Profit = Quality Cost Delivery World Class Management m System … · •Sorting 5S 7...

©1996-2013, John Black and Associates LLC

Licensed Materials – USA Copyright Laws Apply 1

Mod 21 – World Class Management System

21 World Class Management System

v20130521

Global Production System

Product/Patient Quantity Analysis

Kaizen Kaikuku

Just-in-Time

Measures

Standard

Operations

Heijunka

(Leveling)

Continuous

Flow

Total

Productive

Maintenance

Pokayoke (mistake

proofing)

Kanban

Setup Reduction

Changeover

Multi-process

Operations

Jidoka (human

automation)

GPS

MUDA MUDA

Visual

Control

Andon

TAKT TIME ONE PIECE FLOW PULL PRODUCTION

R

e

d

e

p

l

o

y

m

e

n

t

Committed Leaders

Profit =

Price - Cost

TAKT Time Map

Capacity Tables

Cost Reduction By Eliminating Waste

GPS Depth Study

NVA/VA-

Functions/Mgrs

Quality Cost Delivery

Morale Safety

Value Stream Mapping

5S • Sorting

• Simplifying

• Sweeping

• Standardizing

• Self Discipline

3P Prod Prep

8 Flows Medicine

7

Wastes

RPIW

7 Flows

Factory

4 No’s

© 1996-2013, John Black and Associates LLC

(modified from Hiroyuki Hirano, Productivity Press).

World Class

Management

System

Module 21


2 ©1996-2013, John Black and Associates LLC

Licensed Materials – USA Copyright Laws Apply


v20130530

World Class Management System: Key Points

Understand characteristics and uses of the World Class

Management System.

Management by Policy – Hoshin Kanri

Daily Management

Cross-Functional Management

Understand when and how to apply each.

Understand the interrelationships and synergies between

the three elements.





v20130521

The World-Class Management System developed by

world-class companies consists of three interrelated elements.

All three must be in place to be successful.

Management

by Policy

(MBP)

Daily

Management

(DM)

Cross-Functional

Management

(CFM)

Hoshin Kanri - Provides focus and direction

Manages daily

work

Aligns across

the organization

toward full

customer

satisfaction





v20130530

Definitions

Management by Policy: (Hoshin Kanri) How goals are

determined, plans to achieve the goals are established, and

measures are created to ensure progress toward these goals.

Focused on Breakthroughs.

Daily Management: The system used by an organization to

perform its daily activities by establishing standard operations,

eliminating waste in how the work is done, and using facts and

data to ensure that process, products, and services are

continuously improved and predictable forever.

Cross-Functional Management: The major management

system for implementing breakthrough improvements.

Cross-Functional Management is always focused on the

elements of full customer satisfaction.





v20130530

Management by Policy

Management

by Policy

(MBP)

Daily

Management

(DM)

Cross-Functional

Management

(CFM)

Management by Policy: (Hoshin

Kanri) The system by which goals

are determined, plans to achieve

the goals are established, and

measures are created to ensure

progress toward these goals.

Focused on breakthroughs.





v20130530

Characteristics

of Management by Policy

Focus on breakthroughs.

Alignment of the entire organization.

Shared input and responsibility for plans and goals.

High participation.

Equal attention to end results and to the methods for

achieving them.

“Goals were deployed from the top down to all levels of the organization. The goals

were few in number, but they enabled the enterprise to mobilize its total resources to

achieve the desired results. The deployed goals plus the control of the daily work

moved the enterprise down the desired path. Each member of the organization

understood the path the corporation was taking.”

-Bruce Gissing, Executive Vice President Operations

Boeing Commercial Airplane Group, 1991

Management By Policy





v20130530

Management’s Role

Management By Policy is highly participatory. It operates in

both a top-down and a bottom-up fashion. Top

management takes the initiative, but confers throughout the

system with subordinate managers and genuinely takes

their views and all of their data into account.

Top management also:

Reviews and analyzes internal data from customers.

Assesses the operating environment.

Examines internal data from Daily Management.

Compares these data to the company’s vision and long-

term planning in order to develop goals.





v20130530

Accountability, Methods, & Results

Management By Policy gives high visibility to individual and

group accountabilities.

It is used to deploy and emphasize policies.

Goals are quantified.

Methods of achieving the goals are made explicit.

Roles and expectations are agreed to before the fact.

Regular diagnosis and reviews are conducted to

measure both progress toward goals and the

effectiveness of the methods employed.





v20130530

Accountability, Methods, & Results

Results are tracked and measured.

Results indicate the extent to which your methods are

effective.

Direct measures of the methods are also taken to answer

these questions:

1. Are the methods being employed?

2. Are they being employed correctly?

3. Are these the best methods to continue using?





v20130530

Elements of Management by Policy Reflection

Vision.

Feedback from Daily

Management.

Customer requirements /

customer satisfaction

data.

Breakthrough / Policy

Development.

Catchball

Policy Deployment

Check / Diagnosis and

Review

Each of these elements are

explored more deeply on the

following pages.

Reflection & Breakthrough / Policy Development

Company Mission/Goals

Evaluation of Previous Year’s Activities and

Results

Group Mission

Vision

Goals

Objectives

Breakthrough

Bu

sin

es

s P

lan

DO

P 2

-ye

ar

an

d 7

-ye

ar

Customer Requirements/

Customer Satisfaction

Data

Division General

Manager Inputs

Reflection Senior Leadership Review

Quarterly Reviews

General Manager’s

Diagnosis and Review

Operation Reviews

Group Meetings

Crew/Staff Meetings

Check

Diagnosis and

Review

Policy Deployment

Guidance

Division

Breakthrough

Measures

Targets

External

Customer

Requirements

Suppliers

Internal Customer

Requirements

Bu

sin

es

s P

lan

Organization Action Plans

Department/Program Action Plans

Individual/Team Action Plans

Po

lic

y D

ep

loym

en

t

Issu

es/R

oad

blo

cks F

eed

back B

ased

on

Un

ders

tan

din

g o

f

Pro

cesses

Catchball





v20130530

MBP Elements

Reflection Early in the planning process, top management dedicates itself to a true

understanding and appreciation of the current situation.

