Lean and Six Sigma in Healthcare Industry Sultan Qaboos University Mechanical and Industrial Engineering Department MEIE4222/10 Abdulwahab Al Maimani, 96912 Date: 17/12/2014 Submitted to: Dr. Nasr Al HinaiPreface This paper provides guidance and importance of implementing lean and Six Sigma methodologies in healthcare industry. The reason behind the implementation of lean and Six Sigma methodologies is the improvements in the process system that were due to the elimination of non-value adding processes, and the reduction of number of errors during the processes. Introduction With the continuous increase in population, the healthcare providers face higher pressure in providing services with improved quality and reduced cost. This arises the need for lean and six sigma methodologies implementation in the process of providing the healthcare services, specially for countries which does not have the services provided in all parts of the country, but rather in only specific cities in the capital city. Over decades, since the first implementation of lean and six sigma, increase in competitiveness between organizations was due to continuous improvement in the in the efficiency of the processes and the elimination non-value adding wastes. Also to cut down number of deficits in the system, by implementing six sigma methodology. Toyota Production System has been huge step in the manufacturing industry, as it proved leadership in the utilization of performance improvement methods. But these methodologies are now being transformed to be implemented in the service industry as well. Literature Review Phillips Healthcare Consulting (2011), “Successfully Deploying Lean in Healthcare”, [4522 962 76971 * SEP 2011]. ‘They started by defining lean, and provided the steps for lean deployment in healthcare. The stages were defined as short-term (tactical) broad of deployment, to long- term (strategic) broad of deployment. Starting by Inception within the department, Adoption across the facility, Extension with healthcare partners, and Intemationalization on system wide.Jayanta K, Bandyopadhyay and Karen Coppens (2005), “Six Sigma Approach to Healthcare Quality and Productivity Management”, International Journal of Quality & Productivity Management, Volume 5, No. I December 15, 2005. This paper summarized the need of six sigma in healthcare industry, and how to find appropriate unit of performance. Also to mention, they have explained the 5 steps of solving problems, which were developed by Robert Galvin at Motorola. Kim et al (2006), “Lean Health Care”, Journal of Hospital Medicine Vol 1 / No 3 / May/June 2006. They have stated how the healthcare industry can benefit from world class automobile manufactures, which as they mentioned, Toyota Motor. Using the lean methods from TPS, to develop lean method for the healthcare industry and show the improvements. Also to mention, they included some successful stories about the implementation of lean in the health care industry. What is Lean? Lean is a type of quality improvement methodology which can not only be implemented in manufacturing firms, but also in service firms. This paper will be discussing the implementation of lean and six sigma methodology in health care industry. Lean can be defined as maximizing customers value while cutting down wastes related to non-value adding processes. What is Six Sigma? Six sigma is a methodology aiming for eliminating defects in the process of production. The reason behind implementing this paper to show the benefits of implementing Jean and six sigma in the healthcare industry, and also to guide toward the implementation of lean and six sigma.Discussion 1. Lean Toyota Motor has defined non-value adding wastes as follows; Over Production, Over Processing, Waiting, Unnecessary Transportation, Excess Inventory, Defects, and Unnecessary Motion. These are too general to cover the aspects in healthcare industry, by the following table summarizing the wastes: ‘Table 1: Wastes Defined By TPS Transformed to Healthcare Industry. ‘Over Prodeution Poor planning of workforce level. ‘Over Processing Unnecessary approvals, and paper works, Waiting Waiting for approvals, paper works, and treatment. Unnecessary Transportation Poor facility layout, transportation of patients to near-by hospitals. Excess Inventory Large inventory of hygiened equipments and medicines. Unnecessary Motion Papers verifications loops. Defects Cost of patients re-admission The first step for lean methodology is to define the problems that causes the wastes mentioned in Table 1. Start by asking why? Why patients are being transported to a near-by hospital? Why does it takes long to treat a patient? Why not provide more beds? Why not hire ‘more facilities? For each process, ask Why? What? When? and How? so that the causes and effects are well defined. Studies showed many benefits in implementing lean in the healthcare industry which can summarized as follows; reducing number of unnecessary stays, reduce the cost of overtime and undertake, improving efficiency and effectiveness, and improve capacity management. After the definition of the causes, categorize the problems into classes based on the duration of the implementation, short-term and long-term. The classes can also be categorized by the span of control, the larger span of control takes longer to implement than shorter ones. We will segment by span of control; Individuals, Across Departments, Across Partners (local and global), and Across The Organization. We can a combined classes, by which the shorter the span of control; the shorter duration. In this way, individuals will have the shortest 4duration, similarly across the organization will have the longest duration. Following explanation of each point: 1.1 Indi als Introduce the use of new technologies to reduce wastes that causes unnecessary