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Lean and TOC in Healthcare. Learning Objectives. Explain the Lean and JIT philosophy Define waste in a Lean environment Understand push versus pull production Explain JIT manufacturing and Services Understanding Six Sigma Understanding TOC in the context of healthcare. Just-In-Time.

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learning objectives
Learning Objectives
  • Explain the Lean and JIT philosophy
  • Define waste in a Lean environment
  • Understand push versus pull production
  • Explain JIT manufacturing and Services
  • Understanding Six Sigma
  • Understanding TOC in the context of healthcare
just in time
  • Getting the right quantity of goods to the right place – exactly when needed!
  • Just-In-Time= not late & not early
philosophy of lean and jit
Philosophy of Lean and JIT
  • Elimination of waste
  • Broad view of operations
  • Simplicity
  • Continuous improvement
  • Visibility
  • Flexibility
eliminate waste
Eliminate Waste
  • Waste is anything that doesn’t add value:
    • Unsynchronized production
    • Inefficient & unstreamlined layouts
    • Unnecessary material handling
    • Scrap & rework
tmc classified waste into seven major categories examples in healthcare
TMC classified waste into seven major categories – examples in Healthcare
  • Over production
  • Waiting Time
  • Transportation
  • Processing
  • Inventory
  • Motion
  • Production Defects
broad view of operations
Broad View of Operations
  • Understanding that operations is part of a larger system
  • Goal is to optimize the system – not each part:
    • Avoid narrow view: “That’s not in my job description!”
    • Avoid sub-optimization
  • It’s often easy to develop complex solutions to problems by adding extra steps
  • Goal is to find a simpler way to do things right:
    • Less chance to forget extra step
    • Fewer opportunities to make mistakes
    • More efficient
continuous improvement
Continuous Improvement
  • Traditional viewpoint: “It’s good enough”
  • JIT viewpoint: “If it’s not perfect, make it better”
  • Waste can only be eliminated after it’s discovered
  • Clutter hides waste
  • requires good housekeeping
  • Easy to make volume changes:
    • Ramp up & down to meet demand
  • Easy to switch from one product to another:
    • Build a mix of products without wasting time with long changeovers
jit in manufacturing examples in healthcare
JIT in ManufacturingExamples in Healthcare?
  • Kanbans & pull production systems
  • Quick setups & small lots
  • Uniform plant loading
  • Flexible resources
  • Efficient facility layouts
quick setups small lots
Quick Setups & Small Lots
  • Setup times = time required to get ready
    • E.g.: clean & calibrate equipment, preparing Operating Rooms
  • Internal versus external setups
    • Stop production or setup will still be running
  • Internal setups = lost production time
    • Inefficient setups = waste
flexible resources
Flexible Resources
  • General purpose equipment:
    • E.g.: printer-fax-copiers, etc.
    • Capable of being setup to do many different things
  • Multifunctional workers:
    • Cross-trained to perform several different duties, transport personnel aware of patient movement procedures or patient handling
efficient facility layouts
Efficient Facility Layouts
  • Workstations in close physical proximity to reduce transport & movement
  • Streamlined flow of material
  • Often use:
    • Cellular Manufacturing(instead of job shops)
    • U-shaped lines: (allows material handler to quickly drop off materials & pick up finished work)
tqm jit
  • Quality at the Source
  • Jidoka (authority to stop line)
  • Poka-yoke (foolproof the process)
  • Preventive maintenance
respect for people the role of workers
Respect for People:The Role of Workers
  • Cross-trained workers
  • Actively engaged in problem-solving
  • Workers are empowered
  • Everyone responsible for quality
  • Workers gather performance data
  • Team approaches used for problem-solving
  • Decision made bottom-up
  • Workers responsible for preventive maintenance

Respect for People:The Role of Management

  • Responsible for culture of mutual trust
  • Serve as coaches & facilitators
  • Support culture with appropriate incentive system
  • Responsible for developing workers
  • Provide multi-functional training
  • Facilitate teamwork
supplier relations jit can these be applied in healthcare
Supplier Relations & JIT – Can these be applied in Healthcare?
  • Use single-source suppliers
  • Build long-term relationships
  • Co-locate facilities to reduce transport
  • Stable delivery schedules
  • Share cost & other information
benefits of jit
Benefits of JIT
  • Smaller inventories
  • Improved quality
  • Reduced space requirements
  • Shorter lead times
  • Lower production costs
  • Increased productivity
  • Increased machine utilization
  • Greater flexibility
lean and jit in services hospitals
Lean and JIT in Services/Hospitals
  • Multifunctional workers
  • Reduce cycle times
  • Minimize setups
  • Parallel processing
  • Good housekeeping
  • Simple, highly-visible flow of work
push vs pull operations

Typically, a schedule is driving the suppliers or providers.

