Schellter Strategy Consults bvba - Shareholder & Stakeholder Sustainability


Patient Safety and as "GUEST"
 
It’s time to put people – ordinary people – into the health-care process. By working together in creative new ways, people can change the economics of health care, improve health outcomes, improve the patient experience, and solve public health problems. 

Despite amazing advances in medicines and medical technology over the past 50 years, health care today is in crisis. Costs are skyrocketing, health outcomes are uneven, and the patient experience is too often unacceptable. It’s time for a power shift in health care. As a society, we have dramatically underestimated the power of ordinary people to transform the system, to take care of their own health, to help develop therapies, and to help solve massive public health problems.


Hospitals Work on Processes,
Elements of Change Management

Hospitals are sick and need our help. That is the message process improvement concepts like Lean and Six Sigma hope to address as they become more commonly used in healthcare.
 
Like any sick patient, there is a process to help make hospitals better.
 
That process is:
 
  • Assess
  • Diagnose
  • Treat
  • Prevent
 
The symptoms, like waste and blame, pile on like any human illness.
 
"Blame is like a virus".

"But there are no bad people, only bad processes."
 
As for waste, people adjust to it and get used to it. It takes "new eyes"—another common concept to spot waste that hospitals may have become so used to living with that they no longer even notice it.

Without change management lasting change can't happen. Key elements to change management include:
 
  • Leadership buy-in, active participation, and long-term thinking
 
  • Regular communication with key stakeholders (via e-mail, reports, and meetings)
 
  • Employee motivation through incentives (such as recognition, promotion, and burning platform)
 
  • System of checks and balances (e.g., project reviews and scorecards)
 
  • Action plans at both the project and program levels that are updated on a regular basis
 
"Something as simple as an action plan can be incredibly effective—very simple and very powerful."
 
Change management can certainly be done wrong, however. Poor change management can have many variations of negative results:
 
  • Confusion
  • Anxiety
  • Anger
  • False starts
  • Chaos
  • Resentment
  • Burnout
 
A major component of making change management work is meeting management. Leaner processes involve fewer meetings, but meetings are still necessary—so do them right.


From Lean to Supply Chain Management


1. Introduction

The main goal of Lean Approach is to eliminate activities that don't add value (waste) in the healthcare processes.

When a hospital has gone through the Lean Improvement Process, waste also has to be eliminated in the Supply Chain Processes. Supply chain management is a set of approaches utilized to efficiently integrate patients, suppliers, services, warehouses, and logistics, so that patients are received, diagnosed, treated and released in the right numbers, to the right locations, and at the right time, in order to minimize system wide costs while satisfying patient level requirements.

2. Wasted Time, Wasted Money, Wasted Effort

You Must Have a Vision

In these hard Economic times that we are all facing many healthcare organisations are turning to Lean Manufacturing in an attempt to save their organisation. This is a proven method of eliminating wasted time and materials, thereby improving the bottom line. But, as with anything, there are problems that arise and can derail your efforts. I would like to address one of those problems:

“There is NO Vision”

To undertake lean approach without having a Vision of where you are going and what you are attempting to do is a waste of time simply because there will be no interest, you have to do it, there will be no enthusiasm. Without these two elements there will be complacency.

The CEO, or President, must have a vision. The Lean approach is a tool that can assist you in moving your organisation ever forward to your goal, your vision. More than likely someone that has experience in Lean will be hired or appointed to take on the leadership of this project. But the job of the President or CEO has just started.

A vision must be communicated to the people involved in assisting you in bring it about. Since it is a given fact that no one knows everything you must surround yourself with people that know the things you don't. But in order for them to be effective in bringing your vision to reality you must spell it out in clear and concise terms. While authority may be delegated to others you are the one in charge of all aspects of the different programs that will be started. You, the one with the Vision, are responsible.
Lean, Six Sigma and the 5s program are tools that will enable you to realize your objective, your vision. But they are nothing but tools to be used. Do not lose sight of your vision.

Meetings that are held with upper and middle management people should always be held with an agenda in front of them. As president and/or CEO you must set the tone and direction of all meetings. There are other people that, while they will assist you in obtaining your vision, they have an agenda of their own. As president or CEO you must be ever vigilant of this fact.

Problems and projects should be assigned with a timeline for completion and followed up with progress reports. They report to you, you do not report to them.

Projects that are started, such as safety tours are continued on a timely basis not just for the first two weeks.

As President you are ultimately the one that is held accountable. As such you are the one that directs and sets the tone for ALL employees. Most people will follow a leader. That is something that works in your favour only if YOU lead.

3. LEAN Approach

3.1. What you need to know about lean approach?

Schellter Lean approach is an initiative that focuses on cost reduction and increases in turnover by constantly and methodically eliminating activities that do not add value to the healthcare process. Basically what lean does is help organisations to achieve targeted productivity and efficiency, as well as other things, by introducing tools and techniques that are easy to apply and maintain. What these tools and techniques are doing is reducing and eliminating waste, things that are not needed in the healthcare process.

Now that you know and understand what lean is there are a few important tools and concepts that you are going to need to know about in order to fully appreciate all aspects of lean care. One thing that you are going to need to know is visual controls and how they apply to the lean approach, in fact visual controls are one of the most important tools that you will be using if you decide to convert to lean healthcare. One thing that you have to know about visual controls is what they actually are and luckily visual controls are basically exactly what they sound like. Visual controls are controls that you put in place that involve looking at things to see how you can improve them or fix things so that you are not wasting anything, which basically leads to an improvement in your overall healthcare model.