approvals and paperworks, by that, the waiting time for approvals or paperworks will be reduced. Also, improve the skills of the individuals to reduce the defects which are defined y poor treatment of patients. For individuals it is important to properly plan the workforce level, and define responsibilities. Establishing effective communication between individuals leads to success; individuals will be able to transfer information effectively to patients and to other staff; the explanation of the case the patient are having reduces the chances of defects related to returning patients and complaints about poor treatments, 1.2 Across Department Improvements in departments are directly related to improvements in individuals, also, for improvements in departments by reviewing the current policies for paperworks and approvals for stays in the hospital and this will reduce the unnecessary motion. 1.3 Across Partners 1.3.i Local Partners Contracting with reliable suppliers for lot-by-lot inventory control strategy, with aims to cut down the excess inventory, thus, reduce the holding cost. But may cause increase in setup cost. These orders are usually for argent use, and lead time is nor allowed, 1.3.ii Global Partners The global suppliers offers much less cost for purchases, but there is always lead time until the purchases arrives, global purchases are usually for medicines and medical equipments, in the healthcare industry, there is a fixed strategy that shortages are strictly not allowed. For these orders, the Economic Order Quantity is taken into consideration to reduce costs.1.4 Across The Organization The improvements across the organization are the longest to be implemented, it requires changes in capacity, and layout design. The poor layout design can lead to unnecessary transportation which are either during material handling, transportation of patients to other hospitals, and travelling inside the hospital between rooms; X-ray, Radiology, ete. Sigma Six Sigma is quality control methodology that aims to cut the defects to 3.4 defective units per million units. Six Sigma was first applied by Robert Galvin at Motorola, Inc which referred to five steps problem solving processes; these procedures are known as DMAIC, which are: Define, Measure, Analyze, Improve, and Control; explained in the Table 2. ‘Table 2: 5 Steps of Problem Solving (DMAIC). Define This step, you define the potential customers, in this case it is the patients, know the capabilities and capacities, then set the objectives based on what you ‘want to improve. ‘Measure Measure the quality factors that improves customers satisfactions and improve the service performance. This is data collecting step. Analyze ‘Analyzing the data collected in the Measure stage, and then use analytical tools to explain the data; Fish-Diagram for cause and effect, Statical Process Chart for Upper and Lower Control Charts, Process Flow Chart and Diagram, Improve Allocating the resources available or acquire resources for improvements to be implemented. Control This is stage is after the implementation, by which we control the performance to be consistent throughout the processes. This can be done by Control Charts (Upper / Lower Control Charts). As healthcare industry classified as service industry, it is very hard to define a measure for performance, for manufacturing industry, the measure can be defined as defective parts per million units produced. It is also important to take psychological considerations when implementing six sigma in healthcare industry, by which some treatments can be acceptable to some patients and some will not accept those. In Oman for example, we find it inappropriate to have plastic surgeries to change shape or facial details, but in some countries, citizens find it normal for person to change how they look when they want to.By unit of performance, we can have customers feedback with binary options, either good or bad, as measure of performance, for which good is a successful product, and bad is defective product. On other hand, the return of patient for poor treatments can be considered as a defect. Following this unit of performance, the organization can monitor how it is doing while knowing the rate of customer satisfaction which is the aim of service providers. Conclusion Customers satisfaction being achieved while and non-value adding wastes are eliminated can be very challenging if lack of experience exists. While the implementation of Six Sigma is very low in the healthcare industry throughout the world, the implementation of this methodology can be slow and requires patience. Introducing customer satisfaction as measure of performance, leads to high focus on the main objective of the service industries, thus, implementation of Six Sigma can be easier when the type of customers the organization is serving is fully understood. In the other hand, Jean thinking can be improve the way manager look at their organizations, and the perspective they will be looking at the process executed in the industry can eliminate unnecessary transportations, unnecessary motion, waiting, over production, over processing, excess inventory, and defects; which all are indirect costs. Reduction of costs, improving the performance by reducing wastes, proper allocation of resources, and mainly increase the customers value are the reasons behind the implementation of lean and six sigma in the healthcare industry. References 1. Phillips Healthcare Consulting (2011), “Successfully Deploying Lean in Healthcare”. 2. Jayanta K. Bandyopadhyay and Karen Coppens (2005), “Six Sigma Approach to Healthcare Quality and Productivity Management”, Intemational Journal of Quality & Productivity Management, Volume 5, No. 1 December 15,2005. 3. Kim et al (2006), “Lean Health Care”, Journal of Hospital Medicine Vol 1 / No 3 / May/ June 2006.