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Creating Value Through Lean Process Improvement Outreach 2007 Earl Buck, VP Operations Management
Creating Value ThroughLean Process Improvement
Outreach 2007Earl Buck, VP Operations Management
1Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Intent of This PresentationLearn how to apply Lean Six Sigma concepts to process improvement.
Learn how Lean Six Sigma can improve the value proposition for clinical laboratory.
Learn from a real life example of Lean application in the clinical laboratory environment.
Learn about resources available to help understand and apply Lean concepts.
2Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
“Quality” or “Value”
Quality is “a state in which the customer and provider realize value entitlement in every aspectof the business relationship.” Mikel Harry, PhD
CustomerNeed
ProviderService
ValueExchange
Cost
Defects
Time
Price
Quality
Delivery
Product
Service
Capacity
Capability
“We are not in the business of quality,we are focused on the quality of our business.”
Creation of VALUE is Key
3Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Value Proposition - Clinical Laboratory ServicesBalanced Scorecard becomes the tool to manage “value”
Value =(Quality) (Service)(Financial Benefit)
Customer Service
Expense PerformanceRevenue PerformanceMargin ManagementCapital Generation
Work Culture
Clinical Quality andBusiness Excellence
X (People)
Internal Focus Customer Focus
Learning and Growth Focus
Value Focus
4Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Lean vs. Six Sigma - Related to ValueAdopt third generation Six Sigma:
1st generation = defect reduction
2nd generation = cost reduction
3rd generation = value creation (incorporates Lean)
Use Lean to improve single process elements or work cells via repeated Kaizen events.
Use Six Sigma to attack the more complex process issues.
Lean Six Sigma now used to incorporate both methods of process improvement.
Lean will create improvement faster and easier, while Six Sigma will require time and a detailed statistical approach to process improvement greater single project impact.
5Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Principles of Lean EnterpriseSpecify Value–from customer’s perspective.
Identify all the steps in the value stream and eliminate those that do not add value.
Improve flow of service to customer by creating a tight and integrated sequence.
Let customers pull value from the next upstream activity.
Pursue perfection through continuous improvement.
Lean Thinking - Womack & Jones, 1996.
6Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Lean Enterprise Institute - www.lean.org
7Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
LeanCreated by Ohno @ Toyota.Focus is defining value and eliminating both waste (“muda”) and expense.Kaizen event = understand current state, define future state, improve the process.Most times create the performance metric during this process and monitor improvement after the event and over time.Repeat, repeat, repeat–a single Kaizen event will not improve your laboratory operation significantly.
8Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Lean and Value CreationAdd value - by decreasing waste (waste = activity that adds no value) or decreasing cycle time.
Focus on people who adds value and who has knowledge?Are the resource.
Provide the information.
Have process design authority.
Have decision making authority.
Provide the organizational energy.
Flow the value from demand–is a “pull” concept.No activity should occur unless an upstream process pulls (requires) it.
Optimize across the organization by using a scorecard.Each department’s performance metrics must be in alignment with overall organizational goals.
All of this adds up to a focus on adding value.
9Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Theory of ConstraintsLean is based, in part, on the Theory of Constraint (bottlenecks).
Identify the constraint.
Decide how to exploit the constraint.
Subordinate everything else to focus on the constraint.
Elevate the constraint.
Repeat the cycle.
10Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Lean Example - Specimen ProcessingMost labs have constraints (bottlenecks) in specimen processing and could benefit from a Kaizen event.
Applies to labs with and without outreach programs.
Those with outreach have issues associated with timing of specimen receipt.
This example is from a lab with an outreach volume that is at the upper end of hospital-based outreach programs.
This core lab is inside the walls of a hospital.
Issue = inconsistent ability to handle specimen processing volume in a timely manner.
Worked with George Konstantakos, MBB–mfg industry.
11Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Current StateSPECIMEN RECEIVING AREA: Process Flow
1. Receiving - Receive specimens from courier and prepare for order entry.
2. Order Entry - Enter the ordered tests into a computer and print testing labels.
3. Aliquot - Apportion and distribute samples to laboratory for testing.
12Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Receiving Station - Current StateAccept bag containing samples (blood filled glass tubes) and requisitions from courier.
Place samples into a plastic bucket.
Place plastic bucket into the refrigerator.
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Order Entry Station - Current State1. Retrieve sample bucket from refrigerator.2. Remove one sample bag.3. Unbag the contents.4. Confirm that identification information on samples and
requisition match.5. Confirm that the correct sample has been submitted for the
tests requested.6. Troubleshoot ID and ordering problems.7. Enter information on the requisition into the computer.8. Print specimen tube labels.9. Place the requisition and samples back in the bag.10. Place bag back in the bucket, return to step two until all bags
are complete.11. Place labels in the bucket.12. Return bucket to the refrigerator.
