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Chapter 8.

Quality Management: Focus


on Six Sigma
An Integrated Approach to
Improving Quality and Efficiency
Daniel B. McLaughlin
Julie M. Hays
Healthcare Operations
Management
Copyright 2008 Health Administration Press. All rights reserved. 8-2
Chapter 8. Quality Management:
Focus on Six Sigma
Defining Quality
Cost of Quality
Quality Programs
Six Sigma
- DMAIC Process
- Seven Basic Quality Tools
- Statistical Process Control (SPC)
Benchmarking
Quality Function Deployment (QFD)
Taguchi Methods
Mistake Proofing (Poka-Yoke)

o
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Copyright 2008 Health Administration Press. All rights reserved. 8-3
Defining Quality
Organizations perspective
- Performance (design) quality
- Conformance (design) quality
Customer perspective
- Garvins eight dimensions
- Parasuraman, Zeithaml, and Berrys five
dimensions
- Institute of Medicine
- Quality assurance program
Copyright 2008 Health Administration Press. All rights reserved. 8-4
Cost of (Poor) Quality
External failurecosts associated with failure
after the customer receives the product or service
Internal failurecosts associated with failure
before the customer receives the product or
service
Appraisalcosts associated with inspecting and
evaluating the quality of supplies and/or final
product/service
Preventioncosts incurred to eliminate or
minimize appraisal and failure costs
Copyright 2008 Health Administration Press. All rights reserved. 8-5
Quality Programs
Total Quality Management (TQM) or
Continuous Quality Improvement (CQI)
ISO 9000
Baldrige Criteria
Six Sigma
Copyright 2008 Health Administration Press. All rights reserved. 8-6
Total Quality Management (TQM)
Focus on the customer
Top-management leadership and support
Employee involvement
Systems thinking
Continuous improvement
Data-based decision making
Copyright 2008 Health Administration Press. All rights reserved. 8-7
ISO 9000
International standards concerned with
ensuring that organizations maintain
consistently high levels of quality
Five sections:
- Quality management system
- Management responsibility
- Resource management
- Measurement, analysis, and improvement
- Product realization
Copyright 2008 Health Administration Press. All rights reserved. 8-8
Baldrige Criteria
Award established to recognize organizations for
their achievements in quality and to raise
awareness about the importance of quality
Seven categories:
- Leadership
- Strategic planning
- Customer and market
focus
- Measurement, analysis,
and knowledge
management
- Human resource focus
- Process management
- Results
Copyright 2008 Health Administration Press. All rights reserved. 8-9
Six Sigma
Philosophy
- Eliminate defects through prevention and process
improvement
Methodology
- Team-based approach to process improvement using
the DMAIC cycle
Set of tools
- Quantitative and qualitative statistically based tools
Goal
- 3.4 defects per million opportunities (DPMO)

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Copyright 2008 Health Administration Press. All rights reserved. 8-10
Successful Six Sigma
Top-management support
Extensive training
DMAIC approach
Use of quantitative measures
Team-based projects
Impact on organizations financials

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Copyright 2008 Health Administration Press. All rights reserved. 8-11
Six Sigma
Culture
Leadership
Training
- Green belt
- Black belt
- Master black belt
Copyright 2008 Health Administration Press. All rights reserved. 8-12
DMAIC Process
Define
Measure
Analyze
Improve
Control
Define
Improve
Control
Measure
Analyze
Plan
Check
Act
Do
Copyright 2008 Health Administration Press. All rights reserved. 8-13
DMAIC Process
Define
Project team chooses a project on the basis
of strategic objectives of the business and
the needs or requirements of the customers
of the process
Characteristics of good projects:
- Save or make money for the organization
- Produce measurable process outcomes
- Relate clearly to organizational strategy
- Are supported by the organization
Copyright 2008 Health Administration Press. All rights reserved. 8-14
DMAIC Process
Measure
CUSTOMERS
Key
Process
Input
Variables
(KPIV)
Key
Process
Output
Variables
(KPOV)
Critical
to
Quality
(CTQ)
INPUT
OUTPUT PROCESS
Copyright 2008 Health Administration Press. All rights reserved. 8-15