Using the available data from Daily Management and from customers, within

the context of the long-term strategies and vision, they reflect on the past-

year performance and assess:

Critical problems and competitive threats.

Opportunities.

Strategic leverages.

Customers’ needs and levels of satisfaction.

Strategies and competitive advantages of current and future competitors

and competitors’ products.

Environmental, governmental, and economic data.

These assessments include the identification, exploration, and defense of

core competencies.

Simultaneously, subordinate divisions, departments, and organizations

engage in the same assessments to prepare for a series of discussions with

top management.





v20130530

MBP Elements

Vision Top management provides clear direction and focus for the organization

in response to a well-defined vision of the destiny for the company. This

vision is long-term and looks generations ahead. The Vision or Strategic

Intent is confirmed in the Management by Policy activity. If major

changes are warranted by the current operating environment or changes

to this environment in the future, then a change may be required to the

Vision or Strategic Intent guiding the organization.

Environment, Government, and Economic Data Any data that describes the operating environment within which the

organization operates. For Health Care systems this would include the

demographics of the patient population that you are serving, regulatory

or government constraints, and the outlook for economic growth or

decline in the timeframe of the planning activity.





v20130530

MBP Elements

Customer Requirements/Customer Satisfaction Data Data from the customer are extensively analyzed to determine priorities,

both near-term and long-term. These data should encompass all aspects

of full Customer Satisfaction. Survey data, customer complaints, and

any data that would represent the “voice of the customer” are brought

into the Reflection session.

Feedback from Daily Management As we will discuss later, Daily Management enables us to understand

current day-to-day activities. Using Management By Policy (MBP),

issues and roadblocks are identified, and the proper level of

management is alerted to deal with them.





v20130530

MBP Elements

Breakthrough/Policy Development

Based on analysis of the data, Senior Leadership determines whether

an improvement to unprecedented levels of performance is necessary.

These required breakthroughs are established as goals.

Plans are developed to achieve these goals.

Measures and targets are defined.

Plans are documented on A3’s.

These plans are considered DRAFT and the primary input to the next

step: Catchball.





v20130530

MBP Elements

Catchball

Next comes a series of formal discussions between top managers and

their subordinates managers, during which they throw and catch, catch

and throw ideas, information, data, and analyses like a ball, back and

forth to each other (hence the term “catchball”).

These exchanges culminate in a trial agenda, agreed to by all key

managers, concerning:

1. Next year’s priorities and improvement goals.

2. Implementation methods.

3. Resource requirements.

4. Role expectations.

5. Measurement criteria.

6. Review procedures.





v20130530

MBP Elements

Policy Deployment

As a result of the “reflection” and “catchball” stages, senior

leadership jointly determines the annual improvements goals for the

year.

These goals are communicated to subordinate managers throughout

the organization.

From here, subordinate managers begin the critical work of

translating corporate goals into specific strategies, including detailed

written action plans, methods, and measurement criteria.





v20130530

MBP Elements Policy Deployment

Ultimately, when the annual corporate goals are fully deployed,

everyone is aware of goals set by top management for the company,

and the reasons that those goals are the top priorities.

Each organization knows:

How its individual goals will support the goals of top management.

The methods it will use to achieve its goals.

How an organization’s goals support full customer satisfaction.

The criteria by which the organization measures progress toward

the goals.

The process for checking, diagnosis, and review.

The individual role of the organization in making things happen.

In this manner, the entire organization becomes aligned, and each part

understands its role in achieving the established goals.





v20130530

MBP Elements Check/Diagnose and Review

Regular diagnoses and reviews are critical to continuous

improvement.

They are the systematic means for determining the extent to which

annual goals are being achieved and methods employed are working

as designed. (They represent the “Check” part of Plan-Do-Check-

Act.)

Conducted regularly – daily, monthly, quarterly, annually – by various

levels of management, diagnosis and review include:

Intensive study of data.

Comparisons of plans against activities and plans against results.

Joint problem-solving, planning, and follow-up actions and

agreement.





v20130530

MBP Elements Check/Diagnose and Review

Diagnosis and reviews are characterized by a threat-free

atmosphere, focused on understanding and improving the process.

Everyone objectively reviews actual performance and allows

deficiencies to surface in non-defensive ways- all for the purpose of

improving the company and its products, thus improving everyone’s

job security.

A complete check of the Management by Policy (Hoshin Kanri)

methods are included in the Diagnosis and Review session

conducted immediately prior to the annual Reflection session

Reviews are not conducted to find fault, but rather to determine:

1. What needs corrective action.

2. What should be maintained.

3. What can be improved.





v20130530

Examples of Management by Policy The following examples illustrate Management By Policy in

action in world-class companies:

Example 1:

• Highlights goals.

• Methods to achieve goals.

• Performance measures.

• Detailed implementation plans.

• The process for regular checks.

Example 2:

• Demonstrates the deployment elements, including targets, methods

to achieve targets.

• The organizations responsible for implementing the methods.

Example 3:

• Shows the relationship between various managers’ aligned

ownership of the goals.





v20130521

MBP Example 1

Example 1: Management By Policy in Action





v20130521

MBP Example 2

Example 2: Management By Policy Deployment Methods.





v20130521

MBP Example 3

Example 3: Management By Policy in Action





v20130530

Management by Policy Matrix The matrix chart on the following page clarifies the mutual

cause-and-effect relationships between target and means

deployment at a corporate level.

It is used to study the relationships between target deployments and

means. It is especially effective for clarifying relationships between multiple

targets and multiple means.

