Chapter 6. Reengineering

1
Chapter 6.Reengineering
2
Outline

• Reengineering vs. Other Methods
• Work Design in Health Care Organizations
• Work Design
• Job Design
• Work Measurement-Standard Times
• Stopwatch Time Studies
• Standard and Predetermined Times
• Work Measurement Using Work Sampling
• Determination of Sample Size
• Development of Random Observations Schedule
• Training Observers
• Work Simplification
• Flow Chart
• Work Distribution Chart
• Flow Process Chart
• Worker Compensation

3
Reengineering vs. Other Methods

• Healthcare managers have often sought
  organizational change, restructuring, and
  downsizing. Although those methods may improve
  the financial base of the organization or
  productivity at least temporarily by cutting the
  fat, namely by reducing the staff across the
  board, yet they create other problems. In
  particular, reducing staff can lead to major
  problems in the quality of care.
• Two other contemporary and popular methods that
  aim to improve both performance and the quality
  are total quality management (TQM) and continuous
  quality improvement (CQI) which are geared to
  make incremental changes over time.

4
Reengineering vs. Other Methods

• Reengineering is a methodology intended to
  overcome the difficulty in realizing TQM/CQI
  performance over a long duration, as well as the
  myopic conduct of organizational change,
  restructuring and downsizing.
• To reengineer the system, healthcare managers
  must be able to understand work-design, jobs, job
  measurement, process activities, and reward
  systems all well known concepts of industrial
  engineering. With that knowledge, they can
  recognize the bottlenecks in the old system,
  identify unnecessary and repetitive tasks, and
  eliminate them in the reengineered system of
  care.

5
Importance and Purpose

• Human resources represents over 40 of healthcare
  facility budgets
• Productivity and satisfaction of staff involves
  an understanding of the work environment
• Work must be designed so that employees are
  happy, organizational productivity is high, and
  costs are minimized

6
Work Design- A Systems Perspective
External Factors

• Worker
• Compensation
• Time Based
• Output Based
• Incentive Plans

7
Job DesignWho does what, how, and where?

• Consistent with organizational goals
• Write it down!
• Understand and communicate it
• Involve employees and management

8
Frederick Winslow Taylor

• Developed Scientific Management Approach
• Focused on time studies
• Conflicts between labor and management occurred
  because management had no idea how long jobs
  actually took

For what types of jobs would this approach work
best? Are there Healthcare applications?
9
Efficiency School--Logical and Systematic

• Best for simple, repetitive routine, and
  separable tasks
• Healthcare Examples
• lower level administrative duties
• division of labor
• standardized forms and paperwork
• robots in laboratories
• automation of routine tasks
• Not good for judgmental/unpredictable tasks

10
Advantages and Disadvantages of Specialization
Management Employees
Advantages a. Simplifies training b. Higher productivity c. Low wage costs a. Low education/skill b. Minimum responsibilities c. Little mental effort needed
Disadvantages Difficult to motivate quality b. Worker dissatisfaction, absenteeism, high turn- over, disruptive tactics, poor attention to quality a. Monotonous and boring b. Limited opportunities for advancement c. Little control over work d. Little opportunity for self- fulfillment
11
Behavioral SchoolSatisfaction of Wants/Needs

• Intrinsic and extrinsic motivators
• Specialization leads to monotony and worthlessness

12
Socio-technical School Approach
Efficiency School (Technical Focus)
13
How can jobs be improved?

• Job enlargement-- give workers a larger portion
  of the total task (horizontal loading--
  additional work at same level of skill and
  responsibility)
• Job enrichment-- increasing responsibility for
  planning and coordinating tasks (vertical
  loading)
• Job rotation-- workers periodically exchange
  jobs

What are examples of each?
14
Work Measurement Using Time Standards

• Time standards are important in establishing
  productivity measures, determining staffing level
  and schedules, estimating labor costs,
  budgeting, and designing incentive systems
• A time standard represents the amount of time
  needed for the average worker to do a specific
  job working under typical conditions

15
The First Step. . .
The amount of time it should take a
qualified worker to complete a specified task,
working at a sustainable rate, using given
methods and equipment, raw materials, and
workplace arrangements is called a standard time.