One of the reasons that visual controls are a vital part of the lean approach is because it provides the organisation with the ability to manage variances in process conditions and in the caretaking outcomes at the source of where the cure is being made, not to mention it is used at the same time that the treatment is being made. Basically visual controls are going to allow you to respond faster to problems, but they are also going to allow you to develop countermeasures to problems and by doing this your organisation is going to be able to achieve numerous additional things.

Some things that can be achieved and that have been achieved in other hospitals are:

·         90% reduction in materials waste
·         75% reduction in floor space
·         90% improvement in healthcare quality
·         90% reduction in lead time, patient flow
·         50% reduction in variable costs

Something else that you need to know about the lean approach and visual controls is that visual controls can actually be applied in any workplace to a variety of different departments. So basically what this means is that you can use visual controls in any kind of working environment, healthcare process, office work, testing areas, treatments, etc. and the best part is that you can apply the visual controls to any area of that workforce. So what that means is that if you are using visual controls for your healthcare process you can place the visual controls out on the floor where the treatment and cure are taking place or anywhere else for that matter.

Something else that is important to know about the lean approach is how you should actually go about introducing it to your organisation. The reason for this is that different healthcare techniques require different skills and techniques that you should use when converting to that style and lean is no different. So before deciding to switch over to the lean approach you should take a moment to review some of these important factors. This is what Schellter will expose during the analysis.

The first thing that you need to be aware of is that unlike other treatment styles with lean you are not going to want to train your entire workforce at the same time. What you are going to want to do is to get your upper management on board and then choose a handful of people from the different departments. And then you are going to want to choose an area that is small and begin to introduce the lean approach to that one area. Keep in mind that when choosing an area you are going to also want to choose an area that will give you results rather quickly so that you can show your employees the good things that can happen by converting to lean healthcare.

3.2. Lean Approach concepts

The Lean Approach is a type of system that aims to eliminate waste in all of its forms. This waste includes activities that add no value to the over all healthcare service. By eliminating these wastes the organisation benefits from having fewer expenses and losses of time due to a lack of productivity and efficiency. The patient benefits from the lean approach system by benefiting from the cost savings that the treatment and cure can pass on to the patient and also by receiving a service that is free from defect or fault, as is the result of a waste free system.

Where there are other systems that focus on eliminating waste in certain steps of the process, the Lean Approach is all about tackling the waste problem from a hospital-wide approach. The objective of the organisation is to create what is called a "value stream." A value stream refers to the continuous flow of services and treatments that is not burdened by the starts, stops and delays of dealing with waste.

Remember that waste can include not only material overflow but also any activity, step, or process that does not ultimately end in providing the patient with value. Remember, if the patient is not willing to pay for something that you spend time on then you want to eliminate that part of the service in order to maximize your organisation's profitability.

The Lean Approach concepts are obviously appealing to most healthcare organisations however each hospital has different levels or degrees at which they commit to running a lean operation. The Lean healthcare approach is also referred to by a variety of names including the most popular alternative name; the Toyota Production System (TPS). The TPS is all about the systematic elimination of waste and was originally developed by the founder of the Toyota Company.

Types of waste

Naturally in order to eliminate waste it is useful that there be a method for identifying such waste. Toyota assigned a name to non-value work that they call "muda." Muda is only discovered in a manufacturing process once the process has been set in place and put into action. Then it is dealt with until variation in output can no longer be seen. The inconsistencies that care found to be the cause of variation are then fed back into the Lean Manufacturing planning system and re-evaluated for a trial of the next project and corresponding system of production. The process of identifying waste or muda is constantly changing due to the fact that the demands placed on the manufacturing company are ever changing. Whenever demand is changed supply is then affected in order to balance out these effects, improvisation is needed. Naturally, this can lead to downtime and mistakes. However, the process of correction and re-standardizing manufacturing system movement can be relatively quick if wastes can quickly be identified and plans made for the elimination of such wastes.

This original concept has been translated and engineered by Schellter into a healthcare module that can be applied in any hospital or healthcare organisation.

The seven muda or "deadly wastes" are defined as follows:

1. Waste from inefficiency - inefficiency occurs when the healthcare provider produces more than what is required by the patient. In rendering more than needed treatment, the level of service is exceeding the level of demand, thereby generating unnecessary time loss and costs.

2. Waste from transportation - In this context, the term transporting refers to any movement that the patient, or required service, takes part in as part of the healthcare process. Multiple handling or movement of patients, or related services, does not add any value to the treatment if those movements are not required by the standard healthcare process.

3. Waste of motion - Waste of motion refers to the time that is wasted by staff, equipment, and handling due to the fact that they are working or moving more than is necessary to perform their assigned step in the healthcare process path. An example would be searching for utilities or tools due to the inappropriate location of these items. Time is wasted in the motion of looking for these tools, when instead the time of the staff should be completely devoted to accomplishing their assigned portion of the healthcare process.

4. Waiting - Time is wasted whenever there is a period of waiting in between steps. For example, a patient waiting for a machine to finish a cycle or staff leaving their station in order to ask their supervisor a question reflects an interruption to flow, a waiting period of sorts, and needs to be eliminated.

5. Processing – Services and equipment have a great deal to do with what type of time is necessary or unnecessary to the steps of treatment processing. Combining steps or having staff or equipment perform multiple steps should be done in order to decrease processing time.

6. Inventory - Inventory items are also referred to as products and items, including equipment spare parts, which represent a significant percentage of the hospital’s working capital. Inventory optimalisation, including the pharmacy, are integral parts of the Schellter lean approach and can save the hospital millions.