The objectives, targets, improvement targets and selected projects are

placed in each of 4 quadrants of the chart.

The square boxes in the corner of the chart are used to depict

relationships. In this case the black dot indicates a relationship between

two elements and an empty square indicates no relationship between the

two elements.

Another way to show the relationship is by assigning 3 symbols indicating

low, medium, and high levels of relationship of correlation. The

improvement teams to the far right indicate which team has responsibility

for each project.





v20130530

Management by Policy Matrix Correlation Correlation / Contribution Accountability

tactics - hoshins Team Members

pro

cess

/ Im

p T

arge

ts

results

Legend

Strong Correlation or Team Leader

Important Correlation or Core Team member

Weak Correlation or rotating team member

Correlation Correlation / Contribution

stra

tegi

es /

stra

t o

bjs

@ 1996 – 2011, John Black and Associates, LLC ver 1, 30 Oct 2011





v20130530

Management by Policy (Hoshin) Strategies

1. Long-term strategy – a general plan of action that aims

over very long period of time to make major changes:

5-100 years (Strategic Intent)

2. Midterm strategy – a partially complete plan of action

including financial targets and measures of process

improvement: 3-5 years

3. Annual Hoshin – a highly concrete plan of action: 6 to

18 months.





v20130521

Saskatchewan Health Care System – 2013/14 Hoshin Kanri Level 1 Matrix

Long Term Strategy

Short Term (Fiscal Year 2013-14)

6 6 9 7 3 5 3 2 2 5 3 3 6 6 5 0 3 6 3 2 2 8 9

3 2 3 3

Strengthen patient-centered PHC by improving

connectivity, access and chronic disease

management

3 3 3 2 2 3 3 3 3 3 3 31

2 3 2Transform the patient experience through sooner,

safer, smarter surgical care 3 3 3 3 3 2 2 3 3 25

3 2 3 2 Safety Culture: focus on patient and staff safety 2 2 2 3 3 3 2 3 20

Hoshins

Outcomes/Results

2 3 3 3 By 2017, there will be a 50% improvement in the number of

people who say “I can access my PHC Team for care on my day of

choice either in person, on the phone, or via other technology

3 3 3 3 3 15

By March 2017, vulnerable populations ( seniors, mental health,

& communicable disease clients) will have support that will

allow them to remain within their own home and progress into

other care options as their needs change.

3 3 2 3 3 3 2 2 2 23

2 3 3 2By March 2017, provide appropriate safe timely access to

surgical and specialty care2 2 3 2 3 3 3 3 3 3 2 2 3 3 37

By March 31, 2017, no patient will wait for emergency room care

(patients seeking nonemergency care in the ER will have access

to more appropriate care setting)

3 3 3 2 2 3 3 3 3 25

3 2 3 2 By March 31, 2017, establish a culture of safety resulting in zero

defects to patients and staff3 3 2 2 3 3 3 3 3 3 3 3 3 2 3 3 3 48

3 2 2 2 By March 31, 2017, the health care budget is less than the

increase to provincial revenue growth3 3 3 3 3 2 3 2 3 3 3 3 3 37

2 3 2 2 By March 31, 2017, the health care budget is strategically

invested in IT, equipment and facil ity renewal2 3 2 2 2 3 3 2 19

By March 31, 2017, increase staff and physician engagement

scores to 80%2 2 2 2 2 2 2 3 3 3 23

12 13 13 11 19 19 20 5 5 5 6 6 13 10 18 8 13 10 11 10 11 18 20

Medium Term (3-5 Years)

Surgical Access - Keith Dewar, Scott Livingstone, Mark Wyatt & Dr. Kishore Visvanathan

3 Strong Correlation or Team Leader Primary Health - Lauren Donnelly, Beth Vachon, Richard Petit & Dr. Phillip Fourie

2 Important Correlation or Core Team Member Safety Culture - Suann Laurent, Dr. Brenda Hookenson and Duncan Fisher (patient safety) & Greg Cummings and Cecile Hunt (workplace safety)

1 Weak Correlation or Rotating Team Member

Better Health Strategy - Improve population health through health promotion, protection and disease prevention, and collaborating with communities and different government organizations to close the health disparity gap.

Better Care Strategy - In partnership with patients and families, improve the individual's experience, achieve timely access and continuously improve healthcare safety.

Better Value Strategy - Achieve best value for money, improve transparency and accountability, and strategically invest in facilities, equipment and information infrastructure.

Better Teams Strategy - Build safe, supportive and quality workplaces that support patient- and family-centred care and collaborative practices, and develop a highly skilled, professional and diverse workforce that has a sufficient number and mix of service providers

By

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Placeholder Outcome: By March 31, 2022, there will

be a 5% decrease in rate of obese children & youth

Me

diu

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rm (3

-5 Y

ears)

Revision date: 2012-November 5

Imp

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(ho

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BudgetER Waits Safety Culture

Used with permission from Saskatchewan Health Care System





v20130521


6 6 9 7 3 5 3 2 2 5 3 3 6 6 5 0 3 6 3 2 2 8 9

3 2 3 3



management

3 3 3 2 2 3 3 3 3 3 3 31




Hoshins

Outcomes/Results




3 3 3 3 3 15





3 3 2 3 3 3 2 2 2 23

2 3 3 2 By March 2017, provide appropriate safe timely access to





3 3 3 2 2 3 3 3 3 25








scores to 80%2 2 2 2 2 2 2 3 3 3 23

12 13 13 11 19 19 20 5 5 5 6 6 13 10 18 8 13 10 11 10 11 18 20










By

Mar

ch 3

1, 2

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an

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ted

to

tal

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of

10

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Co

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By

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01

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f ca

ses

of

spe

cifi

c

com

mu

nic

able

dis

eas

es

(HIV

, TB

, & S

TIs)

