Presentation is loading. Please wait.

Presentation is loading. Please wait.

Operational Excellence Through Enterprise Risk Reduction (ERR)

Similar presentations


Presentation on theme: "Operational Excellence Through Enterprise Risk Reduction (ERR)"— Presentation transcript:

1 Operational Excellence Through Enterprise Risk Reduction (ERR)

2 About The Presenter UC COE for Healthcare Injury Prevention Previously worked with: UCLA Fender Guitars Boeing E! Network About the presentation: Presentation will be sent to all attendees – list is in back. Will cover many concepts very fast, if you have questions I will be available afterwards. “Key Concepts” will be pointed out – take not of these. Before We Get Started

3 Define ERR ERR Background ERR Concepts High Reliability Organization The “Enterprise” in ERR Opportunity to Apply Concepts Review and Summary Overview

4 Enterprise Risk Reduction (ERR) is: Combination of age old concepts on productivity, quality, and safety. A revised approach with ERM in mind. A systemized process to improve operations as a whole. What is Enterprise Risk Reduction? 4

5 ERR Goals As a team of SME’s, address ALL risks together – Not just individually for your subject areas. Improve the Output of the process/job/operation. Eliminate all failure points. Create a “High Reliability Organization”. What are the Goals of ERR?

6 ERR Background

7 Operations encompass all business processes. All operations are based off of one key similarity: Operational Excellence through ERR OUTPUT (creating a product or service) OUTPUT (creating a product or service) ….which is reliant on BUT WE'RE RISK!!! Why look at efficiency? EFFICIENCY

8 Efficiency is how fast you can get something done….. Right? First we must answer: What is efficiency? EFFICIENCY...is the COST PER UNIT Unit = “Value” Measurement

9 RISK! So, what is efficiency made of? Any ideas?

10 In ERR, everything is a risk! ERR Risks are broken down into Risk Variables Operational Risk (task time, productivity, reliability, user interaction, etc) Loss/Hazard Risk (assets, materials, safety, injuries, etc) Regulatory/Compliance Risk Quality Risk (Right First Time, liability risk, product/service failure, etc) Financial Risk (pricing, currency, liquidity, etc) Reputational Risk (brand, customer satisfaction, etc) Strategic Risk (competition, capital availability, etc) and many more…. All risks tie in together. Efficiency Risks

11 OperationsOutputEfficiencyRisks Everything is a Risk Key Concepts Dependent On Dependent On Based On

12 Identifying & Controlling Risks

13 ERR Strategies: LEAN Hazard Analysis Six Sigma Ergonomics Organizational Behavior Management Failure Mode & Effects Analysis These strategies address: Productivity Loss Quality Predictability Reliability ERR Strategies to Identify Risks

14 Background - Started by Henry Ford in early 1900’s - Improved by Toyota in 1930’s – Continually improving ever since… LEAN focuses on: “Value Add” and “Non-Value Add” task steps Operational “wastes” Optimizing processes Typical types of “waste”: Non “Value Add” processes or steps Non “Value Add” movement, or travel Material waste Overprocessing (rely on inspections rather than having an efficient process) – We often do this in Risk disciplines “Wait time” – caused by an uneven process Supply chain management ERR Goals: 1.Break down and outline all task steps 2.Identify which steps add value to your “Output” 3.Eliminate or control wastes and non value add tasks LEAN in ERR (Productivity)

15 Background - Started at the dawn of time… HA focuses on: Identifying potential “loss” of life, health, or property Typical types of “loss”: Property (Fire, flood, etc) Employee injury (lacerations, ergonomics, falls, death, etc) Tool/equipment breakdown ERR Goals: 1.Break down and outline all task steps 2.Identify where loss may occur 3.Eliminate or control loss Hazard Analysis (HA) in ERR (Loss)

16 Background - Developed by Motorola in 1986 to reduce quality errors Six Sigma focuses on: Identifying & removing the causes of defects (errors) Minimizing variability of processes (Ensure consistency & predictability) Defect/error metrics Typical types of metrics: # of errors per operation/process cycle # of injuries, lost time days, modified duty days Lost/wasted assets ERR Goals: 1.Identify, track, & trend defect (errors) metrics 2.Review metrics for cause & effect trends 3.Remove causes of defects/errors to create a consistent & predictable process. Six Sigma in ERR (Quality)

