Modern management techniques part 1
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D A items Tight control, low safety stock B items Ordinary control measures, moderate safety stock C items High safety stock, purchase based on usage This document discusses various modern management techniques used in healthcare. It begins with definitions of management and describes traditional versus modern techniques. It then provides details on statistical techniques like decision trees, activity analysis methods like time motion studies and queuing theory. It also discusses mathematical techniques such as simulation, linear programming and inventory control methods like ABC and VED analysis. The document aims to explain how these quantitative methods can improve efficiency and ensure better healthcare.
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Modern management techniques part 1
- 1. MODERN MANAGEMENT TECHNIQUES 1 Presenter : Dr. Vishal Moderator: Dr. G K Ingle
- 2. PLAN OF PRESENTATION • Definitions and concepts of management • Relevance to health • Traditional vs modern management tech. • Classification • Description of each technique • Challenges in management • References
- 3. • What is Management? “Management is getting the right things done – – – – In right way, In right time, By right persons With right amount of resources and effective use of resources.” • It is the efficient use of resources and to get people to work harmoniously together in order to achieve objective. ( WHO) EFFICIENCY AND EFFECTIVENESS
- 4. Term Modern: It is a basic principle of good management to choose methods to suits whatever resources available and to use them in pursuit of well-chosen objectives. “Health System Management : is defined as purposeful & efficient use of health system resources and to get members of the health team coordinated to work harmoniously in order to achieve the desired common Goals and Objectives.”
- 5. Importance of management in health Human Resource management Time management Material management Financial management
- 6. Relevance of modern management technique in health Overlapping, conflicting and competing organizations within Health system. Widely scattered funding mechanism with little control over costs Decisions on the mixture of facilities and services without reference to population need and with no information about those who do not use the services.
- 7. Emerged in the last few decades, since world war II. These make increasing use of mathematical and statistical concepts and methods. These are the quantitative & semi-quantitative methods which are fruitfully employed in management of business, defense, industry and health. It has been proved that these techniques useful in increasing the efficiency by cost reduction as well as ensuring better health care
- 8. Traditional vs Modern management tech. Traditional : based on behavioural sciences eg. Personnel selection, training & retraining, motivational methods, leadership development, supervision etc. Modern : based on sociology, psychology, social psychology, educational technology, economics and statistics
- 9. Modern management technique Statistical techniques • Time trends & forecasting • Decision theory and tree Activity analysis • Time motion studies • Work sampling and activity analysis • Queuing theory • Gantt chart & work schedule Mathematical techniques • • • • • • • Simulation study/models Systems analysis Linear programming Inventory control Network analysis PERT & PEP CPM
- 10. Modern management techniques Financial techniques • • • • • • • • • • Monitoring expenditure Cost accounting & analysis DALY Cost benefit analysis Cost effectiveness analysis Performance budget PPBS Zero base budgeting Input output analysis Outcome budget Miscellaneous • Management by objective & appraisal by results • Management by exception • Situational analysis • Current state assessment • SWOT analysis • Log frame analysis
- 11. STATISTICAL TECHNIQUES 1. Time–trends and forecasting : based on information on occurrence of certain events, certain patterns can be recognized eg. 1. Secular trend – increasing incidence of CHD, accidents and cancers etc. 2. seasonal variations of gastro-enteritis. • Based on past experience, predictions can be made about the expected occurrence, by using mathematical methods eg. Demographers made projections about population, epidemiologists anticipation of epidemic
- 12. 2. Decision theory and decision tree : • A methods for determining the optimal course of action when a number of alternatives are available and their consequences cannot be forecast with certainty • Uses probabilistic analysis to help in the selection of remedial actions.
- 13. Types of environment: 1. Decision making under certainty Decision theory Applies – Future “states of nature” are known – Will choose the alternative that has the highest payoff (or the smallest loss) 2. Decision making under uncertainty – Future “states of nature” are uncertain – Depends on the degree of decision maker’s optimism 3. Decision making under risk
- 14. Decision Tree • It is a decision support tool that uses a tree-like graph of decisions and their possible consequences ( including chance event outcomes, resource costs, and utility) • Commonly used in operations research, specifically in decision analysis, to help identify a strategy most likely to reach a goal. • It enables people to decompose a large complex decision problem into several smaller problems
- 15. Constructing a decision tree • Symptomatic patient: »operate (risky) »medical management • If disease present at surgery, must decide whether try for cure or palliate • Want to evaluate surgery vs. medical management
- 16. Three types of nodes: 1. Decision node 2. Chance node 3. End node • only splitting paths no converging path
- 22. • Decision theory (DT) represents a generalized approach to decision making • Decision making is an integral part of management: – The decision maker selects one strategy (course of action) over others depending on some criteria, like utility, sales, cost or rate of return. – Is used whenever an organization or an individual faces a problem of decision making or dissatisfied with the existing decisions or when alternative selection is specified
- 23. Solution steps to any decision problem 1. Identify the problem 2. Specify objectives and the decision criteria for choosing a solution 3. Develop alternatives 4. Analyze and compare alternatives 5. Select the best alternative 6. Implement the chosen alternative 7. Verify that desired results are achieved
- 24. Advantages of decision trees • Are simple to understand and interpret • Useful to analyze the possible outcomes of complex decisions. • Possible scenarios can be added • Most rational decision is taken in terms of resource and effectiveness. • Worst, best and expected values can be determined for different scenarios • For example : to study alternative health strategies in disease screening, immunization etc.