DMAIC Process

Analyze
- Analyze collected data to determine the root
causes
Improve
- Identify, evaluate, and implement the
improvement solutions
Control
- Put controls in place to ensure process
improvement gains are maintained
Copyright 2008 Health Administration Press. All rights reserved. 8-16
Seven Basic Quality Tools
Run Chart
Scatter
Diagram
Histogram
Fishbone
Diagram
Check Sheet
Pareto Chart
Flow Chart
Copyright 2008 Health Administration Press. All rights reserved. 8-17
Statistical Process Control (SPC)
SPC is a statistics-based methodology for
determining when a process is moving out of
control.
All processes have variation in output.
Some of the variation is inherent in the process
(common).
Some of the variation is due to assignable
(special) causes.
SPC is aimed at discovering variation due to
assignable causes and correcting those causes.
Copyright 2008 Health Administration Press. All rights reserved. 8-18
Statistical Process Control (SPC)
20
25
30
35
40
0 5 10 15 20 25 30
Day
M
e
a
n


W
a
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t

T
i
m
e

(
m
i
n
u
t
e
s
)
+/- 1o
+/- 2o
+/- 3 o
Out of
Control
Sample
Copyright 2008 Health Administration Press. All rights reserved. 8-19
SPC
Out-of-Control Situations
Observation
_
X=0
UCL=3
LCL=-3
8 or More Samples Above (or Below) Mean
Observation
_
X=0
LCL=-3
UCL=3
6 or More Samples Increasing (or Decreasing)
Observation
_
X=0
UCL=3
LCL=-3
One Sample More Than +/- 3 Standard Errors fromMean
Observation
_
X=0
UCL=3
LCL=-3
14 or More Samples Oscillating
One Sample More Than +/- 3 Standard
Errors from Mean
14 or More Samples Oscillating
8 or More Samples Above (or Below)
Mean
6 or More Samples Increasing (or
Decreasing)
Observation
_
X=0
UCL=3
LCL=-3
8 or More Samples Above (or Below) Mean
Observation
_
X=0
LCL=-3
UCL=3
6 or More Samples Increasing (or Decreasing)
Observation
_
X=0
UCL=3
LCL=-3
One Sample More Than +/- 3 Standard Errors fromMean
Observation
_
X=0
UCL=3
LCL=-3
14 or More Samples Oscillating
One Sample More Than +/- 3 Standard
Errors from Mean
14 or More Samples Oscillating
8 or More Samples Above (or Below)
Mean
6 or More Samples Increasing (or
Decreasing)
Copyright 2008 Health Administration Press. All rights reserved. 8-20
Statistical Process Control (SPC)
Current Wait Time
15 20 25 30 35 40 45
Wait Time (minutes)
Wait Time Goal
15 20 25 30 35 40 45
Wait Time (minutes)
50% of
patients
wait
more
than 30
minutes
10% of
patients
wait
more
than 30
minutes
Copyright 2008 Health Administration Press. All rights reserved. 8-21
Process Capability
A measure of how well the process can
produce output that meets desired
standards or specifications
Compares process specifications (set by
the customer or management) to control
limits (the natural or common variability in
the process)
Copyright 2008 Health Administration Press. All rights reserved. 8-22
Process Capability
Cp and Cpk
(


=
(

=
s
x USL
or
s
LSL x
C
x USL
or
LSL x
C
s
LSL USL
C
LSL USL
C
pk
pk
p
p
3 3
min

by estimated is and
3 3
min
6

by estimated is and
6
o o
o
Copyright 2008 Health Administration Press. All rights reserved. 8-23
Process Capability
Cp and Cpk
(


=
(

=
s
x USL
or
s
LSL x
C
x USL
or
LSL x
C
s
LSL USL
C
LSL USL
C
pk
pk
p
p
3 3
min

by estimated is and
3 3
min
6

by estimated is and
6
o o
o
Copyright 2008 Health Administration Press. All rights reserved. 8-24
Process Capability
Cp and Cpk
-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7
1.5 o shift
LSL
USL
3.4
DPM
O
Copyright 2008 Health Administration Press. All rights reserved. 8-25
Rolled Throughput Yield
Step 2

