Lean Six Sigma in Hrm

1 Lean Six Sigma in the Service Industry Alessandro Laureani University of Strathclyde United Kingdom 1. Introduction The business improvement methodology known as Lean Six Sigma is rooted in the manufacturing industry, where it developed over the past few decades, reaching widespread adoption worldwide.However, according to the World Economic Outlook Database, published in April 2011, by the International Monetary Fund (IMF, 2011), the distribution of PPP (Purchase Power Parity) GDP, in 2010, among various industry sectors in the main worldwide economies, reflected a decline in the industrial sector, with the service sector now representing three-quarters of the US economy and more than half of the European economies. PPP GDP 2010 Agriculture Industry Service European Union 5. 7% 30. 7% 63. 6% United States 1. 2% 22. 2% 76. 7% China . 6% 46. 8% 43. 6% India 16. 1% 28. 6% 55. 3% Table 1. PPP GDP Sector Comparison 2010. In light of the increasing importance of the service sector, the objective of this chapter is to discuss whether the business improvement methodology known as Lean Six Sigma is applicable to the service industry as well, and illustrate some case study applications. 2. What is Lean Six Sigma? Lean Six Sigma is a business improvement methodology that aims to maximize shareholders’ value by improving quality, speed, customer satisfaction, and costs.It achieves this by merging tools and principles from both Lean and Six Sigma. It has been widely adopted widely in manufacturing and service industries, and its success in some famous organizations (e. g. GE and Motorola) has created a copycat phenomenon, with many organizations across the world willing to replicate the success. www. intechopen. com 4 Advanced Topics in Applied Operations Management Lean and Six Sigma have followed independent paths since the 1980s, when the terms were first hard-coded and defined.  Control Key and Word – Text and Graphics.The first applications of Lean w ere recorded in the Michigan plants of Ford in 1913, and were then developed to perfection in Japan (within the Toyota Production System), while Six Sigma saw the light in the United States (within the Motorola Research Centre). Lean is a process-improvement methodology, used to deliver products and services better, faster, and at a lower cost. Womack and Jones (1996) defined it as: †¦ a way to specify value, line up value-creating actions in the best sequence, conduct those activities without interruption whenever someone requests them, and perform them more and more effectively.In short, lean thinking is lean because it provides a way to do more and more with less and less—less human effort, less human equipment, less time, and less space—while coming closer and closer to providing customers with exactly what they want. (Womack and Jones, 1996:p. ) Six Sigma is a data-driven process improvement methodology used to achieve stable and predictable process results, reducing process variation and defects. Snee (1999) defined it as: ‘a business strategy that seeks to identify and eliminate causes of errors or defects or failures in business processes by focusing on outputs that are critical to customers’.While both Lean and Six Sigma have been used for many years, they were not integrated until the late 1990s and early 2000s (George, 2002; George, 2003). Today, Lean Six Sigma is recognized as: ‘a business strategy and methodology that increases process performance resulting in enhanced customer satisfaction and improved bottom line results’ (Snee, 2010). Lean Six Sigma uses tools from both toolboxes, in order to get the best from the two methodologies, increasing speed while also increasing accuracy. The benefits of Lean SixSigma in the industrial world (both in manufacturing and services) have been highlighted extensively in the literature and include the following: 1. 2. 3. 4. 5. 6. Ensuring services/products conform to what the customer needs (‘voice of the customer’). Removing non-value adding steps (waste) in critical business processes. Reducing the cost of poor quality. Reducing the incidence of defective products/transactions. Shortening the cycle time. Delivering the correct product/service at the right time in the right place. Antony, 2005a; Antony, 2005b) Examples of real benefits in various sectors are illustrated in Table 2. One of the key aspects differentiating Lean Six Sigma from previous quality initiatives is the organization and structure of the quality implementation functions. In quality initiatives prior to Lean Six Sigma, the management of quality was relegated largely to the production floor and/or, in larger organizations, to some statisticians in the quality department.Instead, Lean Six Sigma introduces a formal organizational infrastructure for different quality implementation roles, borrowing terminology from the world of martial arts to define hierarchy an d career paths (Snee, 2004; Antony, Kumar & Madu, 2005c; Antony, Kumar & Tiwarid, 2005d; Pande, Neuman & Cavanagh, 2000; Harry & Schroeder, 1999; Adams, Gupta & Wilson, 2003). www. intechopen. com Lean Six Sigma in the Service Industry 5 Table 2. Benefits of Six Sigma in Service Organizations (Antony, Kumar & Cho, 2007). 3. Lean Six Sigma and the service industryThe service industry has its own special characteristics, which differentiate it from manufacturing and make it harder to apply Lean Six Sigma tools, which can be summarized in the following main areas (Kotler, 1997; Regan 1963; Zeithmal, Parasur and Berry 1985): Intangibility: Although services can be consumed and perceived, they cannot be measured easily and objectively, like manufacturing products. An objective measurement is a critical aspect of Six Sigma, which requires data-driven decisions to eliminate defects and reduce variation.The lack of objective metrics is usually addressed in service organizations through the use of proxy metrics (e. g. customer survey). Perishability: Services cannot be inventoried, but are instead delivered simultaneously in response to the demand for them. As a consequence, services processes contain far too much ‘work-in-process’ and work can spend more than 90% of its time waiting to be executed (George, 2003). Inseparability: Delivery and consumption of service is simultaneous.This adds complexity to service processes, unknown to manufacturing. Having customers waiting in line or on the phone involves some emotional management, not present in a manufacturing process. Variability: Each service is a unique event dependent on so many changing conditions, which cannot be reproduced exactly. As a result of this, the variability in service processes is much higher than in manufacturing processes, leading to very different customer experiences. www. intechopen. com 6 Advanced Topics in Applied Operations ManagementOwing to these inherent differences, it has b een harder for service organizations, such as financial companies, health-care providers, retail and hospitality organizations, to apply Lean Six Sigma to their own reality. However, there are also great opportunities in the service organizations (George 2003): – – Empirical data has shown the cost of services are inflated by 30–80% of waste. Service functions have little or no history of using data to make decisions. It is often difficult to retrieve data and many key decision-makers may not be as ‘numerically literate’ as some of their manufacturing counterparts.Approximately 30–50% of the cost in a service organization is caused by costs related to slow speed, or carrying out work again to satisfy customer needs. In the last few years, successful applications in service organizations have come to fruition and we will illustrate three possible applications: in a call centre, in human resources, and finally in a healthcare provider. 