Lean and TPS in Healthcare: pros and cons.

Theme of the fourth week of our Supply Chain Management course is the concept of lean manufacturing, or simply Lean, and its best representation in the Toyota Production System (TPS).

Lean is, as Wikipedia defines it, “a production practice that considers the expenditure of resources for any goal other than the creation of value (action or process that a customer would be willing to pay for) for the end customer to be wasteful, and thus a target for elimination.” [1] In line with this definition are the words of Taiichi Ohno, the father of TPS: “All we are doing is looking at the timeline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time by removing the non-value-added wastes.” [2]

This new approach has been mainly developed for manufacturing industries; nowadays, companies in different areas are trying to adopt it in order to expand their production effectively and efficiently. Healthcare is one of the sectors where the introduction of the concepts of lean production and TPS has given good results (in terms of eliminating waste, keeping inventory low, increasing efficiency, valuing people, and non-stop improving).

Eliminating non-value-added actions, such as patients’ waiting time in the ER or in a clinic, is one of the issues that could be tackled with  Lean. This problem can be analyzed both from the perspective of the patient, who is forced to wait in order to be examined, and the perspective of the doctor/physician, who knows that s/he did not add “value” to the patients – in fact, s/he caused an annoyance. Improvements in this case are not typically conducted by the hospital/clinic management, but directly by staff members, people who work “in the field” and are familiar with  the causes of such delays. The application of lean principles to staff training can reduce patients’ waiting time, both at registration and in the surgery department. For instance, Lean would suggest the elimination of excessive documents and forms to fill in, it would reduce the time needed to search for supplies, or to redirect patients to the appropriate office to schedule a new appointment. [3]

Lean and the Just-In-Time (JIT) strategy (basically consisting in avoiding over-stocking) have also inspired improvements for managing the inventory and the related operating expenses. Specifically, the utilization of technologies, such as scanner and bar code, has allowed inventory managers to be immediately informed about a scarcity of supplies, such as gloves, bandages, syringes, and it has facilitated a efficient management of medicines, avoiding that they could expire. [4]

Emphasizing the importance of people, making them aware that they are an integral part of the process, giving them the opportunity to analyze a problem and suggest a solution are fundamental aspects of the TPS. In the Virginia Mason Medical Center, for example, doctors and nurses realized that they needed to avoid the risk of catheters’ wrong installation or incorrect positioning, which would imply a double operation on the patient. Therefore, they suggested decreasing the available variety of catheters, because they had different installation processes. [5]

Does the adoption of Lean in healthcare have only positive aspects, as it seems to be the case in manufacturing? Probably not.

Some sociological aspects of Lean thinking are possibly under-valued in healthcare. Specifically, a lean process that promotes standardized work, which surely increases efficiency, may not fit perfectly an environment such as a hospital or a clinic, where very different patients come in and where the human interaction between doctor/nurse and patient is as crucial as a timely, accurate medical treatment. Since the business of healthcare providers is human health and well-being, shouldn’t human interaction be emphasized, even if it is at the expense of economic efficiency? Do all healthcare providers make sure that this important part of the service is indeed considered as a value-added action? [6]

References

1. http://en.wikipedia.org/wiki/Lean_manufacturing
2. Decoding the DNA of the Toyota Production System (Spear and Bowen Harvard Business Review, January 2006)
3. http://www.beckershospitalreview.com/news-analysis/5-key-principles-for-hospitals-from-toyotas-lean-production-system.html
4. http://medicaleconomics.modernmedicine.com/medical-economics/news/how-manufacturing-process-transformed-healthcare-delivery
5. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2793611/
6. http://www.lancaster.ac.uk/pg/dehghans/pdf/dissertation.pdf

The Cloud and SaaS: Enabling Lean Businesses

One of the readings for this week covers the subject of lean manufacturing. The primary effect of lean manufacturing, or also known as lean thinking, is the improvement of flow. It means that products, or services, are moving faster from production to customers. This is possible because one of the principles in lean thinking is how to run production systems in a more efficient and effective way.

It might be common to think that implementing technology in businesses to improve business processes may cost a lot. Investing in hardware, purchasing proprietary software, hiring technical specialists to install or maintain the hardware/software, are just some of the cost that may add to the expenses of a business.

So can a business improve its process by implementing technology, but still cut costs? Can technology be utilized to apply lean thinking?