7. Defects - Perhaps the most obvious and detrimental of all the forms of waste is the rendering of defective or inadequate service. Even if there is a system in place for the inspecting, scrapping, or repairing of these defective services, their creation is by definition pure waste according to Lean principles. These clear identifications or definition of work that adds no value to the healthcare process are critical. After being identified, they are used to evaluate the current work process and naturally the next step is to make changes to the operating system as it is currently organized. Opportunities may lie dormant if the processing assumptions are left unchallenged.

Just in Time manufacturing

The Just in Time manufacturing technique is probably the most recognized and widely used of all the Lean techniques. Just in Time manufacturing gets it name from the process of Lean Manufacturing that it employs in order to reduce wastes. In short, the Just in Time manufacturing technique is to have the "right part at the right place in the right amount at the right time" (this is according to the book "Running Today's Factory"). Just in Time manufacturing focuses on shortening the time it takes to produce on product (also known as the product cycle), decreasing the amount of carried inventory, and streamlining work flow.

Just in Time approach in the healthcare organisations is a very difficult concept for some hospitals to implement simply because it forces them to cut back on services even if there are prospects for more treatments. In the past, the volume of treatments that a hospital was able to achieve was a sign of efficiency. This is true only if the volume being treated directly correlates with the immediate demand that the patient has for that treatment. Finding the balance between the demand of the patient and the supply of the treatment is the big challenge, especially when positive occurrences, such as in increase in sales or interest in your hospital, mandate a change in the healthcare technique to accommodate for the growing demand.

3.3. Lean Approach: JIT services

Just in Time Production (JIT) was first used by the Ford Motor Company in the early 1920s as an inventory strategy to reduce inventory. When Toyota began work on the Toyota Production System, they looked at some of the methodologies that were implemented by Ford. They found that Ford had a part of JIT production, but they did not fully implement the entire strategy. Toyota discovered that Ford had piles of excess inventory lying around their facility and their employees had uneven work schedules.

JIT services in the healthcare organisations are considered an inventory strategy that is implemented to improve the return on investment (ROI) of a hospital by reducing the in-process inventory and its associated costs. JIT must have different signals about the process and identify what is happening within the process. Because JIT is driven by signals, it falls in line with the Kamban methodology.

The Kamban system typically uses visual signals or tickets to indicate a missing item or designate where a particular inventory item is stored. JIT can lead to significant improvements in your quality, efficiency and ROI. The JIT inventory reduction can be the consumption of old stock which triggers new stock to be ordered. By reducing JIT, you are saving on warehouse space and costs. Typically stock levels are determined by historical demand and when a sudden demand rises above the average; your inventory will quickly diminish faster than usual and may cause patient service issues. By using the Kamban system, you will be able to flex your inventory system so these issues won't occur.

There are several components you can use when you implement JIT. Again, there is the Kamban system, service treatment leveling, pull systems, Total Quality Control, and several others. So many people have used the Kamban system with JIT, that the two have become synonymous with each other. The kan-ban coordinates the overall inflow of services to the healthcare treatment and minimizes the process.

The benefits for using the JIT systems include:

Reduced set up times in the hospital. By cutting down the set up time, your hospital will be more productive and will be able to improve their bottom line. This will allow your hospital to look more efficient and you can focus time on other areas in your healthcare treatment line that need improvement.

The flow of patients is improved. By having your staff focus on specific areas in the overall system, they will be able to process patients faster because they won't be fatigued from doing too many jobs at one time.

Employees are utilized more efficiently. When employees are trained to have multiple skills, they can be utilized more effectively. By having your employees trained to work on different services in the healthcare treatment cycle, you will be able to use staff in areas when they are needed or when there is a shortage of staff on a service in high demand.

Consistent scheduling and employee work hours. An adequate scheduling and awareness of idle moments (labour waste) will save your hospital a lot of money because you won't need to pay staff for a job not completed.

Better supplier relationships. Because you will have more time, you will be able to work harder on establishing your supplier relationships. Having a trusted supplier will give you the peace of mint to know when you can rely on goods to be delivered, how they will be delivered, and if they are satisfactory to your patients.

Staff is more productive because the supplies are evenly distributed. Since management is now focused on meeting deadlines, the employees will work harder to meet the deadlines and a continuous stream of services can help them stay busy. The employees will see the benefits of their work through job satisfaction, promotion, or pay incentives, if applicable. One major problem with JIT operations is the large supply and demand changes. While it is nice to maintain a consistent inventory level, your patients could face a supply shock. You will need to use service levelling to help remove the slight variations that come with inventory holdups. JIT is a proven methodology and will help you build relationships with your suppliers. By having excellent suppliers, your margin of error will be improved because you know the exact quality of the product you will be receiving and you trust who is providing you the product.

3.4. Lean approach benefits

  • Reduced Inventory Holding Costs a key lean approach benefit

One of the ways to drive to the bottom line fast is in the inventory of all departments concerned. Invariably most organizations are too heavily dependent on high inventory to ensure a smooth running service. The problem being that the inventory is costly; it gets in the way, and has obsolete issues. Many will argue some of these points, but the simple fact is that any more you have in inventory is not helping you create value for your patient or the organisation. Even if that money is simply put in an interest bearing account the money gained can be substantial. The key being that the business will still run as good as, or better than before, if you implement the lean approach correctly, with significantly less inventory.