17 Background – May have started as early as ancient Greek & Egyptian times. Ergonomics focuses on: Physical risk factors where musculoskeletal stress occurs. User interaction with a process (is the process intuitive). Tool design Typical ergonomic risks: Waste movements Static postures High or repetitive forces (not necessarily movements) User interaction with the task (easy to use….dummyproof) ERR Goals: 1.Identify musculoskeletal stress factors. 2.Engineer out stress factors 3.Dummyproof the process Ergonomics in ERR (Productivity, Loss, Quality)

18 Background – Started at the dawn of time… Successfully modified by marketing strategists who found a way to control consumer behavior. OBM focuses on: How people interact and act at both work and at home. Based on foundations of motivation (“SIRE”) A carrot just big enough to chase, but not too big to weigh down the rabbit What is SIRE? Status – Status in social heirarchy Incentive – Physical or monetary reward Recognition – Recognition for actions Encouragement – Support for desirable action *This is what casino/store rewards are based off of… ERR Goals: 1.Identify possible negative behavioral outcomes 2.Design SIRE based rewards system to direct employees toward desirable goals Organizational Behavior Management (OBM) in ERR (Predictability)

19 Background – Developed by military reliability engineers in the 1950’s to ensure high reliability. Used heavily in weapons design and airplane manufacturing. FMEA focuses on: Where a process can fail. Testing a process with the goal of making it fail. Typical failure points: User interaction & behavior Equipment Process design The design of your control methods ERR Goals: 1.Anticipate failure points (especially the failure points of your controls) 2.Test the revised process and try to make it fail 3.Plan for failure mitigation Failure Mode & Effects Analysis (FMEA) in ERR (Reliablility)

20 Throwing a ball Need 3 volunteers to throw a ball at a target 1.Manually throw the ball Were their mechanics consistent? Was the outcome predictable? Accurate? What could have failed? How likely is each? 2.Throw the ball with a lacrosse stick 3.Launch the ball with a catapult A process vetted by failure modes will be: 1.Consistent 2.Predictable 3.Reliable Failure Mode Examples

21 Almost all failures are indicated by “something” This makes failure predictable… if you’ve identified the indicators. How to identify failure indicators Start with the problem Identify sources of the problem Accumulate metrics on each source Identify the sources of the sources And so on…. ERR Goals: 1.Anticipate failure points (especially the failure points of your controls) 2.Test the revised process and try to make it fail 3.Plan for failure mitigation Failure Indicators

22 Example – Patient falls in the hospital How to Identify Failure Indicators Patient Fall Injury Claims Overall # of patient falls Indicated By Indicated By Patient Mobility Factors (balance, cognitive status, etc) Caused By Unstable Patients

23 Base your solutions on quantifiable data when possible: Time Repeatability Accuracy Force output Behavior Reliability Rate of failure per cycle All risks are quantifiable to an extent, you’ll just need to define how you are quantifying each ERR Solutions are based on ideas Encouraged to be creative Some will be bad… that‘s okay (I have many bad ideas) A bad idea often has merit and can be used to better another idea Just don’t follow bad ideas to a dead end street… Developing Solutions for ERR Risks

24 FMEA Improve Efficiency Improve Efficiency Key Concepts Six Sigma Eliminate Errors Ergonomics Eliminate Stressors Eliminate Failure LEAN Eliminate Waste Creates a High Reliability Organization Creates a High Reliability Organization Hazard Analysis Control Loss (Reduce the Cost per Unit) OBM Encourage desired behavior

25 An organization where: Cost per unit is optimized Operations are reliable and predictable Adverse events are very rare Expectations are very well defined Everyone takes ownership for all risk areas, not just their own Background: Concept UC Berkeley in 1987 Initially focused on adverse events in high risk tasks Over time, morphed to include reliability in business operations What is a High Reliability Organization?

26 The “Enterprise” in ERR

27 Breaking the Silos Risk Management EH&S & Work Comp Researchers Operations Support Services Liability, Property, Litigation, etc… Injuries, Environmen tal, Regulatory, etc… Grants, Chemicals, Data Security etc… Equipment, Quality, Productivity, etc… Material costs, Productivity, etc… Leadership Operations costs, Reputation, Capital availability HR Employee turnover, regulatory, etc… Leadership’s Glass Barrier Is in place to prevent overloading of insignificant problems. Is difficult to penetrate by a singular risk group. Is broken by large adverse events, or losses.

