How about we do a little quiz today. I read you a quote which comes from a U.S. president. And you tell me the name of the president and when he was in office. Okay? So here we go. "The improvement of national efficiency is imperative for the conservation of our national resources." Who said these words of wisdom? Obama? George W? These are the opening lines in Frederick Winslow Taylor's book, The Principles of Scientific Management. So the president I was looking for his Roosevelt. And we're talking about a time over 100 years ago. In a study of workers, Taylor believed in careful and systemic observation. Often time, he was able to obtain 300 percent improvements in productivity typically through a waste reduction, picking the right man and tools for the job, and setting the right incentives. Now as we also discussed, today the word Taylorism is unfortunately used more as a curse word. Taylor it turns out he had a rather difficult relationship when it came to relating with human beings he studied. He was interested in their muscles not in their brains. But please allow me nevertheless to share another two quotes with you from the principles of scientific management. We can see and feel the waste of material things Taylor wrote, "Awkward, inefficient or ill-directed movements of man, however, leave nothing visible or tangible behind. Here comes the second quote. Employers derive their knowledge of how much of a given class of work can be done in a day, from either their own experience and I like this part which is frequently grows hazy with age from casual and unsystematic observation of their man or at best from records. I love these quotes. I think they're important as they are important as now as they were 100 years ago. At the heart of this module is the idea that we need to measure the amount of work that is done by our resources and that measurement is hard but that should not keep us from doing it. A number of years ago, my colleague and co-author Ivan Filson and I did a study in the ICU with the Children's Hospital of Philadelphia. Our research question was simple. We wanted to know what fraction of time an ICU bed was used to provide the care it can provide and how much of that time was wasted. I felt reminded of Taylor's words: "Waste of time leaves nothing tangible behind." Where could we go to find that data? I'm sure you have encountered the same challenge. You have all this data, you have all these information systems epic, navvy care and so on. Whatever these systems are called but you cannot ask this basic question, How much of your capacity of an ICU bed, an MRI machine or a primary care physician is actually wasted? In our study of ICU capacity at Sharp, here's what Evan and I did. This is a typical academic approach. We found a motivated student who could go to the ICU and round the beds, every hour, over and over again. This way we collected thousands of bed hours, not bad hours but bed hours of ICU beds were used. We then classified them as follows. Here on the site you see the hours we observed in total. We then looked at the hours from a medical perspective that were not needed. This includes the hours of bed was staffed by the empty, hours that the kids in the bed was waiting for transfer, and the hours of bed was waiting for cleaning or an incoming kid. So in this case, we can see that an ICU bed is used for care the care it can deliver it's designed to deliver in about 82 percent of the time. I show you the state for two reasons. To introduce a new tool, and then to discuss the limitations of the tool. First this chart illustrates a method of rigorously analyzing value at data. You map out the total time you have available at a resource, and then you subtract the time that you're comfortable defining as a waste. We will talking more about what exactly constitute waste later on in this model for now, just the time that you feel was not medically needed, let's just call it waste. We defined the overall equipment effectiveness or OEE for short of a resource as a percentage of time in which the available time of the resource was used productively i.e. we were not wasting its capacity. We can do this for any time of a resource not just for equipment. The resource could be a room, a person or a device. Second, let me also be upfront about the limitations of the tool. Let's look back at my ICU example. When collecting that data, we told the student that a kid that is on the ventilator always should be in the ICU. So any kid that was observed while on the event was coded as a value add time. Though I think that was a totally plausible perspective and approach from a research design perspective, it is not without limitations. The kid might be on the vent, but the vent really should have been disconnected four hours ago. However the care team was busy doing something else. Are these four hours value add time, or are they waste? To help you in the distinction of what is waste and what not, let me throw some further definitions at you. The idea of waste reduction was the passion of Taiichi Ohno, former chief engineer at Toyota and really the mastermind behind a Toyota production system. Ohno commented on his workers activity. He said moving is not working. I think this is really deep. Moving is not working. Even the dumbest consultants can look at a worker or a resource that is standing around idle and realize that this is not probably adding value. To look at a busy work however a busy resource and then determine how much of that work is really adding value is much harder. This is why I prefer me teaching you this tool, and then you deciding for yourself what is value add time in your work, as opposed to me or some other consultant running around in your clinic declaring everything you do is waste. A buzzword of the Toyota Moven is Genchi genbutsu. Genchi genbutsu means go and see for yourself. To find ways you have to go out and observe. You have to be at the frontline. You cannot do this from the comfort of your office space by studying some stupid reports from a computer. According to Ohno, we can break up the time a worker is around in work and in waste. Ohno defines waste as needless waste of time and worker movement that ought to be eliminated immediately. Worker time minus waste gives us work. But not all work is value adding. Ohno defined non non value-add work as all the work that we do that is not directly valued by the customer. Keep in mind for now that this framework originates from a production setting. Every process has a customer. If we look at a care process, typically the patient is our customer. So we can say that non value-add work in the care process is all the work that does not directly contribute to the care of the patient. Such work is often called incidental work. Let me give you an example. A nurse might be running around a unit to find a piece of equipment. This piece of equipment is needed for the patient care. And so this is not outright wasteful. But this time the nurse was looking for the equipment and finally getting it ready for the patient, it's not value add time either. Incidental work is work that needs to happen given the way that the process is currently designed. All of us are busy. Which means typically, we call for more resources. We want more computers, more staff, more doctors and we want more resources. The OEE framework reminds us that our first job is to get more out of our existing resources. And OEE 50 percent means that we can double our capacity without adding more resources. The OEE framework is primarily there to help you organize data that you collect from observing the frontline. It tells you what to look for as you're looking for process improvement. Like any framework, the framework is not right or wrong. It just gives you a tool for data collection, and help you make sense of the data you collected. It really supports the spirit of Genchi genbutsu. Go and see for yourself. Now we started this session with some historical quotes. So here's another one closing for the session. Benjamin Franklin to my knowledge not associated with Toyota or the operations management community once said, "Lost time is never found again." Well said Benjamin.
