107 – Separate, relate and integrate. Redesign operations to meet services demands.

Posted by Lancing Farrell                                                                              570 words

good cheap fast

Some basic tools are needed to redesign operations to improve performance. Many people charged with responsibility for managing services have limited skills in how to redesign and improve them. Here is a simple and effective approach – just separate, relate and integrate.

The separate bit is about understanding the different demands being placed on the system. Usually, a performance problem is masked by a mess of different demands that have been mixed in one or two delivery processes. The important characteristics of services demand are the expectations of people creating the demand and how the demand is presented. It is essential to separate each type of demand according to its performance objectives and characteristics.

By performance objectives, I mean the outputs of a service that are critical to provide the value expected by service recipients. Operations management texts list them as cost, quality, speed, flexibility and dependability. For any service it is essential to know which of the five performance objectives is most important to the person receiving the service. Once it has been selected there will be secondary performance objectives that then become important. For example, when repairing a hazardous pothole in a road it is most important to repair it quickly (speed) even if the repair is temporary and needs to be re-done (quality).

The diagram below is from Operations Strategy and it compares the performance objectives for newspaper recycling and general recycling. Quite different operations design will be required to deliver on the required objectives for each service.  Polar vector diagrams are useful to compare different services or the actual and required performance for a service.slack strategy performance objectives

Separating demands for services that require speed or dependability or flexibility is particularly important. There is usually an underlying requirement to meet quality and cost standards but it is in the timeliness dimension that many local government services fail. Mowing an oval used for Saturday sport on Monday, however well or cost-efficiently you do it, is a fail. We tend to focus too much on keeping costs low/avoiding waste, or making sure there can be no criticism of the quality, and miss the critical time imperatives.

The next set of important characteristics separating demands are volume, variety, variation and customer contact, as discussed in detail in a previous post. These also help to separate different services and the design of operations, or operational typology, necessary to deliver them. At this stage, demands can start to be related.

To relate each service, analyse it according to performance objectives and operational typology. Group those that are similar. There is the potential for them to be delivered by the same or similar work process. Grouping similar demands can create higher volumes. It also limits variety. Demands with predictable or unpredictable variation can be grouped. If it is unpredictable, more investment is required in work process flexibility. Lastly, the degree of customer contact can be used to group services with similar requirements. Perhaps there are groups with similar customer-introduced variability. As a minimum, the ‘front’ and ‘back’ office activities can be grouped together.

The final stage is integrate. Put the whole show back together but with less messiness. Direct those demands with similar characteristics into a common delivery process. The idea that there are three kinds of service, ‘good, cheap and fast’, and that you can have any two but not all three, illustrates this concept. In this case, quality, price and speed are being traded-off. Customers will decide what is important to them, select thecombination of performance objectives, and the process to deliver will be different for each set of objectives.

Design processes to achieve the primary and secondary performance objectives. Ensure that they match the volume, variety, variation and customer contact characteristics. Do that and you are on your way to operational excellence and becoming a high performance local government organisation.

Slack, Nigel, Chambers, Stuart, Harland, Christine, Harrison, Alan, and Johnston, Robert 1998. Operations Management, 2nd Edition.

Slack, Nigel and Lewis, Michael, 2011. Operations Strategy, 3rd Edition.