4. Case study 1: Lean Six Sigma in a call centre (Laureani et al, 2010a) The two major types of call centres are outbound centres and inbound centres. The most common are inbound call centre operations.Almost everyone in their daily life has had to call one of those centres for a variety of reasons. Outbound centres are used more in areas such as marketing, sales and credit collection. In these instances, it is the call centre operators who establish contact with the user. Although there are some differences between outbound and inbound call centres, they each have certain potential benefits and challenges, with regard to the implementation of Lean Six Sigma. Benefits Some of the benefits that Lean Six Sigma can deliver in a call centre are (Jacowski, 2008; Gettys, 2009): . 2. 3. 4. 5. Streamlining the operations of the call centre: Lean strategy helps in eliminating waste and other non-value added activities from the process. Decreasing the number of lost calls: Six Sigma’s root-cau se analysis and hypothesistesting techniques can assist in determining how much time to spend on different type of calls, thus providing a guide to the operators. Better use of resources (both human resources and technology), thus leading to a reduction in the cost of running such centres.Unveiling the ‘hidden factory’: establishing the root causes of why customers call in the first place can help in uncovering trouble further along the process, providing benefits that go further than the call centre itself, improving customer service and support. Reducing employee turnover: call centres are usually characterized by high employee turnover, owing to the highly stressful work environment. A more streamlined operation would assist in reducing operators’ stress, particularly in an inbound centre. ChallengesSpecific challenges of applying Lean Six Sigma in a call centre environment (Piercy & Rich, 2009): www. intechopen. com 7 Lean Six Sigma in the Service Industry 1. 2. 3. The relentless pace of the activity (often 24/7) makes it more difficult for key staff to find the time to become involved in projects and Lean Six Sigma training. The realization of an appropriate measurement system analysis (MSA) (Wheeler & Lyday, 1990) is difficult because of the inherent subjectivity and interpretation of some call types, failing reproducibility tests of different call centre operators.High employee turnover, that normally characterizes call centres, makes it more difficult for the programme to remain in the organization. Strengths Weaknesses ? ? Root cause analysis can determine major reasons for customers’ calls, helping to unveil problems further along the value stream map of the company Lean Six Sigma deployment requires significant investment in training, that may be difficult from a time perspective in a fastpaced environment such as a call centre Opportunities Threats ? ? ? ? ? Decrease number of lost calls Reduce waiting time for calls in t he queue Improve employee productivity (i. . number of calls dealt with by the hour) ? Lack of metrics Lack of support from process owner Preconceived ideas Table 3. SWOT Analysis for the Use of Lean Six Sigma in a Call Centre. Overall, the opportunities far outweigh the challenges. Call centres nowadays are more than just operations: they are the first, and sometimes a unique, point of contact that a company may have with its customers. Their efficient and effective running, and their timely resolution of customers’ queries, all go a long way to establishing the company’s brand and image. Project selection is a critical component of success.Not all projects may be suitable candidates for the application of Lean Six Sigma, and this needs to be kept in mind in assessing the operation of a call centre. Also, different tools and techniques may be more suited to a specific project, depending on the nature and characteristics of the process it is trying to address. Projects that better lend themselves to Lean Six Sigma share, inter alia, the following characteristics: ? The focus of the project is on a process that is either not in statistical control (unstable) or outside customer specifications (incapable).As already mentioned in the introduction, Six Sigma techniques focus on reducing the variation in a process, making them the ideal tools for tackling an incapable but stable process, whereas Lean tools focus more on the elimination of waste and would be the first port of call for streamlining an unstable process. Priority should be given to unstable processes, using Lean tools to eliminate the waste and simplify the process. Once it has stabilized, more advanced statistical tools from the Six Sigma toolbox, can be used to reduce variation and make the process capable. ww. intechopen. com 8 ? ? ? Advanced Topics in Applied Operations Management The root reason(s) for this has not been identified yet. It is important to start work on the project wit h an open mind and without any prejudice. Data and hard facts should guide the project along its path. Quantitative metrics of the process are available. A lack of measures and failing to realize a complete measurement system analysis (MSA) (Wheeler & Lyday, 1990) can seriously jeopardize any improvement effort. The process owner is supportive and willing to provide data and resources.This is critical for the ongoing success of the project; the process owner’s role is discussed in detail in the Control Phase section. Potential areas of focus for Six Sigma projects in call centres (Gettys, 2009): ? ? ? ? Lost call ratio out of total calls for an inbound call centre; Customer waiting/holding times for an inbound call centre; First-call resolution; Calls back inflating call volumes. Call centres are increasingly important for many businesses and are struggling consistently with the pressure of delivering a better service at a lower cost.Lean Six Sigma can improve the operation o f a call centre through an increase in first-call resolution (that reduces the failure created by failing to answer the query in the first place), a reduction in call centre operator turnover (leveraging on training and experience), and streamlining the underlying processes, eliminating unnecessary operations. Given the large scale of many call-centre operations, even a relatively small improvement in the sigma value of the process can dramatically reduce the defect rate, increase customer satisfaction and deliver financial benefits to the bottom line (Rosenberg, 2005).By focusing on eliminating waste, identifying the real value-adding activities and using the DMAIC tools for problem-solving, it is possible to achieve significant improvements in the cost and customer service provided (Swank, 2003). 5. Case study 2: Lean Six Sigma in HR administration (Laureani & Antony, 2010b) In the late 1980s, when Motorola implemented Six Sigma originally, obtaining astonishing results, the compa ny was then faced with the dilemma of how to reward its employees for these successes (Gupta, 2005).This was the first time Six Sigma and HR practices came into contact, and a more accurate definition of HR practices was needed. If, in the past, the term HR was related only to administrative functions (e. g. payroll, timekeeping, etc. ), the term has increased substantially, in the last few decades, to include the acquisition and application of skills and strategies to maximize the return on investment from an organization’s human capital (Milmore et al, 2007). HR management is the strategic approach to the management of all people that contribute to the achievement of the objectives of the business (Armstrong, 2006).As such it includes, but it is not limited to, personnel administration. In effect it includes all steps where an employee and an organization come into contact, with the potential of adding value to the organization (Ulrich, 1996). www. intechopen. com Lean Six Sigma in the Service Industry 9 As such, and merging terminology from Lean and HR, we define the following seven points as the Human Capital Value Stream Map: 1. 2. 3. 4. 5. 6. 