in h

igh

ris

k

po

pu

lati

on

s ar

e m

anag

ed

acc

ord

ing

to p

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Surgery

By

Mar

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1, 2

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on

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Correlations

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By

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ed

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By

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Midterm Strategy






v20130521


6 6 9 7 3 5 3 2 2 5 3 3 6 6 5 0 3 6 3 2 2 8 9

3 2 3 3



management

3 3 3 2 2 3 3 3 3 3 3 31




Hoshins

Outcomes/Results




3 3 3 3 3 15





3 3 2 3 3 3 2 2 2 23

2 3 3 2By March 2017, provide appropriate safe timely access to





3 3 3 2 2 3 3 3 3 25








scores to 80%2 2 2 2 2 2 2 3 3 3 23

12 13 13 11 19 19 20 5 5 5 6 6 13 10 18 8 13 10 11 10 11 18 20










By

Mar

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By

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By

Mar

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By

Mar

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20

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amil

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By

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By

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By

Mar

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5, 1

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By

Mar

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diu

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rm (3

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ears)


Imp

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By

Mar

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12 Month Hoshins (breakthroughs)






v20130521

A3 Project Plan Template Used to document and monitor Breakthrough Plans





v20130521

Planning and Program Directives:

Methods for MBP

Directives provide a method for developing planning

information, making commitments and giving direction for

large projects.

Planning Directive: Develops Plan.

Program Directive: Authorizes work.

Directives are:

Structured, formal, standard, documented, agreed-to.

Needed when a study or implementation require

participation of multiple organizations.

Part of a World Class Management System.





v20130530

Why Directives? Focuses limited resources on highest leverage projects.

Provides communication and visibility between

organizations and with leadership.

Program Directives provide a baseline “statement of

work” for the business plan.

Facilitates common understanding of progress toward

organization goals, plans and issues.

Disseminates work to the

appropriate organizations.

Shows leadership commitment.

We are

already too

busy, and

resources

are already

stretched!





v20130530

Planning and Program Directives

Vision

Program

Directive

(Authorizes)

Communicate

Monitor /

Follow-up

Planning

Directive

New

Project?

Baseline

Work/Projects

Budgets

Strategic

Direction

Stop work

on Project

No

Yes Implement

New Project?





v20130530

Planning Directives

Deliverables

• Project Objective/Purpose

and Scope

• Linkage to Strategic Plan

• Cost/revenue estimates

• Implementation steps

• Responsibilities

• Implementation schedule

• Risks and mitigation plans

• Funding source

Contents

I. Objective/Purpose and

Scope of Study

II. Background

III. Ground rules

IV. Direction and

Responsibilities (tasks)

V. Schedule

VI. Attachments

A Planning Directive Proposes A Plan





v20130530

Planning Directive Steps

Determine project manager.

Prepare draft and send to affected people.

Hold coordination meeting with all affected

organizations.

Coordinate with management – signatures.

Communicate.

Complete planning study.

Present to leadership for decision.

Close directive when tasks are completed.





v20130521

Example of Planning Directive

1 | P a g e

Planning Directive: 091001

TO: ALL DEPARTMENT DIRECTORS AND/OR DISTRIBUTION LIST

SUBJECT: INTEGRATED HEALTH RECORD INCLUDING PROVIDERS WITHOUT EPIC

Authorization: ________________________________ September 1, 2010 President, CEO

Circle One Date Signature Title Concur/Nonconcur Sr Vice President of

Operations Concur/Nonconcur Sr Vice President of

Planning and Finance Concur/Nonconcur Sr Vice President, Chief

Medical Officer Concur/Nonconcur Sr Vice President, Kaizen

Promotion Concur/Nonconcur Program Sponsor

Concur/Nonconcur

Please indicate concur or nonconcur and the date, and then and forward to next in line.

If nonconcur, provide a written statement of noncurrence as an appendix to the document

I. PURPOSE

Salem Health has identified development of an integrated care model that is patient-centered as a key strategy, and has articulated an initiate to establish aligned relationships with key service providers in this market. A critical step in achieving this strategy is a methodology for integrating clinical information in the health system health record with clinical information in the various independent provider locations throughout the service area. This directive is established to bring the appropriate resources together to explore options to achieve this level of integration and present a recommended solution.

II. BACKGROUND

The federal government is leading a national reform effort to reduce cost and improve quality in the provision of healthcare. It has provided incentives to build integrated information systems (meaningful use), and is piloting programs to financially reward the provision of integrated care (accountable care organizations, bundled payment).

This region’s largest employer is pursuing specific organizations that can provide effective management of chronic conditions through the medical home model. Success in responding to this demand is contingent on robust clinical reporting systems.

Consumers across the country are growing more educated on health care, and demand for transparency and instant access to information is on the rise.

1 | P a g e

Planning Directive: 091001

III. GROUND RULES A. Solutions must protect patient and provider confidentiality. B. Solutions must be efficient and sensitive to the cost of operations. C. The solution must be supported by existing core infrastructure and the EPIC clinical

information system of Salem Health.

IV. DIRECTION/RESPONSIBILITIES

A. Information services team (Name) a. Provide hardware and data architecture experts to understand technical

possibilities and constraints. b. Coordinate involvement of outside experts from EPIC and other key vendors.

B. Clinical informatics. (Name) a. Provide Expertise in clinical information needs and reporting.

C. Willamette Health Partners (Name) a. Physicians and other providers to provide input on information needs for

managing care and sensitivities in sharing data. b. Administrative staff to share information needs of the medical home model.

D. Mid-Valley IPA (Name) a. Represent interests of community physicians b. Participate in the integration vision and design as the host of Next-Gen for

community doctors. E. Physician stakeholders, particularly larger clinics. (Name)

a. Participate in vision development and solution design. F. Finance (Name)

a. Complete financial projection and list of integration partners and systems to be integrated.