• A Standard time can be developed through
• Stop-watch studies
• Historical times
• Predetermined data
• Work sampling

16
Stopwatch Time Studies

• Take time over a number of trials (cycles)
• Workers should be educated regarding the process
  to avoid suspicion and avoid the Hawthorn Effect
• Number of cycles to time (i.e., sample size)
• variability in observed times
• desired accuracy
• desired level of confidence for the estimate

17
Determining Sample Size
Accuracy desired may be explained by the
percentage of the mean of the observed time.
For instance, the goal may be to achieve an
estimate within 10 percent of the actual mean.
The sample size is then determined by
where z number of std. dev. needed
for desired confidence s
sample std. dev. a desired accuracy x
sample mean
Desired Confidence Z-value 90
1.65 95 1.96 98 2.33 99
2.58
18
An Alternative Formula
Desired accuracy may be expressed as an amount
(e.g., within one minute of the true mean). The
formula for sample size becomes
where e Accuracy or maximum error
acceptable
To make an initial estimate of sample size, you
should take a small number of observations and
then compute the mean and std. dev. to use in
the formula for n.
19
An Example
A time study analyst wishes to estimate the time
required to perform a certain job. A
preliminary study yielded a mean of 6.4 minutes
and a standard deviation of 2.1 min. The desired
confidence level is 95 percent. How
many observations will be needed (including those
already taken) if the desired maximum error
is a) /- 10 percent? b) one-half minute?
a)
b)
2
2
1.96(2.1) .10(6.4)
(
)
1.96(2.1) 0.5
(
)
41.36
67.77

n
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Determining the Standard Time

• Observed Time-- average of observed times
• OT åxi/n
• Normal Time-- observed time adjusted for worker
  performance
• NT OT PR (where PR performance standard
  measured for the entire job)
• NT å(EjPRj) (where PR is measured element by
  element)
• PR equals 1 for the average worker PRlt 1 is for
  a slower worker

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ST NT AF

• Standard time equals normal time multiplied by an
  allowance factor
• Allowance Factor
• accounts for personal delays, unavoidable delays,
  and/or rest breaks
• AFjob 1A, where A allowance percentage based
  on job time
• AFday 1/(1-A), where A allowance percentage
  based on work day

22
Table 6.1 Typical Allowance Percentages for
Varying Healthcare Delivery Working Conditions
Allowance Level Percent
1. Basic-low (personal, fatigue, standing) 11
2. Basic-moderate (basic-low and mental strain) 12
3. Basic-high (basic-moderate and slightly uncomfortable heat/cold or humidity 14
4. Medium-low (basic high and awkward position) 16
5. Medium-moderate (medium-low and lifting requirements up to 20 lbs.) 19
6. Medium-high (medium-moderate and loud noise) 21
7. Extensive-low (medium-high and tedious nature of work) 23
8. Extensive-medium (extensive-low and with complex mental strain) 26
9. Extensive-high (extensive-medium and lifting requirement up to 30 lbs.) 28
Source Adapted from B.W. Niebel, 1988.
23
The Allowance Factor

• Compute the allowance factor if
• The allowance is 20 percent of job time.
• The allowance is 20 percent of work time.
• A) AF 1 A 1.20, or 120
• B) AF 1/(1-A) 1/(1-.2) 1.25 125

24
An Example

• The following observed times have been collected
  with a performance rating of 1.10. Using an
  allowance factor of 15 of job time, determine
  the appropriate standard time.
• Preliminary Calculations
• n9
• PR 1.10
• A 1.15

25
The Solution
A. OT 37.35/9 4.15 minutes B. NT OT x PR
4.15 x 1.10 4.565 minutes C. ST NT x (1A)
4.565 x 1.15 5.25 minutes
Now, what do OT, NT and ST represent?
26
What are the problems with time studies?

