Kanban System - Application of Lean Manufacturing in Hospitals

Kanban system is a very helpful and efficient system in manufacturing. Kanban means "sign" or "signboard". In this system, when some materials were consumed and need a refill, a signal is sent to produce and deliver a new order or shipment. Kanban system is developed by Toyota, who studied from supermarket, to improve the efficiency in its operations and eliminate waste. It is now widely used by manufacturers to dramatically ensure supply, reduce manufacturing cost and increase inventory turnover.

This system is applied to hospital inventory management. Hospitals use Kanban cards as a visual signal of "out of stock". Kanban card is like a shopping list for ordering and shopping drugs. All information including drug name, reorder quantity, safety stock quantity, unit price, bar code, item code, store location, etc is on the card. The back of Kanban card has instructions of how to refill a bag of safety stock with the Kanban card so that the card could be reused in the future. When the hospital almost runs out of a certain drug, the bag with safety stock is opened and the Kanban card for the drug should be put into a box call "Kanban post" to send a signal of out of stock. Then when the purchasing manager sees the Kanban card in Kanban post, he will reorder the drug according to the information on the card and refill the stock. The Kanban card will be put into the bag with safety stock again. 

One example of the successful application of Kanban system in hospitals is a regional medical center in southern North Carolina. It saved $80,000 per year in expired inventory. Kanban system was also applied to its OR scheduling. The hospital was able to operate 6 more surgeries per week with the same staffing levels working the same hours as before. This system generated more revenue for the medical center. 

A question for readers to think about is:
1. what other processes can Kanban system applied to in hospitals? 

2. What are shortcomings of Kanban system used in hospital?

Reference: 

1. http://medcitynews.com/2011/03/lean-health-care-tools-come-to-hospitals-via-a-new-road-the-car-industry/

2. http://www.lean.org/Common/LexiconTerm.aspx?termid=242