Do Patients Benefit With Lean Healthcare?

Do Patients Benefit With Lean Healthcare?

We have been hearing a lot of talk lately about the state of healthcare. With an aging population, it is becoming a very expensive process to provide adequate healthcare to all who need it. Once you get past the political rhetoric, there are a few simple facts that are beyond dispute.

According to the U.S. Census Bureau, in 2010 12.8% of the U.S. population is 65 years and over. This number is expected to double in size over the next 25 years. By 2030 almost 1 out of 5 Americans, some 72 million people – will be 65 years or older. In fact, the fastest growing segment of the U.S. population is the age group 85 and older.

Do Patients Benefit With Lean Healthcare?
Do Patients Benefit With Lean Healthcare?

This might not seem like a big deal to most people, but it really is when you look at it from a supply and demand perspective. According to a survey conducted by Press Ganey Associates in 2007, U.S. emergency patients spent an average of 4 hours and 5 minutes in the emergency department. The question is: Are patients harmed by long wait times? In 2006, the Institute of Medicine released a report, which found there was “a growing concern” that a patient having to wait is affecting their level of care.  It also stated that waiting could “result in a patient experiencing protracted pain and suffering and delays in diagnosis and treatment.” The aging population is and will continue to overwhelm the U.S. healthcare system and is creating a fragmented care process.

According to OECD data, American health care is a prime example of the consequences of fragmented care: high costs (40% higher than the next most expensive nation), injuries to patients (between 44,000 and 98,000 Americans dying in hospitals each year due to errors in their care), unscientific care (500 percent variation in rates of some surgical procedures from city to city), and poor service. Patients with chronic diseases — who account for 75 percent of all health care expenditures — are most vulnerable.

What is the answer to this growing problem? Is it a matter of throwing more money at the problem? How can we save the next patient from being harmed as a consequence of the next medical error? The answer will astonish many because we need to go to the automobile industry for the solution. In fact, the Toyota Production System (TPS) is where we find the methods to help improve the healthcare system. How do I know this? Well, there are many examples throughout the U.S. and the world where healthcare facilities have implemented programs using Lean principles from the Toyota Production System to help identify and eliminate waste.

What is demonstrated by using Lean principles is that most hospitals are not designed for sick people. The medical facilities are designed to fulfill functional requirements of the healthcare process and staff needs. The result of this type of hospital design is patients have to be moved or transported from one process to the next.

A typical process will start with a patient going to registration in one part of the building. Next, the patient will check-in with someone in another department to take their vital signs, and maybe they need to give specimens (urine, blood, etc.) in another department somewhere else. After several lengthy waiting periods, and visits to different floor levels and multiple elevator rides the patient will arrive at their main destination. This is the actual reason for them being at the hospital, which is to see a physician for a diagnosis and treatment. For a cancer patient, this is chemotherapy, for an emergency patient this is to have their condition examined and stabilized. After their treatment, they may be discharged to go home, or there could be more tests required, which means more travel time to other departments.

In a Lean Enterprise, the customer is the primary focus. Every improvement is the result of seeing the production and delivery process from the customer’s perspective. Hospitals are now starting to implement the same approach in the delivery of healthcare.  I often work with the staff in hospitals, and I find them to be hard working and dedicated people. The problem is they are overworked and overwhelmed because of the bureaucracy and organizational structures they work with.  However, working harder is not going to change the process, it will only exacerbate the problem. So, what is the solution?

We need to get everyone to work smarter, not harder! This means getting everyone involved in the healthcare process to become a problem solver. The people who live and breathe the daily challenges are the medical staff and patients. Training hospital staff to understand Lean principles and how to implement them to identify and eliminate waste is the first step. Organizing them into improvement (kaizen) teams to find solutions to improve their service to the patient is the second step.  Implementing both steps will dramatically improve the patient’s experience.

If you are interested in learning about Lean Principles check out the Lean Healthcare Online website. All of their Lean training is online and available 24/7. To see more information about the Level 1 – Lean Awareness in Healthcare training…click here

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Does Lean Management Increase Profits?

Does Lean Management Increase Profits?

How Lean Management is using a new cost model to stay ahead of their competitors!

 

In this article, I want to take a look at the advantages of lean management and its effect on any business. There is a direct correlation between the style of management and the success of any business. Why is this? All business owners, no matter what type of field they are in are trying to make a profit. However, to understand an important business process we need to start by asking a simple question “what is profit?” A traditional business owner will say that profit is the difference between costs incurred to produce an item and the selling price to the customer. In a traditional company, the costs incurred are usually production costs, which include raw materials, labor and overhead. Profit is the amount of money added on top of the production costs to generate the selling price of a finished product. They used a traditional cost model or formula for calculating the selling price for a finished product.

