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Posts Tagged ‘process improvement’

Much of operations is about standardization. There is much to be gained from building processes that are appropriately tailored to the task at hand and handling that task in the same “best” way every time. And then there is health care, where every patient is unique in some way and doing less is seen as an anathema. There is a very real possibility that not opting not to do some test or some procedure could lead to adverse outcomes for patients. However, not following best practices can lead to excessive cost.

The Wall Street Journal provides a nice example from a study at a small hospital system Christiana Care that made a conscious effort to get doctors to stick established best-practice guidelines (Hospitals Cut Costs by Getting Doctors to Stick to Guidelines, Sep 22). The procedure in question is cardiac telemetry, which is a monitoring technique, and how it should be used for patients that are not in an intensive care ward.

In cardiac telemetry, electrodes are used to monitor the heart for abnormal rhythms. To try to cut inappropriate use of the monitoring at Christiana Care, which operates two hospitals, a group of physicians redesigned the electronic system that doctors use to order tests and other care.

First, they removed the option to order telemetry for conditions not included in the [American Heart Association] guidelines. Doctors could get around this and order the monitoring, but they had to take an extra step to do so, according to Robert Dressler, who helped lead the study. “We didn’t want to get in the way of the bedside clinician who had a demonstrable concern” and wanted to use telemetry despite contradicting guidelines, he said.

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I am one of those American who is adamantly uninterested in soccer. However, I have to admit that the process of making soccer balls might be interesting. More specifically it can be interesting when a bunch of researchers mess with how it is done.

It turns out that Pakistan is a big player in soccer ball production, as this graph from the Wall Street Journal shows (How Automation Fell Flat in the World’s Soccer-Ball Capital, Apr 28).

BN-CN927_soccer_G_20140427183119

As the figure demonstrates, Chinese have been putting pressure on the Pakistanis in part by machine sewing balls while most Pakistani balls are hand stitched (see here for more on that). You would think that would make Pakistani manufacturers anxious for any process innovation that would let them reduce cost and compete with the Chinese.

In that context, enter a group of economists who have better way to cut the faux leather that makes up the ball. Here is their explanation of the innovation (from the Center for Development Economics and Policy at Columbia).

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The National Highway Traffic Safety Administration maintains a website that users track how many motor vehicle recalls there have been this month. As I am writing this, there have already been 17 in November. As the graphs below show, there have been an increasing number of recalls in recent years affecting an increasing number of vehicles.

recall

Those graphs come from an Automotive News article (Despite quality improvements, costly safety issues continue to dog automakers, Oct 28) that gets to an interesting question: If the general quality of cars has improved, why are there so many more recalls?  (more…)

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What counts as good service at a fast food restaurant? Speed obviously matters but what about staff interactions? No expects a quick service restaurant to have a Zagat’s rating (although some Chicago hot dog stands are graded) but can fast food service slip so much that customers notice?

Apparently the answer is yes, and furthermore McDonald’s hasn’t been doing so well in delivering service (McDonald’s Tackles Repair of ‘Broken’ Service, Apr 10).

But achieving speed and friendliness of service across the chain has been a particularly elusive goal, at least in part because about 90% of McDonald’s restaurants in the U.S. are owned by independent operators.

In QSR Magazine’s annual Drive-Thru Study, the only comprehensive industry comparison of customer service at fast-food chains, other restaurants have consistently outperformed McDonald’s in those areas. In last year’s study, the average service time at the McDonald’s drive-through studied was 188.83 seconds, compared with 129.75 for industry leader Wendy’s Co.  Chick-fil-A had the top friendliness ratings. Out of the seven major chains in the study, McDonald’s was second to last in the “very friendly” ranking, just above Burger King.

So what are the root causes of the problem and what can they do about it? (more…)

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How does a quick service chain increase sales when it’s tough to raise price or open new outlets? Process improvements! Or at least that is what the Wall Street Journal says (Restaurant Chains Feel the Need for Speed, Aug 29). The argument is that long lines scare off customers — especially at peak times — so faster  fast food means more sales.

Here’s what they say about Chipotle:

For Chipotle, it’s a top priority. “We’ve come a long way, but there’s still a long line, and there’s people turning away at the end,” said Co-Chief Executive Monty Moran.

