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Theory of Constraints in Field Service Aalto University Department of Industrial Engineering and Management Aalto- Johan Groop DD Theory of Constraints 47 / 2012 2012 in Field Ser vic e Theory of Constraints in Field Service Factors Limiting Productivity in Home Care Operations Johan Groop 9HSTFMG*aefjdb+ ISBN 978-952-60-4593-1 BUSINESS + ISBN 978-952-60-4594-8 (pdf) ECONOMY ISSN-L 1799-4934 ISSN 1799-4934 ART + ISSN 1799-4942 (pdf) DESIGN + ARCHITECTURE UniversityAalto Aalto University School of Science SCIENCE + Department of Industrial Engineering and Management TECHNOLOGY www.aalto.fi CROSSOVER DOCTORAL DOCTORAL DISSERTATIONS DISSERTATIONS Aalto University publication series DOCTORAL DISSERTATIONS 47/2012 Theory of Constraints in Field Service: Factors Limiting Productivity in Home Care Operations Johan Groop Doctoral dissertation for the degree of Doctor of Science in Technology to be presented with due permission of the School of Science for public examination and debate in Auditorium AS1 at the Aalto University School of Science (Espoo, Finland) on May 4, 2012 at 12:00 p.m. Aalto University School of Science Department of Industrial Engineering and Management Supervisor Professor Paul Lillrank Instructor Dr. Anu Helkkula Preliminary examiners Professor John H. Blackstone Jr., University of Georgia, USA Professor Mahesh C. Gupta, University of Louisville, USA Opponent Professor Emeritus James F. Cox III, University of Georgia, USA Aalto University publication series DOCTORAL DISSERTATIONS 47/2012 © Johan Groop ISBN 978-952-60-4593-1 (printed) ISBN 978-952-60-4594-8 (pdf) ISSN-L 1799-4934 ISSN 1799-4934 (printed) ISSN 1799-4942 (pdf) Unigrafia Oy Helsinki 2012 Finland The dissertation can be read at http://lib.tkk.fi/Diss/ Abstract Aalto University, P.O. Box 11000, FI-00076 Aalto www.aalto.fi Author Johan Groop Name of the doctoral dissertation Theory of Constraints in Field Service: Factors Limiting Productivity in Home Care Operations Publisher School of Science Unit Department of Industrial Engineering and Management Series Aalto University publication series DOCTORAL DISSERTATIONS 47/2012 Field of research Service Operations Management Manuscript submitted 24 February 2012 Manuscript revised 7 April 2012 Date of the defence 4 May 2012 Language English Monograph Article dissertation (summary + original articles) Abstract Public home care providers are pressured to improve productivity in the face of growing demand, limited budgets, and poor availability of labor. Capacity is already perceived to be short, and the ensuing stress experienced by staff is a common cause of concern. Still, productivity is typically low, suggesting that available capacity is not used to its full potential. This dissertation seeks to explore the mechanisms and practices that inhibit the ability of home care providers to make better use of available resources, and to provide general templates for resolving these issues. Productivity in home care is analyzed using the Theory of Constraints (TOC). It is a management philosophy that focuses improvement efforts on the few constraints that have the greatest impact on overall performance. Originally developed for the process-centric environments of manufacturing and distribution, TOC offers an assortment of tools for translating its principles into practice. These tools have been researched, adopted for, and implemented in a variety of service industries, including health services, with very persuasive results. In most cases so far, the structure of the service processes has resembled manufacturing closely enough to render the tools almost directly applicable. The structure of processes in a field service, such as home care, is, however, very different in several key aspects. The successful adoption of TOC in field services requires these structural differences to be identified, and the tools modified accordingly. This dissertation examines the distinctive characteristics of field service processes, and discusses the implications for the applicability of TOC. It is argued that the differing structure of processes renders certain production management tools inapplicable, while other tools originally designed for distribution management are highly relevant in this context. The study demonstrates that TOC can provide home care with a systematic framework for identifying and resolving factors that limit productivity. The application of TOC to home care reveals several policies and practices which, intuitively, may seem logical and efficient, but in reality are counter-productive. These policy constraints artificially accumulate demand in the morning. As a consequence, a disproportionately high level of capacity is needed to satisfy demand, while also reinforcing caregiver stress during peak hours. A resource constraint