Model for Maintaining Operational Control

Defining Best Practice for Standard Unit Times Is Critical

•          Focus on understanding what good looks like, rather than arriving at an average for the entire team

•          Only observe top performers (on speed and quality)

•          Ideal sample size of 30 observations for each activity or activity batch

•          Activities are a set of tasks completed generally at the same time by the same person

•          A completed activity progresses a unit to the next stage of processing

•          Observe total time broken down into “value-added time” and “lost time”

•          Observations done by Process Improvement specialist as well as Team Leader

•          Standard Unit Times are reviewed every 6 – 12 months, or when there is a process change

Standard Unit Time Setting & Defining Activities Are Your Foundations to Success!

•          Being able to see Lost Time is critical to understanding how capable our current processes could be, particularly the Lost Time that we can influence

Capacity Measurement Made Simple

Let’s assume that:

•          You manage a Mortgage Documentation team of 22 people whom work a 40 hour week, with combined absenteeism (planned + unplanned) of 10%

–         Normal hours available for processing each week = 800 (20 x 40)

•          Team is operating at 50% Efficiency & 80% Utilization

–         Current core hours = 640 (800 x 80%)

•              Best practice unit time to prepare/issue a set of mortgage documents is 30 minutes

–         Implies a current output of 640 mortgage docs per week (640 x 50% / 30mins)

•          Short-term capacity = Current level of Efficiency plus 5%, and 90% Utilization

–         Team should be able to issue 792 docs per week (800 x 90% x 55% / 30mins)

–         Or less resource investment

•          Long-term capacity = 80% Efficiency and 90% Utilization

–         Team should be able to process 1,152 docs per week (800 x 90% x 80% / 30mins)

–         Or less resource investment

Develop Your Own Dashboard or Buy From A Vendor

•          Spreadsheets and databases work fine until you start getting beyond 10 teams.

•          Several reputable software vendors that provide professional and cost-effective solutions that integrate into workflow systems and modern IT architectures.

•          Remember that 20% of the potential benefits of Operational Excellence come from effectively measuring operations, and 80% from operational leadership practices.

–         Getting a dashboard up and running is relatively easy & inexpensive

–         Changing operational leadership practices & introducing lean thinking is where your effort is best spent

What Are the Behaviours of Leaders?

Glossary for Operational Excellence