- 25. ACTIVITY ANALYSIS TECHNIQUE 1. Time motion studies : it consists of observing and timing by using stopwatches the physical work & movements carried out by worker. • 1) a complex task is broken into small & simple steps, • 2) the sequence of movements taken by the employee in performing those steps is carefully observed and analyzed to detect & eliminate redundant and wasteful motion, • 3) precise time taken for each correct movement is measured.
- 26. ADVANTAGES: • Reduction of physical effort • Time saving and • Increase productivity • Eg. From each ward lab samples used to sent with a servant to central path lab. Servants take excessive time to return. • Modification :- one servant from the central lab goes to different ward with trolley at predetermined time. Reports delivered in same way
- 27. 2. WORK SAMPLING AND ACTIVITY ANALYSIS Work sampling : is a commonly used industrial engineering technique designed to measure how resources such as people, machines, facilities, or equipments are utilized. • The method consist of making observation at random for appropriate length of time and recording the utilization of equipment or activities of a people during these periods. • sample statistical method total activity • Work sampling is used to estimate the proportion of workers' time that is devoted to different elements of work activity. • The idle time of machines and equipment can be calculated
- 28. • Observed activities are grouped into either of two main classifications: working or nonworking. • The working classification can be subdivided into desirable or undesirable. Advantages: • work sampling is a low cost alternative to continuous monitoring, just as sampling in the audit context is a low cost alternative to 100 percent evaluation of an account. • Better and proper utilization of time
- 29. • Example: Observations among nurses : 21 % of time spent on bed side nursing.33 % of time spent on clerical activities in the ward • PHC staff: 15 % of time on direct services, 34 % on administration, 21 % on travel, 30 % on non productive activities.
- 30. 3. Queuing Theory Queuing theory is basically a mathematical approach applied to the analysis of waiting lines. eg. emergency room, OPD setting, pharmacy, for emergency and disaster management preparedness etc. Goal of queuing analysis: to minimize costs Costs of waiting lines or queue: 1. Cost associated with patients having to wait for service Loss of business to HCO Costs incurred by society Decreased patient satisfaction and quality of care
- 31. 2. Cost of providing the services (capacity cost) Salaries paid to employees. Salaries paid to employees or servers while they wait for service from other server, for eg. waiting for the pathology report, radiology report, labs, etc. Fixed costs – cost of waiting space, facilities, equipments, and supplies. • It is extremely useful in predicting and evaluating performance • Excessive queuing can quickly erode customer loyalty. • How to minimize the time spent by customers standing in a queue • What is the trade-off between the time customers spend queuing and the cost of additional capital to reduce queuing times?
- 32. Answer is Queuing analysis • Queuing theory involves the analysis of what is known as a queuing system, which is composed of a server; a stream of customers, who demand service; and a queue, or line of customers waiting to be served
- 33. Characteristics • Arrival Process – The probability density distribution that determines the customer arrivals in the system. • Service Process – The probability density distribution that determines the customer service times in the system. • Number of Servers – Number of servers available to service the customers. • Number of Channels – Single channel – Multi channels • Number of Phases/Stages – Single Queue – Series or Tandem – Cyclic -Network • Queue Discipline -Selection for Service – First com first served (FCFS or FIFO) – Last in First out (LIFO) -Random -Priority
- 34. Assessing the parameters • Customer arrival rate – The number of customers entering the system per unit time • Customer service rate – The number of customers the system serves per unit time • Average number of customers in the system – The number of customers either waiting in queue or receiving service • Average delay per customer – The time a customer spends waiting plus the service time
- 35. Little’s Law • Example: the average number of customers (N) can be determined from the following equation: • N= T • lambda - is the average customer arrival rate and • T - is the average service time for a customer. • Let N = the number of people seated (say 200) • Let T = mean amount of time a person stays seated (say 90 min) • Conclusion – Avg . Customer arrival rate = 200/90 = 2.22 persons per minute • Wait time – If 100 people are waiting, you could estimate that you will need to wait 100/2.22 = 45 min
- 36. 4. Gantt Chart A Gantt chart is a graphical representation of the duration of tasks against the progression of time. It is a type of bar chart that illustrates a project schedule. allow to assess how long a project should take. Gantt charts monitor progress. It can immediately see what should have been achieved at a point in time. Henry Laurence Gantt (1861-1919)
- 37. How to make Gantt chart • Can be created with simple tools like Excel, but specialised tools like Microsoft Project make it easier • Step 1 – list the tasks in the project • Step 2 – add task durations • Step 3 – add dependencies (which tasks cannot start before another task finishes) • Step 4 – lay out all of the bars on the graph
- 38. Tasks Choose research area Preliminary research Decide research topic Decide methodology Submit/present proposal Finalise methodology Conduct research Analyse data Write up Fig. Simple research project Gantt chart Wk24 Wk23 Wk22 Wk21 Wk20 Wk19 Wk18 Wk17 Wk16 Wk15 Wk14 Wk13 Wk12 Wk11 Wk10 Wk9 Wk8 Wk7 Duration Wk6 Submit assignment
- 39. • Characteristics: – The bar in each row identifies the corresponding task – The horizontal position of the bar identifies start and end times of the task – Bar length represents the duration of the task – Task durations can be compared easily – Good for allocating resources and re-scheduling – Precedence relationships can be represented using arrows – Critical activities are usually highlighted – Slack times are represented using bars with doted lines – The bar of each activity begins at the activity earliest start time (ES) – The bar of each activity ends at the activity latest finish time (LF).