  • Increase Throughput a key lean approach benefit

By eliminating excess steps and non value adding activities and by making sure that every accessory to complete a job is in a known place near the work area you can easily increase your output. It doesn't seem possible before you get into it, but often times there are a ton of hidden time wasters that kill productivity and therefore hurt the service output.  If you find legitimate ways to make those issues go away you will be well on your way to increasing your throughput in a very real way.  More service rendered with the same resources is a huge win for your business.

  • More pleasant work atmosphere a key lean approach benefit

This may seem counter intuitive, but ask anyone who has worked in a lean operation what the difference before and after a 5S program was installed and you will hear that it is plainly night and day.  Having only the stuff needed and no excess is not only a benefit to the business through lower inventory costs and therefore more cash on hand, it also clears up the clutter and allows for people to enjoy the space they work in.  Coming to a clean work environment is a healthy way to work and live and the benefits are not truly felt until after the cleaning up and placing in the right place is done.  The first time you go to grab an item and it is exactly where it should be you will be ecstatic and wonder how you ever worked the other way.  A place for everything and everything in its place seems like an annoying phrase until you have seen the true power that it holds, especially in a work environment.

  • Higher Quality a key lean approach benefit

Better quality and less useless operations is a key target to the lean approach.  Many projects are focused solely on error proofing and a key component of Overall Equipment Effectiveness (OEE) is quality.  On top of the cost of the waste, one needs to remember that the rework and overtime also costs money.  In addition to the labour and equipment time to rework the service concerned it also is lost output.  And if it is limiting output, the cost becomes very large, even greater than the waste cost.  The Lean approach is all about eliminating waste. 

3.5. What causes lean approach failure and how to avoid it?

Before you can even begin to understand how the lean approach can fail and the things that you can do to avoid that kind of failure you should probably know what the lean approach is. Many people think that they understand lean but when it comes down to it they are actually rather clueless, which is why their organisation fails when they try to convert to the lean approach. So before going any further, and this is to help ensure that your organisation can successfully convert to lean let's take a few minutes to go over what the Schellter lean approach is.

The Schellter Lean Approach is an initiative that focuses on cost reduction and increases in turnover by constantly and methodically eliminating activities that do not add value to the healthcare service process. Basically what lean does is help hospitals to achieve targeted productivity, as well as increasing the quality, by introducing tools and techniques that are easy to apply and maintain. What these tools and techniques are doing is reducing and eliminating waste, things that are not needed in the healthcare process. But the most important thing that you need to know about the lean approach is that if it is not used in the correct way then it is going to fail, which means your hospital could fail. But the good news is that there are things you can do to avoid lean approach failure.

Here are some things that you can do to avoid lean approach failure.

Number one: The first thing that you are going to have to avoid to prevent lean approach failure is lack of preparation. What this means is that you are going to have to prepare your organisation to become a lean champion, you can't just up and decide to switch and then expect it to happen overnight. If you are going to convert to lean you are going to need to put forth the time and effort that is going to be needed to make the switch. You are going to need to figure out what things cost to buy and how you can save while buying them while cutting out the middle man. You are also going to need to decide what areas you can cut costs into and where you can't cut any kind of costs.

Number two: Another thing that can cause lean approach failure is not having the right kind of training. So basically you are going to want to avoid improper training which can include management not being trained right, leadership not getting things done or resolved or not having the right kind of training tools. This is the strength of the Schellter lean approach.

Number three: Something else that can cause lean approach failure is not implementing down time. This doesn't mean that you need to give your employees down time in fact it actually means just the opposite. Many times during the healthcare service process there is down time when equipment needs to get moved or something else happens and most of the time people sit around talking and relaxing which allows your hospital to lose money. So what you need to do is to give your employees other work to do during those down times. It will also allow less time spent looking around for things because everything has a certain place and is organized.

Number four: Another thing that can cause lean approach failure is if your employees fail you. Basically what this means is that your employees do not give you their all, they are not trying to get the work done by not applying themselves. In order to avoid this you are going to want to try and motivate your employees.

4. Supply Chain Processes

The main supply chain processes are

·         purchasing and procurement
·         demand planning (forecasting)
·         service planning
·         treatment planning
·         equipment handling
·         material planning
·         warehousing
·         distribution
·         patient service

When lean strategies are applied to these processes, hospitals will achieve

·         lower inventory costs
·         improved patient care
·         improved responsiveness to demand fluctuations
·         closer integration with suppliers
·         increased market share
·         higher levels of customer satisfaction
 
5. The Seven Wastes, 5 S and Kan-ban

The Chief Engineer for Toyota during the mid-1900 was Taiichi Ohno. Ohno is given credit for creating the Toyota Production System (TPS) and creating the seven wastes.

Toyota defines waste as being three-form:

·        Muri - Overburden
·        Mura - Inconsistency
·        Muda - Elimination of waste

Muri is a key concept in the Toyota Production System that relates to being overburdened. Muri generally refers to the unreasonable work that management places upon their workers and machines. Carrying heavy weights, performing dangerous tasks, and working at a significantly faster than normal pace, are all examples of Muri. Muri defines this work as pushing a person or a machine beyond their normal limits.

Mura focuses on the inconsistency and unevenness due to human error. Examples of Mura include scheduling conflicts, assembly line problems, and anything that hurts productivity. Typically mura can be directly traced back to human error. Mura is a key step in the Just In Time (JIT) Methodology.

Muda is the final phase in the Toyota Production System and is the most wide-spread concept of TPS. Management is in charge of overseeing Muda to ensure that waste is eliminated from the company. Management should be able to determine if there are deeper causes of muda that are formed during muri and muda.

