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

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he Toyota Production System, which was developed from the late 1940s through the mid-1970s by top Toyota executives to improve the company's manufacturing processes, is now used by numerous companies across various industries to reduce inefficiencies and improve the overall value of their end product to customers. Although originally developed for the manufacturing industries, the key goals of lean production — eliminating waste, valuing employees and continually 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 an approach to management, a philosophy for improving and leading organizations," says Mark Graban, senior fellow at the Lean Enterprise Institute and author of Lean Hospitals. "[Hospital leaders and clinicians] will have concerns about how this transfers to healthcare, but the key management practices are very transferable."

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

Eliminate waste

1. Eliminate non-value-added activity. One key principle of lean management is the elimination of any activity that does not add value to an organization's end product. For hospitals, 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 the patient, the doctor making the diagnosis. Waiting in the waiting room or in a patient room is a non-value-added activity," says Alan Kent, president and CEO of Meadows Regional Medical Center in Vidalia, Ga. "In the ER, about 80-90 percent of a patient's time is waiting. Lean attacks time that is non-value added."

Lean management promotes employee participation in process improvement. "It is a staple of the 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 lean principles and then involving them in analyzing ER processes and developing ways to reduce wait times. The team of ER staff identified 44 action items for reducing times and began to implement the changes over time. The average length of stay for ER patients at Meadows Regional dropped from 247 minutes to 139 minutes in just two years as a result of the employees' efforts.

Other hospitals have successfully reduced wait times in the operating department through implementing lean principles. Brian Leonard, MS, a performance improvement process manager at Purdue University's Healthcare Technical Assistance program, recently assisted Goshen (Ind.) Health System to increase the on-time starts in the hospital's operating department from 15 percent to 80 percent in only 8 weeks.

A team of operating department employees examined the processes and determined that room turnover and lack of focus on point-of-use concepts were two factors most responsible for the late start times. Point of use, in this instance, refered to having everything one needs in the right place at the right time. This includes supplies, staff, physicians and the patient. As a result, the team developed process improvements for turnovers and the system worked to educate physicians and staff on the impact of late arrivals of any needed resource on patient experience and hospital profitability. As a result of these efforts, the system reduced its average turnover time 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 supplies that expire before they are used and the cost of storing extra supplies.

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

"Healthcare in general hasn't put enough thought into supply management. It's a lot of guesswork. 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 a push system to a pull system. In a traditional system, supplies are pushed into a room without considering what is used on a daily basis."

Hospitals using JIT inventory strategies should not only be concerned with the number of supplies on hand but also with their accessibility, says Mr. Kent. "We made supplies available in the areas [of the ER] where they were most likely to be used as opposed to more central storage room," says Mr. Kent. Such strategies save nursing and clinical staff the time needed to run 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 is embraced by the TPS and should be embraced by hospitals as well. Technology can reduce the manual labor involved in many processes that take place within a hospital and improve overall efficiency.

Goshen Health System could not have been as successful in it efforts to reduce inventory while still having all necessary supplies on hand without digital controls, and the use of technology to manage inventory greatly reduces the labor required for such efforts. Manual inventory counts are very time consuming and costly, labor wise, as opposed to digital tracking systems that can provide 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 medical record system with electronic medical records. "We found that staff spent an amazing amount of time writing on paper and moving the paper charts around," says Mr. Kent. "We moved fully to EMR, and no paper has to move from triage nurse to the lab to the x-ray technician before the patient can receive care."

Value employees
4. Develop people. Lean organizations differ from traditional organizations in putting the power of improving an organization into the hands of the employees that directly interact with the end product, rather than management. Lean organizations train employees in lean processes and entrust them with developing the organization. For hospitals, staff directly involved with patient care is charged with developing process improvement.

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

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

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

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

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

Contact Lindsey Dunn at lindsey@beckersasc.com.

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