during peak hours promotes the emergence of shortages, leading to a reliance on external leased labor. As a result of the investigation, the home care unit that was studied was able to signi- ficantly reduce its use of leased labor, the savings of which are estimated at €0.5M annually. Keywords Theory of Constraints, TOC, field service, productivity, home care, Service Operations Management, health service, core problem, process ISBN (printed) 978-952-60-4593-1 ISBN (pdf) 978-952-60-4594-8 ISSN-L 1799-4934 ISSN (printed) 1799-4934 ISSN (pdf) 1799-4942 Location of publisher Espoo Location of printing Helsinki Year 2012 Pages 213 The dissertation can be read at http://lib.tkk.fi/Diss/ Tiivistelmä Aalto-yliopisto, PL 11000, 00076 Aalto www.aalto.fi Tekijä Johan Groop Väitöskirjan nimi Kapeikkoteoria kenttäpalveluissa: kotihoidon tuottavuutta rajoittavat tekijät Julkaisija Perustieteiden korkeakoulu Yksikkö Tuotantotalouden laitos Sarja Aalto University publication series DOCTORAL DISSERTATIONS 47/2012 Tutkimusala Palvelutuotannonohjaus Käsikirjoituksen pvm 24.02.2012 Korjatun käsikirjoituksen pvm 07.04.2012 Väitöspäivä 04.05.2012 Kieli Englanti Monografia Yhdistelmäväitöskirja (yhteenveto-osa + erillisartikkelit) Tiivistelmä Kotihoidon palveluntuottajat pyrkivät parantamaan tuottavuuttaan kasvavan kysynnän, kustannuspaineiden ja henkilökunnan heikon saatavuuden takia. Kapasiteettia pidetään jo nykyisellään riittämättömänä ja henkilökunta kokee itsensä kiireiseksi. Silti tuottavuus on alhainen, mikä viittaa siihen, ettei nykykapasiteettia hyödynnetä täysimääräisesti. Väitöskirja tutkii mekanismeja ja toimintatapoja, jotka rajoittavat kotihoitoyksiköiden kykyä hyödyntää nykyresurssejaan ja ehdottaa näihin yleisiä ratkaisuja. Kotihoidon tuottavuutta analysoidaan kapeikkoteorian (Theory of Constraints TOC) avulla. Se on johtamisfilosofia, joka kohdistaa kehitystoimet niihin yksittäisiin rajoitteisiin, joilla on suurin vaikutus järjestelmän kokonaisvaltaiseen suorituskykyyn. TOC on alun perin kehitetty kappaletavaratuotannon ja jakelun prosessikeskeisiin ympäristöihin. Se tarjoaa valikoiman työkaluja TOC-teorian periaatteiden viemiseksi käytäntöön. Näitä työkaluja on tutkittu ja sovellettu vakuuttavin tuloksin eri palvelualoilla, myös terveyspalveluissa. Useimmissa tapauksissa palveluprosessien rakenne on riittävästi muistuttanut kappaletavaratuotantoa, jotta työkalut ovat olleet sovellettavissa lähes sellaisinaan. Kenttäpalveluissa, kuten kotihoidossa, palveluprosessien rakenne on kuitenkin monilla keskeisillä tavoilla hyvin erilainen. Nämä rakenteelliset eroavaisuudet on tunnistettava ja TOC:in työkalut muokattava eroavia tarpeita vastaaviksi, jotta TOC:ia voitaisiin soveltaa kenttäpalveluissa. Väitöskirja tarkastelee kenttäpalveluprosessien ominaispiirteitä ja käsittelee näiden vaikutuksia TOC:in sovellettavuuteen. Tutkimus toteaa, että prosessirakenteen ominaispiirteiden vuoksi tietyt tuotannonohjaustyökalut eivät sovellu kenttäpalveluihin. Sen sijaan alun perin jakelunhallintaan kehitetty työkalu voisi soveltua resurssien kohdentamiseen kenttäpalveluissa. Tutkimuksessa osoitetaan että TOC on kotihoitoon soveltuva, systemaattinen viitekehys, jonka avulla voidaan tunnistaa ja ratkaista tuottavuutta rajoittavia tekijöitä. TOC:in soveltaminen kotihoitoon paljastaa useita menettelytapoja, jotka vaistonvaraisesti vaikuttavat järkeviltä ja tehokkailta, mutta todellisuudessa rajoittavat tuottavuutta. Nämä menettelytavat luovat keinotekoisen ruuhkahuipun aamuihin, minkä seurauksena tarvitaan suhteettoman paljon kapasiteettia vastaamaan kysyntää. Samalla hoitajien kiireen tunne ruuhka-aikoina kasvaa. Ruuhka-ajan resurssirajoite johtaa usein työvoimavajeeseen, minkä vuoksi on turvauduttava vuokratyövoimaan. Tutkimuksen tuloksena kotihoitoyksikkö vähensi vuokratyövoimankäyttöään merkittävästi, mistä koituvat säästöt ovat arviolta €0.5M vuositasolla. Avainsanat Theory of Constraints, TOC, kapeikkoteoria, kotihoito, tuotantotalous, kenttäpalvelu, terveyspalvelu, ydinongelma, prosessi, tuottavuus ISBN (painettu) 978-952-60-4593-1 ISBN (pdf) 978-952-60-4594-8 ISSN-L 1799-4934 ISSN (painettu) 1799-4934 ISSN (pdf) 1799-4942 Julkaisupaikka Espoo Painopaikka Helsinki Vuosi 2012 Sivumäärä 213 Luettavissa verkossa osoitteessa http://lib.tkk.fi/Diss/ ACKNOWLEDGEMENTS The endeavor of completing a doctoral dissertation is a challenge on so many levels. Although intellectually rewarding and certainly a great learning experience, the process is a rollercoaster of feelings, ranging from epiphany and enthusiasm to frustration and even despair. I would argue that, at some point, anyone who has experienced the dissertation process has probably felt the urge to hurl the manuscript out the window, most likely on more than one occasion. Fortunately, I have had the pleasure and honor
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