NC State of Business

Organizations often seek opportunities to improve their competitive advantage within their respective industries. Many organizations struggle to accomplish this goal without the use of a systematic approach to improve their organizational performance as it relates to quality products or services. Lean and Six Sigma are proven quality techniques that can help improve organizational performance. Although most organizations want to improve quality and cut costs, the deployment and implementation of continuous improvement methodologies is commonly viewed as a daunting undertaking.

For various reasons, some organizations focus their efforts on implementing Lean concepts, while others focus their efforts towards the implementation of Six Sigma methodologies. Lean is considered to be a systematic approach of eliminating waste in all processes of an organization and is based on the Toyota Production System (TPS). The term Six Sigma was coined by engineers at Motorola in the 1980’s which focuses primarily on reducing variation within a manufacturing or business process. Six Sigma improvements are based on a structured problem-solving methodology which requires project management skills.

Many organizations seem to find the appropriate balance of integrating both Lean and Six Sigma within their organizations to achieve optimal improvement performance. The term Lean Six Sigma represents this collaborative approach. By incorporating the tools and concepts of Lean into the structured DMAIC (Define, Measure, Analyze, Improve and Control) framework of Six Sigma, organizations are reaping the benefits of two very powerful and effective quality improvement methodologies.

Effective problem solving is a crucial issue facing hospitals today. The literature and industry experts agree that the hospitals in the United States have "major system problems" in terms of management and control of delivery processes [1]. To deal with the quality problems, the healthcare industry responded by utilizing problem-solving approaches based on Plan-Do-Check-Act (PDCA) cycle. However, if inappropriately used, these approaches often generated additional work for the professionals and very little apparent reward -- does this sound familiar?

Recently, a few healthcare organizations have responded by using another systems improvement strategy inspired by the PDCA, namely the Toyota Production System (TPS) (also called "lean") approach to help solve their system-related problems. However, what is the fundamental difference between a "lean" and "traditional-healthcare" PDCA cycle? In a recent webcast Durward Sobek suggested that perhaps the fundamental difference is inherent in efforts that organizations spend on 'planning' (P) and 'doing' (D) steps of PDCA cycle [2]. The figure inspired by Sobek’s suggestion graphically represents such difference in healthcare industry.

Traditional-healthcare vs. Lean PDCA Cycle

The PDCA as indicated by the lean approach places significantly more emphasis on the first step of the cycle -- the planning step (P) -- to allow for rapid improvement cycle for step 2 -- the doing step (D). For example, at the middle manager level, where process problems can be identified and tackled daily, the planning requires a close cooperation of problem owner(s) -- middle manager(s) -- and front line healthcare professional(s) that highly understand activities that are needed to complete the process. Such cooperation in terms of lean is based on rigorous and systematic approach that promotes problem solving at the 'root cause.'

The real magic here is that the process owner(s) take accountability for putting the countermeasures in place and sustaining them. This means that this type of accountability is not simply a check mark on the chart, but it is making sure that front-line staff actively participate in the development of what they believe is the best countermeasure for a problem and energetically strive to sustain the implemented change(s).

At Toyota, the problems solvers realize that the devil is in the details [3]. The detailed planning and rapid improvement cycle as proposed by lean PDCA cycle is critical for effective problem solving in hospitals.

Despite the enormous potential of the TPS approach for problem solving, I fear that the inefficient uses of lean principles and tools by healthcare professionals could lead the organization's management to premature and negative conclusions about how the lean tools and principles fit into the healthcare environment.

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[1] Institute of Medicine. Building a Better Delivery System: A New Engineering/Heath Care Partnership, A Report of the Institute of Medicine, Washington, DC, 2005.

[2] Sobek, D. K. "A Primer on A3 Reports: Better Thinking for Stronger Organizations," Industry Week Webcast, September 18, SAP and Intelligence, 2008. Available here.

[3] Spear, S.J., and Bowen, H.K. "Decoding the DNA of the Toyota Production System," Harvard Business Review, vol. 77, no. 5; pp. 97-106, 1999.

As I have gotten started in training and implementing Lean Manufacturing techniques and concepts in medical applications two things continue to rise to the surface. The first is the perception that Lean is a grouping of tools meant primarily for discrete manufacturing in plants and not so much for processes for which the output isn’t so easily identifiable. The second, thankfully, is that as people open their minds to the concepts of Lean beyond what they have traditionally thought, the concepts apply very well; even in the medical profession where the primary output is typically well, happy people rather than a particular product. What I have seen is that the first and most critical hurdle which must be understood is how to define the value stream in the particular health care are (e.g. emergency room, admission, etc.). Sometimes the value is added in the form of directly interacting with a patient; other times it is added to an intermediate product which will eventually interact directly with the patient such as a prescription or an MRI. Whichever the case, once the item or person to which value is to be added is identified then it becomes straightforward how Lean concepts can be applied with significant results.