95/100
error-free
products
Step 3

95/100
error-free
products
Step 4

95/100
error-free
products
Step 1

95/100
error-free
products
Proportions
Step 2

95 in
90 error-
free
products
out
Step 3

90 in
86 error-
free
products
out
Step 4

86 in
81 error-
free
products
out
Step 1

100 in
95 error-
free
products
out
Actual
Copyright 2008 Health Administration Press. All rights reserved. 8-26
Quality Function Deployment (QFD)
House of Quality
Correlation
matrix
Design
requirements
Customer
requirements
Competitive
assessment
Relationship
matrix
Specifications
or
target values
I
m
p
o
r
t
a
n
c
e

Importance weight
I
m
p
o
r
t
a
n
c
e

Importance weight
Copyright 2008 Health Administration Press. All rights reserved. 8-27
Customer
needs
Knowledge that it is time for an office visit
Knowledge of why follow-up is needed
Convenient to schedule
Known appointment length
Appointment on time
Goal: Develop a system to
ensure that diabetes patients
receive preventive exams
QFD Example
Copyright 2008 Health Administration Press. All rights reserved. 8-28
Technical
responses
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Time knowledge
Why knowledge
Convenient
Appointment length
Appointment time
QFD Example
Copyright 2008 Health Administration Press. All rights reserved. 8-29
Importance:
Patient desire
Cost
Competitive
advantage
Time knowledge 5
Why knowledge 3
Convenient 4
Appointment length 3
Appointment time 4
QFD Example
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Copyright 2008 Health Administration Press. All rights reserved. 8-30
Time knowledge
5

