Case Decision Sheet

Protagonist: Paul Suett, Supply Chain Performance Manager at Northwestern

Memorial Hospital (NMH)
Case Facts:
1. NMH's receiving area processes over 500 packages daily for delivery to
various locations within the hospital.
2. The average lead time for packages to reach their destinations is three days.
3. Inefficient processes in the receiving area lead to problems like overstocking,
misplaced items, and inaccurate inventory records.
4. The goal is to reduce the lead time to one day and improve the overall
efficiency of the receiving area.
Problems:
1. Batch-oriented processing leads to delays and bottlenecks.
2. Long lead times cause overstocking and safety stock buildup.
3. Inefficient use of space and lack of visual management contribute to
misplaced items.
4. Inaccurate inventory records due to bypassing the receiving area for urgent
deliveries.
Problem Statement:

The current processes in the receiving area are inefficient and lead to long lead
times, stockpiling, and inaccurate inventory records. This negatively impacts patient
care and increases costs.

Criteria:
1. Reduce lead time for package delivery to one day.
2. Improve space utilization and organization within the receiving area.
3. Minimize waste and errors in the receiving process.
4. Increase transparency and visibility of inventory levels.
Alternatives:
1. Implement Single-Piece Flow: Process packages individually instead of
batches to reduce queuing and lead times.
 2. 5S Methodology: Organize the workspace using the 5S principles (Sort,
Straighten, Shine, Standardize, Sustain) to improve efficiency and safety.
3. Kanban System: Implement a pull-based inventory control system to signal
restocking needs based on actual demand.
4. Mistake-Proofing Techniques: Integrate mechanisms to prevent package
receiving and processing errors.
5. Visual Management: Use visual cues like labels, floor markings, and
inventory boards to improve transparency and communication.
Analysis:
1. Single-piece flow directly addresses the batch processing issue, reducing lead
times and bottlenecks.
2. 5S improves organization, eliminates clutter, and a safe work environment.
3. Kanban optimizes inventory levels and reduces overstocking.
4. Mistake-proofing techniques minimize errors and rework.
5. Visual management enhances awareness of inventory status and facilitates
communication.
Recommendation:

A combined approach implementing all the above alternatives is recommended.

Single-piece flow should be the foundation, supported by 5S for organization,
Kanban for inventory control, mistake-proofing to minimize errors, and visual
management for improved transparency.

Future State VSM:

The future state VSM would reflect a streamlined process with a single-piece flow.
Packages would be received, sorted individually, scanned, and labeled immediately.
Delivery would be based on a Kanban system, eliminating unnecessary stocking and
ensuring items are readily available when needed. Visual controls like inventory
boards and clear labeling would improve communication and awareness of stock
levels. Mistake-proofing techniques would be implemented to prevent errors. The
overall lead time would be significantly reduced, improving efficiency and
responsiveness.
Controls:
1. Monitor key performance indicators (KPIs) such as lead time, inventory levels,
and error rates to track progress and identify areas for improvement.
2. Conduct regular audits to ensure adherence to 5S principles and Kanban
procedures.
3. Continuously evaluate and refine the implemented processes based on
performance data and feedback from stakeholders.

Explanation of the NMH Receiving Area VSM

This VSM illustrates the flow of materials (packages and pallets) through the
receiving area of the NMH facility. It highlights potential areas for improvement by
visualizing the current process with its associated buffers (waiting stages).

Process Breakdown:
1. Unload Trucks: Packages are transferred from incoming trucks to pallets
(estimated time: 12 minutes).
2. Waiting (Buffer): Pallets accumulate here, waiting for further processing
(estimated time: 8-24 hours). This buffer indicates a potential inefficiency, as
packages are not being processed immediately.
 3. Move Pallets: Pallets are transported to the receiving room (estimated time: 4
minutes).
4. Waiting (Buffer): Processed packages remain on pallets, waiting for delivery
(estimated time: variable). This buffer also suggests potential inefficiency in
scheduling or coordinating deliveries.
5. Process Packages: Packages are scanned, sorted, labeled, and stacked on
pallets (estimated time: variable based on package quantity).
6. Move Pallets: Pallets with processed packages are relocated to a holding
area.
7. Load Delivery Pallets: Pallets are filled with packages designated for specific
hospital departments (estimated time: variable).
8. Delivery: Pallets are transported to various floors and departments within the
hospital (estimated time: variable).
9. Unload Pallets: Packages are removed from pallets at their designated
delivery locations.
10. Scan and Stock: Received items are scanned and placed in designated
storage locations.
11. Empty Pallets Wait (Buffer): Empty pallets accumulate, waiting for elevator
transport back to the receiving area (estimated time: variable). This buffer
signifies potential delays in returning empty pallets for reuse.
12. Return Pallets: Empty pallets are transported back to the receiving area.
13. Waiting for Reloading (Buffer): Empty pallets wait to be refilled with new
packages (estimated time: variable). This buffer suggests a potential need for
a more efficient system for managing empty pallets.
Potential Areas for Improvement:
 Reduce Buffering: Analyze the reasons behind the long waiting times. This
could involve implementing a Kanban system for inventory control, improving
communication between receiving and delivery teams, or exploring faster
processing methods.
 Optimize Flow: Streamline the movement of pallets and packages within the
receiving area.
 Standardize Processes: Ensure consistency in unloading, processing, and
delivery procedures.