7. Attraction Selection Orientation (or induction) Reward Development Management Separation Fig. 1. Human Capital Value Stream Map.The Human Capital Value Stream Map is a Lean technique that identifies the flow of information or material required in delivering a product or service to a customer (Womack & Jones, 1996). Human capital is the accumulated skills and experience of the human force in an organization (Becker, 1993). The Human Capital Value Stream Map is the flow of human capital required for an organization to deliver its products or service to customers; the objectives of which are briefly described below: ? ? ? ? ? ? ? Attract: to establish a proper employer’s brand that attracts the right calibre of individual.Select: to select the best possible candidate for the job. Orient: to ensure new employees are properly trained and integrated into the organization. Reward: to ensure compensation packages are appropriate and in line with the market. Develop: to distinguish talent and ensure career progression. Manage: to supervise and administer the day-to-day jobs. Separation: to track reasons for voluntary leavers and maintain a constructive relationship. It is possible to apply Lean Six Sigma tools to each step of the Human Capital Value Stream Map, in order to eliminate waste in the HR process Wyper & Harrison, 2000). For each step in the Human Capital Value Stream Map it is necessary to establish proper quantitative metrics that allow objective assessment and control of the process step (Sullivan, 2003). This makes use of the more quantitative statistical tools from the Six Sigma toolbox possible. Establishing HR metrics can be controversial, with different parts of the organization having different objectives (Jamrog & Overholt, 2005), but the answer to these simple ques tions may help to focus on the real value each step can provide. 1. 2. 3.What is the expected deliverable of the step? What are the relevant metrics and key performance indicators of the step? What are the opportunities for defects in the step? www. intechopen. com 10 Advanced Topics in Applied Operations Management For recruitment, for example, the answers to the above questions may be as follows. 1. 2. 3. Hire, in the shortest possible time, new members of staff to fulfil a certain job. The number of days to fill a vacancy (also define the acceptable norm for the organization). Any job remaining vacant for longer than the acceptable norm.Similar thought processes can be performed for other steps: having set metrics for each step of the Human Capital Value Stream Map, an organization is now in the position to apply Six Sigma DMAIC to it. Six Sigma can be used to improve administrative processes, such as HR processes. Implementing the Six Sigma DMAIC breakthrough methodology in HR f ollows the same path as implementing it in any other part of the organization. However, there are some specific key learning points and challenges for the HR area, such as: ? ? ?Difficulty in establishing an appropriate measurement system analysis and metrics; Data collection can be extremely difficult, as the project team is dealing with very sensitive issues; and Difficulty in performing any pilot or design of experiment. Any of these is going to impact on the behaviour of staff, making it difficult to measure its results accurately. As a result, projects may last longer than the standard four to six months and the wider use of tools such as brainstorming and ‘Kaizen’ workshops with domain experts may be necessary (Lee et al, 2008).Examples of potential Six Sigma projects in the HR function are: ? ? ? ? ? ? reduction of employees’ turnover reduction in time and cost to hire a new employee reduction in training costs reduction in cost of managing employeesâ€⠄¢ separation reduction in administrative defects (payroll, benefits, sick pay, etc. ) reduction in queries from the employee population to the HR department. Every area of an organization needs to perform better, faster and more cheaply, to keep the company ahead of the competition, and be able to satisfy ever-increasing customer expectations.HR is no exception: more cost-effective and streamlined HR processes will create value for the organization, instead of just being a support act for management (Gupta, 2005). 6. Case study 3: Lean Six Sigma in health-care delivery Health care is a complex business, having to balance continuously the need for medical care and attention to financial data. It offers pocket of excellence, with outstanding advances in technology and treatment, together with inefficiencies and errors (Taner et al, 2007). Everywhere in the world, the financial pressures on health care have increased steadily in the last decade.While an ageing population and technolog ical investments are often cited as culprits for these financial pressures, unnecessary operational inefficiency is another source www. intechopen. com Lean Six Sigma in the Service Industry 11 of cost increases, largely under the control of health-care professionals (de Koning et al, 2006). Lean Six Sigma projects so far in the health-care literature have focused on direct care delivery, administrative support and financial administration (Antony et al, 2006), with projects executed in the following processes (Taner et al, 2007): ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? increasing capacity in X-ray rooms reducing avoidable emergency admissions improving day case performance improving accuracy of clinical coding improving patient satisfaction in Accident and Emergency (A&E) reducing turn-around time in preparing medical reports reducing bottle necks in emergency departments reducing cycle time in various inpatient and outpatient diagnostic areas reducing number of m edical errors and hence enhancing patient safety reducing patient falls reducing errors from high-risk medication educing medication ordering and administration errors improving active management of personnel costs increasing productivity of health-care personnel increasing accuracy of laboratory results increasing accuracy of billing processes and thereby reducing the number of billing errors improving bed availability across various departments in hospitals reducing number of postoperative wound infections and related problems improving MRI exam scheduling reducing lost MRI films improving turn-around time for pharmacy orders improving nurse or pharmacy technician recruitment mproving operating theatre throughput increasing surgical capacity reducing length of stay in A&E reducing A&E diversions improving revenue cycle reducing inventory levels improving patient registration accuracy improving employee retention The focus has been on the improvement of clinical processes to identi fy and eliminate waste from the patient pathways, to enable staff to examine their own workplace, and to increase quality, safety and efficiency in processes (e. g. Fillingham, 2007; Silvester et al, 2004; Radnor and Boaden, 2008).The barriers specific to the deployment of Lean Six Sigma in health care, in addition to the ones commonly present in other industries, are: ? Measurement: it is often difficult to identify processes, which can be measured in terms of defects (Lanham and Maxson-Cooper, 2003). www. intechopen. com 12 ? Advanced Topics in Applied Operations Management Psychology of the workforce: in the health-care industry it is particularly important to not use jargonistic business language, as this has a high chance of being rejected or accepted with cynicism by medical professionalsThe application of Lean Six Sigma in health care is still in its early stages. Therefore early successes in simple projects will pave the way for tackling more complicated initiatives in the f uture, initiating a positive circle of improvement, bringing clinical change on a broad scale. Appropriately implemented, Lean Six Sigma can produce benefits in terms of better operational efficiency, cost-effectiveness and higher process quality (Taner et al, 2007), as the case studies presented in this paper illustrate.The spiralling costs of health care means that unless health-care processes become more efficient, a decreasing proportion of citizens in industrialized societies will be able to afford high-quality health care (de Koning et al, 2006). Continuous process improvement is needed to ensure health-care processes are efficient, cost-effective and of high quality. The five case study applications we have examined in this paper provide examples of how Lean Six Sigma can help to improve health-care processes.The adoption of similar programs in other hospitals across the health-care sector will help the delivery of high quality health care to an increasing population. 