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In this interesting video of How the Economic Machine Works Ray Dalio describes some key principles of economic growth. He has three rules for economic improvement. Rule Three is Do All That You Can To Raise Productivity.
Perhaps the most powerful tools for productivity improvement are Lean Value Stream Mapping and Spaghetti Diagramming. The 15-2-20 Rule says that for every 15 minutes of unnecessary delay removed from a process, a business can double productivity and increase profits by 20 percent.
All you need are sticky notes, a flip chart and an hour or two to identify and remove unnecessary delays and movement from any business process.
Continue Reading "Do All That You Can To Raise Productivity"
Posted by Jay Arthur in Lean, Manufacturing, Service.
Almost every time I purchase something online, I see a form that looks like this:
The Credit Card Type and Credit Card Number are redundant resulting in unnecessary duplication and processing
-
- AMEX card numbers start with a “3”
- Visa card numbers start with a “4”
- Mastercard numbers start with a “5”
- etc.
There is no reason to ask for both. The number will tell you what kind of card you’re processing. Every day, across millions of transactions, customers are asked unnecessarily for a Credit Card Type. This is a type of waste. It irritates me.
Continue Reading "Lean – Unnecessary Processing of Online Credit Cards"
Posted by Jay Arthur in Lean, Service.
The April, 2014 Harvard Business Review has an article about creating a culture of quality. The authors found that a culture of quality will save $13,400 per employee per year. Surveyed participants also said it takes two hours to fix a mistake. Joseph Juran often said that companies lose a quarter (25%) of their revenue finding and fixing mistakes and errors, so this gives us a benchmark and a reason to embrace quality.
“Companies that take a grassroots, peer-driven approach develop a culture of quality. Traditional strategies have little effect.”
Four Factors that Drive Quality
- Leadership – As Deming said: “The aim of superision should be the help people and machines and gadgets do a better job.
Continue Reading "Creating a Culture of Quality"
Posted by Jay Arthur in Lean, Manufacturing, Service, Six Sigma.
A QI Macros customer recently asked: ” What is a reasonable and productive ratio of Lean or Six Sigma expert (LSSBB, for example) to staff for a healthcare organization that is starting the journey?”
The general consensus I can find online about Six Sigma belts/employees is:
1 BB/100 employees
3 GB/100 employees
I think these numbers are designed to keep Six Sigma training companies in business.
Depending on the size of a Medical center, you could use one BB and some GBs to get started. You can’t fix everything all at once, so one BB ramrodding a handful of GBs to solve key problems would be a good start.
Continue Reading "How Many Green and Black Belts Do You Need?"
Posted by Jay Arthur in Lean, Service, Six Sigma.
Vanity metrics let you feel good about your business.
Productivity metrics tell you the truth about your business. From Running Lean, by Ash Maurya via the Lean Startup, here’s some productivity metrics:
- Acquisition (how do users find you?)
- Activation (do they have a great first experience?)
- Retention (do they return?)
- Revenue (how do you make money?)
- Referral (do users tell others?).
Most people want to feel good, so they often select metrics that let them feel good. The people that excel choose metrics that tell them where and how to improve.
You can chart either one with the QI Macros, but vanity charts aren’t going to help you improve.
Continue Reading "Vanity or Productivity Metrics"
Posted by Jay Arthur in Lean, QI Macros.
In a matter of months, an NC dermatology group boosted insurance coding accuracy saving $65,000.
http://www.msochealth.com/lean-six-sigma-dermatology-practice/
While most of the healthcare quality focus is on hospitals, there’s a huge opportunity to make doctor’s offices more effective and efficient. In this case, better coding results in faster payment of insurance claims. Offices can use Lean to reduce patient wait times and increase volume resulting in more revenue and better patient care.
Continue Reading "Dermatology Group Boosts Coding Accuracy from 65.4% to 91.7%"
Posted by Jay Arthur in Lean, Service, Six Sigma.
In Matthew May’s new book, The Laws of Subtraction (McGraw-Hill 2013), he outlines some key concepts refined from his years with Toyota:
At the heart of every difficult decision lie three tough choices:
- What to pursue versus what to ignore.
- What to leave in versus what to leave out.
- What to do versus what to don’t.
The key is to remove the stupid stuff: anything obviously excessive, confusing, wasteful, unnatural, hazardous, hard to use or ugly. This is the art of subtraction.
Isn’t that the core of Lean?
Continue Reading "The Art of Subtraction"
Posted by Jay Arthur in Lean, Manufacturing, Service.
My wife ordered a set of monogrammed bath robes for our daughter and son-in-law from RedEnvelope. When they arrived, she checked them (unnecessaryinspection)…no monograms.
So she called (rework) and they told her to keep the two unmonogrammed ones (waste) and they would send two monogrammed ones.
A couple of days later, we did get two monogrammed bath robes (rework). The next day we got two more and the day after that we got two more (waste and rework). When we called (rework), they said, don’t return them because they’ve been monogrammed already.
So now, we have eight robes for the price of two.
Continue Reading "Why Retailers Lose Money"
Posted by Jay Arthur in Jay Arthur Blog, Lean, Service, Six Sigma.
Dr. Richard J. Albin, creator of the PSA test for prostate cancer, says that the devastating consequences treatments including surgery and radiation therapy caused:
- 5,000 deaths soon after surgery
- up to 70,000 serious complications
- 50% had persistent blood in their semen
- up to 300,000 suffered impotence, incontinence or both.
He now calls the widespread use of the PSA test a “Public Health Disaster.” As a result of these findings, the U.S. Preventive Services Task Force will recommend that healthy men no longer receive PSA testing.
Unnecessary tests and treatments of all kinds are estimated to cost $250 Billion in the U.S.
Continue Reading "PSA Test – a Public Health Disaster"
Posted by Jay Arthur in Lean, Service, Six Sigma.
Last week, Toyota unveiled it’s multimillion dollar system for gather repair reports, complaints and safety concerns from dealerships, internet sites and other sources into one system and mine that data for problems beyond the doors of the factory. The WSJ reported that EVP Shinichi Sasaki said that Toyota had succumbed to ‘Big Company Disease’.
It happens. Big or small, companies shift their focus to bottom-line benefits or growth and drop the ball on quality. But, as I’ve predicted for awhile, Toyota’s quality culture is repairing itself and resuming the quest for quality; now on a global basis.
What are you doing to monitor your quality on a global basis?
Continue Reading "Toyota’s Global Data Mining"
Posted by Jay Arthur in Lean, Manufacturing, Six Sigma.
