Patrick M. Anderson, Executive Director
Chugachmiut
1840 Bragaw St., Suite 110
Anchorage, Alaska 99508
(907) 334-0147
As a new chief executive for an Alaska Native non-profit organization in 2004, Chugachmiut, Inc., I heard the message about Lean from Brian Jones, President of Nypro Precision Plastics based in Clinton, MA. During lunch Brian explained Nypro’s “High Velocity System” to three of us. I asked Brian whether Nypro ever utilized Lean for their administrative processes, and while he said they did not, they were looking into it. He piqued my interest and I returned to Alaska to talk about Lean with my Executive Staff. They were willing to give it a try. I then sought out the first available conference that discussed Administrative Lean, and worked around my schedule to attend The 2004 Shingo Prize in Lexington, Kentucky. I could only attend 2 days of the conference if I traveled all night the first day and returned home in the early morning following the last day in order to fulfill obligations. My commitment to learning about Lean was intense.
At the Shingo Prize, I attended a number of presentations, but none by the host for this Blog, Dr. Tom Jackson. I was fortunate enough to stop Dr. Jackson on my way to another presentation and meet him. He ended up becoming Chugachmiut’s Sensei about a year later.
I must confess that I was already very knowledgeable about the principles taught by Dr. W. Edwards Deming, so I was predisposed to process management. The Lean training and simulations I experienced at Shingo convinced me to start a Lean initiative at Chugachmiut. 5 years later, we have achieved considerable success, and learned a lot about resistance to change.
It’s not my intention to talk about Chugachmiut’s Lean improvements here. Our website talks about a number of our lean initiatives. Instead I want to discuss resistance to Lean management in Alaska, and elsewhere, to this proven and true improvement method. What I have learned is that the Lean management message is very hard to sell. Persistence, results, and a network of true believers are necessary to make an impact.
Why am I even trying to sell the message? I explain I through one of the Lean Management principles of working with the supply chains that serve your customers. Our patients at Chugachmiut also receive health care services from two other Alaska Native health care organizations. I realized that both organizations could benefit our patients through adoption of Lean Healthcare and Lean Administration.
So in December of 2006, I sent a letter to the heads of the largest Alaska Native health care programs in the state of Alaska. By then one of the organizations had conducted a Kaizen for one of its smaller but critically important processes. They achieved about a 40 day reduction in the length of the process, an increase of quality from somewhere in the 5% range to somewhere in the 90% range, and a savings of 80% from the original cost of the process. What I found was that the middle management staff that engaged in the Kaizen were sold on the idea quickly. They have quietly advocated for slow spread of the culture. Through their efforts, and the many examples of successful hospital lean healthcare implementations such as occurred at Virginia Mason, Theda Care, Park Nicollet and others are pointing the way for other executives.
Shortly afterwards, I learned about the Lean Production advocacy coming from the Alaska Manufacturing Extension Partnership. Their staff includes a Lean Sensei. Together he and I wrote to the former Governor of Alaska recommending that she look at the use of Lean Production for managing the now defunct Matanuska Susitna Dairy and the Alaska Office of Children’s Services, two highly distressed organizations. We did not receive a response.
I also discovered the Alaska Performance Excellence Network, an organization dedicated to spread the gospel of process management and the Baldrige Quality Criteria.
Lean Healthcare is finally making some inroads in one of the two Alaska Native Healthcare organizations. One high level administrator has expressed considerable interest and a number of Kaizen events are scheduled this year. This brave executive needs support among his policy makers and the other executive leadership at his organization. This organization is on it’s way, and if Lean is implemented properly, the successes will soon pile up and hopefully encourage deeper involvement.
I also spoke to 2 heads of Alaska’s Department of Health and Social Services, 2 Anchorage Mayors, the Anchorage Chief of Police (he sent 2 of his staff to learn more and was starting an implementation when he was removed from his position), and countless other business leaders in Alaska. I don’t get discouraged. Again, our customers are served by each of these organizations, and I firmly believe they could benefit from the application of Lean Management.
By the way, if you have avoided learning about Lean and its benefits, take a second look. The quality of your organizations work will go up, the productivity of your work force will increase, and one of the nice benefits of a Lean implementation is that you will save money. You won’t even have to try if you implement well.
Sunday, October 25, 2009
Thursday, October 8, 2009
9 Points (conclusion)
J. Michael Rona
Principal, Rona Consulting Group
Mercer Island, Washington
This is the fourth and final post in a series about 9 Points that define the lean heatlh care enterprise:
1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability
These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.
