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Module 8: Purchasing & Project Management Essentials

Sam Pratt
Sam Pratt

World-class purchasing & project management require a lot more than common sense.

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Work Focused Improvement®
Management Essentials for Daily Use & Ongoing Improvement
World-Class Purchasing & Project Management
Require A Lot More than Common Sense
By Sam Pratt
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
Module 8
Purchasing / Project Management Essentials
Purchasing / Project Management Introductory Thoughts
1. It is important that all users, impactors, benefactors,
opponents, and casualties of the project get a chance to
comment, question, and contribute
2. The more people supporting the project at each stage,
the more positive and effective will be the response
when things go wrong … and things always go wrong
3. The goal is not to have a perfect project since unrealistic
goals do more harm than good
4. It is to have a very successful project that exceeds
expectations in the short and long term
5. It’s good to have people sign off on stages & documents
6. Generally the more impactors that have a stake in the
outcome, the better the outcome
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
Project Management Step 1 - Initiating
1) Examples of triggers that can highlight a need for change
a)Events such as the factory burns down or the top customer signs a
contract with the competition
b)Technology becomes obsolete such as cameras pretty much stop using
film
2) Ongoing discussion, collaboration, or brainstorming lead to a consensus
that change is needed
3) Balanced Brainstorming, Fishbone Analysis, Flow Charting, or the
Advancement Process can also highlight the need for a project (these tools
can be used at any stage)
4) Alternatives, unknowns, risks, and weaknesses are identified
5) The Project Manager is delineated
6) In broad terms, the benefits and feasibility of the project are outlined
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
Project Management Step 2: Planning
1) The objectives, boundaries, budget, ROI, schedule, and personnel of the
Project Team are determined
2) In many instances, especially for larger projects, key personnel at this
step are identified as participating in the long term operational phase, in
recognition that continuity of ownership has its own advantages
3) A comprehensive specification is written in an iterative process of
communicating with vendors and other impactors
4) A list of suppliers, contractors, and other participants in the project are
assembled and entered into a Purchasing Value Matrix or Matrices
5) Vendors & other contributors are selected & agreements drafted,
negotiated, and signed
6) “What if” questions are asked and potential pitfalls are identified
7) The plan with its steps, tasks, and milestones are completed
8) The Approval Process triggers the next step
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
Project Management Step 3: Execution & Control
1) The objectives, boundaries, budget, ROI, schedule, and personnel of the
Project Team are determined
2) In many instances, especially for larger projects, key personnel at this
step are identified as participating in the long term operational phase, in
recognition that continuity of ownership has its own advantages
3) A comprehensive specification is written in an iterative process of
communicating with vendors and other impactors
4) A list of suppliers, contractors, and other participants in the project are
assembled and entered into a Purchasing Value Matrix or Matrices
5) Vendors & other contributors are selected & agreements drafted,
negotiated, and signed [Build in flexibility since not all contracts are
signed at the same time, and there will be variances]
6) “What if” questions are asked and potential pitfalls are identified
7) The plan with its steps, tasks, and milestones are completed
8) The Approval Process triggers the next step
© 1986-2015 Samuel H. Pratt / SHP Consulting Limited
Project Management Step 4: Commissioning
1) The plan from the preceding step is implemented and monitored
2) Personnel and roles are tweaked as emphasis and control shifts from
implementation to operations
3) Status Reports and Meetings review progress or lack thereof
4) Sequence of tasks are set and adjusted as needed
5) Punch Lists identify and track key startup & performance issues
6) Bottlenecks, delays, and variances are overcome
7) The specification and associated objectives, along with the Return on
Investment objectives are captured in a Project Evaluation Matrix &
Summary
Ad

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Module 8: Purchasing & Project Management Essentials