Muda divides waste into 7 categories:

1.      Over-production
2.      Waiting
3.      Transporting
4.      Inappropriate Processing
5.      Unnecessary Inventory
6.      Unnecessary/Excess Motion
7.      Defects

Besides the 7 waste approach of Toyota, there are other approaches to lean manufacturing. Many companies have developed "tools" to assist in the identification and the elimination of waste. These tools are often called value stream mapping, the 5 S Methodology, and Kan-ban. The goal of all the approaches is to reduce waste; the only difference is how you go about achieving the goal and if you can successfully implement it into your organization.

The 5 S Methodology is widely used by several companies. The 5 S methodology is another philosophy used as a way to organize and manage the workspace and work flow in your business to improve efficiency by eliminating waste, improving flow, and reducing process variables.

The breakdown for the 5 S Methodology is as follows:

·        Seiri - Sorting.
·        Seiton - Straighten or Set in Order
·        Seiso - Sweep or Shine
·        Seiketsu - Standardizing
·        Shitsuke - Sustaining

The other popular approach is a Kan-ban system uses visual aids to control the movement of materials between different work stations. The name Kan-ban referred to a Japanese sign shop that used a visual image on a sign to communicate the type of products that were sold. The Toyota Production System implemented Kan-ban into their transport container. It is a card that is attached to the transport and storage containers. The purpose of the Kan-ban card is to identify part number and the container capacity.

There is other information on the card as well that provides easy, visual, signals to the employees.

Successful implementation will expose the quality problems which exist within the organisation and you will be able to identify how to reduce the waste the problems are causing. For some hospitals, the focus on waste reduction only looks at one small problem at a time instead of a system-wide approach. Depending upon which type of managers you have, both approaches can be successful and both will reduce or eliminate waste.

In the end, the Schellter lean approach is "focused on getting the right things, to the right place, at the right time, and in the right quantity to achieve perfect work and service flow while minimizing waste and being flexible and able to change." The concepts of lean need to be understood, embraced, and appreciated by the employees who render the services and treatments. If the employees do the concepts, they will pass them onto the entire process and deliver the value to the healthcare service. Management is again the biggest factor in the lean approach.

Weak management will not understand how to implement the tools of lean and it will not benefit anyone. Schellter Lean is simple to understand and easy to do. It is all about making the work simple, easy to manage, and understandable for the employees.

If you would like to take an additional step in the lean process, you can adopt the Toyota mentoring process called Senpai and Kohai. Senpai and Kohai are essential elements of Japanese age-based status relationships. They are similar to a family relationship, which is decided upon age. In western culture, Senpai and Kohai can be compared to the concept of a mentor.

This mentoring approach works like this: an older sibling begins a company and mentors their younger sibling; the younger sibling will eventually have enough insight to become the mentor to the older sibling. It is a process of "thinking up and down" the organizational structure. Employee A affects the steps of Employee B who affects Employee C and so on. This process has been taken by Toyota and it has helped their suppliers to improve their production as well.

There is another mentoring approach which is similar to Senpai and Kohai; it is called "Lean Sensei". Lean Sensei encourages your company to seek out outside, third-party experts who will provide coaching, advice, and unbiased opinions to your company.

Implementing the seven wastes into your lean healthcare process will take some time and a complete mindset change on your part and on the part of management to become successful.

5. What is value added work and non-value added work?

What is value added work and non-value added work? Value added work and non-value added work refers to the idea that a patient will pay for the healthcare service that adds value. If there is no value added a patient does not want to, nor will they pay for the service. This is only a fair way of thinking. However, how does this all come to play with different management options that are out there.

The application of programs like Six Sigma or Lean management uses these theories to bring a higher level of efficiency to the way a business is run.

Manufacturing and other businesses are benefiting from the practices that impress upon employers and employees the importance of value added work.

As service organisations and other businesses are constantly looking for better ways to make money, with fewer costs, and have better services and treatment, there are geniuses coming up with ways that will add value to the work, and eliminate non-value or waste.

Non-value added costs are costs that are simply associated with long lead times and quality. Quality is important, that will not be taken lightly. However, in some cases a slight quality change can cost tons of money for the hospital. However, there are some costs for quality that hospitals are willing to accept.

The key difference is the costs that add no feature or functions to the patient values. These wasted costs are ones that are like; time wasted or low direct labor productivity.

These types of expenses simply cost the organisation money. There is no real benefit; therefore it is non-value added work. That is how you will know the difference. Is there a benefit from the cost that has a value in the end?

You can also look at things like the cost of obsolesce, excess in capital investments, transportation expenses, stock rooms, etc. You can include anything that does not offer direct value to the service or treatment.

In addition to these types of costs, you will find the non-value added work creeping in when there is an expansion for a higher volume of productivity. This is because so much of the time growth includes more resources, and therefore expenses in training, maintenance, replacement etc.

Lack of knowledge all too often will be a major contributing factor in the accumulation of a business having large amounts of non-value added work. Therefore, the best way to prevent more than necessary non-value-added work, you will need to make sure to work out each step of a growth, new treatment, or change in order to prevent the waste that will occur with inaccurate planning.

As with anything new, there is a new idea that work or don't work. There are more services, therefore there are more items needed to get those treatments done. There are also more people needed to render these services. This can all greatly contribute to the costs involved in non-value added work.

Quality and speed are also areas that will be figured with the non-value added work. Because a job that could be completed quickly and with good quality is what the goal is. Therefore if you are working to get this overall goal, then you will need to work a process that allows for those growths to happen.