Traditional Cost Model:  Selling Price = Production Costs + Profit

Does Lean Management Increase Profits?
Does Lean Management Increase Profits?

In today’s global markets, there are very few companies that are driven by supply and demand in the traditional sense. Today, the world markets are consumer driven, which changes the dynamics of selling and setting the sales price for any item. What does this mean for the business owner? It means they must realize that, unless they are in a niche market, there are hundreds of companies competing for the same customers. Therefore, the traditional formula for calculating profit is not going to work in this business environment. Companies must use a different formula to ensure their selling prices are competitive in the global markets. However, if they set their prices too high the consumer will not purchase their products because they will be too expensive compared to other similar products. If they set their sales prices too low they will reduce their profit margins, and this will impact overall business growth. So, what does a company need to do to compete in global markets?

As we moved into the 21st century the old business cost model has changed dramatically, to one of collaboration between consumers and businesses. Product branding has become the buzz word for any items being sold in these new vibrant global markets. Countries like India and China are expanding economies that are generating huge numbers of new consumers.  In the traditional cost model, higher prices were due to higher demand and a limited supply. However, today it is the opposite! The demand for products is still high but the selling prices of finished goods are determined by the consumer, not the business owner. If the consumer believes the selling price is too high they will go find another business selling the same item at a cheaper price. The internet has made the world a smaller place for the consumer in that they can purchase products from anywhere in the world. Modern companies are turning to lean management to change their way of thinking and developing a better understanding of what consumers want and how to meet their needs.

What is Lean Management?

Lean Management is using lean thinking to improve business practices by implementing lean principles to identify and eliminate waste. This has created a paradigm shift in business strategy and product development for the 21st century. The consumer driven markets also demand a new cost model for any business to stay competitive and thrive. A lean management team understands the needs of the global markets and how to establish a new level of thinking about setting the selling price of their products. There is a new lean cost model for defining the selling price of a product.

Lean Cost Model is:   Profit = Selling Price – Production Costs

A lean cost model is forcing companies to review their current business practices to reduce costs and increase profits. The reason for this is because the selling price is determined by customer demand. Lean Management teams understand that they have no control over the selling price, this is determined by the consumer, and therefore, they must find ways to reduce costs. Forward thinking companies are developing lean management teams to use lean principles to improve the quality of their products, while at the same tie reducing costs. The consumer has many choices to take their business anywhere they want to. The business owner has one choice, and that is to find a way to reduce costs. Lean Management is helping them to do this more cost effecively, click hereto learn more…

Is It Lean or Six Sigma?

Is It Lean or Six Sigma?

Getting beyond the hype is improtant whe it comes to implementing Lean and/or Six Sigma?

Which one first, Lean or Six Sigma?

The Lean vs. Six Sigma discussion continues to roll on. Which is the best system for a business to adopt? Which one

Is It Lean or Six Sigma?
Is It Lean or Six Sigma?

will deliver the best results? Which one gives fast results? What are the implementation cost difference’s between a Lean and a Six Sigma program? These are typical questions that get asked in this long running comparison between Lean and Six Sigma.

There are three factors that will influence any management team to decide on Lean or Six Sigma:

  1. Complexity of the business processes.
  2. Dollar amount available in the training budget.
  3. Discipline of management team to execute improvement initiatives.

1. Complexity of the business processes:

Any business with a high level of complexity in its processes will require an improvement program that can meet the demands of the  customer by using a more analytical approach. These types of businesses will use Lean to stabilize their processes and Six Sigma to reduce variation and improve quality. These types of organizations operate in a more academic or scientific level of industry such as chip manufacturers, software developers, etc.

Any business with a lower level of complexity needs an improvement program that can meet the demands of its customers by identifying and eliminating waste using basic Lean principles and problem solving tools. Kaoru Ishikawa stated, ” that 95% of all problems could be solved using seven basic quality tools.” These seven tools are:

  1. Flow Chart ( or Value Stream Map)
  2. Pareto Chart
  3. Scatter Diagram
  4. Cause & Effect Diagram
  5. Check Sheets
  6. Histograms
  7. Control Charts

Organizations that have successfully implemented Lean Principles use most, if not all of these seven quality tools as part of their Problem Solving toolkit.  In conjunction with the “5 Why’s”, the Lean toolkit can become a very effective set of tools to help identify and eliminate waste.

2. Dollar amount available in the training budget.

Traditionally, companies will spend less than 3% of their revenue on training. The Lean vs. Six Sigma discussion raises a legitimate question: “How much does it cost to implement each system?” Well one thing I know for sure is that Lean is a much cheaper system to implement than Six Sigma. Why is this? Six Sigma requires specialist training to develop a core group of green and black belts to run projects. This training is much more complex and expensive than teaching your employees to understand Lean principles and how to apply them. So, why do companies adopt Six Sigmas if it is more expensive to implement than Lean?