- 40. Advantages Simple Good visual communication to others Task durations can be compared easily Good for scheduling resources Disadvantages Dependencies are more difficult to visualise Minor changes in data can cause major changes in the chart
- 41. Mathematical techniques 1. Simulation Studies/Model • Use of mathematical models to calculate results by means of simulation of a real situation. • Impact of inputs and changes on the output can also be estimated • Objective : to forecast the probable effects of measures in terms of relative cost and benefit.
- 42. 2. Systems Analysis • System : An arrangement and set of relationships among multiple parts functioning as a whole. • Systems Analysis: Study of inter relationships operating in the various components within a system and also between a system and other systems. • Systems: Hospital, Community health centre, dispensary,
- 43. Steps • Set of objectives to be achieved is defined and alternatives to achieve these is formulated. • Alternatives are evaluated in terms of cost-effectiveness. • Mathematical models may be used.
- 44. 3. Linear Programming •Mathematical tool Components of a system and its constraints are depicted In a linear equation and the desirable combination of activities With regard to certain given set of objectives and constraints is arrived at. linear programming (LP) problems are optimization problems in which the objective function and the constraints are all linear. • It is a useful tool for deciding the course of action for a problem in which there are competing alternatives uses for limited resources.
- 45. 4. Inventory Control • Method of maintaining of stock at a level at which purchasing and storing costs are the lowest possible without interference with supply
- 46. Why needed? If drugs purchased in large quantity Adv: the risk of out of stock avoided Disadv: locking up money in maintaining huge stock large storage space require staff to store and handle various items chances of expiry, pilferage Objective : maintaining optimum stock Techniques ABC analysis VED analysis FSN analysis SDE analysis
- 47. Analysis of store items based on their cost
- 48. ABC A N A L Y S I S WORK SHEET 1 90000 90000 2 50000 140000 20000 160000 4 7500 167500 5 7500 175000 5000 180000 4500 184500 8 4000 188500 9 2750 191250 10 1750 193000 11 1500 194500 12 70 % CUMMULATIVE COST [Rs.] 7 20 % ANNUAL COST [Rs.] 6 10 % ITEM 3 ITEM % 1500 196000 13 500 196500 14 500 197000 15 500 197500 16 500 198000 17 500 198500 18 500 199000 19 500 199500 20 500 200000 COST % 70 % 20 % 10 %
- 49. • A items : small in no. , but consume large amount of resources • Must have • • • • • Tight control Rigid estimate of requirement Strict & closer watch Low safety stock Managed by top management • C items : larger in no. but consume lesser amount of resources • Must have • Ordinary control measures • Purchase based on usage estimates • High safety stocks
- 50. VED Analysis : based on criticality in pt. care • VED Analysis V=10% E=39% D=51% • V =Vital life saving drugs. Absence of which cannot be tolerated. • E= Essential items. Absence can be tolerated for a short time period. • D=Desirable. Non availability can be tolerated for a longer period.
- 51. Combination of ABC &VED Analysis V E D A AV AE AD CAT I 15% B BV BE BD CAT II 40% C CV CE CD CAT III 45% Cat 1 : needs close monitoring & control Cat 2 : moderate control Cat 3 : no need for control
- 52. SDE ANALYIS Based on availability Scarce Managed by top level management Maintain big safety stocks Difficult Maintain sufficient safety stocks Easily available Minimum safety stocks FSN ANALYSIS Based on utilization. Fast moving. Slow moving. Non-moving. Non-moving items must be periodically reviewed to prevent expiry & obsolescence
- 53. 5. Network analysis A technique whereby objectives are identified, activities and tasks involved in attaining the objectives are determined and their interrelationships are presented graphically in the form of network and used as a basis of determining sequence of activities and allocation of resources. Planning and monitoring the progress of large no. of different interrelated activities necessary for the completion of project with minimum time & cost.
