October 26, 2010

Healthcare links

The pros and cons of ER posting wait times
A bit more in depth, but along the same lines of my earlier post here.
So these break down along the lines of people may be stupid and caregivers may be given bad incentives.  On the former, the concern is that people will opt for long drives or stay home because they are overly sensitive to waits. While I generally believe that it is never good to underestimate stupidity, this seems a bit much. As I said above, I am not sure that I would think to look at a Twitter feed when faced with a medical emergency. That is certainly clear if the emergency involved, say, chest pains. This really is about sprained vs broken ankles so this concern seems overstated.
 Operations Management at the Dr.'s Office
What is interesting is that a number of the approaches the article highlights are pretty basic recommendations from the OM tool box. For example, shifting work to less expensive staff (e.g., having nurses give flu shots) is simply moving work from the bottleneck to less constrained resources. Having patients complete registration before arriving at the clinic or reducing unnecessary follow ups are examples of moving activities off the critical path or eliminating non-value added work
 Vaccines – producing more by starting sooner
The idea behind the new technology is to do some pre-processing. Novartis will “develop a bank of synthetically constructed seed viruses ready to go into production as soon as the WHO identifies the flu strains”. In short, they will artificially create a bunch of potential viruses in the hope that one of them will turn out to be the useful one for production.
What will this extra time give them? The biggest advantage seems to be additional capacity. If a facility can make X doses per week, then adding 4 weeks to the schedule means 4x more doses for the season, pretty much with the same overhead as before.

No Company Can Rest on Previous Reputation for Quality and Responsiveness

 Johnson & Johnson's recent battle with quality issues:
J&J and its McNeill unit has had a rather difficult two years, and a sweeping look at all manufacturing and perhaps supply chain processes is the right move.  An overall revamping of all manufacturing operations is underway, including a new czar of manufacturing with an associated task team with sweeping organizational powers across all of J&J’s operating groups. The FDA also indicates that J&J faces additional close scrutiny and inspection by that agency. But the damage remains in millions of lost sales to date, over $100 million to upgrade McNeill’s plants, and uncertain consumer perceptions regarding brands.

Yet another well-run company with a stellar reputation for quality could not overcome a series of multiple back-to-back incidents relating to its process design and quality control processes. A compounding slow response and untimely or ineffective response by senior management was also evident.
 Annoying Dentists or The irrational way we interact with Dentists
 Dentistry is basically the unpleasant experience. They poke in your mouth. It's uncomfortable. It's painful. It's unpleasant. You have to keep your mouth open. And I think all of this pain actually causes cognitive dissonance - and cause higher loyalty to your dentist. Because who wants to go through this pain and say, I'm not sure if I did it for the right reason. I'm not sure this is the right guy.
 So you can imagine that at some point in your dental treatment, you have a choice between things that have the same possible outcome, but one of them is more expensive to you and better financially for the dentist. Which one would you choose, and how the duration of relationship be affecting that?
And it turns out that the more time people have seen the same dentist, the more likely the decision is going to go in favor of the dentist. People are going to go for the treatment that is more expensive but has the same outcome. More out of pocket for them, more money for the doctor. So in this case, loyalty actually creates more benefit for the dentists.

October 19, 2010

And in other news: McDonald's is taking over the world (or at least the news)