• Subjective performance ratings and allowances
• Only observable jobs can be studied
• Highly costly -- best for repetitive tasks
• Disrupts worker routine
• May cause worker resentment

27
Other Methods

• Historical/Standard Elemental Times
• Firms collect data on standard job elements
• Put these data together to determine job times
• Less costly and disruptive
• Limited applications in healthcare
• Predetermined Standards
• Obtained from trade publications
• Need no performance of allowance factor
• Operations are not interrupted

28
Work Measurement Using Work Sampling

• Technique for estimating the proportion of time
  that a worker or machine spends on various
  activities
• Observers make brief observations of a worker or
  a machine at random intervals over a period of
  time and simply note the nature of the activity
• Purpose
• To estimate percentage of unproductive or idle
  time for repetitive jobs
• To estimate the percentage of time spent on
  various tasks for non-repetitive jobs

29
Work Sampling Steps

• 1) Determine the sample size
• 2) Train the observers,
• 3) Develop random sample schedule
• 4) Take observations, and re-compute the
• desired sample size several times if initial
  
• estimates are not reliable
• 5) Determine the estimated proportion of time
• spent on specified activity

30
Step 1 Sample Size
The goal of work sampling is to obtain an
estimate that provides a specified confidence not
differing from the true value by more than a
specified error

CI confidence interval, e error, z number
of standard deviations needed to achieve desired
confidence, sample proportion (number of
occurrences divided by sample size), n sample
size.
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Sample Size, cont.

• Example 6.1 A hospital administrator wants an
  estimate of X-ray idle time that has a 95.5
  percent confidence of being within 4 percent of
  the actual percentage. What sample size should be
  used?

e 0.04 z 2.00
n (z/e)2p(1-p)
Desired Confidence Z-value 90
1.65 95 1.96 95.5 2.00
98 2.33 99 2.58
When p is unknown, a preliminary estimate of
sample size can be obtained using p 0.5. Then
after 20 observations, a new estimate can be
obtained.
32
Solution Given e 0.04 z 2.00 (see Appendix
A)
0.5 (preliminary).
0.5 n (2.00/0.04)2 .50 (1-.50) 625
observations.
If for 20 observations, it is observed that the
x-ray was breaking down on average 1 time, the
revised estimate is then
1/20 0.05.
The revised estimate of sample size is
0.05, n (2.00/0.04)2 x .05 x (1-..05)
118.75 or 119 observations.
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Step 2 Train Observers
A comprehensive training program of three steps
should be standardized for all data collectors.
Data collectors should be first educated as to
the studys goals, protocol, collection
procedures, and data submission procedures, and
the guidelines for their behavior. Then, the
observers should be trained in data collection.
Training may include sessions using videotaped
activities for practice in identifying and
recording actual nursing services. In the third
phase, observers participate with a project
member, in explaining the nature of the project
to those who will be observed, in the observation
setting.
34
Step 3 Random Observation Schedule

• Need random number for day, hour, and minute,
  with the number of digits needed for each number
  equaling the number of days in the study, hours
  per day, and minutes per hour.

35
Table 6.6 Random Numbers
  1 2 3 4 5 6 7 8
1 35491937 20651090 30546738 27696713 91854858 26470901 29600381 43662404
2 90089321 75138197 18262296 58506988 53664329 58683691 44072656 72123301
3 74264444 20553216 88880910 32182848 99227273 42091243 00185415 8357505
4 6975941 19701236 59830829 79995795 34330400 63691396 97866058 36093751
5 85104515 28079011 30791869 49069307 25601053 20059512 59647584 82327514
6 49445830 31791906 92435664 55449680 36293078 76826714 89141197 12205275
7 97984536 60317366 21508928 98014497 61529058 44276591 14715726 69340554
8 50991720 74038271 96451777 08764415 56072460 46404128 38033324 01926168
9 64349299 37831506 63182639 04789945 77658452 04272124 48048380 41902751
10 34894237 13116155 43110883 70982790 83397806 76383491 01380231 72811348










 
  Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel)) Random number generator formula RAND()1000 ((generated using Excel))  
36