The new technologies of today increase the speed and quality of service and treatment; in addition to lower the non-value added work. This is the difference between value added work, and non-value added work. The work that adds value, and the work that is an expense that does not.

6. Kaizen-Continuous Improvement

What does the word "Kaizen" mean?

This Japanese word has been associated with many Lean Manufacturing techniques and more specifically the Toyota Production System.

In Japanese this word is pronounced 'kaizen'. KAI means 'change' or 'the action to correct' while ZEN means 'good'. So quite literally Kaizen means a change for good or an action to correct something to make it better. The Chinese translation is extremely similar. The only addition is that the Chinese translation adds a component of "benefit" to the definition of the word. In this regard the term Kaizen refers to good changes that not only benefits the business but also the society. In the Chinese translation it is assumed that one of these two parties cannot possibly benefit at the other party's expense. Therefore the Kaizen changes are to be mutually beneficial to all or they are not true to the Kaizen methodology.

The Kaizen strategy

In English the term Kaizen and the workplace strategy referred to as Continuous Process Improvement are often used interchangeably. Like many of its complementary partners, Kaizen aims to improve productivity in the work place by minimizing and eliminating waste. Waste in the workplace is defined as activities that add cost but do not add value. More specifically Kaizen tries to eliminate this waste not simply by picking it out and ridding the production line of individual components, but rather by creating a standardized "better way" of operating.

This "better way" of operating involves many elements, five of which are mentioned specifically. They are: teamwork, personal discipline, improved morale, quality circles, and suggestions for improvement. These founding principles demonstrate well just how different Kaizen strategies are from other less personal lean manufacturing methods. When executed correctly, Kaizen not only improves productivity, but it also humanizes the workplace, eliminates overly hard work (both mental and physical), and teaches employees of all positions how to identify and create solutions for everyday problems or inefficiencies that they may encounter. Small changes made by individuals are meant to build a long term transformation.

Naturally, there needs to be order as far as what types of changes are implemented on a large scale, and therefore brainstorming groups are often guided through the Kaizen process by a supervisor of some sort. Nurturing such a culture where continuous improvement is a way of life will lead to innovations yielded from a pool of contributors much larger than any room of board room executives or management team. In this atmosphere of small changes and experimentation, employees are not discouraged by other more common managerial strategies that involve a type of "command and control" mentality. Every member of the company has a voice through which they can express their ideas not only for how their own job can be improved, but also for how the company as a whole can make improvements to eliminate those procedures that are not needed.

It is sometimes difficult to implement a new method, especially one that may be as drastically different as Kaizen may be for some organizations. So it may be simpler to start the implementation process by first following these three steps:

1.      Re-align the focus of managerial techniques - In Kaizen, the worker is attributed with much of the credit as far as contribution for continual improvement methods are concerned. The idea is that when Kaizen methods are implemented correctly, the worker see that benefits of having a job that is more productive, less physically demanding (and ultimately safe) and more efficient. The worker is an actively contributing member of a support group that is working towards making the work day more pleasant and rewarding.

2.      Improve equipment - Your next focus, after your employees, should be on your equipment and how you can improve it. Changing machine layout and installing devices to improve their function are just a few suggestions.

3.      Create a plan - Continuous improvement doesn't just happen, you have to have a plan. It is unlikely that improving procedures will have a long term effect if there is no plan by which they can be measured and identified.

The Kaizen way of thinking/managing

The Kaizen way of thinking is not something that comes naturally to all managers. Kaizen is unique in that it focuses on both maintenance and improvement at the same time, two concepts that some would assume are contradictory in ways. What Kaizen methods suggest that may help to clear up this misunderstanding is that the maintenance aspect of the thinking style pertains to the standards that are currently being upheld by management and the maintenance of technological and operating standards.

Obviously, if there are no policies or rules for these sorts of standards, they will need to be established before they can be maintained. The term standard operating procedures (SOP) is one that is frequently used when Kaizen methods are being explained so it is important to understand what exactly these SOP's are for your company or production line.

Improvement is also central to the Kaizen way of thinking and managing. Once standard operating procedures are in place, it is management's job to work towards the revising and improvement of those standard practices. Very gradually, higher and higher standards are set for the company (obviously at a pace that does not deplete the company of its resources or its employees of their energy and enthusiasm).

Improvement and innovation go hand in hand.

Innovative ideas are constantly needed if the company is to achieve levels of productivity, quality and efficiency on a continually improving basis. Kaizen is unique in that improvement and innovation are recognized as features that are gradual and will not necessarily yield drastic improvements, nor are such drastic improvements a benefit to the company. It is the coordinated and continuous efforts of all the employees in an organization that can truly change that organization for the better. Managerial attitudes towards this coordinated effort of all employees can be either instrumental or detrimental in the overall result of the of the Kaizen methods. How an organization meets and masters change, or in other words, their attitude towards this new way of thinking will quickly reveal whether or not Kaizen is right for your company.

Gemba

The word "gemba" is a word that you may find associated with the term "Kaizen" and the process of continuous improvement. Gemba, as you may have guessed, is a Japanese word. When translated into English this word means "real place" or "where real action takes place." In a business setting the gemba is the place where the actions that add value to the customer are taking place. In a production or assembly line type of a business the gemba is typically going to refer to the shop floor or place where most of the work is taking place. The value in recognizing gemba is that in doing so less emphasis can be placed in the more popular customer attraction practices such as marketing, sales, and financial management, and re-assigning the emphasis where it is most important, on the production line floor. When you have the gemba as the centre of your operation you are putting all of your effort into where the real action takes place or where your customers are ultimately going to receive what is of value to them from. The customers are not paying for add campaigns or marketing techniques, so the emphasis of the company's efforts and funds ought not to be centralized in these areas.