7. Conc lusion Lean Six Sigma is now accepted widely as a business strategy to improve business profitability and achieve service excellence, and its use in service organizations is growing quickly. However, there are a number of barriers to the implementation of Lean Six Sigma in services, such as the innate characteristics of services, as well as the manufacturing origins of Lean Six Sigma that have conditioned service managers to consider them as physical products only.On the other hand, as shown in the case studies, there are a number of advantages for the use of Lean Six Sigma in services (Eisenhower, 1999). Overall, the applications so far have showed the benefits (such as lowering operational costs, improving processes quality, increasing efficiency) to outweigh the costs associated with its implementation. 8. References Adams, C. , Gupta, P. & Wilson, C. (2003) Six Sigma deployment. Burlington, MA, Butterworth-Heinemann. Antony, J. (2005a) Assessing the status of six sigma in the UK service organizations. Proceedings of the Second National Conference on Six Sigma, Wroclaw, pp. -12. Antony, J. (2005b) Six Sigma for service processes. Business Process Management Journal, 12(2), 234-248. Antony, J. , Antony, F. & Taner, T. (2006), The secret of success. Public Service Review: Trade and Industry, 10, 12-14. Antony, J. , Kumar, M. & Cho, B. R. (2007) Six Sigma in services organizations: benefits, challenges and difficulties, common myths, empirical observations success factors. International Journal of Quality Reliability Management, 24(3), 294–311. www. intechopen. com Lean Six Sigma in the Service Industry 13 Antony, J. , Kumar, M. & Madu, C. N. 2005) Six Sigma in small and medium sized UK manufacturing enterprises: some empirical observations. International Journal of Quality & Reliability Management, 22(8), 860-874. Antony, J. , Kumar, M. & Tiwari, M. K. (2005) An application of Six Sigma methodology to reduce the engine overheating problem in an automot ive company. IMechE – Part B, 219(B8), 633-646. Armstrong, M. (2006) A handbook of human resource management practice. London, Kogan Page. Becker, G. S. (1993) Human capital: a theoretical and empirical analysis, with special reference to education. Chicago, University of Chicago Press. e Koning, H. , Verver, J. P. S. , Van den Heuvel, J. , Bisgaard, S. & Does, R. J. M. M. (2006) Lean Six Sigma in health care. Journal for Healthcare Quality, 28(2), 4-11. Eisenhower, E. C. (1999) The implementation challenges of Six Sigma in service business, International Journal of Applied Quality Management, 2(1), 1-24 Fillingham, D. (2007) ‘Can lean save lives? Leadership in Health Services, 20(4), 231-41. George, M. L. (2003) Lean Six Sigma for service: how to use Lean speed and Six Sigma quality to improve services and transactions. New York, McGraw-Hill. George, M. 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(1997) Analysis, planning ,implementation and control, 9th ed. Prentice-Hall. Lanham, B. & Maxson-Cooper, P. (2003) Is Six Sigma the answer fo r nursing to reduce medical errors? , Nursing Economics, 21(1), 39-41. Laureani, A. & Antony, J. 2010) Reducing employees’ turnover in transactional services: a Lean Six Sigma case study, International Journal of Productivity and Performance Management, 59(7), 688-700 Laureani, A. , Antony, J. & Douglas, A. (2010) Lean Six Sigma in a call centre: a case study, International Journal of Productivity and Performance Management, 59(8), 757-768 Lee, Y. , Chen, L. & Chen, S. (2008) Application of Six Sigma methodology in human resources to reduce employee turnover rate: a case company of the TFT-LCD industry in Taiwan. International Journal of Operations and Quantitative Management, 14 (2), 117-128.Milmore, M. et al, (2007) Strategic human resource management: contemporary issues. 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(2004) Reducing waiting times in the NHS: is lack of capacity the problem? Clinician in Management, 12(3), 105-11. Snee, R. D. 2010) Lean Six Sigma: getting better all the time, International Journal of Lean Six Sigma, 1(1), 9 –29. Snee, R. D. (2004) Six Sigma: the evolution of 100 years of business improvement methodology. International Journal of Six Sigma and Competitive Advantage, 1(1), 4–20. Snee, R. D. (1999) Why should statisticians pay attention to Six Sigma? Quality Progress, 32(9), 100–103. Sullivan, J. (2003) HR metrics the world class way, Kennedy Information. Swank, C. (2003) The Lean service machine. Harvard Business Review, October, 123-129. Taner, M. T. , Sezen, B. & Antony, J. 2007) An overview of Six Sigma applications in the health-care industry. International Journal of Health Care Quality Assurance, 20(4), 329-340 Ulrich, D. (1996) Human resource champions. The next agenda for adding value and delivering results. Boston, Harvard Business School Press. Wheeler, D. J. & Lyday, R. W. (1990) Evaluating the measurement process. 2nd ed. SPC Press. Womack, J. P. & Jones, D. T. (1996) Lean thinking. New York, Simon & Schuster. Wyper, B. & Harrison, A. (2000) Deployment of Six Sigma methodology in human resource function: a case study. Total Quality Management, 11, (4/5/6), 720-727. Zeithaml, V.A. , Parasuraman, A. & Berry, L. L. (1985), Problems and strategies in services marketing, Journal of Marketing, 49 (Spring), 33-46. www. intechopen. com Advanced Topics in Applied Operations Management Edited by Mr. Yair Holtzman ISBN 978-953-51-0345-5 Hard cover, 200 pages Publisher InTech Published online 16, March, 2012 Published in print edition March, 2012 The chapters in Advanced Topics in Applied Operations Management creatively demonstrate a valuable connection among operations strategy, operations management, operations research, and various departments, systems, and practices throughout an organization.The authors show how mathematical tools and process improvements can be applied effectively in unique measures to other functions. The book provides examples that illustrate the challenges confronting firms competing in today's demanding environment b ridging the gap between theory and practice by analyzing real situations. How to reference In order to correctly reference this scholarly work, feel free to copy and paste the following: Alessandro Laureani (2012). Lean Six Sigma in the Service Industry, Advanced Topics in Applied Operations Management, Mr.Yair Holtzman (Ed. ), ISBN: 978-953-51-0345-5, InTech, Available from: http://www. intechopen. com/books/advanced-topics-in-applied-operations-managem ent/lean-six-sigma-in-theservice-industry InTech Europe University Campus STeP Ri Slavka Krautzeka 83/A 51000 Rijeka, Croatia Phone: +385 (51) 770 447 Fax: +385 (51) 686 166 www. intechopen. com InTech China Unit 405, Office Block, Hotel Equatorial Shanghai No. 65, Yan An Road (West), Shanghai, 200040, China Phone: +86-21-62489820 Fax: +86-21-62489821

Government Budget chapter 1 Essay