• Example 6.3 A nursing manager wants to observe
  the time a nurse spends in direct and in indirect
  care over a 5-day period, on a unit where the
  shift is 8 hours.
• Solution
• A one digit number will be needed for the day,
  one digit for the hour, and two digits for the
  minute.
• Using Table 6.4, starting from row 4, column 3,
  we obtain the random number 59830829.
• The first number is 5. Thus, we determine the day
  (in this case, the fifth day of the week,
  Friday).
• We move to the next number, 9, for the hour but
  since activity is performed 8 hours daily, we
  discard that number, and move to the next one, 8.
  If we assume that the shift starts at 700 AM,
  the number 8 represents 200 PM.
• The minutes are derived from the next two digits,
  30. Put together, the first observation is made
  on the fifth day, 30 minutes into the 8th hour of
  work, or at 230 PM.
• This procedure is repeated for each observation
  to be taken. Then the observations should be
  sorted chronologically by day, hour and minute.

37

• Example 6.4 The chief of the hospital
  maintenance technicians wants to estimate the
  proportion of time that technicians spend in a
  part of the maintenance process. The maintenance
  office is open 9 hours, starting at 800 AM,
  every day of the week. 20 observations will be
  taken during a month-long investigation.
  Determine the random observation times and
  develop an observation schedule, assuming that
  the serial number of a dollar bill starts with
  25.
• Solution
• Since we know the starting point in Table 6.4 is
  the 2nd row and 5th column, the random number is
  53664329.
• Next we need to choose the reading direction of
  the succeeding random numbers either by moving
  to the right on the same row, and when the row is
  finished, going down one row and moving from left
  to right or by going down on the same column,
  and when the column is finished moving to the
  next column right and reading from bottom to top.
  
• For this case, we choose to read in the same
  column, going down. For days, read two digits
  from left to right select two-digit number, if
  higher than 31, then move to the next digit to
  make a two-digit day observation, and so on.
• Within eight digit numbers, if there are not
  enough digits to identify day, hour and minutes
  for the observation, discard that random number
  and select the next one.
• For hours, read single digit numbers from left to
  right, discard 0 and assign 1800 A.M., 2900
  A.M., and so on.
• For minutes, read two digit numbers and discard
  numbers 60 or over. Prepare a chronological list
  of the observation time results by day, hour and
  minute, to be given to the data collection team.

38
Table 6.7 Development of the Schedule for a Work
Sampling Study
Observation Random Number Day Hour Minute Notes
  53664329 discarded
1 99227273 22 72 PM 27  
2 34330400 30 411 AM 00  
3 25601053 25 61 PM 01  
4 36293078 29 310 AM 07  
5 61529058 15 29 AM 05  
6 56072460 07 29 AM 46  
  77658452 discarded
  83397806 discarded
7 41697527 16 94 PM 52  
8 97271339 27 18 AM 33  
  39337813 discarded
  75852472 discarded
9 35183489 18 310 AM 48  
10 08589156 08 512 PM 15  
39
Table 6.8 Final Work Sampling Schedule
Observation Day Time
18 04 828 AM
17 04 921 AM
13 07 804 AM
6 07 946 AM
10 08 1215 PM
14 10 236 PM
15 11 1013 AM
12 11 408 PM
16 12 1142 AM
5 15 905 AM
7 16 452 PM
9 18 1048 AM
11 19 1208 PM
1 22 227 PM
3 25 101 PM
20 26 214 PM
8 27 833 AM
19 27 159 PM
4 29 1007 AM
40
Table 6.4 Abridged Patient Care Tasks in a
Nursing Unit
Patient Care Tasks Professional Non-Professional Direct Indirect
1. Ace bandage application
2. Admit patient orientation
3. Assist to/from bed, chair
4. Bed bath
5. Bed change empty
6. Bed change - occupied
7. Bed pan
8. Blood pressure
9. Catheterization of bladder
10. Census count
41
Table 6.5 Work Sampling Data Collection Form for
Nursing Unit
Unit 4 West Unit 4 West Observer CL Observer CL Date 11/02/05 Date 11/02/05 Shift AM Shift AM Time 1004 Time 1004 Time 1004
Observed Staff Name Title Prof. Direct Non-Prof. Direct Prof. Indirect Non-Prof. Indirect In Communication with In Communication with In Communication with In Communication with In Communication with On Break
Observed Staff Name Title Prof. Direct Non-Prof. Direct Prof. Indirect Non-Prof. Indirect Patient Patient Staff Staff Physician On Break
G. Smith, RN v v v
V. Black, RN v v v
E. Mason, RN v
Z. Sander, RN v
P. Bills, RN v v