Schellter applies this method successfully in healthcare organisations as patients are central.

Other terms that are commonly associated with Kaizen are: SMED, Total Productive Maintenance (TPM), Zero defect, Fool proof Poka-Yoke and Just in Time. All of these are methods by which a method of production can be improved and are therefore related at least in some extent to Kaizen and the continuous process of improvement.

Examples of Kaizen

Examples of Kaizen are often times the most effective ways of showing just how this method can be used in the workplace. Kaizen, Continuous Process

Improvement and many other techniques in Lean Manufacturing involve a great deal of thinking outside of the box, a task that can be quite difficult to do when you have been running with the same operation system and managerial tactics for the life of your business. Thinking differently is much harder than many people think. These examples of how other companies use Kaizen may help to spark some creative ideas of how you can apply similar innovation in your own service system.

  • Changing equipment layout - Something as simple as changing the layout on the service line floor can make a big difference in eliminating wasted resources. For example, arranging equipment so that they are in a `U' shape design can eliminate the need for an operator as the layout of the equipment make them more assessable to a fewer number of staff.

  • Making pieces of equipment your own with small modifications - Many times a home remedy or simple adjustment to standard tools or equipment can make a huge difference to the overall efficiency of the work that is being done. For example, a chef who attaches a paper towel rack to the side of an island prep area can save himself a lot of time by not having to move around to different areas of the kitchen in order to keep his workstation and himself clean.                                        

  • Use what you have working for you to your advantage - You can use forces that occur naturally to make your service job that much easier to perform. For example, you can let gravity work for you by creating shoots or holes where products can simply fall through to get re-routed to their appropriate positions in the recycling bins or at different points in the service line. Using this free energy saves time, money, and frustration.


7. Six sigma and lean manufacturing criticisms

Lean Manufacturing focuses entirely on solving the problem of waste through a constant process of analysis, production and mistake-proofing. Lean
Manufacturing is a holistic, comprehensive, enterprise-wide program designed to be integrated into your company's core strategy. Many experts believe Lean Manufacturing strategy is the most effective way to launch and sustain lean activities. A second process of Lean Manufacturing is improving the `flow' or the smoothness of the work. Toyota developed this added process to improve the flow instead of focusing on waste reduction. The Flow is designed to produce goods at a constant rate and allow further processing to be carried out at a constant and predictable rate.

Lean Manufacturing is focused on "the right" that is; getting the right things to the right place at the right time in the right quantity. During this "right" process the Lean Manufacturing system also strives to achieve perfect work flow while minimizing waste and being flexible to change.

Lean Manufacturing does lead to the overall reduction of costs in your organisation, but it also teaches that most of the "extra" costs are assigned when the product is first designed. Many times it has been noted that employees will specify familiar, safe materials and processes rather than search for a new one. This tends to lead to expensive and inefficient programs and/or processes.

When you implement lean manufacturing, you should start by setting up a checklist and review it often. Product design can be cut in half with a few brainstorming sessions that improve overall company cost and performance. Lean Manufacturing also requires the use of an effective, efficient leader. Lean Manufacturing focuses on a complete cultural change to your business. Toyota has used a system of coaching and guiding series to help the less experienced companies become proficient in their division.

Many companies have had outstanding results from implementing Lean Manufacturing. Cefla Group published they have accelerated business process by 87%. General Motors has implemented Lean Manufacturing to cut down administration costs. They reported a $200 million dollar savings for halting the printing of catalogues for dealers. Chrysler also reported savings upward of $2 million by implementing Lean Manufacturing. Many other companies have reported cutting costs by 10% to 40% and increased productivity by 12% to 52%.

Criticisms of lean manufacturing


Common problems with lean manufacturing tend to remove around the key principles and if they make sense. For a rational thinker, very few of the principles will make sense because when properly applied, lean manufacturing will lead to a sense of urgency, stress and discomfort. This problem lies because people do not have the proper mindset that is required for lean manufacturing.

Another problem with lean manufacturing is the immediate patient needs that need to be responded to. This again will create a sense of urgency and that will lead to misunderstandings and discomfort. Employees tend to cover a problem if they are rushed instead of focus on fixing the problem. If you have buffers in the system, it is seen as weak and should be eliminated.

Many people feel that the lean approach forces people to change instead of allowing them to do it on their own. It is a necessary part in lean to push people beyond their comfort zone in order to obtain results.


Six Sigma


Motorola developed Six Sigma to identify and remove defects in the manufacturing process. The Six Sigma methodology uses a series of quality management methods that are based on statistics. Six Sigma creates a unique infrastructure within your organization, assigning certain individuals to have different roles and responsibilities. The methodology follows a karate belt method calling these roles "black belt, green belt, etc."

Each step in the Six Sigma project will be assigned to a different group and will be carried out following a defined sequence of steps. The entire process is focused on statistics and your overall goal will be financially set, meaning the end result will include cost reduction or an increase in revenue.

Six Sigma encompasses a wide range of topics. Originally it was designed to improve the manufacturing processes and eliminate defects, but it now defines anything that leads to customer dissatisfaction.

When Bill Smith at Motorola formulated Six Sigma, he was inspired by the Toyota Production System and Lean Manufacturing.