V. SCHEDULE A. 10/15/2010 Kickoff meeting B. 1/31/11: Meet with key physician stakeholder groups to understand level of interest in

participation in an integrated care model and data integration solutions. C. 3/31/11: Work with identified partners to brain storm potential solutions D. 4/30/11: Test feasibility of options. E. Deliverables

a. 5/10/11 List of integration partners and systems to be integrated b. 5/15/11 Written description of recommended solution c. 5/20/11 Implementation timeline and sequence of provider integration d. 5/25/11 Financial projection of cost

F. 5/31/11: Present recommendation to Salem Health Executive Council.

VI. EXPECTED DELIVERABLES A. Written description of recommended solution and specific data to be shared. B. Financial projection of cost to develop and maintain solution. C. List of integration partners and systems to be integrated. D. Implementation timeline and sequence of provider integration





v20130530

Program Directives

Deliverables

• Authorization for Project

• Budget commitments

• Implementation direction

Contents

I. Objective/Purpose and

Scope of Project

II. Background

III. Ground rules

IV. Direction and

Responsibilities (tasks)

V. Cost/revenue projections

VI. Implementation Schedule

VII. Attachments

A Program Directive Authorizes Work





v20130521

Example of Program Directive Program Directive: 091001

Program Directive: 091001

TO: ALL DEPARTMENT DIRECTORS AND/OR DISTRIBUTION LIST

SUBJECT: GROWTH PLAN FOR INPATIENT REHABILITATION SERVICES

Authorization: ________________________________ September 1, 2010 President and CEO

Circle One Date Signature Title Concur/Nonconcur Sr Vice President of

Operations Concur/Nonconcur Sr Vice President of

Planning and Finance Concur/Nonconcur Sr Vice President, Chief

Medical Officer Concur/Nonconcur Sr Vice President, Kaizen

Promotion Concur/Nonconcur Program Sponsor

Concur/Nonconcur

Please indicate concur or nonconcur and the date, and then and forward to next in line.

If nonconcur, provide a written explanation of noncurrence as an appendix to the document

REFERENCE: MURER CONSULTANTS PROPOSAL FOR INPATIENT REHABILITATION PROGRAM

I. PURPOSE The purpose of this directive is to authorize all activities necessary to implement the plan to increase the census from 12 to 18 patients per day. This magnitude of growth should produce an increased net margin of $1.4 million per year.

II. BACKGROUND The work outlined in this program is referenced by project D4 in the strategic plan. This work supports the organization’s strategies of a culture of continuous improvement and increasing the value of its services to the community. It is linked to the third strategic plan initiative to improve clinical quality and patient satisfaction. It calls for improved financial performance as discussed in the fourth initiative, and also contributes to the fifth initiative that is focused on growth.

Salem Health provides rehabilitation services at its Center Street campus in a 63,000 foot facility. This includes a 15-bed inpatient unit with semi-private rooms. This unit services five counties in the mid-Willamette valley (Marion, Polk, Linn, Benton, and Lincoln). Inpatient rehabilitation services have been a financial drain to Salem Health so management asked Murer Consultants to perform a detailed review of the operation and market and make recommendations as to program potential and appropriate financial expectations.



Their findings identified a statistical need for 41 rehabilitation beds in this market. A population based analysis indicated a need for 91 beds. This type of unit is critical in the post acute continuum of care. In order to be successful investment in the facilities will be required converting the semi-private rooms to private.

The analysis indicated that Salem Hospital discharged 300 stroke patients over a one year period. Typically, 40% of all stroke patients require inpatient rehabilitation services. This equates to 120 patients could have been treated in this unit, yet only 90 patients in the unit during this year were categorized as stroke. Murer applied this same logic to brain injury, spinal cord, and neurological patient, and determined there were an additional 63 patients that could have benefited from this service.

The assessment report identified a potential rehabilitation bed need of 20 for orthopedic patients at Salem Hospital.

III. GROUND RULES A. Key metrics will be displayed in the visibility room and presented during the stand up

meeting. B. The project is expected to be completed based on time and on budget. Any anticipated

variance must be discussed with the operations council as soon as it is identified. C. Capital funding required to complete this work must fit within the current capital

resources of the organization. D. The program is constrained by space available on the Center Street campus.

IV. DIRECTION A. Present an action plan to the operations council with detailed steps and timeline to

desired growth in program and financial improvement target. Identify key metrics with baseline and target measures, and present a capital and operating budget for this project.

a. Develop a one and three year plan for this service to evolve into a regional provider of rehabilitation services with a reputation for excellence and quality outcomes.

b. Assure adequate and appropriate space for an inpatient rehabilitation unit of 24 private beds.

c. Expand unit to fully utilize 24 licensed beds. d. Centralize all rehabilitation services under one umbrella. e. Institute an aggressive case finding team for both internal and external referrals. f. Develop seamless protocols from inpatient to outpatient rehabilitation to

increase throughput. g. Target a 14% reduction of patients in the unit with a length of stay of less than 5

days. These patients may be more appropriate for an outpatient day program. h. Develop a Neurological Institute to become the recognized regional leader in

stroke rehabilitation.





v20130521

Example of Program Directive Program Directive: 091001


i. Emphasize training and increased skill levels for clinical staff to facilitate treatment of patients with co-morbidities and complex medical conditions.

j. Establish an orthopedic sub acute rehabilitation program at an area nursing home for patients ineligible for IRF.

k. Increase critical mass by timely identification and transfer from Salem Hospital and other referral hospitals in the region.

l. Adjust staffing to correlate with census. m. Market to managed care and other payer referral sources that this unit focuses

on the following tertiary areas: Stroke, Brain injury, Spinal cord injury and Neurology.

n. Negotiate appropriate payment with managed care companies. o. Develop measurable outcomes to reinforce Salem’s reputation for quality

rehabilitation services. p. Re-establish CARF Accreditation.