Budgeting is the cornerstone of the management control process in nearly all organizations including government agencies. Practitioners express concerns about using budgets for planning and performance evaluation. The practitioners argue that budgets impede the allocation of organizational resources to their best uses and encourage myopic decision making and other dysfunctional budget games. They attribute these problems, in part, to traditional budgeting’s financial, top-down, command and control orientation as embedded in annual budget planning and performance evaluation processes (as cited in Hansen, Van der Stede & Otley, 2008 pp. 95) A government budget is the financial plan of a government for a given period, usually for a fiscal year. The budget is the government’s key instrument in promoting its socio-economic objectives. The use of government funds is based on Article VI, section 29 of the 1987 constitution that â€Å"No money shall be paid by the Treasury except in pursuance of an appropriation made by law.† (Domingo, Liz, & Ruado, 2013) Funds are used by the government for public interest in which it has the sovereignty, but in general, budgets can differ from the actual expenditures. These differences should be justified and presented to the Congress and Senate for the approval of the next annual budget. Background of the Study The Philippines’ Department of Energy (Filipino: Kagawaran ng Enerhiya), abbreviated as DOE is the executive department of the Philippine Government responsible for preparing, integrating, coordinating, supervising and controlling all plans, programs, projects and activities of the Government relative to energy exploration, development, utilization, distribution and conservation. It was created by President Marcos as he issued Presidential Decree No. 1206 which created the Ministry of Energy and attached the National Power Corporation and Philippine National Oil Company to this new agency. The Ministry was abolished during the Regime of Corazon Aquino. During the Regime of President Fidel V. Ramos, that Department was created by virtue of Republic Act No. 7638 otherwise known as the Department of Energy Act of 1992. The Department was vested additional powers and functions under pertinent energy and power related legislations, such as Republic Act No. 9136 or the â€Å"Electric Power Industry Reform Act of 2001†, Republic Act No. 9367 or â€Å"Biofuels Act of 2006†, and Republic Act No. 9513 or â€Å"Renewable Energy Act of 2008.† In this study, the interviewees are the officers in the budgeting and accounting department. They are given the chance to evaluate themselves whether they have formulate their budgets in compliance with the guidelines included in the Budget Call that DBM issues every year. These guidelines are essential for the formulation of the budget of every government agency because it sets the ceiling that each of them may expend and contains required documents they need to submit. Each government agency receives Budget Call that is similar with the other government agency and this Budget Call is what each of the government agency considers as their bible since all that is written in the Budget Call must be complied; otherwise, they will be subject for further questioning which may have a positive or a negative result. They can also evaluate the controls adopted so as to determine if the present controls are sufficient to guarantee an effective implementation of the approved budget and to assure that the actual expenditures are not exceeding the allotted amounts for that type of expense. Furthermore, the researchers would be able to determine how the government agencies make sure that their budgets will be sufficient, to see how government units justify their budgeted expenditures if those expenditures were above the ceiling that is set by the Development Budget Coordination Committee (DBCC), and to familiarize themselves with the Budget Process that a government agency undertakes. Theoretical Framework The budgeting process is an essential component of management control systems and has been an effective system by which management can successfully plan, coordinate, and control. The process involves the creation and implementation of the broad objectives of an organization, the detailed objectives, and a short-term and long-term financial plan. There exist a variety of techniques for establishing budgets. Some of the most common techniques include, Incremental budgeting, Program budgeting, Zero-Based budgeting, and Site-Based budgeting. But this study focuses more on the Zero-Based Budgeting (ZBB approach) because the time on which the researchers conducted the study was under the administration of President Benigno Aquino III who vowed to shift from the old â€Å"incremental† system of budgeting to the ZBB approach on his first State of the Nation Address (SONA) in July 2010. The philosophies and procedures used to implement zero-based budgeting in industry and government settings are quite similar, but somewhat different with the mechanics to fit the specific needs of each organization. The basic process of zero-based budgeting is to justify budget requests in every budgeting cycle, regardless of prior period budgets. (http://www.referenceforbusiness.com/management/Tr-Z/Zero-Based-Budgeting.html#b. Retrieved August 4, 2013) ZBB approach is a technique that sets all budgets to nil at the beginning of the year or period and requires from the departments that they justify all of their expenditures, not just those exceeding the budget. Money is allocated to the departments based on merit and not based on the previous year budget plus or minus some percentage such as in many traditional budgeting systems. It is also a technique of planning and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting, departmental managers justify only increases over the previous year budget and what has been already spent is automatically sanctioned. No reference is made to the previous level of expenditure. By contrast, in ZBB, every department function is reviewed comprehensively and all expenditures must be approved, rather than only increases. It requires the budget request be justified in complete detail by each division manager starting from the zero-base. The zero- base is indifferent to whether the total budget is increasing or decreasing. It also refers to the identification of a task or tasks and then funding resources to complete the task independent of current resourcing. An important element of this budgeting procedure is that it forces prioritization of government programs and activities. With the prospect of insufficient revenue for matching the demand of spending, it is useful for the government to have a ranking of programs and activities based on proven effectiveness as well as suggested alternatives to expensive or ineffective programs. There are two steps in the process of zero based budgeting. The first step is to develop what is called as â€Å"decision packages† which includes an analysis of cost, purpose, alternative courses of action, measures of performance, consequences of not performing the activity, and the benefits. The second is to rank the decision packages. The decision package is a document that identifies and explains the specific and goals and objectives, measurement of performance, costs, benefits and alternative courses of action. Ranking of decision packages is then accomplished at each management level until a comprehensive agency wide ranking is obtained. Conceptually, zero-based budgeting is a systemic logical approach to allocating resources where they will do the most good. ZBB is often encouraged by fiscal watchdog groups as a way to ensure against unnecessary spending. It is used, or some modified version of it, in the private- and public sectors for decades. Peter Phyrr used ZBB successfully at Texas Instruments in the 1960s and authored an influential 1970 article in Harvard Business Review but only in 1977 the concept of ZBB gained notoriety because President Jimmy Carter announced to implement a ZBB system at a federal level thus spread more rapidly. The impact of budgeting on organizations was probably first studied by Argyris in the 1950s. These studies show some of the behavioral effects resulting from