Home        Articles        Business Partners        Contact Us        Employment        Quality Assurance        Six Sigma Consulting        SPC Systems        Training

About MAP

Case Study: Retail Process Optimization

Client Profile:
This case study is based on work performed for one of the largest HMO’s in the world. This project encompassed 34 different clinical and retail locations totaling more than 300 different care providers and retail assistants.

Due to changing membership benefits, our client found themselves needing to provide contact lens (CL) benefits to all of its members. However, not every clinic/retail store was staffed or had the facilities to provide CL services at projected increased demand levels. Furthermore, the clinics and retail locations that were providing CL services we not following the same policies or procedures. Administrators contracted with MAP Quality Engineering to help prepare the client to provide increasing services in the most effective and efficient manner.

Project Objectives:
The objectives of this project are to:

• Define the current CL processes in the clinical and retail environments
• Refine and improve the current CL process to support increasing demands in the most effective and efficient manner
• Define the clinical and retail needs associated with increasing membership services (people, equipment, facilities)
• Define the costs associated with providing increasing membership services (people, equipment, facilities)
• Demonstrate the validity of the request for additional funding in order to provide the projected increased services

Project Strategy
The CL process was divided into three components: the clinical process, the retail process, and the supply and delivery process.

Four workgroups were assembled to document each sub-process, to conduct a time & condition study to determine the measurements (time, revenue, expense) associated with each activity, to identify the most likely process options, and to quantify the impact of the process options in terms of service time (retail and clinical), product throughput, expense, and profitability.

Process Analysis
In addition to interviewing managers, technicians, data entry personnel, and workgroup members, MAP Quality Engineering (MAP) reviewed data from the client’s manufacturing laboratory and 27 clinics’ IT systems. MAP also reviewed, in the context of the workgroup, existing tray-color documentation (i.e. assignment of each tray color per day). Additionally, MAP created a process flow diagram with root-cause analysis, and performed a statistical analysis of the data.

MAP Quality Engineering identified internal and external root causes for system inefficiencies. The internal root causes were found to be within the facilities’ control, and they are tied specifically to the way the Black Tray Color is being assigned in the order receipt step of the process and used throughout the facility; the way the Yellow Tray Color is assigned and used throughout the lab; the way the 5 daily colors are assigned in and used throughout the lab, and the way that stickers and labels are used. In Figure 1 below, the colored trays can be seen stacked, in an unorganized manner, on tabletops within the facility.

Figure 1

Upon completion of the time and condition studies, the data were embedded into the process model to enable client Administrators to simulate the effects of process, policy, and pricing decisions on revenue, expense, and profitability. Figure 2 shows the resulting impact of process, policy, and pricing decisions by comparing the current processes to the "ideal process".

Figure 2

Project Results
This project required 9 months to complete and an investment of approximately $740K. This investment includes professional services and software configuration to provide the model that simulates the process, and user training to use the software model. As a result, the client:

• Successfully supported the capital funding request for additional staffing, facilities, and equipment
• Reduced the order fulfillment time by 66%
• Increased their revenue by 11% per full encounter
• Increased their profitability by 15% per full encounter
• Was able to match their largest competitor’s product price and still realize a 5% profitability advantage due to the efficiencies in their new process

These results translate into a projected annual savings in excess of $1M at current demand levels. The projects savings increases in step with the demand levels that are expected to increase dramatically with the benefit change.