MATERIEL SERVICE DEPARTMENT UNIVERSITY OF MICHIGAN HOSPITALS

Introduction of Statistical Process Control to Turn-Around Time Analysis

DATE: December 12, 1991

TO: John Gialanella Director, Materiel Services University of Michigan Hospitals

Richard J. Coffey, Ph.D. Director, Management Systems University of Michigan Hospitals

FROM: George K. Chen Laurie D’Alleva Douglas M. Donaldson Management Systems

SUBJECT: Final project report.

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(2) TABLE OF CONTENTS

Executive Summary 3

Introduction 4

Approach 5

Methodology 8

Results 15

Recommendations 21

References 25

Appendices 26

(3) EXECUTIVE SUMMARY

This project demonstrates methods to better organize turn-around time (TAT) used to measure performance in the Materiel Service Center (MSC). The data can be meaningfully analyzed using the ideas and methods of Statistical Process Control (SPC), such as control and scatter plots. By constructing these charts and graphs, an improved methodology for TAT became apparent. The control charts show whether or not the TAT’s, when standardized by the number of lines and deliveries for each run, are in control for each of the four different delivery types (SUPP, STAT, REQ, PAR). This can help management come to conclusions regarding the delivery system. By calculating appropriate , unusual or unsatisfactory times can be easily seen on graphs. By following a progression of charts over time, management will be better equipped to locate problem areas and determine possible courses of action to improve performance in the MSC. The charts are also excellent for monitoring improvements as changes in the delivery system are made, as the graphs are easy to interpret and full of meaning. Seven major recommendations are being made: 1. The control charts introduced by this project should be made a part of the standard routine in the MSC. 2. The MSC should increase inventory levels for the 13 items identified as major contributors to the number of stockouts. 3. It is recommended that the MSC keep better track of changes in stockout items. 4. A hospital wide, synchronized time system should be used when recording delivery times to increase the accuracy of the TAT’s. 5. The databases used by the department should be reconstructed for more efficient data storage. 6. Further study of the relationship between the distance of a unit from the MSC and the service provided to that unit is recommended. 7. The department should utilize SPC methods in order to effectively summarize and reduce the data collected to concise, meaningful charts and graphs.

(4) INTRODUCTION

The purpose of this project was to demonstrate methods to more effectively represent the overall and performance of the Materiel Service Center. The MSC delivers items from its inventory supply to various units throughout the University of Michigan Hospital. The elapsed subtimes for specific steps in this order-filling process are recorded and summed for a net TAT for each delivery. This project has implemented the techniques and ideas of statistical process control (SPC) to meaningfully organize this historical data, to represent the overall efficiency and performance of the department. Effective measures of organizational performance have been developed, summarized and applied toward producing graphical representations of the data. In the future, analyzing TAT data by these methods will help management reach better conclusions about departmental performance, and, in turn, better manage the Materiel Services Department.

(5) APPROACH

In order to determine the most effective and useful manner in which to organize the TAT data, the following approa