the way budgets are used in organizations. The results of his research showed that the particular process used could cause dysfunctional behavior in subordinates, regardless of the degree of technical refinement of the budgetary system. In the 1970s, Hopwood’s studies inquired into the effects of budgets on human behavior. These studies showed that the use by a superior of a budget-constrained style of evaluation gave rise to significant levels of job-related tension; had adverse effects on peer and subordinate-superior relationships, and was implicated in manipulative behavior on subordinates. A long line of studies have been performed since then to uncover an array of variables that govern the effects of reliance on budgets on behavioral outcomes, including managerial performance. Examples of these variables include budgetary participation, task uncertainty, environmental uncertainty, strategy, and culture. It may require an extensive amount of time, money, and paper work; but it does provide a systematic method of addressing an organization’s financial concerns, in turn enabling an organization to better allocate its resources. (http://www.referenceforbusiness.com/management/Tr-Z/Zero-Based-Budgeting.html#b. Retrieved August 4, 2013) The aforementioned theory have supported the study for better understanding of the budgeting process and the people’s state of mind involved in describing the overall cycle of the budget process of DOE as well as the valuation of controls applied. Conceptual Framework The conceptual framework discussed the flow of the study to be taken. The study used the systems approach. The system of three (3) frames is composed of input whish went through the process and emerged as the output. The input contains the leading variables regarding the budget of the DOE. It includes the phases of the budget process. It discusses in detail the activities conducted in the first phase of the process which is the budget preparation. Next is about the activities conducted in the second phase which is the budget legislation. Then, discussions about the budget implementation phase. And the last phase of the budget process which is the budget accountability. As inputs, problems encountered by the agency and also the possible solutions they adopt are included. The second frame contains methods and procedures used to describe those variables by making observations, research and conducting an interview and statistical analysis The third frame is the output. It contains recommendations in conducting trainings and seminars of the employees about controlling their funds. Recommendations in monitoring the controls are also addressed. Statement of Problem This research is aimed to describe the budget formulation and implementation of the Department of Energy (DOE). Moreover, the budget made by the DOE is also compared to the actual operations of the department to know whether the budget is being conformed to and if such differences are being justified well. Specifically, the study endeavored to answer the following: 1.0 What are phases of the budgeting process in DOE? 2.0 What are the activities conducted in the budget preparation phase of the budgeting process in regard with the following: 2.1 The determination and valuation of the items in the budget proposals; 2.2 Identifying the functions of some government agencies in the budget cycle; 2.3 Identifying the expenditure priorities of the agency; and, 2.4 Identifying the external parties involved in the budget proposals and deliberation? 3.0 What are the activities conducted in the budget legislation phase of the budgeting process regarding the following: 3.1 Budget Deliberation/Review; and, 3.2 As to the importance in conducting deliberation/review in different offices of the national government? 4.0 What are the activities conducted in the budget implementation phase of the budget process regarding the following: 4.1 Guidelines on implementation of the budget; 4.2 Controls the agency uses to monitor the implementation of the approved budget; 4.3 The treatment on the variance between the budgeted amounts and the actual results; and, 5.0 What are the activities conducted in the budget accountability phase of the budget process? 6.0 What are the problems encountered by the agency and the possible solutions they adopt? Scope and Limitations This study will look into the budget formulation and implementation of the Department of Energy based on the rules and regulation issued by the National Government to all government units. This was done to have an understanding on the actual budgeting process of a government unit. The respondents of the study were the OIC financial services director- Araceli Soluta, chief of the budget division- Elisa Morales and the OIC – Chief Accountant – Arturo M. Cudia. The interview was administered in July 24, 2013. The interview questions were made by the researchers based on what they need to know. Significance of the Study This study was anticipated to contribute additional information to serve the following individuals and organizations. Department of Energy. The Department of Energy (DOE) will benefit from this study as they will be able to evaluate the controls adopted by the DOE in valuing the items in the budget proposal and in monitoring the items approved by the Department of Budget and Management (DBM). Thus, the controls can be improved as needed. This can also serve as evidence that the DOE is complying with the guidelines set by the DBM. Department of Budget and Management. This study can help the Department of Budget and Management (DBM) in assuring that the DOE was able to comply with the guidelines set by them. They can also evaluate the controls that they implement and improve it so as to guarantee the compliance of each government agency in every step of the process. Students. This study will contribute to students to gain basic knowledge about the budgeting process of government agency. This is applicable to students required to gain an understanding on how the budget process took place and the justifications required in each line item in the government agency’s budget proposal. Although not all students need to know this study, it will be beneficial for them to have an idea about it. General Public. This study can give the general public some basic information that can be easily understood for them to have an idea on how the government funds are allocated and what projects are being prioritized by the President. They are not forced to learn this issue but understanding this would be useful for them. Taxpayers. This study will be advantageous for the taxpayers because it discusses the budgeting process that a government agency undertakes. The taxpayers will be assured that the government funds, which mostly came from the taxes paid by the public, are used for the projects or programs that could help the residents of this country and the country itself. Other Researchers. This study will be an effective tool and reference for the subsequent researchers who would want to conduct further study about the budgeting process undertaken by each of the government agency and the justifications required on each item included in their budget. Definition of Terms For better understanding and interpretation of this study, the following terms are operationally defined. Allocation. This refers to the allotment or assignment of funds to be used by the government agencies to different projects and programs and to the operation of the agency itself in accordance with the rules promulgated by the Department of Budget and Management (DBM). Budget. This is the allocated funds for the implementation of various government programs or projects and for the operation of the government agency that is set by the agency for approval by the DBM. Budget Call. This is issued by the DBM that defines the budget framework, sets the economic and fiscal targets, subscribe the priority thrusts