Faced with stiffening competition, increasingly demanding customers, high labor costs, and, in some markets, slowing growth, service businesses around the world are trying to boost their productivity. Although manufacturing businesses can raise productivity levels by monitoring and reducing waste and variance in their relatively homogeneous production and distribution processes, service businesses find that improving performance is trickier; their customers, activities and volumes vary too widely. Moreover, services are highly customizable and people, the basic unit of productivity in service, bring unpredictable differences in experience, skills and motivation to the job. A simple system, process performance boards, can be implemented and used to create an accurate system for improving productivity.
Our team was working with a leading medical diagnostics firm to analyze and improve their performance as it pertains to receiving, logging in and sorting human bio specimens for analysis. Accuracy and speed are critical.
As with any task or operation, to improve the productivity of services, you must apply the lessons of experience. Consequently, measuring and monitoring performance is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout the organization. Service companies need to compare themselves against their own performance rather than against poorly-defined external measures. Using external benchmarks only compounds the difficulties that service companies face in getting comparable measurements from different parts of the organization.
Some people in the organization may insist that services are inherently random and unique and that accurate measurement is difficult. But only by implementing rigorous measurement systems throughout the organization can you begin to identify variability and take the first steps toward bringing down costs and improving the pricing and delivery of services.
One of the first problems that organizations face is the inability to identify what must be measured. And even when companies know what to measure, they struggle to achieve accuracy. Data is rarely defined or collected uniformly across an organization’s environments.
It is important that organizations use internal benchmarks. While a company must know what its peers are achieving, it’s a mistake to measure its performance against the competition; these benchmarks are typically just samples of data with little explanation behind them. Companies that use external benchmarks are often frustrated to find themselves off by a factor of five to ten, positively or negatively.
Measuring and monitoring performance is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout an organization. Service companies need to compare themselves against their own performance rather than against poorly defined external measures. Using external benchmarks only compounds the difficulties that service companies face in getting comparable measurements from different parts of the organization.
What is the answer? Visual measurement display systems. When we think of visual measurement display systems we think of the latest technology – large screen TVs displaying detail performance data that is updated several times per hour, or faster. But these systems take time to develop, set up and cost money.
The approach should be immediate! Set up process performance boards at key locations based on work group or functional execution. The team leader, or the designee, is responsible for ensuring that the previous day’s data is updated and displayed on the board. So you may be saying to yourself “this is not real time performance.” You are right, at this point getting this system started is more important than minute-by-minute data display. Real-time data comes later.
Any configuration with the appropriate information can be used. That’s the beauty of a simple board; it is easily configurable and can be changed in minutes
The performance board model we use has seven key areas.
- Record yesterday’s number of employees on shift and volume, the date and shifts.
- Safety: Provide safety data pertinent to the work function.
- Service: Start to display performance. The run chart helps the team visualize how performance varies with time of day. It also provides a visual on how we are doing compared to the target. (In the example shown in the figure below, there are 90 samples.)
- Quality: Tracking quality is essential. In this case we are measuring mismatched (samples with wrong patient ID) and mistested (wrong test requested for the type of sample) items.
- Productivity: In this area we could look at individual technician actual productivity or the desired team productivity on an hourly basis.
- Announcements: Key business-related announcements as well as information that is of personal interest (for example, a holiday party in the cafeteria at noon).
- Issue resolution: Team members have input and get feedback on concerns and issues as well has progress for resolution. Team members are encouraged to raise issues, concerns or suggestions for improvement.
Now that team members, team leaders and management can see actual performance and variance data, they can focus on reducing wasting and improving the delivery of services.