Seeking Perfection:

Lean Operations in Non-Manufacturing Environments

What You Will Learn

The definition and history of Lean Thinking

The three phases of Lean implementation

Lessons from a case study: Lean in the Health Care industry

How to identify and reduce Waste

How to Value Stream Map any process

To understand change and how to manage people through it

This Is Not the Lean We Are Talking About

Is it cutting corners?

Is it fewer people?

Is it working harder?

Is it making less?

What Does the Boss think Lean Is?

Definition of Lean Thinking or

Lean Management

1. Doing more with less

2. Providing customers with exactly what they want: Every time With no waste

Key Lean Concepts

Value streams

Waste elimination

Flow

Pull

Continuous improvement

Why Apply Lean?Impact of Lean Operations on

Industry

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Validated Historical Industry Averages*

% Changes

Direct Labor Productivity Improved 45-75

Cost Reduced 25-55

Throughput Increased 60-90

Defects and Scrap Reduced 50-90

Inventory Reduced 60-90

Space Reduced 35-50

Lead-Time Reduced 50-90

*Source: Virginia Mason Medical Center

History of Lean

Before Lean

After Lean In Modern Auto Assembly Plants

Lean Thinking Applies to Any Company in Any

BusinessWomack and Jones of The Machine

That Changed the World have spread the gospel to other sectors

Health Care industry especially is adopting lean thinking

Many of us are now applying lean methods to the office and other non-manufacturing environments

Why is it spreading? It works!

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Scope of Lean Operations Can Vary

Learning how to stabilize, standardize, and simplify

business processes using the power of the Toyota Production System

The Lean System

Stabilize

Stabilize tools are:Understanding WasteLeading ChangeTeaming5S and Visual ControlsCycle TimeTakt TimeData CollectionValue Stream MappingBrainstorming and Problem-solvingMetrics

Standardize

Standardize tools are:• Just-In-Time• Continuous Flow• Pull Systems and Kanbans• Standard Work• Pitch• Space Layout• Work Load Balancing• File System

SimplifyKaizen – the process of improving “Continuous improvement”

Can be a single task or team project

People are the foundation

Virginia Mason Medical Center:

Seeking Perfection in HealthcareFounded in 1920 in Seattle

Now consists of 336 bed hospital, group practice of 480 physicians, network of regional clinics

In 2002, Virginia Mason embarked on an ambitious, system-wide program to improve the way it delivers safe health care.

It adopted the Toyota Production System (TPS), calling it the Virginia Mason Production system (VMPS).

Virginia Mason’s “Strategic Issues”

Quality

Safety

Morale

Cost

Profit

Design the Production System to Optimize the Seven Flows of

Medicine

VMPS Action Tools

Patient Safety Alert System

Value Stream Development

RPIW (Rapid Process Improvement Workshop)

5-S (Sort, simplify, standardize, sweep, self-discipline)

Daily work life –Everyday Lean Idea System (ELI)

Example: Nursing Cells

“Less nursing time provided to patients is associated with higher rates of infection, GI bleeding, pneumonia, cardiac arrest and death.”

Keeping Patients Safe: Transforming the Work Environment of Nurses - Institute of Medicine 2004

Nurses’ Workshop Ideas

Nursing Cells

Organize work of RN and patient care technician (PCT) in a geographic grouping of rooms (cell)

Supplies at point of use

One piece flow of documentation

In room handoff with patients

Standardize work for staff from 7AM –11 AM (First cycle of day)

Increase nursing surveillance of our patients—make care safer

Nursing Cells: 90 day Results

Metric Before After

RN # of steps 5,818 846

PCT # of steps 2,664 1,256

Completion time for AM work cycle

240’ 126’

Patient dissatisfaction 21% 0%

RN time spent in indirect care

68% 10%

PCT time spent in indirect care

30% 16%

Call light on between 7a-11a

5.5% 1%

Selected Results of VMPSSaved $11 million in planned capital investment and freed

an estimated 25,000 square feet of floor space

Reduced the time it takes to report lab test results to the patient by more than 85 percent.

Reduced inventory costs by more than $1 million

Reduced staff walking distance by 60 miles per day

Reduced labor expense in overtime and temporary labor by $500,000 in just one year

VM was named a 2007 Leapfrog Top Hospital , one of 41 hospitals in the nation and the only hospital in Washington state to receive this designation.

