Balancing Quality Service with Operational Efficiency

Balancing Quality Service with Operational Efficiency

Judy Wright & Marv Sauer – April 19, 2011

webinars.plantemoran.com

Current Situation

Cutbacks / decreased revenue

Increasing demand for services

Increased regulatory requirements

Increasing competition

Breadth of service

Complexity of service

How do we do more with fewer or

the same number of resources?


Lean Methodology

Applies specific tools and methods in a consistent manner to eliminate waste and improve operational effectiveness

Based on the Toyota Production System (TPS) - a set of manufacturing techniques to increase profits through the continuous elimination of waste


Lean Methodology

Driven by six principles

1. Define customer value

2. Identify the value stream

3. Make it flow

4. Pull it through the process

5. Eliminate waste

6. Create perfection


Process

A process is any sequence of activities that satisfies a customer or business need or results in an output. It can be very simple, or extremely complex.

A B C D


Process


A B C D

It has a beginning and an end

EndBeginning


Process


Uses inputs to produce either a product or a service as its output

A B C D EndBeginning


Process


Can be broken into a series of small steps or tasks

AA B C D EndBeginning

i ii iii iv v


Process Redesign

Process redesign involves looking at a process and identifying areas of:

A

J

Exception report is run to identify

issuesB C D E

F G H I

Inefficiency


Process Redesign


AException report is run to identify

issuesB C D E

Waste


Process Redesign



issuesB C D E

B

Duplication of Effort

B

B


Process Redesign



issuesB C D E

Workarounds

B1


Process Redesign

Process Redesign Ensures: Standardization of processes

Increases in efficiency

Incorporation of Best practices

New systems (technology) do not simply automate current processes

Technology (where used) is not driving processes, but that technology is configured to support processes


Barriers to Process Redesign

Staff who are comfortable with the “way we’ve always done it”

Staff who are uncomfortable outlining and examining how they perform their jobs

Reliance on paper-based processes (e.g. Excel spreadsheet tracking and reporting)

Resistance to change


First Law of Improvement

“Every process is perfectly designed to achieve the results it achieves”


Second Law of Improvement

“If you want better results, get a new process”


Why is Process (Redesign) Important?

Departments are frequently focused on “firefighting”

Many processes are designed to the “exception” rather than the “rule”

Cross-functionality provides greatest opportunity for collaborative improvement

Technology investments can be maximized when process improvements incorporate all features and functionality


Process Examples

Student Processes Administrative Processes Admissions Registration Financial Aid Student Accounting Parking Bookstore Management

Accounts Payable Purchasing Position Control Accounts Receivable Hiring and Placement Status Change Payroll Time and Attendance Regulatory Reporting Compensation Administration


Where to Start?

Identify sources of “pain”: Manual routing of items for approval

Multiple sign-off on purchase requests

Increased time

Identify sources of “waste”: Value added vs. non value added work

Redundancies

Duplication of effort

Use data to help prioritize and minimize

Go with your gut

Listen to the feedback provided by your stakeholders


Time Allocation

Have all members of a department fill out a time allocation matrix, e.g. technology, purchasing, financial aid

Review the FTE allocation against client satisfaction (if available)

Review performance metrics and FTE allocation against peer or industry best practices

Use process redesign as necessary to improve departmental efficiencies

Revisit after major process redesign initiatives, new technology deployment, or every 3 years (whichever comes first)


Technology Enablers

ERP System with built-in capabilities to efficiently adapt and streamline processes: Work Flow

Employee Portal (open enrollment, paperless pay) – self service

Student Portal

Data warehousing

P-Cards

Time and Attendance

Email or electronic communications


Performance Metrics

Examples of performance metrics: Journal Entries Adjusted

Invoice Processing

Turnaround for purchase orders

Applications processed

Calls per day per person

Cost per student

Use metrics to help to determine whether your new process is working

Adjust when necessary


Invoice Processing

JanFebMarAprMayJunJulAugSepOctNovDecJan

Issue Action Impact Owner Start Date Due Date Increased Process Days Train Peggy to cover AP when vacations / absences occur High Steve 08/15/07 09/30/07

Invoice Processing

-

24

48

72

96

120

Jan

Feb Mar Apr

May Ju

n Jul

Aug Sep OctNov Dec Ja

n

Month

Tim

e (H

ou

rs)

ActualTarget

Performance Metrics


Performance ManagementPerformance Data Departmental Information


Key Ideas

Redesign processes to enhance service

Focus on value-add activities only

Know how your staff spend their time

Leverage technology

Establish measures and then track performance

plantemoran.com

Thank YouFor more information, contact:

Marvin Sauer, ManagerPlante & Moran, PLLC

[email protected]

Judy Wright, PartnerPlante & Moran, PLLC

[email protected]

Balancing Quality Service with Operational Efficiency

Documents

comprocessa process

process redesignstaff

sequence of activities

business need

aexception report

ajexception report

comlean methodologydriven

operational effectivenessbased