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Operational In Index for Public Sector (P (PSOEI): Increasing Puerto Ricos Global Competitiveness and Public Value Progress Report Jos A. Santivez, PhD Rossell Scholar and Professor Department of Industrial and Management

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

Operational In Index for Public Sector (P (PSOEI): Increasing Puerto Rico’s Global Competitiveness and Public Value

Progress Report

José A. Santiváñez, PhD Rosselló Scholar and Professor Department of Industrial and Management Engineering

June 19, 2019

SLIDE 2

Department of Industrial and Management Engineering José A. Santiváñez, PhD

Outline

▪ Introduction ▪ What have been done? ▪ What do we want to do? ▪ What have we accomplished so far? ▪ Work in progress

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

Competitiveness Level of Productivity Higher Levels of Income for Citizens Rate of Return of Investments Prosperity and Economic Growth

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

▪ The Global Competitiveness Index (GCI) aims to measure factors that determine productivity. ▪ The GCI is a highly comprehensive index to measure national competitiveness introduced by the World Economic Forum in 2004

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

World Economic Forum. Reports (2016). The Global Competitiveness Index 2015- 2016

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

𝐻𝐷𝐽𝑗𝑡 = 𝛽𝑡1𝐶𝑏𝑡𝑗𝑑𝑗 + 𝛽𝑡2𝐹𝑔𝑔𝑗𝑑𝑗𝑓𝑜𝑑𝑧𝑗 + 1 − 𝛽𝑡1 − 𝛽𝑡2 𝐽𝑜𝑜𝑝𝑤𝑏𝑢𝑗𝑝𝑜𝑗 How do they get the parameters?

𝑡 = 1st, 2nd, and 3rd stage of development

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

World Economic Forum (2017). The Global Competitiveness Report 2017-2018

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

In Introduction

Operational Excellence is made up

f four main categories. They

include: ▪ Strategy Development ▪ Performance Management ▪ High Performance Work Teams ▪ Process Excellence

Butler Active Business Solutions LLc. Operational Excellence – What It Really Is?.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have been done?

Puert erto Ric ico

Manufacturing

g Association (P (PRMA)

In 2016, PRMA established the Committee of Operational Excellence, with the objective

f promoting activities that

improve the GCI of Puerto Rico.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have been done?

Operational Excellence Index (OEI) Structure Alignment to GCI

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have been done?

▪ A comparative assessment of the performance of projects presented by Puerto Rican companies in Quest 2017 and 2018, using the OEI to determine if actual improvements in productivity are attained. ▪ The results show that the index is sensitive to weighting schemes 𝑃𝐹𝐽2017 = 0.4𝑁𝑓𝑢ℎ𝑝𝑒𝑝𝑚𝑝𝑕𝑧 + 0.4𝑆𝑓𝑡𝑣𝑚𝑢𝑡 + 0.2𝐷𝑣𝑚𝑢𝑣𝑠𝑓 𝑃𝐹𝐽2018 = 0.7𝑁𝑓𝑢ℎ𝑝𝑒𝑝𝑚𝑝𝑕𝑧 + 0.15𝑆𝑓𝑡𝑣𝑚𝑢𝑡 + 0.15𝐷𝑣𝑚𝑢𝑣𝑠𝑓

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Design an operational excellence index focused on projects undertaken by the public sector aligned with the GCI

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Design an operational excellence index focused on projects undertaken by the public sector aligned with the GCI, termed the Public Sector Operational Excellence Index (PSOEI)

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

▪Citizens want effectiveness in exchange for their tax dollar ▪Customer focus to process improvement ▪Performance Measurement ▪Assessment of contribution of projects to competitiveness

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Project Level Public Sector Operational Excellence Index (PSOEI)

1. Project Structure
2. Public Value

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Project Structure

DMAIC Methodology

▪ Define ▪ Measure ▪ Analyze ▪ Improve ▪ Control

Source: https://www.sixsigmadaily.com/what-is-dmaic

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Public value

▪ Public services should add value to their communities. ▪ Public value is added by first providing something that the public values and add value to the public sphere. ▪ Public value has two components: benefits to individuals and their families and benefits to the society.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Public value

Authorizing Environment Public Value Proposition Operational Capacity

Systems view

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Public value: Input-Output Transformation Process

Resources Resources

Processes Outputs Outcomes

Input measures Process measures Output measures Outcomes measures Service Quality measures Pidd, M (2012). Measuring the performance of public services. . Cambridge University press

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

Public Value Scorecard 1-Is it profitable? 2-Is it useful? 3-Is it decent? 4-Is it politically acceptable? 5-Is it a positive experience?

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

1. Public Value Award for Start -UPS, (2018), What is public value?, Available from: http://eypva.com/en/ 2. Hannover, (2015), New Design Competition: IF PUBLIC VALUE AWARD 2016 - impact beyond design, Available from: https://ifworlddesignguide.com/press-releases/new-design-competition-if-public-value-award-2016-impact-beyond-design 3. World Economic Forum (2007). The Global Competitiveness Index: Measuring the Productive Potential of Nations.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

▪The PSOEI must be aligned to the GCI ▪Weighting scheme needs to be determined ▪Outcomes addresses impact of projects, a rather difficult task

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

This is about to get complicated

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

𝑄𝑇𝑃𝐹𝐽 𝑗 = 𝛾1 ∗ 𝑄𝑠𝑝𝑘𝑓𝑑𝑢 𝑇𝑢𝑠𝑣𝑑𝑢𝑣𝑠𝑓𝑗 +𝛾2 ∗ 𝑄𝑣𝑐𝑚𝑗𝑑 𝑊𝑏𝑚𝑣𝑓 𝑗

𝛾1 + 𝛾2= 1 𝑗 = 1,2, … … (specific project)

SLIDE 25

Department of Industrial and Management Engineering José A. Santiváñez, PhD

What do we want to do?