42
Work Sampling Steps

• 4) Take observations, and re-compute the desired
  sample size several times if initial estimates
  are not reliable
• 5) Determine the estimated proportion of time
  spent on specified activity

43
Advantages of Work Sampling

• Observations less susceptible to short term
  fluctuations
• Little or no work disruption
• Workers are less resentful
• Less costly and time-consuming
• Many studies can be conducted simultaneously
• Useful for non-repetitive tasks

44
Disadvantages of Work Sampling

• Less detail on elements/tasks of a job
• Workers may alter patterns
• Often no record of method used by worker
• Observers may fail to adhere to random
  observation schedule
• Not useful for short, repetitive tasks
• Much time required to move from observation area
  to observation area to ensure randomness

45
Nobody likes to do things the hard way!Work
Simplification

• Work Simplification-- process of changing work
  methods
• Eliminate unnecessary parts of work
• Combine and rearrange parts of work
• Simplify work when possible
• Work Simplification Tools
• Flow Chart
• Work Distribution Chart
• Flow Process Chart
• Layout Chart

46
Figure 6.4 Commonly Used Flow Chart Symbols
Start/Terminate
On page connector
Process
Off page connector
Decision
Document
Preparation
Manual Operation
47
Figure 6.5 Flow Chart for Emergency Room Specimen
Processing
Initial Process
After Improvement
Patient Entry
Patient Entry
Triage need blood?
Triage need blood?
No
end
No
end
Yes
Nurse draws blood
Nurse draws blood
MD orders lab
MD orders lab
IS order entry
IS entry label package
Lab
Label package
Lab
Accession analysis
Results arrive in ER (end)
Verification
Accession analysis
IS double entry
MD terminates lab order (end)
48
The Work Distribution Chart

• Shows what a department does to identify each of
  its major activities and to pinpoint the
  contribution of each employee to those activities
• Must be specific!
• Spotting Trouble
• Which activities consume the most time?
• Are tasks evenly distributed?
• Is there under-specialization?
• Are employees assigned too many unrelated tasks?
• Are talents utilized efficiently?

49
Table 6.9 Partial Work Distribution Chart for
Nursing Unit
Activity Hours Nurse Manager Hours Nurse I Hours Nurse II Hours
Patient admissions 12 Coordination with Admissions Dept. 8 2 2
Communications 16 Physicians and patient family 8 Patient family 4 Patient family 4
Direct patient care 48 8 Medication administration 20 20
Indirect patient care 16 Monitor charts 4 Meals 6 Update Charts 6
Discharge planning 14 2 6 6
Scheduling Adm. 4 4
Miscellaneous 10 Supervisory meeting Sessions with trainees 4 2 Emergency coverage 2 2
TOTAL 120 40 40 40
50
Flow Process Chart

• Records a procedure in a graphic form, using a
  sort of shorthand to simplify and unify the
  record
• Ensures every significant detail of the work
  process in its proper sequence is recorded
• Highlights inconsistencies and redundancies
• Can eliminate, combine, change (sequence, place,
  person), or improve activities

Operation
Inspect
Store
Move
Delay
51
Figure 6.3 Flow Process Chart for Emergency Room
Specimen Processing
OPERATION
MOVE
INSPECT
DELAY
52
Now the important part! Worker Compensation

• Compensation schemes
• Time based-- most common in healthcare
• Output based-- more difficult to operationalize,
  yet pay is related to efforts
• Incentive Systems
• Profit sharing plans-- receive of profits
• Gain sharing plans-- receive a of the value
  (i.e., cost savings) realized through increases
  in productivity

53
The End