and budget level and spells out the guidelines and procedures and timetable for budget preparation. Budget Ceiling. The Development Budget Coordination Committee (DBCC) sets a budget ceiling for expenditures that the government agencies may obligate themselves which gives an allowance of about 10% from previous budget. Funds allocated in a project or program in excess of the budget ceiling must be justified. Budget Authorization. This involves reviews/deliberations and a separate deliberations conducted by the Congress and the Senate. Once approved, the President signs the bill into law. Budget Deliberation/Review. It is a process were the Congress or the Senate or both question the budget proposals of the government agency before submitting it to the President. Budget Formulation. This is the first step in the budget process in which the government agency prepares its budget proposals that will be submitted to the DBM who holds hearings for the agencies to justify their budget proposal. Budget Implementation. This is the phase where the approved budget is being executed. The DBM will issue and release allotment and notice of cash allocation to government agencies. Budget Monitoring. This is the last phase that involves evaluation of the financial reports and performances by management. The Commission on Audit (COA) will also evaluate the agencies financial reports and performances through audit. Budget Process. It is the systematic, repetitive procedures that every government agency must follow. Budget Proposal. It is the budget being prepared by DOE which subject to review and justification. Compliance. It is making decisions in accordance with the rules and guidelines

Reflection on postmortem care Research Paper Example | Topics and Well Written Essays - 500 words

Reflection on postmortem care - Research Paper Example Further, the involved nurse may be expected to contact the next of kin and seek permission for possible actions such as undertaking an autopsy and even donation of organs if such cases are involved in the will of the dead. The postmortem care involves three major elements, assessment, diagnosis, and planning. The assessment phase of the activity involves confirmation of the death, evaluation of the family’s emotional condition, and consultation with the family regarding autopsy and organ donation. The initial stage of the care is the verification that the heart and the lungs have stopped functioning and that the involved physician has pronounced the person dead. The nurse then evaluates emotional status of the bereaved family to offer necessary support. Diagnosis that may identify anxiety and insufficient knowledge among the family follows before contact with the next of kin and the actual care process. My team performed a postmortem care at Rose hospital in Lindsay, Ontario. It was my first time to participate in the activity and I did not know the patient, neither had I attended to him before his death. Our instructor led us into the room after the family had left and she talked to us in a low voice, probably to ensure that nobody heard us because it was a training exercise and not a professional practice. The activity involved the instructor, four other students, and I. I was the team leader and led the team as we performed postmortem care on the body by removing all the tubes such as the urine and IV catheters. We then cleaned the body and put the identification tag on it. We left the gown on to ensure respect for the body, bagged it, and transferred it to the morgue. I felt sad at watching the dead body but the experience did not have significant emotional effect on me and I treated the body in a similar way that I would to a patient. A major issue in the post mortem care is ethical

Describe functionalism and critiqued it with Feminism inrelation to Essay

Describe functionalism and critiqued it with Feminism inrelation to family - Essay Example It is this approach towards interpreting the society that it was criticized by Marxists and later on by Feminists to the extent that by the1970s, it became antique. This paper will describe Functionalism and offer a Feminist critique especially its approach towards the role of the family. An attempt will also be made to relate social work to functionalism. When Europe was going through a period of tumult in the nineteenth century basically in the event of the emerging industrial society which brought with it social issues like poverty, poor working conditions, high crime rate and most importantly heightened political awareness which posed a threat to the social fabric woven around essentially Christian moral values, there emerged a need to safeguard the society. But as argued by Davis (1959), â€Å"†¦historically, the rise of functionalism represented a revolt against reductionist theories, anti-theoretical empiricism and moralistic or ideological views under the name of sociology or social anthropology.† The French Revolution preceded by renaissance challenged the status quo of the erstwhile industrialised Europe thus questioning the role of the ruling classes. Radical ideas like equality, individual rights, free will and contentment stimulated the revolution which also changed the social consciousness. These conditions w ere naturally a matter of concern for the rulers and the conservative intelligentsia, and in order to counter the growing radicalism they came up with a new social paradigm based on the theory that every institution in the society had a function, that all social structures and processes strove to maintain a social order and had a tendency to integrate the society which was essentially to be studied as an integral whole. Proponents of Functionalism further propounded that all societies had functional

Social media - internet forum,email and picture sharing Term Paper

Social media - internet forum,email and picture sharing - Term Paper Example At the present, almost all the business organizations are well aware of the fact that the use of the Internet can be very helpful for better serving customers and reaching into the international markets. When the size and business of a company expands the need for the distribution of these products to their target customers also increases. In this scenario, the Internet marketing is the most excellent way that offers higher potency and access to international markets for the marketing of products. On the other hand, traditional marketing and its techniques have turned out to be less efficient to defeat the need for more targeted and wide marketing. In addition, with the emergence of the Internet, the techniques of marketing not only have changed but also improved amazingly, and at the present business organization are more talented in telling their stories and carrying out their marketing communications out there (Rao, Salam and DosSantos; Summers, Gardiner and Lamb; Watson, Zinkhan and Pitt). This paper presents an overview of some of the important marketing and advertising techniques such as email, internet forums and picture sharing. The basic aim of this research is to show how these marketing techniques can play a significant role in business marketing. Changing Trend in Advertisement and Promotion As discussed in the above section, in the past few years the majority of business organizations have started making use of the Internet to reach worldwide customers and access international markets without spending a lot of money.... In addition, the Web-based nature of social networks allows the business organizations to make use of this modern tool in different forms that can take benefit of the users' personal and social data. In fact, these social networking websites have a great effect on the social life of a lot of people, even more than millions of people that make use of these web sites directly (Golbeck; Conti, Hasani and Crispo). Keeping the numerous benefits of social networks in mind, Sony Corporation took a great advantage of this wonderful technology, which has proven to be successful and effective for its business marketing. According to information given on (Facebook), â€Å"the creation of this Facebook page was aimed at allowing the consumers to engage with the product. Additionally, this advertising campaign attracted more than 173,000 Facebook users that straight away linked to the Sony VAIO Page since September 24, 2010, approximately doubling the objective of catching 90,000 users, also unt il 2011, above 380,000 people had connected to the Page† (Facebook). Figure 1Example of Social Media based Adverting, Image Source: http://ads.ak.facebook.com/ads/FacebookAds/Sony_Vaio_CaseStudy.pdf Online Advertising and Promotion The cost of web based marketing and advertising depends on the experience that a company is looking for. However, the standard cost for per click is about a quarter. In fact, the majority of small size businesses are spending extremely little by performing associated marketing, with other websites to bring traffic to their website. In this scenario, they just pay the host website a proportion of their corporate based on the

