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Fall 2011 Class #2. Toyotas Way What is Toyota doing now? Taiichi Ohnos answer was very simple: All we are doing is looking at the time line from the.

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Presentation on theme: "Fall 2011 Class #2. Toyotas Way What is Toyota doing now? Taiichi Ohnos answer was very simple: All we are doing is looking at the time line from the."— Presentation transcript:

1 Fall 2011 Class #2

2 Toyotas Way What is Toyota doing now? Taiichi Ohnos answer was very simple: All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value- added wastes. (Taiichi Ohno. Toyota Production System: Beyond Large-Scale Production. p. ix.)

3 Littles Law Example A major manufacturer sells $300 million worth of cellular equipment per year. Average amount in accounts receivable is $45 million. What is the average elapse time from the time a customer is billed to the time payment is received? Note that in this case, the process is the manufacturers account receivable department and the flow unit is a dollar in accounts receivable.

4 7-4 Analyzing the Job Flow process chart Chart used to examine the overall sequence of an operation by focusing on movements of the operator or flow of materials

5 7-5 Symbols for Flow-Process Chart Operation (a task or work activity) Inspection (an inspection of the product for quantity or quality) Transportation (a movement of material from one point to another) Storage (an inventory or storage of materials awaiting the next operation) Delay (a delay in the sequence of operations)

6 7-6 FLOW PROCESS CHART Job Requisition of petty cash Details of Method ANALYST D. Kolb PAGE 1 of 2 Operation Movement Inspection Delay Storage Requisition made by department head Put in pick-up basket To accounting department Account and signature verified Amount approved by treasurer Amount counted by cashier Amount recorded by bookkeeper Petty cash sealed in envelope Petty cash carried to department Petty cash checked against requisition Receipt signed Petty cash stored in safety box

7 7-7

8 Example: Bariatric Surgery Flow Chart 5 x 1.2 = 6 min (20% callback) Patient Receptionist Cash Request tests Initial consul- tation Initial phone call Set appointmt for test 1 Test 1 delay decide 30 min Patient Surgeon 10 min Patient Surgeon 5 min Patient Receptionist 60 min Patient Care-nurse Outpatient room 2 days Patient Set appointmt 5 min Patient Receptionist 40% quit More tests (50%) 80% approved Yes (50%) Insurance 90% Medical Necessity Letter Insurance Approval decide 20 min Patient Surgeon 10% quit Set appointmt for test 2 5 min Patient Receptionist Visit 2 15 min Patient Surgeon Test 2 30 min Patient Care-nurse Outpatient room delay 2 days Patient Insurance Approval 2 wks Patient 20% denied & quit Pre- surgery Visit 3 20 min Patient Surgeon Outpatient room Schedule surgery 10 min Patient Care-nurse Patients Arrive & Check-in Pre- surgery Seminar 60 min 6 Patients Surgeon Seminar room OR Cleaning 15 min 2 s-nurses OR Patient Prep 30 min Patient Care-nurse Drs. Prep 15 min Surgeon anesthetist Laparoscopic Surgery 75 min 2 surgery nurses Anesthetist, surgeon patient, OR Check-ups & Recovery 2 days Patient, Inpatient room Care nurse 120min (10minx6x2) Open Surgery Check-ups & Recovery 4 days Patient, Inpatient room Care nurse 240min (10minx6x4) Follow Up 30 min Patient Care-nurse 45 min 2 surgery nurses Anesthetist, surgeon patient, OR Patient Leaves x % 1- x %

9 Questions to ask when adopting a process view 1. What are the process boundaries: what is the input and output? 2. What is the flow unit or the unit of analysis? 3. Attach yourself to the flow unit and record its process steps through the process What are the value-added and necessary activities? What are the associated processing times or work content? Where does the flow unit wait (buffers)? What are the associated waiting times? What are the routes a flow unit can take? What are necessary precedence relationships? (i.e., what must be done sequentially?) Note that the first improvement step will be to delete non-value-added and unnecessary activities and buffers = waste

10 Questions to ask when adopting a process view (Cont.) 4. Who does the work? What are the resources for each activity? What are all the activities a given resource performs? (cross-training, flexibility) What are the resource constraints? What determines the flow rate? (demand or capacity) How is quality measured? What is the cost of each resource? 5. What information is required to perform each activity? Where does this information come from? This specifies the information flow (dashed lines) Key for Capacity Analysis

11 Case Study Paediatric Orthopaedic Clinic at the Children's Hospital of Western Ontario

12 Introduction As Chief of Paediatric Orthopaedic Surgery, Dr. Leitch was very concerned by the long wait times that the young patients (and their parents) were experiencing in the clinic. Long wait times tended to aggravate the already pent-up distress and concern that they were feeling. She glanced at recently collected data on service times and wondered how the process might be improved, while continuing to balance budgetary pressures to reduce costs. Moreover, any changes could not be done in isolation, as her clinic shared resources with other departments. A monthly executive meeting was fast approaching, and expectations were starting to run high that Leitchs efforts might be able to spur improvements in other departments too.

13 Issues Major: Reducing lengthy wait times Minor: Improving process and service performance Reducing variability in activity times and wait times Identifying the interactions with patients from other departments (shared resources) Efficiently managing both demand and human resources to address patient needs.

14 Average Patient Mix at the Clinic Patients - 80 New – 80 (40% of total patients) Follow-up - 48 (60% of total patients) No X-Ray required- 7.2 (15% of follow-up patients) Need X-Ray – 40.8 (85% of follow-up patients)

15 Process Flow Diagram


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