In this post I cover Point 7, 8, and 9.
7. Respect for Staff
A lean healthcare enterprise recognizes and behaves as if its staff were its most precious and irreplaceable resource. It respects its staff and demonstrates a profound commitment to enabling the best performance of its people. It sees as its second most important challenge to its leadership, the creation of a supportive environment in which it engages its people in creating excellence. Lean health care organizations enable perfectly competent and capable people to perform at extraordinary levels. Such organizations develop processes that allow their people to soar every day.
Lean health care organizations, in their actions, recognize and believe that releasing the creativity and brilliance of their workers is the key to breakthrough innovation and the success of the company.
8. Continuous Improvement
Lean health care organizations are constantly improving their processes and reducing their lead times (delivery times) through the vigorous elimination of waste. At every level, one can see the organizational learning cycle of PDCA (Plan, Do, Check, Act) at work. They are never satisfied with the current state and while they are not routinely looking for quantum changes in their processes, their steady, tortoise like constancy on waste reduction, they far outpace their competition in perfecting their processes
9. Generate Higher Margins or Create Greater Capability
Lean health care organizations generate margins that far exceed those of organization which do not use lean management approaches. This is because their source of value creation starts with a focus on customers, respect for staff and the elimination of waste to improve unit costs, reduce lead times, dramatically improve throughput and increase capacity with no added costs. These organizations do not rely on layoffs and other short-term strategies to generate margins, they rely on their people to find better ways and see their investment in their people as their most important strategic advantage. In organizations that are on fixed budgets, the elimination of waste enables greater capacity to serve customers using the same or less resources.
The effectiveness of these nine principles are clearly demonstrated in the results of the implementation of lean healthcare at the Virginia Mason Medical Center in Seattle, where we achieved productivity increases between 45 to 75%, cost reductions between 25 to 55%, improvements in throughput between 60 to 90%, quality improvements between 50 to 90%, inventory reductions between 35 to 50%, and lead time reductions between 50 to 90%.
The effectiveness of these same principles has been demonstrated more recently by our clients, who report similar achievements and confirm that the return on their investment in lean healthcare ranges from a low of 100% to over 1000%.
Principal, Rona Consulting Group
Mercer Island, Washington
This is the fourth and final post in a series about 9 Points that define the lean heatlh care enterprise:
1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability
These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.
In this post I cover Point 7, 8, and 9.
7. Respect for Staff
A lean healthcare enterprise recognizes and behaves as if its staff were its most precious and irreplaceable resource. It respects its staff and demonstrates a profound commitment to enabling the best performance of its people. It sees as its second most important challenge to its leadership, the creation of a supportive environment in which it engages its people in creating excellence. Lean health care organizations enable perfectly competent and capable people to perform at extraordinary levels. Such organizations develop processes that allow their people to soar every day.
Lean health care organizations, in their actions, recognize and believe that releasing the creativity and brilliance of their workers is the key to breakthrough innovation and the success of the company.
8. Continuous Improvement
Lean health care organizations are constantly improving their processes and reducing their lead times (delivery times) through the vigorous elimination of waste. At every level, one can see the organizational learning cycle of PDCA (Plan, Do, Check, Act) at work. They are never satisfied with the current state and while they are not routinely looking for quantum changes in their processes, their steady, tortoise like constancy on waste reduction, they far outpace their competition in perfecting their processes
9. Generate Higher Margins or Create Greater Capability
Lean health care organizations generate margins that far exceed those of organization which do not use lean management approaches. This is because their source of value creation starts with a focus on customers, respect for staff and the elimination of waste to improve unit costs, reduce lead times, dramatically improve throughput and increase capacity with no added costs. These organizations do not rely on layoffs and other short-term strategies to generate margins, they rely on their people to find better ways and see their investment in their people as their most important strategic advantage. In organizations that are on fixed budgets, the elimination of waste enables greater capacity to serve customers using the same or less resources.
The effectiveness of these nine principles are clearly demonstrated in the results of the implementation of lean healthcare at the Virginia Mason Medical Center in Seattle, where we achieved productivity increases between 45 to 75%, cost reductions between 25 to 55%, improvements in throughput between 60 to 90%, quality improvements between 50 to 90%, inventory reductions between 35 to 50%, and lead time reductions between 50 to 90%.
The effectiveness of these same principles has been demonstrated more recently by our clients, who report similar achievements and confirm that the return on their investment in lean healthcare ranges from a low of 100% to over 1000%.
