5 Key Principles for Hospitals From Toyota's Lean Production System

Written by Lindsey DunnSeptember 17, 2009

he Toyota Production System, which was developed from the late 1940s through the mid-1970sby top Toyota executives to improve the company's manufacturing processes, is now used bynumerous companies across various industries to reduce inefficiencies and improve the overallvalue of their end product to customers. Although originally developed for the manufacturingindustries, the key goals of lean production — eliminating waste, valuing employees andcontinually improving — can be applied to service providers, such as hospitals.

"One thing that hospitals need to keep in mind regarding lean processes is that it is anapproach to management, a philosophy for improving and leading organizations," says MarkGraban, senior fellow at the Lean Enterprise Institute and author of Lean Hospitals. "[Hospitalleaders and clinicians] will have concerns about how this transfers to healthcare, but the keymanagement practices are very transferable."

Here are five ways you can apply the key goals of TPS to your hospital to improve efficiency.

Eliminate waste1. Eliminate non-value-added activity. One key principle of lean management is theelimination of any activity that does not add value to an organization's end product. Forhospitals, this refers to any activity that is not necessary in providing excellent patient care.

"In an ER visit, a value-added activity would be registering the patient, having a nurse triage thepatient, the doctor making the diagnosis. Waiting in the waiting room or in a patient room is anon-value-added activity," says Alan Kent, president and CEO of Meadows Regional MedicalCenter in Vidalia, Ga. "In the ER, about 80-90 percent of a patient's time is waiting. Leanattacks time that is non-value added."

Lean management promotes employee participation in process improvement. "It is a staple ofthe lean process that the staff actually doing the work figures outs ways to improve it," says Mr.Kent. "It's not a management-driven process. It's a staff-driven one."

Meadows Regional implemented lean management in 2005, training their staff on leanprinciples and then involving them in analyzing ER processes and developing ways to reducewait times. The team of ER staff identified 44 action items for reducing times and began toimplement the changes over time. The average length of stay for ER patients at MeadowsRegional dropped from 247 minutes to 139 minutes in just two years as a result of theemployees' efforts.

Other hospitals have successfully reduced wait times in the operating department throughimplementing lean principles. Brian Leonard, MS, a performance improvement processmanager at Purdue University's Healthcare Technical Assistance program, recently assistedGoshen (Ind.) Health System to increase the on-time starts in the hospital's operating

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5 Key Principles for Hospitals From Toyota's Lean Production System

Written by Lindsey DunnSeptember 17, 2009

department from 15 percent to 80 percent in only 8 weeks.

A team of operating department employees examined the processes and determined that roomturnover and lack of focus on point-of-use concepts were two factors most responsible for thelate start times. Point of use, in this instance, refered to having everything one needs in the rightplace at the right time. This includes supplies, staff, physicians and the patient. As a result, theteam developed process improvements for turnovers and the system worked to educatephysicians and staff on the impact of late arrivals of any needed resource on patient experienceand hospital profitability. As a result of these efforts, the system reduced its average turnovertime from 30 minutes to 15 minutes, says Mr. Leonard.

2. Keep inventory low. Another principle of lean management is using what is referred to as a"just-in-time" inventory strategy, which aims to reduce inventory and associated carrying costs.Not overstocking supplies can help hospitals to reduce supply costs associated with suppliesthat expire before they are used and the cost of storing extra supplies.

Goshen Health System recently implemented a JIT inventory strategy for its operatingdepartment, which saved the system $1.3 million in supply costs over the course of a year. Thesystem now replenishes supplies daily based strictly on demand and uses digital tools, includingscanners and bar codes, to track supply use and notify central inventory of what is needed ineach OR every day.

"Healthcare in general hasn't put enough thought into supply management. It's a lot ofguesswork. Someone says we need gloves, so we put 500 on the shelf," says Mr. Leonard."Lean systems are more responsive and provide more accurate par levels. It's moving from apush system to a pull system. In a traditional system, supplies are pushed into a room withoutconsidering what is used on a daily basis."

Hospitals using JIT inventory strategies should not only be concerned with the number ofsupplies on hand but also with their accessibility, says Mr. Kent. "We made supplies available inthe areas [of the ER] where they were most likely to be used as opposed to more centralstorage room," says Mr. Kent. Such strategies save nursing and clinical staff the time needed torun between the patient and the storage area, which is a non-value-added activity.

3. Embrace technology. The use of technology to improve processes and eliminate waste isembraced by the TPS and should be embraced by hospitals as well. Technology can reduce themanual labor involved in many processes that take place within a hospital and improve overallefficiency.

Goshen Health System could not have been as successful in it efforts to reduce inventory whilestill having all necessary supplies on hand without digital controls, and the use of technology tomanage inventory greatly reduces the labor required for such efforts. Manual inventory countsare very time consuming and costly, labor wise, as opposed to digital tracking systems that canprovide accurate inventory counts at any time, according to Mr. Leonard.  

Meadows Regional was able to reduce ER wait times, in part, through replacing its paper

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5 Key Principles for Hospitals From Toyota's Lean Production System

Written by Lindsey DunnSeptember 17, 2009

medical record system with electronic medical records. "We found that staff spent an amazingamount of time writing on paper and moving the paper charts around," says Mr. Kent. "Wemoved fully to EMR, and no paper has to move from triage nurse to the lab to the x-raytechnician before the patient can receive care."

Value employees4. Develop people. Lean organizations differ from traditional organizations in putting the powerof improving an organization into the hands of the employees that directly interact with the endproduct, rather than management. Lean organizations train employees in lean processes andentrust them with developing the organization. For hospitals, staff directly involved with patientcare is charged with developing process improvement.

This commitment to the value of employees should be steadfast, even in difficult economictimes. "Traditional management will approach cutting costs by looking at people; lean looks atthe work being done and how it's being done," says Mr. Graban.

Many lean organizations have a straightforward policy against layoffs. Instead, they useemployees to find alternative ways to cut costs through process improvement. "It's not aboutmaking people work harder, it's about figuring out how to do more cases in a day with the samenumber of people," says Mr. Graban. "If you can improve productivity by 10 percent [throughprocess improvement], you can reallocate staff or give them career growth opportunities."

Continually improve5. Focus on root causes. The largest difference between traditionally managed organizationsand lean organizations is their focus on systemic improvement. Lean organizations focus onidentifying the root causes of all problems and adjusting processes to stop the same problemsfrom occurring in the future.

If a problem occurs in a lean hospital's operating department, for example, management will putresources toward identifying where in the process the breakdown occurred and what can bedone to improve it. "If an instrument is missing from the cart during a procedure, in a traditionalhospital, someone would run and scramble to get the needed instrument and move on, leavingthe exact same problem to occur the next day," says Mr. Graban. "In a lean hospital, you lookfor the root cause. You recognize there is a problem in the instrument sterilization process, andyou put together a process improvement group to improve it."

To identify root causes, Mr. Graban recommends that leaders ask "why" five times. Continuallyasking "why?" the best way to expose root causes because it helps leaders move beyond thesurface explanation of a problem. "In a lean hospital, hospital leadership deems it import todedicate time and training to look at systems and processes instead employing a workaround orblaming individuals," he says. "It's about looking at the overall system and challenging thingsthat could be done better."

Contact Lindsey Dunn at lindsey@beckersasc.com.

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