From Fast Company: McDonald's experience design of the future:
The next phase, McDonald's execs say, depends on design. "People eat with their eyes first," says president and COO Don Thompson. "If you have a restaurant that is appealing, contemporary, and relevant both from the street and interior, the food tastes better.
As the younger generation starts to see McDonald's as a place you go to eat instead of just picking up food, you could very well change their behavior for years to come," says Darren Tristano of restaurant consultancy Technomic. "The next step," he says, "is to draw people in for a dining experience."
As previously discussed about Starbucks:
"How do you increase service speed and efficiency and optimize the customer experience at the same time?"
Line of interaction
"If Martians came to Earth and visited a McDonald's, a post office, and a bank, they wouldn't be able to tell the difference. They would just see that everything starts with a line, has a counter that acts as a divider where the money exchanges, and has something hidden going on way in the back."
On technology innovations (self service):
 A few minutes later, the mother and son try a prototype of a self-ordering kiosk. "Oh, you already know what you are ordering," Karen exclaims, when Joey starts interacting with it like a video game.  "The mom and son shared a moment while looking over that menu," he says. "And the kid obviously felt empowered by the kiosk. It gives customers more control and makes it easier to make decisions. Those are the directions we might want to explore."
On integrating design into operations:
""We don't design in a vacuum here. If an idea doesn't come alive in the restaurant, it doesn't work. Once you can see it," Weil says, "you can show it to an operations person and they can see the differences and they usually get it." And if they don't? "Repeat often," he says. "This is the only way to line up what we are doing with our business needs."
On experience design (old post on oatmeal here):
Weil has restored some live entertainment value by positioning McCafé barista stands next to the registers. Customers can view their drinks made with traditional espresso machines that pull fresh shots and steamed milk on demand -- just the way Starbucks used to do before it got too big. At breakfast, employees must stir a cup of oatmeal a minimum of 12 times before serving it to the customer, both to mix the ingredients properly and to signal homemade goodness.
On queuing or wait perception:
Weil and his team have a patent pending on a design that adds an additional window for people with enormous orders. The drive-through of the renovated Kearney store, a rural outpost just past Kansas City's suburbs, features two lanes of cars lined up at two different ordering kiosks. This rejiggered drive-through isn't going to find its way into MoMA, but functionally, it's genius: It consolidates the traffic around the restaurant so everything appears much less gridlocked.
And finally, on sequence:
Rather than the usual swinging gate in front of the trash bin, this one is open faced with a slimmer, oval-shaped slot that still seems to shield customers from an unpleasant view or smell. He leans over and slides his trash off the tray and into the receptacle. This is the last step in the customer experience. "It always took two hands to operate," he says, one to hold the gate open and one to fumble with the tray. "I wanted it to be quick and easy, to leave the customer with a good impression as they leave."

In other news, from CNN: Weddings at McDonald's or "Can you hear the fry bells ringing? Would you like an apple pie-cake with that?"  

The package has all the details to attract a wedding banquet cynic or a Golden Arches obsessive: a baked apple pie wedding cake, dress made out of party balloons, kiddie party favors for guests, and of course, catering by McDonald’s.
In still other news, McDonald's is the winner in the Cornell Hospitality Research in Practice Award competition
McDonald's has evolved its menu many times over the years, basing their modifications on customers' preferences and tastes. Their strategic plan to enter the beverage market space was no exception. Since the coffee market space was already crowded, McDonald's developed its McCafĂ© Beverage Program by methodically testing all products in three different ways. Every product had to pass customer taste tests, operations testing, and market analysis. 
And some older McDonald's related links:

Photo of isolated seating in Japan

Smooth supply chain Smoothie roll out

hat tip: Tyler Cowen 

October 15, 2010

Can you get too lean, be too fast?: The Starbucks Experience at risk

Although I am not a coffee drinker (if you are interested -here's why), I found the recent article in the WSJ very interesting.  It is about the direction that Starbucks is taking its processes. A while back Starbucks tried to take ideas from lean manufacturing trying to find ways to shave seconds off their service process.  Here is an example from the article of the things they found:

That team discovered that many stores kept beans below the counter, leading baristas to waste time bending over to scoop beans, so those stores ended up storing the beans in bins on the top of the counter. 
Although So, that sounds great except  that it turned out that baristas seemed to get a bit too efficient at the expense of their core product:
 Amid customer complaints that the Seattle-based coffee chain has reduced the fine art of coffee making to a mechanized process with all the romance of an assembly line, Starbucks baristas are being told to stop making multiple drinks at the same time and focus instead on no more than two drinks at a time—starting a second one while finishing the first, according to company documents reviewed recently by The Wall Street Journal.
 The WSJ article makes it sound like Starbucks is making the changes for the sake of product quality, mainly that by working on too many drinks at a time, drink quality goes down.  This could be the case if each drink may take slightly longer than if it was worked in isolation. It seems baristas don't buy the time saving part, they claim that the new policies will make things slower.  One of my favorite lines in the article:

When asked whether changes have created longer lines in the test markets, Starbucks spokeswoman Ms. Smith said she didn't have "that level of detail."
Hmmm, pretty sure that means either, we didn't think of that (unlikely) or "well, yes, but it will be better for the customer." Will it? 

Quality might also be reduced  in multi-drink-proccessing because each drink has its own process unique from the one before and after making mistakes more likely.  So, the new policies are acting as a sort of mistake proofing, poke-yoke if you will.  This may insult the multitasking capabilities of the baristas, again a tough sale.

So, where does this bring us?  Is it better for a process to be faster with a slightly higher risk of mistakes and un-freshness or should baristas be told to slow down at the sake of longer queues?  This is not an easy question to answer, hence(in my opinion) the more interesting problems that arise in service operations.