Monday, October 5, 2009
9 Points (continued)
J. Michael Rona
Principal, Rona Consulting Group
Mercer Island, Washington
This is the third in a series of posts about 9 Points that define the lean heatlh care enterprise:
1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability
These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.
In the first two post in this series, I covered Points 1, 2, and 3. In this post, I cover Points 4, 5, and 6.
4. Respect for the Customer and Customer Driven
In all of its manifestations, such an organization would demonstrate the concept of “Customer First”. In every way, in the layout of facilities, the flow of healthcare processes, in communications, and in the behavior of providers and staff, one would see that there is a deep understanding of customer needs and wants. In every respect, the organization’s production processes would demonstrate a complete understanding of customer rate of demand by product family. In all of its written and verbal communications, the organization would demonstrate a deep respect for the customer. In every way, the presence of the customer would be felt within the organization and Toyota’s concept of “Customer In”, the idea that for the staff, the customer is always present, would be evident. We would call this for health care “Patient on shoulder”; the concept of the ever observant and present patient as customer.
5. Quality Driven
The lean health care enterprise is obsessed with quality. It has a deep understanding of the key quality characteristics, which its customers desire and of the products it delivers. It knows immediately when defects occur in the process and the process stops until the defect is fixed. It is uncompromising in its attack on defects as they occur. It has defect alert systems in place to allow the staff to know when defects occur and to stop the production process if defects cannot be resolved in the process. Quality is assured along the way, or what would be termed through “in-line inspection”, along the production process, so that essentially zero retrospective quality assurance is required. Each staff member is a front-line quality inspector and the role of management is to ensure that the staff can do perfect work.
6. Obsessed with Safety
Safety for the customer and the staff is paramount in a lean health care enterprise. As the organization understands the needs of the customer, it is constantly looking for ways to make the product safer. It not only looks at obvious areas for improving safety and what the customer tells it, but it looks ahead and simulates what could happen in the future and builds in safety for that possible eventuality before the potential safety issue even presents itself. This type of organization is obsessed with safety and cannot imagine that the customer would ever be the one to alert the organization about a defect that has occurred to them.
This kind of organization is similarly obsessed with safety for the staff. It addresses issues of physical safety and stress caused by the working environment to ensure the safety of its staff.
Principal, Rona Consulting Group
Mercer Island, Washington
This is the third in a series of posts about 9 Points that define the lean heatlh care enterprise:
1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability
These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.
In the first two post in this series, I covered Points 1, 2, and 3. In this post, I cover Points 4, 5, and 6.
4. Respect for the Customer and Customer Driven
In all of its manifestations, such an organization would demonstrate the concept of “Customer First”. In every way, in the layout of facilities, the flow of healthcare processes, in communications, and in the behavior of providers and staff, one would see that there is a deep understanding of customer needs and wants. In every respect, the organization’s production processes would demonstrate a complete understanding of customer rate of demand by product family. In all of its written and verbal communications, the organization would demonstrate a deep respect for the customer. In every way, the presence of the customer would be felt within the organization and Toyota’s concept of “Customer In”, the idea that for the staff, the customer is always present, would be evident. We would call this for health care “Patient on shoulder”; the concept of the ever observant and present patient as customer.
5. Quality Driven
The lean health care enterprise is obsessed with quality. It has a deep understanding of the key quality characteristics, which its customers desire and of the products it delivers. It knows immediately when defects occur in the process and the process stops until the defect is fixed. It is uncompromising in its attack on defects as they occur. It has defect alert systems in place to allow the staff to know when defects occur and to stop the production process if defects cannot be resolved in the process. Quality is assured along the way, or what would be termed through “in-line inspection”, along the production process, so that essentially zero retrospective quality assurance is required. Each staff member is a front-line quality inspector and the role of management is to ensure that the staff can do perfect work.
6. Obsessed with Safety
Safety for the customer and the staff is paramount in a lean health care enterprise. As the organization understands the needs of the customer, it is constantly looking for ways to make the product safer. It not only looks at obvious areas for improving safety and what the customer tells it, but it looks ahead and simulates what could happen in the future and builds in safety for that possible eventuality before the potential safety issue even presents itself. This type of organization is obsessed with safety and cannot imagine that the customer would ever be the one to alert the organization about a defect that has occurred to them.
This kind of organization is similarly obsessed with safety for the staff. It addresses issues of physical safety and stress caused by the working environment to ensure the safety of its staff.
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