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Order Entry - Current State
Unbag Req
Place req back in bag
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Aliquot - Current State1. Retrieve bucket from refrigerator.2. Initial all labels.3. Remove contents of one bag.4. Confirm that information on printed labels matches that on requisition.5. Apply the label to each specimen.6. Place sample in a rack corresponding to testing sit in the laboratory.7. Continue for all bags in bucket.8. Transport rack to laboratory.
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Work in Process - Processes Were Not Linked
Because there was no linkage between the processes, work in process was allowed to build up in three areas:
Samples waiting to be received
Samples waiting for order entry
Samples waiting for aliquot
Every sample queues 60 minutes for next step of each operation
AM: 60+ min.
PM: 240+ min.
17Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Why Try to Reduce Lead Time?Long lead times hide problems!
Waste in processesOverburdenLevel loadingDefects and errors
Long lead times starve, and then, overwhelm downstream processesOne of the tenets of the lean enterprise is to reduce time between error occurrence and error detection, and then to reduce time from error detection to corrective action. If the lead times in the lab processing area are long, errors are allowed to sit waiting in process for minutes, sometimes hours.
18Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Current State Value Stream Map MorningsCustomer Demand:1600 Reqs per Day
(Takt Time 47.3 seconds)
Lab
Receiv ing Station
Total C/T = 20 seconds
Doctor
Courier
Request Data
Inf ormation & Sample
Inf ormation
0.333 mins.
11.8 mins.
0.75 mins. 6 mins.
23.6 mins.
0.667 mins.
11.8 mins. Lead Time = 55 mins.
VA / T = 7.75 mins.
0 pcs
Order Entry
Total C/T = 45 seconds
15 pcs
Aliqout
Total C/T = 40 seconds
Centrif uge
Total C/T = 360 seconds
30 pcs
15 pcs
Microbiology
7.5 minutes of work, yet 55 minutes to go from courier drop off to the lab
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Current State Value Stream Map EveningsCustomer Demand:1600 Reqs per Day
(Takt Time 47.3 seconds)
Lab
Receiv ing Station
Total C/T = 20 seconds
Doctor
Courier
Request Data
Inf ormation & Sample
Inf ormation
69.3 mins.
0.333 mins.
94.5 mins.
0.75 mins. 6 mins.
94.5 mins.
0.667 mins.
11.8 mins. Lead Time = 278 mins.
VA / T = 7.75 mins.
88 pcs
Order Entry
Total C/T = 45 seconds
120 pcs
Aliqout
Total C/T = 40 seconds
Centrif uge
Total C/T = 360 seconds
120 pcs
15 pcs
Microbiology
Work In Process makes
the lead time long278 minutes
of lead time in the evenings
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Kaizen GoalsOne of the outcomes of the planning phase is a clear understanding of process data. The process data should be traceable back to the Value Stream Map.With process data in hand, a team can identify an area on the value stream map to improve, estimate a goal for the event, and feel comfortable that achieving the goal will be positive for both the customer and the work area.
Kaizen Goals:Reduce: Current Future Post Event
1. Inventory (Items)
2. Cycle Time (Seconds/Order) 68.5 513. Throughput (Total Units)
4. Space (sq ft)
5. Set-Up Time (minutes)
6. Lead Time Day (Minutes) 58 296. Lead Time Afternoon (Minutes) 168 846. Lead Time Evening (Minutes) 276 1387. People Travel (Feet)
8. Product Travel (Feet) 75 259. Volume (Units)
10. Crew Size (Number)
11. Safety (# of issues)
12. Label Defects
% Change
Please NoteThe team was new to the concepts of Value Stream Mapping and Measuring a Value Stream. The team trained on how to read and create a value stream map during Day 1 of the Kaizen Event. This Goals Worksheet was completed during Day 2.
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7W (Wastes) Approach (Ohno @ TPS)Wastes to seek and remove:
Overproduction - creates work-in-process and costs $.
Inventory - costs $.
Extra processing steps - create no value.
Motion - if wasted, creates no value.
Defects - are waste.
Waiting - is a labor cost, creates no value.
Transportation - is not value added, creates waste.
22Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Examples of 7W for This ProjectOverproduction (overprocessing)
Removing and replacing reqs in bags.
Process/sort several buckets before a move.
Client does not properly submit specimen.
Assign separate accessions for certain tests.
InventoryLarge amounts waiting to sort due to arrival times.