Chipotle processed an average of six more transactions during the lunch hour last quarter, beating its 2007 record. The Colorado-based burrito chain is training its staff to be more prepared for the lunch rush, with extra trays of ingredients ready on the sideline, and to be attentive to customers so they don’t have to repeat themselves.

At each of its most efficient restaurants, Chipotle averages more than 350 transactions during the lunch hour—about one every 11 seconds.

A customer every 11 seconds is pretty impressive and certainly faster than I would have expected. Note that Chipotle’s approach makes sense since their service is very much human paced as orders are filled by scooping fillings and rolling burritos. The article reports that they have tried having a second register but found it generally made no difference. That they even tried that makes me wonder if whoever proposed that has ever eaten at a Chipotle since payment is clearly not the bottleneck.

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A recent New Yorker article by Atul Gawande has gotten a lot of attention (Big Med, Aug 13). The article is built around an intriguing observation: The Cheesecake Factory can churn out a high variety of dishes at consistently decent quality at reasonable prices across more than a hundred locations. The question then is whether healthcare providers can learn anything from the Cheesecake Factory?

It is an thought-provoking question. The Cheesecake Factory is one of many “service factories” in a variety of industries that provide decent service at very reasonable prices. Many (e.g., Jiffy Lube) do this by winnowing down the range of services they offer but the Cheesecake Factory has a huge menu and can handle some special requests. So Gawande takes a hard look at the Cheesecake Factory to see just how they do it and finds that the kitchen manager plays a special role:

I watched the kitchen manager for a while. At every Cheesecake Factory restaurant, a kitchen manager is stationed at the counter where the food comes off the line, and he rates the food on a scale of one to ten. A nine is near-perfect. An eight requires one or two corrections before going out to a guest. A seven needs three. A six is unacceptable and has to be redone. This inspection process seemed a tricky task. No one likes to be second-guessed. The kitchen manager prodded gently, being careful to praise as often as he corrected. (“Beautiful. Beautiful!” “The pattern of this pesto glaze is just right.”) But he didn’t hesitate to correct. …

The managers had all risen through the ranks. This earned them a certain amount of respect. They in turn seemed respectful of the cooks’ skills and experience. Still, the oversight is tight, and this seemed crucial to the success of the enterprise.

The managers monitored the pace, too—scanning the screens for a station stacking up red flags, indicating orders past the target time, and deciding whether to give the cooks at the station a nudge or an extra pair of hands. They watched for waste—wasted food, wasted time, wasted effort. The formula was Business 101: Use the right amount of goods and labor to deliver what customers want and no more. Anything more is waste, and waste is lost profit.

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The current issue of Businessweek has an interesting profile of a Monomoy Capital Partners, a private equity firm with about $700 million in investments (My Week at Private Equity Boot Camp, Apr 26). Private equity deals are not the normal focus of this blog, but the article highlights an intriguing aspect of how Monomoy goes about deals. To take over a company and then be able to spin it off for a profit requires some combination of cleaning up balance sheets, rethinking the acquisition’s strategy, or straightening out the firm’s operations. As  the article tells it, Monomoy’s approach to the latter is (from an operational perspective) is encouraging.

To buy a company and sell it at a profit requires a complex skill set: financing, restructuring, negotiating new leases and labor contracts, and, of course, “operations,” the term private equity uses for “making things.” Improving operations can mean parachuting in a consultant or a former chief executive officer as an adviser. Monomoy goes further. It occupies a plant floor like heavy infantry, with yellow tape, label makers, and overwhelming force.

In part, Monomoy does this through a series of two-week “boot camps.” Four times a year, the firm pulls about 20 managers from the manufacturers in its portfolio and sends them to one of its plants to suggest—and carry out—efficiencies.  …

Monomoy has adopted Toyota’s system. Five of the seven people in Stewart’s operations group spent time on the line at the Toyota plant in Georgetown, among them Mike Bray, also in the training room. Bray, tall and goateed, runs the boot camps for Monomoy. He uses the word “kaizen” as a transitive verb and as a noun with an indefinite article, as in “We’re going to kaizen this” and “We ran a kaizen on it.”

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