Stabilize

Stabilize tools are:Understanding WasteLeading ChangeTeaming5S and Visual ControlsCycle TimeTakt TimeData CollectionValue Stream MappingBrainstorming and Problem-solvingMetrics

Stabilize – Understanding Waste

Waste: Anything that Adds Cost or Time

without Adding Value

What is Value?

Value is what, in its entirety, the product and service does to fulfill the expectations of the customer

Elements of value:PerformancePriceAppearanceReliabilityDeliveryFeaturesEtc., etc.

Understanding Waste: Overproduction

Overproduction – producing work prior to it being required is waste and is the greatest of all the wastes

• Producing reports no one reads or needs• Making extra copies• E-mailing, faxing same document• Entering repetitive information on multiple documents

Understanding Waste: Waiting

Waiting – for people, signatures, supplies, repairs, and information is waste. This is “low hanging fruit” which is easy to reach and ripe for the taking.

• Unnecessary signatures or approvals• Waiting for others to complete tasks (bottlenecks)• Slow computer operations• Cross-departmental resource mismatches

Understanding Waste: Motion

Motion - any movement of people, paper, electronic exchanges that does not add value is waste• Searching for computer files• Searching for documents in file cabinets• Repeatedly reviewing manuals for information• Hand carrying paper to another process• Walking to and searching for supplies or equipment

Understanding Waste: Transport

Transport - the time to deliver any work within an operation• Locating commonly used equipment at a distance• Distributing unnecessary copies• Sending unnecessary attachments• Hand-carrying paper to another process

Understanding Waste: Over-Processing

Over-processing - putting more effort than necessary into the work required by internal or external customers is waste

• Duplicate reports or information• Repetitive data entry• Constantly revising documents• Revisiting agenda items• Specifying incomplete or unclear requirements

Understanding Waste: Inventory

Inventory - work piles, excessive supplies, and excessive signature requirements are waste • Files awaiting signatures or approvals

• Work awaiting task completion by others• Inadequate training of back-ups• Excessive office supplies• Storing obsolete documents or files

Understanding Waste: Defects

Defects (or mistakes) - all processing required creating a defect or mistake and the additional work required to correct them • Data entry errors• Pricing errors• Shipping errors• Forwarding incomplete documentation• Lost files • Incomplete or incorrect customer service

The Eighth Waste: Underutilization of people

Underutilization of People – the result of not placing people where they can (and will) use their knowledge, skills, and abilities to the fullest

• Unbalanced work loads• High absenteeism and turnover• Diminished work capacity• Stunted skills development

Stabilize – 5S

Example of Applying 5S:The Computer Desktop

Action Example Issues

Sort Cluttered desktop; files everywhere

Set in Order Inconsistent folder structure

Shine or Scrub Old and obsolete files retained

StandardizeEach worker has his or her own folder scheme

Sustain No audit system

Stabilize – Value Stream Mapping

Value Stream Mapping – the visual representation of the processes (work units and information) required to meet customer demandThe core starting point for applying lean thinkingIncludes both value-added and non value-added

activitiesAllows for “seeing” areas of waste in current stateCurrent state becomes the basis for improved

future state

Value Stream Mapping:Example of Current State

Elements of Value Stream Mapping

Walk the product’s production path from beginning to end

Identify every sub-process in the material and information flows

Measure time of each operation within a sub-process

Record all waiting times

Draw a visual representation of how the material and information flows connect

Value Stream Mapping:Example of Current State

Creating the Future State of the Value Stream Map

Conduct a waste auditBrainstorm ideasLook for easy flow issuesReview “common sense” remediesUse the basic Lean tools and update the map as

you learn moreKeep going

Value Stream Mapping:Example of Future State

Implementing Lean is a Big Change

Leadership must set the course and commit

Involve all key people

Provide the necessary training and resources

Anticipate resistance and manage it

Communicate, communicate, and deliver

If the “Horse Doesn’t Drink”, You Have Nothing

Three Elements of Success

WaterLead the

HorseDrink

Situation Technique Behavior

Opportunity Process Commitment

Nikes Athletic Skills Just Do it!

Tools Method Action

Thank You!