One of the trends in technology nowadays is cloud computing. There are companies that are offering business solutions for customers without having the need to install expensive hardware. There is even no need to install software. All of the resources are provided over the Internet, or in the “cloud”.

However, cloud computing may not be suitable for everyone. Since it operates over the Internet, it depends on an established and reliable network. There might also be some security issues, since the information is stored in the cloud.

So is cloud computing just a hype? Check out these interesting headlines from the past several months in sequential order:

• Oracle Buys Cloud-based Customer Service Company RightNow For $1.5 Billion (October 24, 2011 via techcrunch.com)
• SAP Challenges Oracle With $3.4 Billion SuccessFactors Purchase (Dec 07, 2011 via zdnet.com)
• Oracle buys Taleo in a $1.9B response to SAP (Feb. 9, 2012 via gigaom.com)

One thing that RightNow, SuccessFactors, and Taleo have in common is they all offer cloud-based services in the form of Software as a Service (SaaS). Based on the large amount of money invested by large companies such as Oracle and SAP, there must be something special in the “clouds”.

Sources:

1. Nave, Dave. “How to Compare Six Sigma, Lean and the Theory of Constraints: A Framework for choosing what’s best for your organization”. Quality Progress, March 2002, Volume 35 Number 3. American Society for Quality.
2. http://businessonmain.msn.com/browseresources/articles/itandproductivity.aspx?cp-documentid=32113199#fbid=YtKN8eXN7BF
3. http://en.wikipedia.org/wiki/Cloud_computing
4. http://techcrunch.com/2011/10/24/oracle-buys-cloud-based-customer-service-company-rightnow-for-1-5-billion/
5. http://www.zdnet.com/blog/howlett/sap-acquires-successfactors-a-first-take/3608
6. http://gigaom.com/cloud/take-that-sap-oracle-buys-taleo/

Lean in Software Development

Lean, being primarily a manufacturing and production buzzword has seen its embracement in other industries as well like health care services, food chains etc. I have had a chance to implement and practice Lean in a software development life cycle while working at IBM and I would like to share my experience in this post.

When my team transitioned from a traditional iterative model of software development to Agile model, we decided to incorporate some Lean practices into our development process. The first and foremost challenge in front of our team was to deliver small chunks of code as early as possible to the stakeholders/customers and get an early feedback on the system. Such a change required reducing the development cycle from 6 months to 4 weeks (which was met with a lot of criticism at the onset). But the objective was that the sooner the end product is delivered without considerable defect, the sooner feedback can be received, and incorporated into the next iteration. The shorter the iterations, the better the learning and communication within the team. Speed assures the fulfilling of the customer's present needs and not what they required yesterday. This gives them the opportunity to delay making up their minds about what they really require until they gain better knowledge. Customers value rapid delivery of a quality product.

The Just-in-Time ideology was put into application here , which affected not just the development cycles but the QA cycles as well, the testers had to be ready with all guns blazing the moment a piece of code was available for testing so that defects can be raised at an early stage and fixed appropriately. A significant amount of planning was required at the end of every iteration by dividing the tasks for achieving the needed result.

The Lean paradigm in software development also facilitated the ideology of self-driven teams. A very effective tool that drives this ideology is a stand-up 15 minute meeting every day, better known as Scrum meeting.(the term Scrum is derived from Rugby).

Such a meeting involved a Scrum-master, who is a facilitator of the meeting and all the team members who were required to give answers to three questions in less than a minute

1)       What did I do yesterday?

2)       What am I going to do today?

3)       What is it that blocks my progress?

The idea is to ensure that every team member knows what every other team member is doing so that they can help each other and achieve their targets. Such meetings facilitate transparency and improve communication between team members.  

In terms of reducing wastage in the software development life cycle, Lean facilitates a prompt and responsive testing cycle that goes in hand with the development cycle, which does not allow accumulation of technical debt and aims at providing error-free code at the end of every iteration.

The embracement of Lean practices in the software world is still at an infant stage and needs to evolve as teams are become cross-geographic in nature which adds to the communication overhead between teams. Shorter iterations lead to a stressful time for developers and testers who need to put in and test a lot of features in a very short period of time. Also , getting a continuous constructive feedback from customers about the system is a big challenge , customers are generally not very responsive that too at such frequent intervals.

These are certain challenges faced by the software industry and how well the software industry embraces Lean in the future is something to look out for.