While idle time is an important and obvious waste of capacity, it is not the only enemy of a lean operation. Academics like me likes the problems of line balancing and staffing to demand, driving out the idle time to takt time given the processing times. Because these are very well-defined problems, they lead to very elegant mathematical formulations. In practice however, often times an even bigger lever for productivity improvement is going after the variation of processing times across workers. Just like you and I would differ in our ability to sing. In our speed with which we're going to run five or ten kilometers. You and I will differ in the processing time that it would take us to make a sandwich. Addressing this variation across workers and processing time is the idea behind standardization. Teaching observation in the way that Frederick Winslow Taylor did it is hard in an academic course. For this reason, I find that many academic courses are biased towards the mathematical treatment of productivity, but really miss out on some great insights that can be obtained by going to the front line. To address this challenge in academic courses, I've made two calls to a large call center of a retail bank. Both calls are about making deposits to a mortgage account via a credit card. But the two calls are handled by different operators. One whereas you will notice a slightly different ways of handling the call. At this point, I would like you to take out a stopwatch and carefully listen to what happened in the calls. Just go thru the call step by step and take notice of how much time is spent on the various tasks. Are you ready? Here we go. >> Hello, you're speaking to David. Can I have your name, please? >> Yes, it's Natalie Walker. >> Good morning, how can I help you today, Miss Walker? >> I'm calling because I'd like to make a payment to my account. Can you do that? >> No problem. Can you give me the 7-digit mortgage account number starting with BCC? >> Yes. It is BCC658. >> Bcc658. >> 2314. >> 2314. >> Yes. >> Thank you, Miss Walker. I just need to ask you some basic security questions. >> Okay, that's fine. >> Can you give me the first line of your address and the post code, please? >> It is 48 Church Road, Bolton, and the post code is B038FD. >> Thank you. And your date of birth, please? >> Seventh of March 1979. >> Thank you. And what amount would you like to pay? >> 500 pounds please. >> Would you like to pay by debit or credit card? >> Credit card. >> Okay, and is it Anex, Visa or Master Card? >> Master Card. >> Thank you. Can I take the sixteen digit code on the middle of the card please. >> 5590 >> 5590 >> 7143 >> 7143 >> 8973 >> 8973 >> 6322 >> 6322 >> Correct >> Thank you. And the expiry date? >> 03/13 >> Thank you. And the full name on the card please? >> Jess Natalie Walker. >> Thank you. And the three digit code at the back of the card? >> 485 >> 485. Bear with me while the payment goes through. >> Thank you, your payment has gone through. >> Thank you. >> Thank you for calling. Is there anything else I can help you with today? >> No, I think that was all. I will need to make a change later, but I will do that on a later date. So no, that will be all for now. >> Okay. Thank you. Goodbye. >> Hello you're speaking to Anna, can I have your mortgage account number please? >> Yes, it's BCC757. >> Yes. >> 1958. >> Thank you, can you confirm your name please? >> Scott Jones. >> Thank you Mr. Jones, I just need to ask you some basic security questions. >> Okay, that's fine. >> Can you give me the first line of your address, and the post code please? >> It's the Boathouse 58 Green Lane and the post code is TN73CA ... >> Thank you, and your date of birth please? >> Twenty-seventh of September, 1981. >> Thank you, and how can I help you today? >> I'm looking to make a payment into my account today. >> No problem. What amount would you like to pay? >> 750 pounds. >> And would you like to pay by debit or credit card? >> Credit card please. >> And is that Amex, Visa, or MasterCard? >> Visa. >> Thank you. Can I take the sixteen digit number on the card please? >> 2256 >> Yes >> 4080 >> Yes >> 1253 >> Yes >> 5879. >> Thank you. And the expire date. >> 04/12. >> And the full name on the card please. >> Scott Jones. >> And the three digit code at the back of the card. >> 153. >> Thank you. Your payment has just gone through. >> Oh, thank you. >> Thank you for calling. Good bye. So, what did you notice? Who was faster, who was the better employee? Which of those two employees do you want to have work for you? If the only enemy that we consider in our study of productivity is idle time, we're missing a big opportunity that resides in the processing times themselves. Ono would have referred to the extra words that the first operator was using as unnecessary motion. So in our case, this really means unnecessary talking. To analyse such variation in processing times across operators, I find it is helpful to just collect a sample of processing times for each operator. The average processing time across these operators will vary. Instead of simply comparing the best operator, and the worst operator based on the averages. And, this picture show what is called a quarter analysis. The quarter analysis compares the highest quarter performing operator, that means the operator with still 25 percent other operators that are faster than him or her, versus the bottom quarter operator, i.e. The operator who has 75 percent of the other operators faster, and 25 percent slower. In this line, I do this for two tasks that exist in a large bank in the underwriting operation for consumer loans. You see on the right of this line, the closing step for this activity. For closings, there are a couple of other critical, and manual tasks that need to happen. If you observe, a very, very tiny difference, between the top quartile. And the bottom quartile perfomer. On the left you look at the underwriting function itself. For underwriters, the gap between the top performer and bottom performer varies dramatically for the selected set of activities shown here. So it is interesting that actually in the more knowledge-intent activities, the variation in productivity is more dramatic. In a recent study of over a 100,000 patients that were treated in the emergency room of three hospitals, my colleagues and I wanted to investigate to what extent productivity in the form of processing times would differ in health care settings. The 100,000 patients were seen over multiple years by a group of some 80 doctors and over 100 nurses. The results were very similar to what we just saw in the banking settings. We saw about a 260 percent difference between the tenth quarter and the 90th percent quarter operators. Again we see dramatic activity effects, not coming from idle time, but by looking at processing time across operators. After 300%, the variation that we saw in today's class between the top performing employees and the low performing employees in a service operations were enormous. Call center, bank, hospital. Service employees, manufacturing employees, everyone differs according to their productivity. Reducing these productivity gaps between the top quarter and bottom quarter on employees provides enormous financial opportunity. Typically, if we can transfer the best practices from the top performers to the bottom performers, the average productivity is going to be lifted upwards. This should motivate you to go out of the front line and follow the foot steps of Frederick Winslow Taylor, go out and measure yourself. Measure these productivity times because typically, this is not data that most organizations currently have available. Then, take this data, plot it, compare the top at the bottom quarter if you get a sense of the variation and the process. And then anything you can do to reduce this variation by moving the bottom quarter up, with the median up to the top quarter, will give you an enormous productivity boost.