  • 1. Work Focused Improvement® Management Essentials for Daily Use & Ongoing Improvement World-Class Purchasing & Project Management Require A Lot More than Common Sense By Sam Pratt © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Module 8 Purchasing / Project Management Essentials
  • 2. Purchasing / Project Management Introductory Thoughts 1. It is important that all users, impactors, benefactors, opponents, and casualties of the project get a chance to comment, question, and contribute 2. The more people supporting the project at each stage, the more positive and effective will be the response when things go wrong … and things always go wrong 3. The goal is not to have a perfect project since unrealistic goals do more harm than good 4. It is to have a very successful project that exceeds expectations in the short and long term 5. It’s good to have people sign off on stages & documents 6. Generally the more impactors that have a stake in the outcome, the better the outcome © 1986-2015 Samuel H. Pratt / SHP Consulting Limited
  • 3. © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Project Management Step 1 - Initiating 1) Examples of triggers that can highlight a need for change a)Events such as the factory burns down or the top customer signs a contract with the competition b)Technology becomes obsolete such as cameras pretty much stop using film 2) Ongoing discussion, collaboration, or brainstorming lead to a consensus that change is needed 3) Balanced Brainstorming, Fishbone Analysis, Flow Charting, or the Advancement Process can also highlight the need for a project (these tools can be used at any stage) 4) Alternatives, unknowns, risks, and weaknesses are identified 5) The Project Manager is delineated 6) In broad terms, the benefits and feasibility of the project are outlined
  • 4. © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Project Management Step 2: Planning 1) The objectives, boundaries, budget, ROI, schedule, and personnel of the Project Team are determined 2) In many instances, especially for larger projects, key personnel at this step are identified as participating in the long term operational phase, in recognition that continuity of ownership has its own advantages 3) A comprehensive specification is written in an iterative process of communicating with vendors and other impactors 4) A list of suppliers, contractors, and other participants in the project are assembled and entered into a Purchasing Value Matrix or Matrices 5) Vendors & other contributors are selected & agreements drafted, negotiated, and signed 6) “What if” questions are asked and potential pitfalls are identified 7) The plan with its steps, tasks, and milestones are completed 8) The Approval Process triggers the next step
  • 5. © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Project Management Step 3: Execution & Control 1) The objectives, boundaries, budget, ROI, schedule, and personnel of the Project Team are determined 2) In many instances, especially for larger projects, key personnel at this step are identified as participating in the long term operational phase, in recognition that continuity of ownership has its own advantages 3) A comprehensive specification is written in an iterative process of communicating with vendors and other impactors 4) A list of suppliers, contractors, and other participants in the project are assembled and entered into a Purchasing Value Matrix or Matrices 5) Vendors & other contributors are selected & agreements drafted, negotiated, and signed [Build in flexibility since not all contracts are signed at the same time, and there will be variances] 6) “What if” questions are asked and potential pitfalls are identified 7) The plan with its steps, tasks, and milestones are completed 8) The Approval Process triggers the next step
  • 6. © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Project Management Step 4: Commissioning 1) The plan from the preceding step is implemented and monitored 2) Personnel and roles are tweaked as emphasis and control shifts from implementation to operations 3) Status Reports and Meetings review progress or lack thereof 4) Sequence of tasks are set and adjusted as needed 5) Punch Lists identify and track key startup & performance issues 6) Bottlenecks, delays, and variances are overcome 7) The specification and associated objectives, along with the Return on Investment objectives are captured in a Project Evaluation Matrix & Summary
  • 7. © 1986-2015 Samuel H. Pratt / SHP Consulting Limited Purchase Order & Contract Provisions Before Contracts, Purchase Orders, and Agreements are issued, key specifications, requirements, and provisions should be delineated in writing. It is far easier to reach agreement on important issues before issuing a barebones Purchase Order than after. Examples of provision & subjects that might be included: 1) Price increases may be made on an annual basis and may not exceed the Bureau of Labor Statistics Consumer Price Index inflation rate 2) Performance criteria for all machinery, systems, interfaces, controls, etc 3) Reliability performance for all machinery, systems, interfaces, controls etc 4) Safety factors, human interface specifications and expectations 5) Schedule with milestones & owners 6) Procedures and cost limits on changes and additional interfaces for data, etc 7) Start-up personnel, support expectations, including after commissioning 8) Warranties, including expectation that technologies will keep up with the competition
  • 8. Purchasing Value Matrix examples on next 2 slides 1. Captures and evaluates components of a project or purchase 2. Evaluates, tracks, & summarizes the endeavor 3. Can identify weaknesses / opportunities for suppliers, partners, implementation team, and users 4. Elevates reliance on facts as opposed to opinions