Multigenre paper Essay Example | Topics and Well Written Essays - 750 words

Multigenre paper - Essay Example Power is now vested in institutions and not individuals, further, these institutions are designed in a way that allows them to manage and check the powers borne by every institution. However, the absence of a critical example in modern day does not mean such examples never existed, on the contrary, there are a myriad of such examples. One critical lesson to be learnt from the absolute power contexts is that it only leads to vicious, ruthless, and corrupt leadership. This research takes interest in the life of Al Capone; his is an example of a man born in poverty and rose to become the head of a vicious criminal gang in Chicago, actually, head of crime in Chicago (Bardsley). Through him the transformation of a man by power is manifest and the result of having greater power is obvious. Review Al Capone was a Chicago mobster, one of the most talked about gang leaders in the history of United States. However, Al Capone’s life was not entirely laden with crime; he had started off a s an honest young boy, who sought to lead a decent life like his father, who ran a barbershop. His effort to lead a balanced life was disrupted by two men Johnny Torrio and Frankie Yale (Balsamo 8). Both men were gang leaders with the only difference being their means of managing their criminal activities. Torrio was a diplomatic and a shrewd businessman who silently and wisely expanded his criminal activities (Lorrizo 24). He was the first criminal leader Al Capone worked under and had a chance to interact and learn from. The other was Yale; Yale was a brutal man who expanded his criminal reach through brute and murder. Al Capone had a chance to work under him as well. However, it was through Torrio that Al Capone honed his criminal life, as expected he had learnt from two extremes and he never shied from implementing the lessons from his mentors (Eig-WSJ). Being shrewd and brutal allowed for his fast expansion owning brothels, gambling houses and bootlegging businesses in quick su ccession (Knight 54). This built up his empire fast enough and allowed him a lot of power. Unlike his preferred mentor, Torrio, Al Capone led a more public life which meant his actions were much more publicized than Torrio’s (Capone 29). Under his leadership, following Johnny Torrio’s retirement, Al Capone became a target by rival gangs and by Chicago’s authority. This fact seemed to make him more brutal and unforgiving a characteristic of absolute power. His monster side was defined by two events; one was when he ordered the murder of his two sworn enemies in 1926 and when he masterminded St. Valentine’s Day massacre in 1929 (Capone 52). Both of these events dealt a major blow to his reputation and provided a leeway for his prosecution (Eig 321). He was duly sentenced on June 1931 and committed to 11 years in prison (Al Capone Museum). Comparison Al Capone’s turnaround from an honorable childhood to a vicious gang leader reads like a tale. However , it is a true reflection of what unchecked power would do to an individual. His rise and subsequent fall is reminiscent of Shakespeare’s Macbeth. Macbeth is a play about an army general who served diligently and led conquests for the king only to be misguided by witches and his personal ambitions and affinity for power. He ended up killing his king and together with his evil wife masterminded other deaths of probable heirs and likely opposition

Current threats to UK Security Essay Example | Topics and Well Written Essays - 2000 words

Current threats to UK Security - Essay Example (Chalk & Rosenau, 2004) On the British mainland, the police were responsible for all intelligence operations against Irish Republican terrorism work through the Special Branch (SB) of the Metropolitan Police Service. However, a series of high-profile terrorist incidents in London in the early 1990s, including a mortar attack on Number 10 Downing Street, prompted the British government in 1992 to take appropriate actions against terror by giving the Security Service lead responsibility for all intelligence gathering related to Irish extremism. Britain was then followed by significant terror attacks from 1988, when the country suffered with the bombing of Pan Am flight 103 over Lockerbie. The terrorists found to be two Libyan agents. When British counter-terrorism efforts were busy concentrating on the IRA's bombing campaign, Britain was again confronted to the terror attacks, which resulted in the outcome of the 1998 Good Friday Agreement. At last it was clear to the UK's intelligence agencies and military police that London is being continuously used as the grounds for terrorism attacks for individuals that promote, organise and fund terrorism. It was found that such individuals belonged from Middle East and related nations. Britain at that time was either over confident of the national security or may be it did not consider the terror attacks and International terrorism due to which it made a mistake of ignoring threats from Al-Qaeda. Even the 9/11 attacks remain unable to gain attention of the British intelligence community. But the suicide terror attacks after 9/11 in London, made the forces realise to take appropriate considerations against terrorism. Today Al-Qaeda is considered to be the most dangerous form of terrorist threat not only in Britain but also to the whole International system. Among the most traditional terrorist groups formed, Al-Qaeda is the most modernized form of terror as its aim is to promote mass killing through every possible means. It is considered to be the most perilous of all the groups because it plans and implements those plans beyond killing. 'Brainwashing' is its most significant characteristic, which leads to suicide bombing. It plays with the morals of the young generation thereby convincing and brainwashing them with the advantages of suicide bombings. The UK is confronted towards the risky situation of threat due to some reasons. First it is the closest ally of the United States, which is the most precarious enemy of Al-Qaeda. It has deployed armed forces in the military campaigns to bring down the Taliban regime in Afghanistan and Iraq, and has played a leading role in the cooperation against Al-Qaeda. (Gregory Frank & Wilkinson Paul). Al-Qaeda has not stopped sending threatening messages to the UK, which are to some extent still ignored by the military forces. The extremists have succeeded in taking advantage of the current circumstances where they assume UK to be an easy meal for them as they are very well aware that their deployment within the UK territory is not a big deal and in particular circumstances where there is a new threat of 'suicide bombers', it is a lot more easier for them to harass