V. RESPONSIBILITIES A. Project Sponsor (Lorissa Price)

a. Manage the project based on the established timeline and target metrics. b. Assemble team from the following functional areas to complete this program. c. Escalate issues to remove barriers d. Communicate progress to all stakeholders

B. Rehabilitation service line (name) a. Contribute expertise on clinical program needs, workflow design, and specific considerations to accomplish the operating objectives associated with the service. b. Develop protocols from inpatient to outpatient rehabilitation to increase throughput.

C. Facilities administration (name) a. Lead the analysis of facilities construction needs and operating costs to support

the proposed expansion of beds. b. Provide budget estimates.

D. Medical staff (name) a. Provide specific physician expertise is required from neurology, physiatry and orthopedics to develop the identified programs that contribute to increased census. b. Provide assistance for market outreach in the surrounding five counties, as required.

E. Care management (name) a. Determine resources required to develop protocols for transferring patients into the program, and for moving appropriate patients to outpatient day programs.

F. Managed care contracting staff (name)



G. Finance (name) a. Develop budgets, measurable outcomes and comparison of actual performance to target. b. Identify key metrics (baseline and targets)

H. Marketing and communications (name) a. Develop appropriate materials and marketing program to increase census and

referral network. I. Training (Name)

a. Develop training plan for clinical staff to facilitate treatment of patients with co-morbidities and complex medical conditions

J. Program management (name) a. Pull the necessary team from the above areas together to manage completion of the work within the established schedule.

b. Report on progress of the team and the results from completed work via the visibility room and stand up meetings.

c. Reimbursement rates negotiated with payers d. Nursing homes sub-acute services with area negotiated e. Marketing materials and marketing program developed and approved

VI. SCHEDULE A. Kickoff meeting (Due Date) B. Implementation plans (1 and 3 year) for identified programs developed with

protocols (Due Date) C. Workflow design completed (Due Date)

D. Facilities construction needs completed (Due Date) E. Operating costs developed (Due Date) F. Market outreach plan developed (Due Date) G. Resources required to develop protocols for transferring patients into the program,

and for moving appropriate patients to outpatient day programs identified (Due Date)

H. Capital and operating budgets completed (Due Date) I. Key metrics with baseline and target measures identified (Due Date) J. Training plan developed for clinical staff to facilitate treatment of patients with co-

morbidities and complex medical conditions (Due Date) a. Develop a Neurological Institute to become the recognized regional leader in

stroke rehabilitation. b. Develop a Neurological Institute to become the recognized regional leader in

stroke rehabilitation.





v20130530

Program Directive Steps

Identify project manager.

Prepare draft and send to affected people.

Hold coordination meeting with all affected

organizations.

Coordinate with management – signatures.

Communicate.

Implement.

Close directive when program/project is

completed.





v20130521

First 24 Months

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Management by Policy (Hoshin Kanri)

Annual Agenda

Task

Develop Strategic Intent

Reflection

Develop Midterm

Strategy

Develop Annual Plan

Catchball

Finalize Plan and Deployment

Diagnosis and Review





v20130530

MBP Top 10 Pitfalls 1. Managers have little experience in analyzing serious

problems in order to identify the real root cause.

2. Managers neither understand nor practice the concepts

of Plan-Do-Check-Act.

3. The organization policies are not deployed with

complete and specific goals and means to foster

implementation at lower levels in the organization.

4. Management may only use scolding if “results” are

poor, and fail to use problem-solving approaches

focused on the means.

5. Management still uses excessively high goals to

“motivate” others, which causes the process to be

unrealistic from the beginning.





v20130530

MBP Top 10 Pitfalls 6. Management themselves do not conduct the complete MBP

process within their organization. They often do not develop a

regular “check” process, and rely solely on the comprehensive

“check” done by top management.

7. No manual is available on the MBP process. No notebook is

maintained for the detailed deployment of means.

8. Management or control items that manage the execution of an

objective and its means are not adequately identified.

9. The top management “checking” process is unclear and not

developed. Standard procedures and schedules are not

followed.

10. Often it is unclear what the real items are that top management

is checking. The feedback is either weak or not helpful.

(Adapted from Y. Nayatani: “Management By Policy For Promotion of TQC Through the

Utilization of the New QC Seven Tools.” Deltapoint private translation, 1988.)





v20130530

Cross-Functional Management

Management

by Policy

(MBP)

Daily

Management

(DM)

Cross-Functional

Management

(CFM)

Cross-Functional Management:

The major method for

implementing breakthrough

improvements. Cross-Functional

Management is always focused

on the elements of full customer

satisfaction.





v20130530

Why Cross-Functional Management

Organizational alignment:

Organizations are typically vertically integrated, yet they

utilize a cross-functional approach to problem-solving

and new product development. Organizations exist solely

for the purpose of contributing to the success of the

manufacturing of products with little regard for

organizations barriers.





v20130530

Cross-Functional Management Characteristics

At the highest leadership level, the Senior Leadership determines

breakthroughs using the Management By Policy process.

At the next lower level (or another level), management identifies

what needs to be done to implement the breakthroughs.

Cross-Functional Management is used to implement the

breakthrough.

Necessary resources must exist to deploy the breakthrough.

An owner leads the breakthrough. The owner is usually a senior

executive.

A formally-organized process is established to focus on major

customer-satisfaction needs.

Organizations coordinate and cooperate. The balancing and

prioritizing of resources and activities is needed to implement the

breakthrough.





v20130530

Organizing CFM

In the 82 Deming Prize companies from 1962 to 1986, the

main functions used to organize Cross-Functional

Management were:

Q = Quality.

C = Cost and profit control.

D = Volume and delivery control.

S = Safety.

