Seven Steps to Quality Improvement in Service Industries

2. The Seven Steps to Quality Improvement presented by Timothy E. Hull, CR Violand Management Associates

3. Where Would We Be Without Quality Improvement?

4. Learning Objectives • Define quality as it relates to service industries • Understand the impact of customer needs, customer expectations, and service value • Use a universal process equation for improvement • Implement the seven-step process to improve the quality of the processes in your business

5. Quality, Value, and Waste

6. Quality, Value, and Waste Service Level Performance Unidentified Expectations Waste Value Quality Customer’s Willingness to Pay Identified Needs Waste Revenue

7. Violand’s Third Rule of Business: Someone always pays.

8. Juran’s Trilogy Three Universal Processes of The Quality Trilogy Source: Juran Institute http://www.juran.com/

9. Quality Planning • Identifying customers (internal and external) • Determining needs and expectations • Developing products and services • Creating features and benefits

10. Quality Planning Worksheet

11. Quality Planning • Developing processes • Process equation • Planned results (quality): Inputs + Activities = Outputs

12. Process Development Guide

13. Quality Planning • Developing processes • Process equation • Planned results (quality): Inputs + Activities = Outputs • Proving process capabilities

14. Quality Control • Evaluate performance • Inspections • Metrics • KPIs • Compare actuals to planned levels of quality • Benchmarking • Take action on the variances

15. EMS Water Damage Checklist EMS Fire Damage Checklist

16. Process Mapping

17. Standard Operating Procedures

18. Quality Improvement

19. Relationship with Quality Control • Improvement is a process IN ADDITION TO, not in place of, control • The intent is to breakthrough and establish superior levels of performance • Traditional emphasis is always on quality control

20. Key Components

21. Quality and Finance Parallels Planning = Budgeting Control = Expense control Improvement = Cost reduction

22. Quality improvement will always yield the greatest ROI when the emphasis is on the reduction of the cost of service delivery.

23. Seven Steps to Quality Improvement

25. Identify the Need • Deficiencies • Fixing internal process components that are broken • The planned level of quality is not fulfilling the organization’s needs Example: gross profit margins on TPA work are not great enough to support administrative costs associated with facilitating the work

26. Identify the Need • Opportunities • Identifying external influences to achieve a competitive advantage Example: exclusion of mold damage from insurance policies has limited funding for remediation services Example: mortgage companies are holding funding for repair projects

28. Establish Specific Projects for Improvement • A project is a problem or opportunity scheduled for a solution • It’s all about priority • All projects should have a sponsor (leadership) • Projects should have quantifiable objectives (deliverables) targeted for a specific business process

30. Assign Improvement Teams • Should consist of at least one management-level employee and others with specific subject-matter expertise or experience • Need to be given adequate resources, training, and support to develop solutions • Need to have deadlines and adequate follow-up from the project sponsor

32. Discover Root Causes • Process improvement checklist • Use this to identify and target areas for improvement

33. Process Improvement Checklist • Planned Results • The stakeholders’ expectations are known and clearly defined • The planned results meet or exceed the stakeholders’ expectations • The planned results are in alignment with the organization’s strategic plan • Employees know what the results look like and how they are measured

34. Process Improvement Checklist • Inputs • Employees have the tools necessary to complete the process activities • Employees have the knowledge and skills necessary to complete the process • The quality of the inputs are in alignment with the planned results • Sufficient time and money is allocated to the process

35. Process Improvement Checklist • Activities • Process activities are standardized (performed consistently the same way each time) • Waste or risk involved with the activity is mitigated • Internal compliance (policy, practice, and procedure) and external compliance (regulatory) roadblocks have been removed

36. Process Improvement Checklist • Outputs • Outputs are measured (quantity, time, money, etc.) • Outputs are in alignment with the planned results

37. Root Cause Analysis Job profitability less than planned

39. Develop Solutions • Focus on reducing the cost of service delivery and the cycle time of business processes • Innovate with by-products • Solutions should be presented with a cost/benefit analysis and should answer the question, “How much money will it make the company?”

41. Prove the Solutions

43. Establish Controls to Maintain Improvement • Revise the process and SOPs • Update metrics, KPIs, and benchmarks • Revise checklists and inspections

44. Top 5 Myths of Quality Improvement

45. 1. Don’t Fix It If It Isn’t Broken • Stagnant companies become complacent and fail • You can always do things faster, spend less money, and produce less waste

46. 2. Quality Improvement Is Limited to Manufacturing Environments • Time is the common element and equalizer

47. 3. We Are Too Busy • “Have you ever been too busy driving to get gas?”

48. 4. You Have to Be the Best • Focus on value, NOT on being the best • 2004 hurricane floods

49. 5. It Won’t Work Anyway • Not every quality improvement project is going to work • Establish “Pilot” initiatives and test the waters • The majority WILL work and provide a significant ROI

50. Conclusion • How do you define quality as it relates to service industries? • What is the impact of customer needs, customer expectations, and service value? • How do you use a universal process equation for improvement? • What is the seven-step process to improve the quality of the processes in your business?