My opinion is that Starbucks has seemed to find a paradox: applying operations management principles directly into a service process might impact the customers experience.  If asked what makes service operations management different from manufacturing operations a good answer would be that services involve customers in the process - you have to consider what they do and what they think about what you do.  For traditional manufactured products, customers don't particularly care about how a product is made apart from that it has the features and quality that they expect.

Starbucks barristas seemed to be forgetting that they are in the service business.  If they were making coffee in a bottling plant then efficiency is the best principle, but because customers are in front of them seeing and experiencing (and paying a hefty price for) the process of making their drink they may need to emphasize something different:
To boost the freshness of the coffee and to bring back some of the "theater" that had been lost, the baristas also started grinding beans for each batch of coffee, instead of grinding the day's beans in the morning

Starbucks sells more than the liquid in the cup, it is in the business of the experience of the "fine art of coffee making" (at least it used to), but because of its popularity and high demand it has transformed into a service factory - spitting out drinks as fast as possible.  The danger is that it is losing its hard fought brand promise. 

So, what would you do if you were Starbucks management?  How do you handle the barristas fear that lines will get longer?    Who do you side with - baristas, customers, management?  What are the needs and concerns of each of these groups?  How are these needs and concerns out of balance and how can you align them?  

October 11, 2010

The future of...

Self Service ATMs

The Future of Self-Service Banking from IDEO on Vimeo.

Book reading as an experience (It is all pretty cool, but the I especially found "Alice" interesting, starting at 3:10)

The Future of the Book. from IDEO on Vimeo.

The bathroom (an example of self service failure...)

bathroom of the future from Mike Merrill on Vimeo.

Retail Checkout (this is a bit old and maybe we should be there by now..)

Retail Experience of the Future from Mike Wittenstein on Vimeo.

October 9, 2010

Random Links

Is it staged or is it not, who cares Cebu Airline flight attendants jam in the aisles:  read more here 

Is Mexico City really this cool or is this a case of letting photographers create unrealistic expectations.

Is China posed to take on outsourced services

      From Forbes :
China’s scale--and the number of potential outsourcing cities and service providers to choose from--offers huge opportunity for the market ahead of its competitor nations. Organizations are able to source multiple suppliers within one country, which reduces their dependence on a single location or supplier. It has a large domestic market, a government that invests heavily in infrastructure and a large pool of graduates that form the workforce. It offers good logistics operations, in addition to competitive wages. It does now need to shift from manufacturing into services, in order to maintain its competitive edge. Its main consumers in Europe and the US are purchasing less and this means their importance to China will lessen as its economy continues to expand. There will be less opportunity to sell its goods to overseas markets. This will equate to steady volume growth, while margins continue to fall and investment in factories and equipment will decline. Hence the need to shift its focus to services.

October 6, 2010

How is healthcare like pizza?

I stumbled onto this (I think I clicked an ad on accident), but found it pretty interesting:

The very first line is what hooked me:

Even my pizza place stores my information digitally, so why do I have to fill out the same medical forms over and over?

The numbers on everyone are little freaky, but the idea is worthwhile considering.  Think about why the pizza place stores your information?  One of my first jobs during high school days was at Papa John's Pizza.  At one time I won the fastest dough slapping contest in the state Utah - there was only one store in Utah at the time, but I digress.  We opened the first Papa Johns in the state of Utah, so when we first opened taking orders over the phone usually meant taking the time to get all the information from customers: name, address, phone number, etc.  Order taking was a slow process and it required lots of people on the phone and queues built up fairly quickly.  Often the bottleneck was the order taking process and not the pizza making, the dough slapper and pizza assembly workers would often look over the shoulders of the order takers and get a head start on making the pizza.  After several months - maybe even a year - the store had developed a healthy database of most of regular customers that called in and ordered.  Order takers just had to confirm customer's information and could even ask if they wanted the same thing they ordered last time.  Now the bottleneck shifted to pizza making and delivery - the actual value added parts of the service.  We needed less people to handle phones and customers got their food faster.

So how does this apply in a health care system?  Apart from no longer annoying  customers with endless forms to fill out,  a data driven approach to patient health records certainly will have the same effect, mainly that a bottleneck and resource hog that used to be the check-in process can be shifted to a more value-added process like, I don't know, actual health care.  Additionally,  doctors should be able to review quickly the history of patients without having to rely on the patients memory.

Poke around on United Healthcare's new Numbers site and tell me what you think.