M = Morale of people.





v20130521

Cross-Functional Management This chart explains how CFM is used. The focus is on full customer

satisfaction across the organization. As breakthrough goals are

implemented, changes are integrated into the Daily Management system.

Daily Management Daily Management Daily Management Daily Management

The breakthrough goal is managed cross-functionally, focused on customer satisfaction. As plans are

established and actions taken, they are commonly integrated into Daily Management.

Ow

ner:

Pre

sid

ent/C

EO

Enterprise

A B C D E F G H I

Breakthrough Goal: Transition to Lean as the Management System

Q

C

D

S

M





v20130521

Cross-Functional Management: A World Class Example Cross-Functional Management is typically implemented using long-term committees to plan and check the methods and results associated with the functional policy. The structure for managing the cross-functional policies may vary, depending on the organization size and business. This L matrix shows the relationships between the functions and the divisions.

Management By Division

Cro

ss-F

un

ctio

nal M

an

ag

em

en

t

Corporate Activities

Product Planning

Product Designing

Product Preparation

Purchasing Manufacturing Sales

Technical Planning

Product Testing

Design

Testing

Production Planning

Production Engineering

Purchase Control

Purchasing

Motomachi Factory

Domestic Sales

Overseas Sales

General Planning

Personnel and Office

Cost

Product Planning

Production

Acquisition

Sales

Overseas Planning

Quality

Housing Industry

Closely Related

Related

Distantly Related





v20130530

Daily Management

Management

by Policy

(MBP)

Daily

Management

(DM)

Cross-Functional

Management

(CFM)

Daily Management: The system

used by an organization to perform its

daily activities by establishing

standard operations, identifying and

eliminating waste. It uses data to

ensure that all processes, products

and services are continuously

improved and predictable forever





v20130530

Characteristics

of the Daily Management System

Daily activities include performance to schedule and

execution of operating plan commitments.

Division-level and interdivision-level activities are

included.

Equal attention is paid to results and methods.

The focus is on implementing standard operations and

continuous improvement.

Management by Facts and Data.

Actual facts are reviewed, at the actual place, and the

goal is to understand the actual problem.

Extensive use is made of Lean tools.

Problem-solving and planning tools are employed.





v20130530

Elements of

the Daily Management System

Statement of the core purpose of the process.

Specification of the outcomes of the process - control

points, control items, and target level.

Document description of the process for achieving core

purpose and specific outcomes, for example:

Description of individual roles and responsibilities.

• Flow diagrams.

• Standards.

• QC process charts.

• Check items (checkpoints).

• Operating and procedure

manuals.

• Requisites for implementing

procedures and reliable

methods.





v20130530

Elements of

the Daily Management System

Data and information requirements:

Procedures for checking results by control items and

check items.

Procedures for corrective action when abnormalities

occur.

Procedures for daily improvement activities.

Description of linkages to other processes and other

roles.

• Types of data.

• Method and frequency of

collection.

• Visual display and charts

used.

• Method and frequency of

reporting.





v20130521

Daily Management system:

Tying it all together on a daily basis is the structured,

disciplined, unwavering application of Daily

Management. Elements include all the tools of the

Global Production System. Daily Management is

where the rubber meets the road!





v20130530

Daily Management Consists of:

1. A Visual Workplace where abnormalities are seen.

2. An environment where staff test their own ideas.

3. Transparency of objectives and metrics.

4. Managing by measures that change regularly.

What you cannot see, you cannot manage!





v20130530

Applications

and Uses of Daily Management

Daily Management serves as the basis for:

Knowing the level of performance of important areas by

organizational units as well as for the whole company.

Determining areas of breakthrough for the MBP system.

Determining improvement priorities for all important areas

throughout the organization. These priorities are:

Needs breakthrough (MBP).

Needs incremental improvement (daily).

Maintain as-is – do not let deteriorate (daily).

Means of holding the gains of breakthrough

achievement from MBP system.3





v20130530

Applications of Daily Management

Daily Management allows us to make evolutionary improvements.

Facts and data derived from Daily Management will help us to determine

what breakthrough advances we need and how to make these advances.





v20130521

Applications and Uses of Daily

Management Vice President-General Manager

Ambulatory

Emergency Department

Inpatient Medicine

Surgery

OR Ops Manager

Director, Operations

Daily Management

Control Points

Management By

Policy

• Breakthrough

Goals

Cross-

Functional

Management

• Improve 5S

• Reduce Non-Op Time

• Improve Tech Training

• Reduce Supplies and

Equipment Inventory Daily Management

Control Points

Management By

Policy

• Increase Capacity by 20%

• Ancillary Services

• Overtime –6.6%

• Breakthrough

Goals

Cross-

Functional

Management

• Breakthrough

Goals

Cross-

Functional

Management

Daily Management

Control Points

Management By

Policy

Meet DOP

• Profit contribution target and

program costs targets

(balance to go)

• Controllable expenditures

• Employment- year average

• Computing cost

• Capital asset budget

• Improve access to services

• Leadership in customer

satisfaction

• Internal customer commitment





v20130521

Daily Management

Process Control Table





v20130521

Putting it all Together: Interrelationships

Management

by Policy

(MBP)

Daily

Management

(DM)

Cross-Functional

Management

(CFM)

Provides focus and direction

Manages

daily work

Aligns across

the organization

toward full

customer

satisfaction





v20130530

Interrelationships

Like a three-legged stool, the World Class Management System

requires all three components to maintain balance: Daily

Management governs day-to-day activity; Management By

Policy provides focus and direction; and Cross-Functional

Management is oriented across the organization.

All are in place to accomplish company goals, improve

processes, and provide full customer satisfaction.

This section will discuss the ways in which these elements

interrelate with four areas that may be familiar to you:

Management system and Lean Production.

Management system and implementation.

Management system and SDCA/PDCA.

Management system and visibility and alignment.