  • 9. Purchasing Value Matrix Purchase of Widget Welder Matrix Characteristic Weight Acme Beta Carlson Acme Beta Carlson Electronic Reliability 7 28 42 49 4 6 7 Mechanical Reliability 6 21 42 28 3 6 4 Ease of Use 4 42 28 35 6 4 5 Warranty 4 49 49 49 7 7 7 Speed of cycle 8 35 56 35 5 8 5 Price 8 56 42 42 8 6 6 Customer Support 4 28 28 28 4 4 4 Long term Viability 2 21 28 28 3 4 4 Weighted Score 280 315 294 More Information needed = Enter Raw ScoreWeighted Score
  • 10. Software Example of Purchasing Value Matrix Billing Software Value Matrix # Selected Categories Wt Cat IDX SMS MillbrookIDX SMS MB 1 Graphical User Interface (GUI Capabilities) 3 1 5 3 4 15 9 12 2 Operating System Reliability 2 1 4 4 4 8 8 8 3 Automatic Processing 3 1 4 4 1 12 12 3 4 Imaging Solution 2 1 4 4 2 8 8 4 5 ED Automation - Electronic Medical Record 2 4 4 5 3 8 10 6 6 CasNet (Stand-alone Imaging) Compatability 4 4 4 4 4 16 16 16 7 Flexible Claims Editing Capabilities 1 2 5 5 2 5 5 2 8 Collections: Internal / External / Workqueue Mgt 3 2 5 4 2 15 12 6 9 Flexible File Building 4 2 4 4 3 16 16 12 10 Hierarchy - File Building Levels 1 1 5 5 3 5 5 3 11 RVU Module tied to Fees 3 2 4 4 4 12 12 12 12 Contract Managment for HMO / PPO 3 2 5 5 4 15 15 12 13 Line Item Payment Posting / Charge Posting 1 2 5 5 4 5 5 4 14 Encounter Forms / Fee Tickets-Exit Billing 1 2 3 3 3 3 3 3 15 Custom Development of Forms 3 2 5 5 2 15 15 6 16 Audit Reporting 1 2 4 4 3 4 4 3 17 Flexibility of Note Entry 2 2 4 5 3 8 10 6 18 Updated CPT / ICD-9 / HCPCS / APC Databases 1 2 5 4 4 5 4 4 19 Canned / Custom Reporting (w/Graphical Presentation) 4 3 4 5 4 16 20 16 20 Statements/Mailers by Cycle, Monthly, or ON-Demand 2 5 5 5 3 10 10 6 21 Electronic Claims Submission / Remittance 1 5 5 5 5 5 5 5 22 Eligibility Verification 1 2 5 5 5 5 5 5 23 Address Verification 1 2 4 4 4 4 0 24 HCFA / UB92 / INVOICE Production 1 5 5 5 5 5 5 5 25 Refund Module 1 2 4 4 4 4 0 26 Internet access to Individual Patient accounts 1 1 4 2 4 2 0 27 Telephone access to Individual Patient accounts 1 1 4 2 4 2 0 28 Ease of Training 3 5 4 4 4 12 12 12 29 Onboard Help / user modified 3 5 4 4 4 12 12 12 30 Credit Card authorization online 1 5 5 5 5 5 0 31 Real time as opposed to batch (1 day delay) 4 5 5 4 5 20 16 20 32 Initial Investment 4 6 5 4 4 20 16 16 33 Monthly Cost 4 6 4 3 4 16 12 16 34 Protection - Price 4 6 5 5 5 20 20 20 35 Protection - Scope of Software [full disclosure] 4 6 3 3 3 12 12 12 36 Protection against obsolecence & out of business 4 6 4 3 3 16 12 12 37 Long Term Viability 4 46 3 4 2 12 16 8 Totals 161 153 111 377 359 287 Categories Systems 1 Billing 2 Reporting 3 Medical Record / Coding 4 Production 5 Investment / Business / Legal 6 Weighted
  • 11. • The following slides relate to key mechanisms that insure ongoing improvement in all key components of the organization • Other Work Focused Improvement® modules provide more Moving from Project & Purchase to Business as Exceptional © 1986-2015 Samuel H. Pratt / SHP Consulting Limited
  • 12. The Performance Organization • Key Performance Indicators (KPIs) are visible and important to everyone • The organization as a whole is focused more on facts and less on opinion • There is high flexibility, and people move to where they are needed most • All business mechanisms are geared to performance • Personnel assessment, recognition, and reward are all tied directly to actual measured results • Individuals act as positive forces • Associates are aligned with organizational goals, and at the same time, the organization supports individual objectives Organizational Dynamics© 1986-2007 Samuel H. Pratt / SHP Consulting Limited
  • 13. Company Performance Review Meeting Guidelines 1. One Hour Time Limit Enforced (this is a fast paced review of performance with limited discussion on specific issues … stage hook at 5 minute mark) 2. If follow-up is needed on a topic, agree on who/when/where and move on 3. Focus on the work (performance and enabling of organization) 4. Stay away from personalities, politics, turf, blame, rigid positions, and “me” issues 5. Emphasize the understanding and use of Key Performance Indicators, but do not spend more than 5 seconds on a new data point close to a positive trend line 6. Value listening & cooperating more than persuading & winning 7. Manage with, and focus on facts 8. Keep an eye on Strategic Targets a. Become one of the very best companies to work for in the world b. Insure that business mechanisms are fair to individuals and the company c. Continuously improve and be able to show this factually d. Be world class in every respect © 1986-2014 Samuel H. Pratt / SHP Consulting Limited
  • 14. Define objective in terms of KPIs, outputs, and other measures or results Communicate clearly with the objective of two way understanding Build natural follow-up points for feed back such as month-end reports, and Performance Reviews Document discussions, agendas, actions, issues, performance over time Follow-up as promised (lead by example) 5 Step Closed Loop System A. If project or task, repeat until complete B. If process, repeat on ongoing basis © 1986-2012 Samuel H. Pratt / SHP Consulting Limited
  • 15. Performance Zone Assurance • Review Monthly KPIs, Calc Sheets, Communications, Graphs • Review Advancement Lists and Process • Attend Monthly (or Quarterly) 1 Hour Performance Review Meeting • Audit all key business mechanisms to insure compliance, alignment, and positive impact • Provide documentation and Continuous Improvement of Work Focused Improvement, including all mechanisms, modules, templates, workbooks, and tools • Work with leaders on long and short term strategy • Perform Work System Design as needed • Monitor Stages of WFI and address culture anomalies • Contribute when asked or needed © 1986-2015 Samuel H. Pratt / SHP Consulting Limited