OE gets ahead and specimens backing up re aliquot.
MotionSamples not properly stored causing someone to search.
Aliquot person must constantly move up and down.
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Examples of 7W (cont.)
WaitingSpecimens in receiving wait for someone to sort.
There is a lag time from order input to label print.
Aliquot staff is waiting to get specimen from OE staff.
TransportationMust walk specimen from desk to fridge.
Must pickup specimen from fridge and move to next work station.
DefectsWait times impact specimen integrity.
Client submits mislabeled specimen.
Client req has unclear order.
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Process Change Ideas That Would Eliminate Waste
Once the team identified waste within their processes, they were able to come up with low cost (mostly no cost) ideas to eliminate waste.The team implemented the following off this list:
Receiver sorts.Receiving is a dedicated workstation.Order to an Aliquot (make one, move one).Overflow into the fridge.
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6S SystemSorting - remove items not needed.
Straighten - a place for everything and everything in its place.
Scrub - clean, allow for easy inspection, reduce errors.
Safety - reduce chance of accidents.
Standardize - create rules to maintain the sort/straighten/ scrub/safety components.
Sustain - train everyone, then follow these rules.
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Sort - Remove Unnecessary ItemsBulletin boards should be neat and organized, so that they are easy to read and communicate necessary information.
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Cleaned, OrganizedBulletin board with only essential, current information.
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Sort - Remove Unnecessary Items
Doors on cabinets serve to hide filth. The only way to prevent the clutter, is to remove the doors! Then remove everything which is not necessary.
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Clean, Organized, Labeled
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Receiving - After
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New Process for ReceivingEliminate over-processing for the order entry and aliquot workstations by eliminating bagging and unbagging.
Never allow an error to knowingly progress through a process: resolve “defective” requisitions (i.e., no sample for order) at Receiving rather than at the Order Entry work station.
New Functions for Receiver: Unbag every requisition.
Check the samples against the order.
Filter out problem requisitions.
Arrange the samples in a test tube rack.
Stack the orders and the rack in a bucket.
Troubleshoot problem orders during the day.
Add a second Receiver during the periods of heavy courier deliveries in the afternoon and evening.
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Summary of Outcome and ProcessSignificant improvement:
Reduced lead time from OE to aliquotting by 90%.Reduced cycle time by 34% - receiving sort and single station process.Increased productivity by 35% (69 sec/req 45 sec/req).Initially implemented 5% staff reduction, now at 20% (or could handle additional volume through growth).
Leadership commitment essential.Facilitated process with Lean MBB and Content Experts.Solutions come from work team–people actually doing the work at the bench.Only sustainable, with post-event review/support.This lab has now completed its 4th Kaizen event.
33Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Sustainable Lean Implementation“Kaizen Cowboy” = do a single event and think that your lab is now Lean–not successful long-term.
Sustainable Lean Implementation requires:Leadership commitment and education (six days over one year).
Black Belt and Green Belt staff education (by a MBB).
BB = 16 days, GB = eight days
BB = team facilitator, GB = all middle management
Kaizen events–repeated, ongoing.
Lean Culture deployment takes a total of 18 months, can be phased in six-month segments but not ideal.
34Outreach 2007 – Earl Buck – Creating Value Through Lean Process Improvement
Lean Value - Balanced Scorecard Perspective
Quality PerformanceImproved flow through pre- and post-analytic processes
Improved flow of info in tech/admin processes
Improved performance via standardization of processes and implementation of best practices
Customer ServiceImproved process cycle time
Reduction in overall turnaround time
Improved customer satisfaction
Financial PerformanceReduction in cost associated with non-value added activities
Improved capture of revenue via process improvement
Improved operating margins
Work CultureImproved employee satisfaction
Reduction in turnover and improved retention
Improved ability to attract new employees
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Value and Lean Six Sigma
Innovation leading to Growth
Configure Goals
Realize Gains
Attenuate Gaps
Recognize value needs
Define opportunities
Measure existing condition
Analyze contributing factors
Improve action settings
Control input variables
Standardize success factors
Integrate lessons learned
Value is created via:
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Lean Impact on Value Creation
Quality Customer
PeopleFinance
Value Proposition - We Must Grow This SpaceValue Proposition viewedvia Balanced ScorecardPerspective
Lean forces us to focus on more than finances!
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Sources of Lean Six Sigma Supportwww.lean.org
www.isixsigma.com
www.asq.org
www.LeanHealthcare.comGemba Research
www.gemba.com
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Follow-up
Any questions or comments regarding this presentation
can be forwarded to [email protected]