It is easy to answer this question by using the comparison I used earlier in this article. “If a business can improve its process using seven basic quality tools and lean principles, why would they want to implement a Six Sigma program?” I think the answer is obvious, they would only do this if they had complex processes or were influenced by the hype that Six Sigma is the ultimate silver bullet to solve all of their problems and improve performance. Lean is easy and relatively much more cost effective to implement compared to the overall cost of a Six Sigma program.

3. Discipline of management team to execute improvement initiatives.

In the end it really does not matter how much a business pays for any system if the management team lacks the discipline to implement any of their improvement initiatives. During the 27 years I have been working in the Continuous Process Improvement field, it is amazing how many companies do not execute their own strategic or tactical initiatives. The best plan in the world is useless unless it is converted into action. The cost of training employees to understand Lean or Six Sigma in one thing. However, the cost of taking several employees away from their daily productive work to participate in an improvement team and their ideas are not used is the worst kind of waste.

To summarize the article, I would recommend that any company start their Continuous Process Improvement journey by first implementing Lean principles and the seven problem solving tools. Employee training can be done on-site or online.  If you’re interested in signing up for a free access to Lean training, click here. When business processes have been stabilized through the application of Standardized Work using Lean princples, then and only then would I personally consider implementing a six sigma or a lean six sigma program.

3 Critical Questions About Lean Principles!

Answer these 3 critical questions before trying to implement lean principles into any type of business.

If a company can’t answer these three simple questions about how they plan to use lean principles they are doomed to failure!

The most common question I am asked is “What is the best way to implement lean principles into a business?” The answer will depend on how the business owners can define three critical factors about why they want to use lean principles :

  • Are you a willing to embrace a system of thinking that will challenge your current business model?
  • Are you willing to create a business environment that will support the implementation of lean principles?
  • Are you willing to start to see problems as opportunities for improvement rather than a necessary evil of doing business?

If you are thinking of implementing lean principles into your company and you answered “No” to any of the three questions above, stop reading this article because its not for you.

I know. You are probably surprised that I am ready to challenge you to go do something else, instead of asking you to continue to read more of this article. So, why would I be willing to do this, instead of just telling you more about lean principles?

If any business owner can’t answer “Yes” to these three key questions, their company is not ready to implement Lean Principles. The reason I am so sure that this is true is based on many years of experience working in the continuous process improvement field. To many business owners pay lip service to it, instead of doing it. Action always speaks louder than words!

Accepting change is the first step towards implementing lean principles into any business!

3 Critical Questions About Lean Principles!
3 Critical Questions about Lean Principles!

Change is a condition driven by a need, and it always starts as a thought process. The first part of the process is when someone starts thinking about change and how it will impact their environment. Next, the thinking moves into research, where the person starts to look for tools and techniques. They start to learn about the different applications and may decide to choose to understand more about lean methods. In other words, they become aware of lean principles and start to do deeper research into how they are used.

The call for change usually starts at the tactical or operational level of an organization such as on the shop floor or in an office. The person wanting to implement lean principles will often be a Team Lead, Supervisor or Line Manager, who read a book, went to a seminar or knows someone who works at a company that successfully implemented lean principles. They will start to implement their own changes to help them learn more about how lean techniques are capable of improving their workplace. Some will be successful. However, most will fail and give up. Why is this?

Adults are natural problem solvers. They desire to understand the reasons why and how things actually happen. If left to their own devices they will slowly learn and find ways to improve their environments. History demonstrates this process to be true. However, the one thing that stops this process dead in its tracks is when those in charge refuse to accept change. The same happens in a business.

Executives and managers are often focused on what they consider to be important issues involved in the day to day running of the business. However, the question here is: Are they focused on the “urgent” or the “important”? This is a very simple but significant distinction. Most are entrenched into the re-active cycle of focusing on the “urgent” issues. A few see the light and move towards the more pro-active cycle of looking at what’s “important”. Lean Manufacturing, Lean Healthcare and Lean Administration all focus employees on the lean process of identifying and eliminating waste or muda.

Bringing about change in any organization requires perseverance and discipline. Implementing lean principles needs these and more. If management does not embrace the need for change it will not happen because employees will feel disempowered by the lack of support.

About the Author:

Chris Turner is the CEO and Director of Training and Development for Radical Transformation LLC. He has 27 years of experience in the Continuous Process Improvement field. During this time, he has integrated Lean Principles, Lean Six Sigma and Change Management into his skill’s portfolio. He has worked with major organizations in the UK, USA and Canada such as the US Air Force, Canadian Ministry of Health, Siemens, Medtronic, APW, English China Clay to name a few. He participated in the design and development of Lean Certification Online, where learners have 24/7 access to online lean training materials. To learn more about lean principles click here

Are You Satisfying Your Customers?