- 54. • Advantages Simple to understand Well defined in practical terms Applies to any project where activities can be described sequentially. Inexpensive Does not need very highly qualified specialists.
- 55. • Two types : Programme Evaluation Review Technique (PERT) Critical Path Method (CPM)
- 56. • PERT Programme Evaluation Review Technique : Shows diagrammatically the logical sequence in which different events between the start and end of the project need to take place 4 mnths Staff recruited 2 months Staff trained 1 months Plan service 2 months Equipment ordered Equipment installed 10 months 1 months Start providing service
- 57. • PERT involves planning, monitoring and controlling of projects where time taken for each activity in the project is not known • PERT is classically used in long-term projects like construction of hospitals, ships, roadways and buildings, in planning & launching of new health programs, products & services, in publication of books etc where exact time for each phase is not known with certainty. • PERT uses probabilistic and linear programming methods to assist a manager in planning schedules & costs, determining time & cost status, forecasting skill requirements,
- 58. • Under PERT, three time-estimates are made, 1. Most Likely Time is the time taken most frequently in completing a particular activity. 2. Optimistic Time is time in which an activity can be completed, if all goes as per the pre-determined plan. 3. Pessimistic Time is the time taken to complete an activity under most adverse conditions. This is thus the longest possible time taken to complete a project. • Calculation of activity time Activity Time= Optimistic time + 4 X( likely expected time)+Pessimistic time 6 50 % chance (Probability of correct estimate of time)
- 59. • Advantages of PERT • Disadvantage of PERT Aids in planning, scheduling and monitoring Overemphasis on the project time & almost no attention to cost Provision for better communication Identifies potential problems Furnishes continuous timely progress report Enables evaluation and feedback
- 60. Critical Path Method (CPM) • Longest path in the method. • The process cannot end before the critical pathway ends. • Reduction in time of a project is only possible if there is a reduction in the time taken the critical path. • Reduction in time may be brought about by increase in the resources keeping cost factor in mind.
- 61. Determining the Critical Path for Project X
- 62. EMERGING CHALLENGES FOR MANAGEMENT • Globalilization: Managers need to think globally and act locally. • Technology: Management will need to manage changing technology effectively. • Quality: Quality assurance is getting important. • Social responsibility: Management will pursue long term goals that are good for society. • Empowerment: To empower worker is a challenge to management. • Human resource management: Management needs to deal with diversified work force, requires visionary leadership on the part of management • Organization design: Organization will be lean flat and less hierarchical
- 63. References • Modern management methods and organization of health services. WHO.pdf • Park’s Textbook of Preventive and social Medicine. 22nd ed. • P. V. Sathe’s textbook of Epidemiology and management for health care for all. 3rd edition • Reetu Mehandiratta. Applications of queuing theory in health care. IJCBR. May 2011. VOL2 N2.P9
Editor's Notes
- #3: The process of getting activities completed efficientlywith and thru other people. (Stephen Robbins)
- #4: The process of getting activities completed efficientlywith and thru other people. (Stephen Robbins)
- #7: There is a lot of scope for improving efficiency using these technique.
- #8: There is a lot of scope for improving efficiency using these technique.
- #9: Traditional: team building , conflict resolution , morale promotion, development of communication channel & skill, utilization of knowledge of group dynamis.
- #12: Forecasting the demand for supplies of materials like vaccine or drugs.
- #14: For resolution of uncertainty we can use decision tree.
- #16: Forecasting the demand for supplies of materials like vaccine or drugs.
- #26: Technique of industrial engineering. Useful analytical tool.The time and motion study looked to reduce the number of motions in performing a task in order to increase productivity
- #27: Without much input, with a simple modification the productivity has increased.
- #31: Capacity costs, waiting costs, the cost of waiting space, cost to the society and the effects of loss of business to healthcare organization if patients refuse to wait and decide to go elsewhere
- #36: We begin our analysis of queuing systems by understanding Little's Theorem. Little's theorem states that:
- #45: Financial, human and biological constraint
- #48: Different items categorized into three groups based on annual expenditure incurred on these items. Drugs cat A should get high priority and managerial attention because of bulk of expenditure. Their stock , consumption , purchase must be critically watched.
- #52: For making hierarchy of priority.
- #62: How many paths are on this network diagram? b. How long is each path?c. Which is the critical path? d. What is the shortest amount of time needed to complete this project?