Page 83 - Operations Strategy

58 CHAPTER 2 • OPERATiOns PERfORmAnCE

Figure 2.4 significant times for the delivery of two products/services

Hospital Milestone Software producer

Presentation of Awareness of Customer decides new
symptoms need software is needed

Consultation decision time Enquiry decision time
Visit to doctor for Request for Asks for specification
advice and tests information and estimates

Diagnostic lead-time Enquiry lead-time
Test information Receipt of Receives proposal
confirms diagnosis information

Customer decision time Customer decision time
Decide on Request for Places order
surgery product/service

Waiting time for surgery Service waiting time
Enter hospital Start of core Start of design
for surgery processing and coding

Core processing time Core processing time
Procedure
successfully End of core Software
processing
‘completed’
completed
Recovery time Installation time
‘Installed’ Software fully
Patient fully product/service debugged and
recovered
fully operational working

Second, long delivery times are often a result of slow internal response, high work-in-
progress and large amounts of non-value-added time. All of these can cause confusion,
complexity and lack of control, which are the root causes of poor dependability. Good
dependability can often be helped by fast throughput, rather than hindered by it. In
principle, dependability is a straightforward concept:
Dependability = due delivery time - actual delivery time.

When delivery is on time, the equation should equal zero. Positive means it is early
and negative means it is late. What, though, is the meaning of ‘due time’? It could be
the time originally requested by the customer or the time quoted by the operation.
Also, there can be a difference between the delivery time scheduled by operations
and that promised to the customer. Delivery times can also be changed – sometimes
by customers, but more often by the operation. If the customer wants a new delivery
time, should that be used to calculate delivery performance? Or, if the operation has
to reschedule delivery, should the changed delivery time be used? It is not uncommon
in some circumstances to find four or five arguable due times for each order. Nor is the

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