While idle time is an important and obvious waste of capacity, it is not the only enemy of a lean operation. Academics like me, like the problems of line balancing and staffing to demand, driving out the idle time to tact time given the processing times. Because these are very well defined problems that lead to very elegant mathematical formulations. In practice, however, often times an even bigger lever for productivity improvement is going after the variation of processing times across workers. Just like you and I work differently in our ability to sing, in our speed with which we are going to run five or ten kilometers, you and I will differ in the processing time that it would take us to make a sandwich. Addressing this variation across workers and processing time, is the idea behind standardization. Teaching observation the way that Frederick Winslow Taylor did it is hard in an academic course. For this reason, I find that many academic courses are biased towards the mathematical treatment of productivity but really miss out on some great insights that can be obtained by going to the front line. To address this challenge in academic courses, I've prepared two calls that were made to a large call center of a retail bank. Both callers are about making deposits to a mortgage account via a credit card, but the two calls are handled by different operators, who, as you will notice, have slightly different ways of handling the call. At this point, I would like you to take out a stopwatch and carefully listen to what happened in the calls. Just go through the call, step by step, and take notice of how much time is spent on the various tasks. Are you ready? Here we go. >> Hello. You're speaking to David. Can I have your name please? >> Yes. It's Natalie Walker. >> Good morning. How can I help you today, Ms. Walker? I'm calling because I'd like to make a payment to my account. Can you do that? >> No problem. Can you give me the seven digit mortgage account number, starting with BCC? >> Yes, it is B, C, C, six, five, eight. >> B, C, C, six, five, eight. >> Two, three, one, four. >> Two, three, one, four. >> Yes. >> Thank you, Ms Walker. I just need to ask you some basic security questions. >> Okay, that's fine. >> Can you give me the first line of your address and the post code, please? >> It is 48 Church Road, Bolton, and the post code is BO38FD. >> Thank you. And your date of birth, please? >> Seventh of March, 1979. >> Thank you. And what amount would you like to pay? >> 500 pounds, please. >> Would you like to pay by debit or credit card? >> Credit card. >> Okay. And is it Amex, Visa, or MasterCard? >> MasterCard. >> Thank you. Can I take the sixteen digit code on the middle of the card, please? >> Five, five, nine, o. >> Five, five, nine, o. >> Seven, one, four, three. >> Seven, one, four, three. >> Eight, nine, seven, three. >> Eight, nine, seven, three. >> Six, three, two, two. >> Six, three, two, two. >> Correct. >> Thank you. And the expiry date? >> O, three, thirteen. >> Thank you. And the full name on the card, please. >> Jess Natalie Walker. Thank you. And the three digit code at the back of the card? >> Four, eight, five. >> Four, eight, five. Bare with me while the payment goes through. Thank you. Your payment has gone through. >> Thank you. >> Thank you for calling. Is there anything else I can help you with today? >> No, I think that was all. I will need to make a change later, but I will do that on a later date. So no, that will be all for now. >> Okay. Thank you. Good bye. >> Hello, you're speaking to Anna, can I have your mortgage account number please? >> Yes, it's B,C, C, seven, five, seven. >> Yeah. >> One, nine, five, eight. >> Thank you. Can you confirm your name, please? >> Scott Jones. >> Thank you, Mr. Jones. I just need to ask you some basic security questions. >> Okay. That's fine. >> Can you give me the first line of your address and the postcode, please? >> It's The Boathouse, 58 Green Lane, and the post code is TN73CA. >> Thank you. And your date of birth, please. >> 27th of September, 1981. >> Thank you. And how can I help you today? >> I'm looking to make a payment into my account, please. >> No problem. What amount would you like to pay? >> 750 pounds. >> And would you like to pay by debit or credit card? >> Credit card, please. >> And is that Amex, VISA, or MasterCard? >> VISA. >> Thank you. Can I take the 16-digit code on the card, please? >> Two, two, five, six. >> Yeah. >> Four, zero, eight, zero. >> Yeah. >> One, two, five, three. >> Yeah. >> Five, eight, seven, nine. >> Thank you, and the expiry date. >> Four, twelve. >> And the full name on the card, please. >> Scott Jones. >> And the three digit code at the back of the card. >> One, five, three. >> Thank you. Your payment has just gone through. >> Thank you. >> Thank you for calling. Goodbye. >> So, what did you notice? Who was faster? Who was the better employee? Which of those two employees do you want to have work for you? If the only enemy that we consider in our study of productivity is idle time, we're missing a big opportunity that resides in the processing times themselves. Referred to the first extra words that the first operator was using as unnecessary motion. Though in our case, this really means unnecessary talking. To analyze such variation in processing times across operators, I find it is helpful to just collect a sample of processing times for each operator. The average processing time of process operators will vary. Instead of simply comparing the best operator and the worst operator based on the averages, I, in this picture show what's called a Quartile Analysis. The Quartile Analysis compares the highest quartile performing operator, that means the operator was still 25% other operators that are faster than him or her, with the bottom quarter operator, i.e.the operator who has 75% of the other operators faster, and 25% slower. In this slide, I do this for two tasks that exist in a large bank in the underwriting operation for consumer loans. You see on the right of the slide the closing step for this activity. For closing there are a couple of rather clergical and manual tasks that need to happen and if you observe, a very, very tiny difference between the top quartile and the bottom quartile performer. On the left, you look at the underwriting function itself. For underwriters, the gap between the top performer and the bottom performer varies dramatically for the selected set of activities shown here. So it is interesting that actually in the more knowledge intense activities the variation in productivity is more dramatic. In a recent study of over 100,000 patients that were treated in the emergency room of three hospitals, my colleagues and I wanted to investigate to what extent productivity, in the form of processing times, would differ in healthcare settings. The 100,000 patients were seen over multiple years by a group of some eighty doctors and over 100 nurses. The results were very similar to what we just saw in the banking settings. We saw about a 260% difference between the 10th quartile and the 90th percent quartile operators. Again, we see dramatic productivity effects, not coming from idle time, but by looking at processing time across operators. After 300%, the variation that we saw in today's class between the top performing employees and the low performing employees in the service operations were enormous. Call center, bank, hospital, service employees, manufacturing employees, everyone differs according to their productivity. Reducing these productivity gaps between the top quarter and the bottom quarter employees provides an enormous financial opportunity. Typically, if we can transfer the best practices from the top performers to the bottom performers, the average productivity is going to be lifted upwards. This should motivate you to go out to the front line and follow the footsteps of Frederick Winslow Taylor. Go out and measure yourself. Measure these productivity times because, typically, this is not data that most organizations currently have available. Then, take this data, plot it, compare the top and the bottom quartile and you get a sense of the variation in the process. Again, anything you can do to reduce this variation by moving the bottom quartile up to the median or to the top quartile, will give you an enormous productivity boost.