Why knowledge
3

Convenient
4

Appointment length
3

Appointment time
4

QFD Example
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Relationships:
Strong = 5
Medium = 3
Weak = 1
Copyright 2008 Health Administration Press. All rights reserved. 8-31
Time knowledge
5 5 3
Why knowledge
3 5
Convenient
4 3
Appointment length
3 5 3
Appointment time
4 3 5
QFD Example
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Replace icons with numbers
Relationships:
Strong = 5
Medium = 3
Weak = 1
Copyright 2008 Health Administration Press. All rights reserved. 8-32
Time knowledge
5 5 3
Why knowledge
3 5
Convenient
4 5
Appointment length
3 5 3
Appointment time
4 3 5
25 15 15 20 27 29
QFD Example
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Multiply by importance and sum
Copyright 2008 Health Administration Press. All rights reserved. 8-33
Time knowledge
5 5 3
Why knowledge
3 5
Convenient
4 5
Appointment length
3 5 3
Appointment time
4 3 5
25 15 15 20 27 29
QFD Example
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Technical
correlations
Relationships:
+ = Strong positive
= Strong negative
+
+
Copyright 2008 Health Administration Press. All rights reserved. 8-34
Time knowledge
5 5 3
Why knowledge
3 5
Convenient
4 5
Appointment length
3 5 3
Appointment time
4 3 5
25 15 15 20 27 29
QFD Example
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Target:
100
diabetics/month;
85% compliance
Copyright 2008 Health Administration Press. All rights reserved. 8-35
QFD Example
Outcome
To: Dan McLaughlin
From: Southview Clinic
Dear Dan,
You had an appointment with Dr. Adams about six months ago, and it
is now time for another visit. We need to check your blood pressure,
do some blood tests, and adjust your prescriptions if needed. We
would like to review these preventive procedures in advance, so
please see www.southview.com/prev22.
We have two openings available next week, on Tuesday at 8:30 am
and Thursday at 2:30, to see Dr. Adams. Click on one of these days to
make the appointment, or e-mail us with dates and times that work
for you.
We appreciate you continuing your care with us, and Dr. Adams looks
forward to seeing you.
Copyright 2008 Health Administration Press. All rights reserved. 8-36
Taguchi Methods
Taguchi loss function
- A quality product is a
product that causes a
minimal loss
(expressed in $) to
society during its entire
life.
Design of Experiments
(DOE)
Design for Six Sigma
(DFSS)
Taguchi Loss Function
Y ($)
LSL Target USL
Loss
( ) | |
2
2
2
$
where Loss
A
= + = k T Y k o
A
Copyright 2008 Health Administration Press. All rights reserved. 8-37
Design of Experiments (DOE)
A structured approach to the investigation of
a system or process that determines the
level of each input variable for each trial and
does not require all possible levels of every
input variable
Requires fewer trials because it eliminates
the need to change one variable at a time
Can find effects of combinations of input
variables
Copyright 2008 Health Administration Press. All rights reserved. 8-38
Benchmarking
Process of identifying, understanding, and
adapting outstanding practices and
processes to improve organizational
performance
Steps in benchmarking:
- Determine what to benchmark
- Determine how to measure it
- Gather information and data
- Implement the best practice within the
organization
Best
Worst
Range
of
values
Your
organization
Best
Worst
Range
of
values
Range
of
values
Your
organization
Your
organization
Copyright 2008 Health Administration Press. All rights reserved. 8-39
Mistake Proofing (Poka-Yoke)
A mechanism that either:
- Prevents a mistake from being made
- Makes the mistake immediately obvious
Eliminates errors
Copyright 2008 Health Administration Press. All rights reserved. 8-40
Riverview Generic Drug Project
Riverview Drug Prescription Process
Patient
needs
drug
Clinician
prescribes
drug
Information
on drugs
Type of
drug
Drug
efficacy
End
Drug
efficacy
End
Generic
Drug
works
Non-Generic
Drug
works
Drug
doesnt
work
Drug doesnt work
Copyright 2008 Health Administration Press. All rights reserved. 8-41
Riverview Generic Drug Project
Drug Type and Availability
65% 35%
15%
20%
Generic
Non-Generic,
Generic
Available
Non-Generic,
Generic Not
Available
Microsoft Excel screen shots reprinted with permission from Microsoft Corporation.
Copyright 2008 Health Administration Press. All rights reserved. 8-42
Riverview Generic Drug Project
Microsoft Excel screen shots reprinted with permission from Microsoft Corporation.
Clinician Prescriptions
0
5
10
15
20
Davis Jones Smith Swanson Anderson
Clinician
N
o
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p
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s


a
v
a
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l
a
b
l
e
/
m
o
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t
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Non-Generic Prescriptions Where There Is a Generic Available
0
5
10
15
20
O W J V B H M A C I G D K L T U N P Q R
Drug
P
r
e
s
c
r
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p
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/
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Copyright 2008 Health Administration Press. All rights reserved. 8-43
DMAIC Process
Seven Quality Control Tools
Tools and Techniques
D
e
f
i
n
e
M
e
a
s
u
r
e
A
n
a
l
y
z
e
I
m
p
r
o
v
e
C
o
n
t
r
o
l
Cause-and-Effect Diagram x
Run Chart x x
Check Sheet
Histogram x x
Pareto Chart x x x
Scatter Diagram x x
Flowchart x x
Copyright 2008 Health Administration Press. All rights reserved. 8-44
DMAIC Process
Other Tools
Tools and Techniques
Bar Graph x
Line Graph x
Pie Chart x
5 Whys/ Root Cause x
FMEA x x
Hypothesis Testing x
Regression Analysis x
DOE x
Control Chart x x x
Process Capability x x x
Simulation x
Copyright 2008 Health Administration Press. All rights reserved. 8-45
DMAIC Process
Other Tools
Tools and Techniques
Quality Function Deployment x x x
Poka-Yoke x
Brainstorming x x x
Benchmarking x x x x
Project Planning x x x
Charters x
Gantt Chart x
Tree Diagram x
Force Field Analysis x x
Activity-Based Costing
Balanced Scorecard
Cost and Benefit Analysis x