28 One Big Silo Collaborative approach penetrates the barrier Leadership Operations costs, Reputation, Capital availability Entire Organization Everyone: Considers all risks. Leads for their subject area. Takes ownership of all other subject areas. ALL Risks

29 Include everyone in ERR projects, but keep member size manageable Actively engage primary risk holders Keep secondary risk holders informed in real time Report findings to all Know your project groups personality types: Program builders Visionaries/Innovators Devil’s advocates Program managers Sustainers People Leaders Assign responsibilities in line with personalities. Working Together

30 Who Owns the ERR Process? Project Owner Keeps Project On Target Removes Obstacles Owns Project Success Or Failure Addresses Problems Head On Considers All Risk Control Ideas

31 Make the Business Case

32 Quantifiable ROI metric examples Cost per unit Time improvements (productivity) Employee injury cost savings (medical, lost time, mod time, replacements, training, litigation) Quality improvement (Less waste, happier customer, minimized errors) Insurance benefits (lower rates, increased rebates) Difficult to quantify ROI metric examples Liability savings Employee satisfaction & retention Brand improvement Competitive edge Executives rely on Return on Investment (ROI) estimates In order to have ROI estimates, you must have metrics If it was a risk it can be estimated in the ROI. COST PER UNIT This all boils down to the

33 Sustain & Continually Improve

34 Sustain & Continually Improve Track & review metrics Audit checks and balances Report metrics to stakeholders Re-evaluate if metrics are off. Implement solutions ERR process Create checks and balances Establish metrics PLANDO CHECKACT

35 Opportunities to Apply Concepts (or at least food for thought)

36 A group of 100 employees in a medical billing office have all complained of injuries from working at their computer. You have one ergonomics specialist. What is your cost per unit? (wages, benefits, injury costs, equipment breakdown, new equipment, etc) What risks (efficiencies) are there? Who should be involved in the ERR project? How can you control the risks? What are the failure modes? How can you sustain risk control? Now plan for 50,000 of these employees at UC… You still only have one ergonomics specialist. Do your risks change? How can you control the risks? What are the failure modes? How can you sustain risk control? Hands on Scenario - Job

37 Your custodial department for your office building needs to cut 40% of its budget & staff, but still maintain the same level of service to the university. The major tasks that they do are: empty all large & small trash bins in the building, vacuum all carpets weekly, mop floors every day, clean the grounds, & clean the restrooms 3x daily. What is your cost per unit? (wages, benefits, injury costs, equipment breakdown, new equipment, etc) What risks (efficiencies) are there? Who should be involved in the ERR process? How can you control the risks? What are the failure modes? How can you sustain risk control? Hands on Scenario - Process

38 PI just received a grant to perform research on a newly discovered, and highly contagious, infectious disease. He/she has nothing set up… no lab, no equipment, no staff, no procedures. What risks are there to this research? Who should be involved in the ERR process? How can you control the risks? What risks can you anticipate and control to help them optimize their research dollars? How will they transport, receive, handle, & dispose of this new disease? What happens if something goes wrong in the research? (foreseen reactive controls) Hands on Scenario – Entire Operation

39 Summary

40 OperationsOutputEfficiencyRisks Everything is a Risk Key Concepts Dependent On Dependent On Based On

41 FMEA Improve Efficiency Improve Efficiency Key Concepts Six Sigma Eliminate Errors Ergonomics Eliminate Stressors Eliminate Failure LEAN Eliminate Waste Creates a High Reliability Organization Creates a High Reliability Organization Hazard Analysis Control Loss (Reduce the Cost per Unit) OBM Encourage desired behavior

42 One Big Silo Leadership Operations costs, Reputation, Capital availability Entire Organization Everyone: Considers all risks. Leads for their subject area. Takes ownership of all other subject areas. ALL Risks Collaborative approach penetrates the barrier

43 Who Owns the ERR Process? Project Owner Keeps Project On Target Removes Obstacles Owns Project Success Or Failure Addresses Problems Head On Considers All Risk Control Ideas

44 Sustain & Continually Improve Track & review metrics Audit checks and balances Report metrics to stakeholders Re-evaluate if metrics are off. Implement solutions ERR process Create checks and balances PLANDO CHECKACT

45 Questions?


Download ppt "Operational Excellence Through Enterprise Risk Reduction (ERR)"

Similar presentations


Ads by Google