the solution (trial, progress)

Check, the results of the change (the effect)

Act, to standardize the solution and reflect on learning from experience (communicate)

7-5


Problem-Solving approach in the PDCA Cycle:

Step 1: Recognizing the Problem & Establishing Priorities (problem outline)

Step 2: Forming Quality Improvement Teams (interdisciplinary and management)

Step 3: Defining the Problem (pareto analysis) Step 4: Developing Performance Measures (pre &

post) Step 5: Analyzing the Problem/Process (Flowcharting)

7-6


Step 6: Determining Possible Causes (Fishbone diagram) Step 7: Selecting & Implementing the Solution (criteria-

cause, prevention, cost & time) Step 8: Evaluating the Solution: The Follow-up (compare

performance) Step 9: Ensuring Permanence (control charts) Step 10: Continuous Improvement (new round of

improvement analysis)

7-7

Quality Tools for Analysis and Problem Solving Check Sheet Run Chart Histogram Pareto Chart Flowchart Cause-and-Effect Diagram Scatter Diagram Control Chart

Case: Data from an airline

7-8

Check Sheet of Problemshistorical record of observations Month Lost Departure Mechanical Overbooked Other

Luggage Delay

January 1 2 3 3 1

February 3 3 0 1 0

March 2 5 3 2 3

April 5 4 4 0 2

May 4 7 2 3 0

June 3 8 1 1 1

July 6 6 3 0 2

August 7 9 0 3 0

September 4 7 3 0 2

October 3 11 2 3 0

November 2 10 1 0 0

December 4 12 2 0 1

Total 44 84 24 16 12

7-9

Run Chart of Departure Delaystracks change in a variable over time (compare)

0

2

4

6

8

10

12

14

1 2 3 4 5 6 7 8 9 10 11 12

Months

De

pa

rtu

re D

ela

ys

7-10

Histogram of Lost Luggagedata collected over time as a frequency distribution

0

0.5

1

1.5

2

2.5

3

3.5

1 2 3 4 5 6 7

Occurrences per Month

Fre

qu

en

cy

7-11

Pareto Chart of Problemsorders problems by relative frequency

0102030405060708090

DepartureDelay

LostLuggage

Mech. Over-booked

Other

Number of Problems

7-12

Pareto Analysis of Flight Departure Delay Causes

Cause Percentage of Incidents Cumulative Percentage

Late passengers 53.3 53.3

Waiting for pushback 15.0 68.3

Waiting for fuel 11.3 79.6

Late weight and balance sheet

8.7 88.3

7-13

Flowchart at Departure Gateprocess flow for intervention points

Passenger Arrives

Ticket No Wait for For Flight Appropriate Flight

Yes

Check Yes Excess Luggage Carry-on

No

Issue Boarding Pass

Passenger Boards Airplane

7-14

Cause-and-Effect Chart for Flight Departure Delay (Fishbone Chart)

Equipment Personnel

Procedure

Material

Other

Aircraft late to gateLate arrival

Gate occupied

Mechanical failures

Late pushback tugWeather

Air traffic

Late food service

Late fuel

Late baggage to aircraft

Gate agents cannot process passengers quickly enoughToo few agents

Agents undertrainedAgents undermotivated

Agents arrive at gate late

Late cabin cleaners

Late or unavailable cockpit crewsLate or unavailable cabin crews

Poor announcement of departuresWeight and balance sheet late

Delayed checkin procedureConfused seat selection

Passengers bypass checkin counterChecking oversize baggage

Issuance of boarding pass

Acceptance of late passengersCutoff too close to departure time

Desire to protect late passengersDesire to help company’s income

Poor gate locations

DelayedFlightDeparture

7-15

Service categories: Information, customers, material, procedures, personnel, and equipment

Uncovered causes by asking the 1H5W Eliminate causes through discussion

and consensus Investigate remaining possibilities/root

causes

Cause-and-Effect Chart for Flight Departure Delay (Fishbone Chart)

Scatter Diagram of Departure Delay vs Late Passengersrelationship between 2 variables (correlation) to identify root cause

0

2

4

6

8

10

12

0 1 2 3 4 5 6 7

Late Passengers

Dep

artu

re D

elay

s

7-17

Control Chart of Departure Delaysmonitor a process (shows when a process is out of control)

60

70

80

90

100

Per

cen

tag

e o

f o

nti

me

flig

hts

Target

Lower Control Limit

1998 1999

n

pppUCL

1(3

n

pppLCL

1(3

7-18

Benchmarking

Measuring a firm’s performance by comparing with the performance of other

“______________” companies

For every performance dimension, some firm has earned the reputation, and, thus, is a benchmark for comparision.

Benchmarking

The benchmarking process: Determine what to benchmark

(improvement) Identify the company, form a

benchmark team Contact the benchmark firm, make a

visit, & study the process Collect and analyze information Take action to match or exceed the

benchmark

Reasons to benchmark Establishing the difference

Examine the process that contribute to giving your market differential

Setting the highest possible standards Learning from Best in Class Creating synergy of ideas

Any degree of sharing of ideas is likely to benefit your company

Focus on ___________________

Possible Processes to Benchmark Customer satisfaction Reducing set up time Improved training On-time delivery Product consistency Correct invoicing Speed of service Pricing and purchasing

Quality Improvement Programs

Personnel Programs for Quality Assurance individual development (skills and knowledge) management training (development) human resource planning (identify resources) standards of performance (procedures) career progression (job-advancement) opinion surveys fair treatment profit sharing

7-23


Other QIP: Deming’s 14 Point Program

Refocus attention on meeting customer needs continuously to saty ahead of the competition.

Baldrige National Quality Award Annual award to U.S. companies that excel in

quality achievement and management

7-24


Other QIP: ISO 9000

Series of quality management system standards Documentation of processes and consistent

performance Certification signals that the firm has a quality

management system that ensures consistency output quality

7-25


Other QIP: Six-Sigma Objective is to reduce variations in

performance A rigorous and disciplined methodology that

uses data and statistical analysis

7-26

Tutorial Questions

• Prepare a cause-and-effect or fishbone diagram for a problem such as “Why customers have long waits for coffee in a restaurant.” Use Figure 7.16, pg 164 as a guide.

• Explain how the application of the PDCA cycle can support a competitive strategy of low cost leadership.

• Explain why it is necessary for Step 10 – continuous improvement in PDCA cycle

• What are the limitations of “benchmarking”?

7-27

Common Test

• Seating Plan

7-28

Documents

SOM- L7_Process Improvement_stud (1)