1. Ozcan: Chapter 6 Reengineering (Overview)
Dr. Joan Burtner,
Certified Quality Engineer
Associate Professor of
Industrial Engineering and Industrial Management

2. Chapter 6 Topics 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
Work Simplification
Flow Chart
Work Distribution Chart
Flow Process Chart
Worker Compensation
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

3. What is Reengineering (Ozcan Interpretation)?
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.
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

4. Importance of Work Design
Human resources (manpower) represents over 40% of healthcare facility budgets
Human resource management issues
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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

5. Work Design- A Systems Perspective
External
Factors
Work
Measurement
Time Study
Predetermined
Standard
Work Sampling
Job Design
Who?
How?
Where?
Job Simplification
Worker
Compensation
Time Based
Output Based
Incentive Plans
Source: Ozcan Figure 6.1
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

6. Frederick Winslow Taylor
Developed scientific management approach
Focused on time studies
Asserted that conflicts between labor and management occurred because management had no idea how long jobs actually took
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

7. Socio-technical School Approach
Behavioral School
(Human Focus)
Efficiency School
(Technical Focus)
Socio-technical School
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

8. How can jobs be improved? – Behavioral School
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 (limited applicability in healthcare)
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

9. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

10. Standard Time Development
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.
Standard time can be developed through:
Stop-watch studies
Historical times
Predetermined data
Work sampling
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

11. Stopwatch Time Studies
Take time over a number of trials (cycles)
Workers should be educated regarding the process to avoid suspicion and avoid the Hawthorne Effect
Number of cycles to time (i.e., sample size)
variability in observed times
desired accuracy
desired level of confidence for the estimate
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

12. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

13. 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.
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

14. Example 6.1
A heath care analyst wishes to estimate the time required
to perform a certain job. A preliminary stopwatch 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)
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

15. Determining the Standard Time – Normal 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(Ej*PRj) (where PR is measured element by element)
PR equals 1 for the average worker; PR< 1 is for a slower worker
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

16. Allowance Factor
Standard time equals normal time multiplied by an allowance factor ST = NT * AF
Allowance Factor
accounts for personal delays, unavoidable delays, and/or rest breaks
AFjob = 1+A, where A= allowance percentage based on job time
AFday = 1/(1-A), where A = allowance percentage based on work day
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

17. 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.
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

18. Allowance Factor Computations
Compute the allowance factor if:
The allowance is 20 percent of job time.
The allowance is 20 percent of work day.
A) AF = 1 + A = 1.20, or 120%
B) AF = 1/(1-A) = 1/(1-.2) = 1.25 = 125%
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

19. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

20. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

21. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6 21

22. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6 22

23. Estimating Required 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.
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

24. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

25. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

26. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

27. Figure 6.4 Commonly Used Flow Chart Symbols
Start/Terminate
On page connector
Process
Off page connector
Decision
Document
Manual
Operation
Preparation
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

28. 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
Results
arrive in ER
(end)
Accession &
analysis
Verification
Accession &
analysis
IS double
entry MD
terminates
lab order
(end)
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

29. 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
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?
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

30. 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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

31. Figure 6.3 Flow Process Chart for Emergency Room Specimen Processing
OPERATION
MOVE
INSPECT
DELAY
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6

32. Compensation schemes: Time based-- most common in healthcare
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
ISE 491 Fall Dr. Burtner
Ozcan Ch. 6