Are You Satisfying Your Customers?

The purpose of this article is to get you to ask this question: “Are you satisfying your customer?” This seems like a pretty straightforward question. However, it is not always that easy to get a straight-forward answer. Most business owners will tell you that they are “definitely satisfying their customer needs.” How do they know for sure? Are they telling the truth? Or, are they in denial?

The follow-up question will always throw them if you dare to ask it: “Where’s your metrics to prove it.” BAM…WHAM…KAPOW! A this point in the conversation you’re either going to be shown the door, or experience an awkward silence followed by rapid change of subject. It seems perfectly normal to ask an executive management team to share their customer satisfaction feedback or their on-time delivery metrics to demonstrate their ability to fulfill their customer needs. In fact, you would think they would be extremely excited to let you see them! If they are truly satisfying their customer needs, they are consistently delivering their products or services to them on time, every time, right?

You see the problem with asking the question is that the answer you receive is not always grounded in reality; it’s often based on perception.  So, does this means they are telling lies or being dishonest? No, of course not, they are simply seeing things from a different perspective, and that is all fine and dandy. What is based on reality? How do we get to see the real picture? Well, that would be simply a matter of listening to what your customers are saying about your products and services. A business owner or management team can fool themselves, and many do but they cannot fool their customers, well not for long anyway! You see, in the 21st century, a customer has many choices and they can and will change their supplier at any time if they are unhappy with them.

So, back to the original question: can your business satisfy customer needs, or not? I have created a simple flow chart that will guide you through an easy  process to discover what and how you are dealing with the current situation in your company when it comes to customer needs. Take a look at the graphic to see the customer needs algorithm. Click here to see a larger size.

Answer the first question and then follow the path to see where it leads you. Now, you get the chance to become a character in your own version of Alice in Wonderland as you follow the white rabbit. However, try to keep a tight grip on reality as you enter and go deeper into the rabbit hole.

Are You Satisfying Your Customers?
Are You Satisfying Your Customers?

If you answer the first question honestly, it will clearly identify whether your company’s has the ability to satisfy customer needs or not, and it will tell you what action to take. On the other hand, if you’re in denial, or unaware of the reality of your current situation, it will lead you to where you believe your company is today, and it will tell you what action to take.  Enjoy your journey down the rabbit hole!

Make sure you read my next post to get the next installment about the way companies deal with this issue and try to answer the questions: Are you satisfying your customers? If you enjoyed this article please share it with your friends and colleagues by email, or the social media buttons below.

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What is a Lean Process?

What is a Lean Process?

One of the questions that I receive in my email inbox more than any other is “What is a Lean Process?

what is a lean process

You would think that everyone would know the answer to this question, especially when we are living in the 21st century. It makes you wonder where these people that ask me this question have been living for the past few years. With companies like Toyota and GM appearing on the main news channels almost nightly for one reason or another. Did they not see the ongoing reports? Or, maybe they were focused on more important things?

It really demonstrates that people don’t find it easy to connect  common or related events together. However, this is not a scientific study, it is based on my own observations. Why is this happening?

Well, its because there is so much information being thrust at us from social media sites and news channels that its easy to get overwhelmed and lost in the quagmire of data.  The same thing happens with companies that are trying to get through their day to day business activities, going from one crisis to the next to correct an issue with a customer order, etc. They are focused on the “Urgent” and forgot to take time out to get back to the “Important.”

When you live in the fast track and get use to dealing with the urgent issues, you never get time to step back and see reality. You live in a mental construct that is like your playing a character part in the Matrix movie. You are unaware of how things are working or not working. Everything becomes a habit and we get addicted to the certainty and comfort of activities that are repetitive and familiar.

Here are a couple of short videos that will help answer the question:

What is a Lean Process?

Lean Process Training LIVE NACE 2011

Thinking about Lean in your collision repair center? The experts from 3M break down the basics of Lean Process LIVE from NACE 2011.

 

So, the first video gives a good overview of lean principles, the next video will demonstrate how an organization is using them to improve its processes.  It is important to understand the what, when and how to use lean principles to give a practical answer to the question we are posing in this article – What is a Lean Process?

 

Transforming your business through Lean Process Improvement

Don Wetekam, Group Vice President of MRO, gives an extensive presentation on how to cut costs while still operating at a high level.

This quote by George Bernard Shaw explains it better than most, “Progress requires change and if you can’t change your mind, then you can’t change anything.”

If you want to change, you have to become aware of the flaws in the current process and this cannot happen by maintaining the status quo, it requires a paradigm shift. An executive management team must gain insight into their business practices and realize that something it not working. They must stop blaming the system and start to realize that they are enabling and supporting their organizations poor performance. So, what is a lean process? It’s when employees learn how to work smarter and stop believing that the only way to improve performance is to work harder.

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