Management system and planning tools.





v20130530

The Management System

and Lean Production

Lean Production, as the foundation, enables the system to more

effectively develop and implement policies, provide continuous

improvement in daily work, and manage cross-organizational

coordination to achieve improvements in quality, cost, delivery,

safety, and morale. MBP

DM CFM

Understanding the capability

of the processes to implement

policy as deployed through

the organization.

Managing processes

across the entire

organization.

Managing processes

at each level in each

organization in our

day-to-day work.





v20130530

The Management System

and Implementation World-Class companies recognize the need for proper implementation of the

management system.

The graphic below depicts the general sequence for implementing the

management system. Daily Management should be first, followed by either-or

both- Management By Policy and Cross-Functional Management. All are

implemented starting with communication, education, and training.

Until Daily Management and Cross-Functional Management are in place,

Management By Policy will not work to its maximum potential.





v20130530

The Management System and SDCA/PDCA

We standardize work through Daily Management. With data from customers and Daily Management, we determine our current capabilities to reach a new, unprecedented level of performance. Again, we use Daily Management to standardize and stabilize, and make incremental improvements.

Cross-Functional

Management

Management By Policy

A

C

P

D

Daily Management

A

C

S/P

D

Daily Management

A

C

S/P

D





v20130521

BETTER CARE

0 NEVER EVENTS

Strategic Visibility

Room (Breakthroughs/

Hoshins) 3-5 Year

Outcome Targets

Weekly Wall Walk -

QCDSM

Daily Visual

Management

Target Progress

Patient mortality related

to L 3& 4 pressure

ulcers Service Line Leader

Front Line Mgrs

Pressure Ulcer

Level 3 and 4

#1 priority

Reduce level 3 & 4

pressure ulcers at LTC

Chart updated as of

______ Action to be taken

to return to

LTC Site 1 LTC Site 2

LTC Site 3 LTC Site 4

Strategy

Senior Leader,

Breakthrough Leader Man

ag

em

en

t b

y

Po

licy (

Ho

sh

in K

an

ri)

Cro

ss

Fu

ncti

on

al

Ma

na

ge

me

nt

Daily

Man

ag

em

en

t The Management System and Visibility and Alignment





v20130521

Quality Cost Delivery Safety Morale

Hoshin 1 Hoshin 2 Hoshin 3 Strategic Visibility Room

(Breakthroughs Only)

Wall Walks

(Monthly; CEO

& Exec Team)

Daily Visual Management

(Daily or Weekly; Manager and point of care staff)

Service Line #1

Service Line #2

The Management System and Visibility and Alignment





v20130530

World Class

Management System Summary

Understanding MBP, DM & CFM and how they operate

together provides:

Clarity of priorities and focus.

Alignment and visibility.

Clear means for achieving objectives.

Communication and control.

Fundamental to each of the parts of the system

is deep knowledge of Lean Production.





v20130530

Recommended Reading

Hoshin Kanri - Policy Deployment for

Successful TQM; Yoji Akao, Editor;

Productivity Press, 1991.

Hoshin Kanri for the Lean Enterprise;

Thomas L. Jackson; Productivity Press,

2006.

Beyond Strategic Vision; Michael Cowley

and Ellen Domb; Routledge; First Edition,

2011.





v20130530

Glossary

Management by Policy: How goals are determined, plans

to achieve the goals are established, and measures are

created to ensure progress toward these goals.

Daily Management: The system used by an organization

to perform its daily activities by establishing standard

operations, eliminating waste in how the work is done,

and using facts and data to ensure that process,

products, and services are continuously improved and

predictable forever.

Cross-Functional Management: The major management

system for implementing breakthrough improvements.

Cross-Functional Management is always focused on the

elements of full customer satisfaction.





v20130530

Glossary General Terms

Goal: The level of change required to achieve the objective.

Objective: The type of change that must occur to address the

strategic issue.

Strategic Issue: An area of concern that requires significant

improvement or change.

Strategy: The approach that will accomplish the objective.

Structured Planning: The use of HOSHIN Structure for managing

objectives and measures.

Tactic: Detailed implementation plans which support each strategy.

QPM (Quality Performance Measure): A performance measure for

the objective or strategy which will indicate progress towards the

goal.





v20130530

Glossary Terms used in Daily Management are defined as follows:

Daily activities: Those actions that either provide incremental improvement or maintain the current level of performance without degradation.

Daily work: All the activities performed in an organization, by all levels and all positions.

Management by facts and data: All goals, targets, and measures in the Management By Policy system, together with facts and data from Daily Management. These facts and data are based on the current understanding of the process performance and capability.

Process improvement: Those processes that are targeted to either improve standard operations (SDCA), or to improve to a new level of performance (Kaizen - PDCA).

Standard Operations: Standard Operations concentrates all jobs around human motion and creates an efficient production sequence without any Muda. It is made up of three elements of Standard Work, Takt Time, and Standard Work-in-Process.

Control point: A description of the outcome of a process for which we want to achieve a specified (predictable and consistent) level of performance.

Checkpoint: An item within a process that impacts the achievement and level of performance of a control point.

Target: A specific value or prescribed, quantitative level of performance of a control point or checkpoint.





v20130530

Glossary

Terms used in Management By Policy are defined as

follows:

Goals: Breakthrough goals are the focus of the Management By

Policy system. These breakthrough goals are established at the

Senior Leadership level.

Breakthrough: An improvement to unprecedented levels of

performance; a dynamic, decisive movement to new, higher levels of

performance. This may be a step at a time, over time.

Plans: Plans are short-range (1 year), mid-range (2 years), and long-

range (7 years). (Note: Plans include methods to achieve goals).

Measures: Methods to determine progress toward the

accomplishment of the goals. They include quantitative and

qualitative measures. Qualitative measures are defined as the

process of implementing the methods and steps toward meeting the

goals.

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