Six Sigma and Lean Manufacturing both believe a business can become successful with the following:


  • Reduce process variation through continuous effort to achieve stable and predictable results.
  • The manufacturing process has characteristics that can be measured, analyzed, improved and controlled.
  • To achieve results, management must believe in the concept and implement a complete cultural change in their organization.


Six Sigma not only implements the above, but it also believes in the following:


  • Increasing the emphasis on leadership. Management must be strong and passionate about the program in order to obtain success.
  • Having a clear focus will help to measure and achieve quantifiable financial returns.
  • The infrastructure of "Champions", "Master Black Belts", "Black Belts", "Green Belts" and "Yellow Belts" will lead, implement, and obtain results from the Six Sigma approach.
  • Assumptions and guesswork lead to poor results. By following Six Sigma, a clear commitment to making decisions will come from verifiable data.


Six Sigma came from a field of statistics that is known as process capability studies. These studies are designed to produce defect levels below 3.4 defects per million opportunities.

The different belts in the Six Sigma methodology are as follows:


  • Black Belts - they are able to devote all their time to the process.
  • Champions - Middle or senior-level executive who sponsors the Six Sigma project and is responsible for the implementation of Six Sigma throughout the company.
  • Green belts - these individuals can devote some of their time to Six Sigma.
  • Yellow belts - these individuals have been trained in the process, but have not completed a Six Sigma project.


Criticisms Six Sigma

Although Six Sigma is a proven method, it still has critics who disagree that it is successful. Many people will tell you that Six Sigma is simply a marketing ploy. 

While Six Sigma does draw on tools from other measures, it also represents a modern quality in the context of defects per million opportunities.

Some people will argue that Six Sigma doesn't take enough of a preventative approach to problems. They state that it is more of an appraisal system or a corrective action system. Six Sigma is much more than an appraisal system; it involves extensive training and education to the entire workforce and creates an infrastructure of experts who are involved in numerous projects focusing on quality, timeliness and cost.

Other people have argued that the success of the program depend more on the establishment of the right organizational culture rather than on the program. Unlike other programs, Six Sigma's training takes a look at the importance of a company-wide program mindset instead of individual buy-ins. The methodology must be internalized if it is going to be successful.

Another area where Six Sigma is criticized is for its leadership. Leadership is the key to the success of the complete Six Sigma program. Without the support of leadership at every level, the program will fail. Many critics claim that Six Sigma is simple a "flavour of the month" program and relies heavily on individual support instead of a group implementation.

A few other criticisms of Six Sigma get into the technical aspects like distribution and short-term variability. For each critic of Six Sigma, there are always proponents of the process who can find factual evidence to support their defence.

Lean Manufacturing and Six Sigma

Despite all the critics that are looking for ways to pick apart the 2 methodologies, both systems have been effective and useful for several companies. Because the 2 methodologies go hand-in-hand, many companies have actually combined certain aspect of each method and call it "Lean Six Sigma." Like lean manufacturing and Six Sigma, Lean Six Sigma focuses on creating a "cultural change" within your organisation.

The results you should see from Lean Six Sigma include:


·         Cost reduction
·         Improved product quality
·         Improved reputation
·         Increased customer satisfaction
·         Increase in revenue
·         Higher volumes of business



Patient Safety

10 Facts on Patient Safety from the World Health Organization (WHO):

Fact 1
Patient safety is a serious global public health issue. In recent years, countries have increasingly recognized the importance of improving patient safety. In 2002, WHO Member States agreed on a World Health Assembly resolution on patient safety.

Fact 2
Estimates show that in developed countries as many as one in 10 patients is harmed while receiving hospital care. The harm can be caused by a range of errors or adverse events.

Fact 3
In developing countries, the probability of patients being harmed in hospitals is higher than in industrialized nations. The risk of health care-associated infection in some developing countries is as much as 20 times higher than in developed countries.

Fact 4
At any given time, 1.4 million people worldwide suffer from infections acquired in hospitals. Hand hygiene is the most essential measure for reducing health care-associated infection and the development of antimicrobial resistance.

Fact 5
At least 50% of medical equipment in developing countries is unusable or only partly usable. Often the equipment is not used due to lack of skills or commodities. As a result, diagnostic procedures or treatments cannot be performed. This leads to substandard or hazardous diagnosis or treatment that can pose a threat to the safety of patients and may result in serious injury or death.

Fact 6
In some countries, the proportion of injections given with syringes or needles reused without sterilization is as high as 70%. This exposes millions of people to infections. Each year, unsafe injections cause 1.3 million deaths, primarily due to transmission of blood-borne pathogens such as hepatitis B virus, hepatitis C virus and HIV.

Fact 7
Surgery is one of the most complex health interventions to deliver. More than 100 million people require surgical treatment every year for different medical reasons. Problems associated with surgical safety in developed countries account for half of the avoidable adverse events that result in death or disability.

Fact 8
The economic benefits of improving patient safety are compelling. Studies show that additional hospitalization, litigation costs, infections acquired in hospitals, lost income, disability and medical expenses have cost some countries between US$6 billion and US$29 billion a year.

Fact 9
Industries with a perceived higher risk such as aviation and nuclear plants have a much better safety record than health care. There is a one in 1,000,000 chance of a traveller being harmed while in an aircraft. In comparison, there is a one in 300 chance of a patient being harmed during health care.

Fact 10
Patients’ experience and their health are at the heart of the patient safety movement. The World Alliance for Patient Safety is working with 40 champions – who have in the past suffered due to lack of patient safety measures – to help make health care safer worldwide.


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