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Choosing A Quality/Performance Improvement Methodology

Methodology Comparisons: Six Sigma, Lean, Theory of Constraints and


by Hal Moyers, James G. Shaw, and Wayne New, FACHE Copyright 2004 Shaw Resources

With the concepts of Total Quality Management and Continuous Quality Improvement being introduced to hospital
operations over the last fifteen years, hospital executives and quality improvement managers have had differing
degrees of success. Knowledge and skill levels have increased as different methodologies of quality improvement
have been studied, transferred from non-healthcare industries, and implemented in hospitals. Hospitals have
expended enormous fiscal and human resources implementing leading methodologies, achieving some short-
term successes but then becoming frustrated and uncertain as quality and cost effectiveness initiatives are not
sustained. Executives continue to be dedicated to quality improvement but are left with the question What is
the quality improvement methodology that is right for success in my organization?

The purpose of this analysis is to review four leading quality improvement methodologies utilized in the market
today to help you answer one of the most important questions that healthcare executives face today How do you
choose the one thats right for your organization? The quality improvement methodologies reviewed in this
analysis are:

1. Six Sigma Pioneered by Motorola and made famous by General Electric, this manufacturing
methodology focuses on variance reduction through a problem solving approach that will improve output
2. Lean Thinking Touted by Toyota as its key to success, this methodology strives to reduce waste to
improve business performance through improved workflow.
3. Theory of Constraints TOC addresses manufacturing system constraints, emphasizing faster system
throughput in system processes.
4. Customer-Inspired

Quality Patented by Shaw Resources in 1992, this service industry methodology

focuses on work processes that directly impact the care and service provided to hospital and medical
group patients by identifying, defining, analyzing, and improving the quality and effectiveness of
processes. It is liberally borrows techniques from each of the three other methodologies.
Comparison of Quality Improvement Methodologies

Program Six Sigma Lean Thinking Theory of Constraints Customer Inspired Quality
Theory Reduce variation Remove waste Manage constraints Customer perspective drives

Target Organizations Manufacturing Manufacturing Manufacturing Service/Healthcare
Focus Problems Work Flow Systems constraints Customers perspective

Applications /


Identify value;
Identify value stream;

Identify constraint;
Exploit constraint;
Elevate constraint.
Repeat cycle

Discover customers perspective
of key processes;
Prioritize processes;
Create process profile graphic;
Identify measures;
Improve process;
Review progress;
Monitor Customer-Measures;
Repeat cycle
Assumptions A problem exists;
Fast throughput;
Less inventory;
measures for
Improved quality.
Waste removal will
improve business
Many small
improvements are
better then systems
Emphasis on speed
and volume;
Uses existing
Customer perspective
determines the key processes;
Improving processes that touch
customers have the highest
Organizations that satisfy
customers have better financial

Primary impact Uniform process
Reduced flow time Fast throughput Improved customer loyalty and

Key effects

Less waste;
Fast throughput;
Less inventory;
performance measure
for managers.

Less variation;
Uniform output;
Less inventory;
New accounting
measures for

Less inventory/waste;
Throughput cost
measurement system;
Improved quality.

Increased market share;
Reduced cost;
Reduced errors and waste;
Improved quality;
Increased employee
Customer & management

Criticisms System interaction
not considered;
Process improved
Ignores customer
Statistical or system
analysis not valued;
Ignores customer
Minimal worker input;
Data analysis not
Ignores customer
Primarily for service

All the above methodologies rely on application of rigorous statistical and analytical techniques. Three of the
above methodologies were developed for, and are primarily found in, manufacturing organizations. Only one of
the methodologies, Customer-Inspired

Quality (CIQ), was created for the healthcare service industry, addressing
quality and cost effectiveness from a holistic perspective as seen by the patient.

Do the three manufacturing methods bring value to service organizations? Certainly, addressing specific
problems or constraints will definitely improve quality. However, the manufacturing originated methodologies
approach things first from managements point of view, not the customers. By employing a management
perspective, it is difficult, if not impossible, for these methodologies to be used as the vehicle for attaining top
performance in high-touch patient-care environments or similar service settings.

In summary, the Shaw Resources Customer-Inspired

Quality methodology is the quality and performance

improvement methodology that is best suited for success in healthcare due to the following reasons:

Customer-Inspired Quality defines all patient care and administrative work processes so that process
improvement efforts can be prioritized from the customers perspective and a consistent and complete
review and approach to improvement is maintained.
The methodology is hospital / service organization friendly and understandable by all stakeholders
(medical staff, hospital staff, patients, and other care / service providers), encouraging a broad cross
section of staff input and involvement.
It provides a comprehensive cross-functional work process review and analysis, addressing all
problems and constraints found in each process or system of care.
Administrative and quality measures are implemented to monitor work process changes, to bring
deviations back in line with process designs, and to alert managers to process variations before serious
adverse effects occur.

Quality takes the quality methods used in manufacturing and adapts them so that the
healthcare industry can successfully achieve short and long-term improvements in quality, safety,
and customer satisfaction.

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