No clearly-identifiable customer is in sight

Production is its own end objective


In Pure Pull, Nothing is done unless there is a signal from the customer--that is, the next process.

When the signal does come, responsiveness better be there!

Push vs. Pull Operations


push mode justification
Push-Mode “Justification”


  • Long lead times
  • Inflexibility of provider’s resources
  • Separation of provider and customer
  • Erroneous costing
  • Attempts to justify capacity and/or budget allocations
toward pull mode operations
Toward Pull-Mode Operations


Pull-mode operations are more likely when:

  • Employees are empowered to stop production Personnel are multi-skilled
  • Undercapacity scheduling is the policy
  • Simple, flexible, movable equipment is the rule
  • Flow distances are shorter
  • Lead times are shorter
six sigma and quality
Six Sigma and Quality
  • Brief History of Quality Management
  • Measurement and Inspection
  • Industrial Revolution
  • Statistical Quality Control
  • Six Sigma - Motorola
Healthcare is one industry that is adopting fundamental quality principles and methods, including Six Sigma initiatives.
  • “Incentives from Fortune 500 companies are driving Six Sigma and other initiatives in US healthcare.
six sigma
Six Sigma
  • “A business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and result in a clear financial return for the organization”
anything that cannot be measured cannot be controlled
Anything that cannot be measured cannot be controlled
  • Because hospital processes are largely people driven, measurements are often ill-defined.
  • Therefore create measurement systems before collecting data.
  • Ex: Time of Entering Emergency Department measured by security.
  • Key Measures: Accuracy, Cycle Time, Cost, Customer satisfaction.
what causes most quality problems
What Causes Most Quality Problems?
  • Six Sigma is a method to reduce variation.
Six-sigma equates to 3.4 errors per million opportunities.
  • A “stretch goal”

“have all critical processes at a six-sigma level of capability”

– near zero defects!

3 sigma level of capability
3 sigma level of capability
  • Until now, we assumed process output should be modeled as +/- 3 standard deviations
  • By doing so, we ignore the 0.26% of output that falls outside +/- 3 sigma range
  • The result: a 3-sigma capable process produces 2600 defects for every million units produced
six sigma capability
Six Sigma Capability
  • Six sigma capability assumes the process is capable of producing output where +/- 6 standard deviations fall within the design specifications (even when the mean output drifts up to 1.5 standard deviations off target)
  • The result: only 3.4 defects for every million produced
how do we achieve those quality levels
How do we achieve those Quality Levels?
  • Technical Tools
  • People Involvement
problem solving or qc tools
Problem Solving or QC Tools
  • Cause-and-Effect Diagrams
  • Flow Charts
  • Check Lists
  • Control Charts
  • Scatter Diagrams
  • Pareto Charts
  • Histograms
cause and effect diagrams
Cause-and-Effect Diagrams
  • Also called Fishbone Diagrams
  • Help identify potential causes of specific ‘effects’ (quality problems)
  • Examples in Healthcare
flow charts
Flow Charts
  • Diagrams of the steps involved in an operation or process
  • Simple forms used to record the appearance of common defects and the number of occurrences
control charts
Control Charts
  • Track whether a process is operating as expected
scatter diagrams
Scatter Diagrams
  • Illustrate how two variables are related to each other
value stream mapping
Value Stream Mapping
  • Value Stream Mapping is a method of visually mapping a product's production path from "door to door“- “admitting to discharge”
  • Draw a visual representation of every process in the flow. Ask key questions and draw a "future state" map of how value should flow.
  • VSM can be a communication tool, a business planning tool, and a tool to manage change.
key differences between lean and six sigma
Key Differences between Lean and Six Sigma
  • Lean addresses visible problems while six sigma with less visible eg variation
  • Lean tools are easier to apply while six sigma requires advanced training

Both, however, aim to eliminate waste

the theory of constraints
The Theory of Constraints
  • The GOAL
  • Necessary but Not Sufficient
  • Its not Luck

Eliyahu Goldratt

TOC builds on the concepts of TQM and Lean
  • Can increase the rate of Continuous Improvement
five steps of toc
Five Steps of TOC
  • Identify the Constraint
  • Select a Method to Exploit Constraints
  • Subordinate everything to the method
  • Elevate the constraints
  • Return to identification step if a constraint is broken
  • Bed Availability Study at University of Louisville Hospital (UofL Healthcare)
Lean production has now changed to “Lean Thinking”
  • Lean thinking does not provide a new management program for the one minute manager
  • It offers a new way of thinking, being and doing for the serious manager – one that will change the world!