𝑄𝑇𝑃𝐹𝐽 𝑗 = 𝛾1 ∗ 𝑄𝑠𝑝𝑘𝑓𝑑𝑢 𝑇𝑢𝑠𝑣𝑑𝑢𝑣𝑠𝑓𝑗 +𝛾2 ∗ 𝑄𝑣𝑐𝑚𝑗𝑑 𝑊𝑏𝑚𝑣𝑓 𝑗

𝛾1 + 𝛾2= 1 𝑗 = 1,2, … … (specific project)

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have we accomplished so far?

Poster Presentations (UAGM Engineering day)

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have we accomplished so far?

Conference Presentations

2019 Institute of Industrial and Systems Engineers Annual Meeting. May 18-21 2019. Orlando, Fl.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have we accomplished so far?

Conference Presentations

2019 Institute of Industrial and Systems Engineers Annual Meeting. May 18-21 2019. Orlando, Fl.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

What have we accomplished so far?

Conference Proceedings Paper

2019 Institute of Industrial and Systems Engineers Annual Meeting. May 18-21 2019. Orlando, Fl.

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Department of Industrial and Management Engineering José A. Santiváñez, PhD

Work in progress

Conference Proceedings Paper

▪ Measure outputs (somehow straightforward) and outcomes (difficult structural equation models) ▪ Determine the weights for the categories using either regression analysis or Analytical Hierarchy Process. ▪ Disseminate best practices and findings resulting from the implementation of the PSOEI.

SLIDE 31

Department of Industrial and Management Engineering José A. Santiváñez, PhD

Operational In Index for Public Sector (P (PSOEI): Increasing Puerto Rico’s Global Competitiveness and Public Value

Progress Report

José A. Santiváñez, PhD Rosselló Scholar and Professor Department of Industrial and Management Engineering

Outline

In Introduction

In Introduction

▪ The Global Competitiveness Index (GCI) aims to measure factors that determine productivity. ▪ The GCI is a highly comprehensive index to measure national competitiveness introduced by the World Economic Forum in 2004

In Introduction

In Introduction

𝐻𝐷𝐽𝑗𝑡 = 𝛽𝑡1𝐶𝑏𝑡𝑗𝑑𝑗 + 𝛽𝑡2𝐹𝑔𝑔𝑗𝑑𝑗𝑓𝑜𝑑𝑧𝑗 + 1 − 𝛽𝑡1 − 𝛽𝑡2 𝐽𝑜𝑜𝑝𝑤𝑏𝑢𝑗𝑝𝑜𝑗 How do they get the parameters?

In Introduction

In Introduction

Operational Excellence is made up

include: ▪ Strategy Development ▪ Performance Management ▪ High Performance Work Teams ▪ Process Excellence

What have been done?

What have been done?

What have been done?

What do we want to do?

Design an operational excellence index focused on projects undertaken by the public sector aligned with the GCI

What do we want to do?

Design an operational excellence index focused on projects undertaken by the public sector aligned with the GCI, termed the Public Sector Operational Excellence Index (PSOEI)

What do we want to do?

▪Citizens want effectiveness in exchange for their tax dollar ▪Customer focus to process improvement ▪Performance Measurement ▪Assessment of contribution of projects to competitiveness

What do we want to do?

Project Level Public Sector Operational Excellence Index (PSOEI)

What do we want to do?

Project Structure

DMAIC Methodology

What do we want to do?

Public value

▪ Public services should add value to their communities. ▪ Public value is added by first providing something that the public values and add value to the public sphere. ▪ Public value has two components: benefits to individuals and their families and benefits to the society.

What do we want to do?

Public value

What do we want to do?

Public value: Input-Output Transformation Process

What do we want to do?

What do we want to do?

What do we want to do?

▪The PSOEI must be aligned to the GCI ▪Weighting scheme needs to be determined ▪Outcomes addresses impact of projects, a rather difficult task

What do we want to do?

𝑄𝑇𝑃𝐹𝐽 𝑗 = 𝛾1 ∗ 𝑄𝑠𝑝𝑘𝑓𝑑𝑢 𝑇𝑢𝑠𝑣𝑑𝑢𝑣𝑠𝑓𝑗 +𝛾2 ∗ 𝑄𝑣𝑐𝑚𝑗𝑑 𝑊𝑏𝑚𝑣𝑓 𝑗

What do we want to do?

𝑄𝑇𝑃𝐹𝐽 𝑗 = 𝛾1 ∗ 𝑄𝑠𝑝𝑘𝑓𝑑𝑢 𝑇𝑢𝑠𝑣𝑑𝑢𝑣𝑠𝑓𝑗 +𝛾2 ∗ 𝑄𝑣𝑐𝑚𝑗𝑑 𝑊𝑏𝑚𝑣𝑓 𝑗

What have we accomplished so far?

Poster Presentations (UAGM Engineering day)

What have we accomplished so far?

Conference Presentations

What have we accomplished so far?

Conference Presentations

What have we accomplished so far?

Conference Proceedings Paper

Work in progress

Conference Proceedings Paper

Work in progress Thanks