Creating Value Through Lean Process Improvement. Outreach 2007 Earl Buck, VP Operations Management

Transcription

1 Creating Value Through Lean Process Improvement Outreach 2007 Earl Buck, VP Operations Management

2 Intent of This Presentation Learn 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. 1

3 Quality or Value Quality is a state in which the customer and provider realize value entitlement in every aspect of the business relationship. Mikel Harry, PhD Creation of VALUE is Key Price Product Capacity Cost Quality Customer Need Value Exchange Provider Service Defects Delivery Service Capability Time We are not in the business of quality, we are focused on the quality of our business. 2

4 Value Proposition - Clinical Laboratory Services Balanced Scorecard becomes the tool to manage value Clinical Quality and Business Excellence Customer Service Internal Focus Value = (Quality) (Service) (Financial Benefit) Customer Focus X (People) Expense Performance Revenue Performance Margin Management Capital Generation Work Culture Learning and Growth Focus Value Focus 3

5 Lean vs. Six Sigma - Related to Value Adopt third generation Six Sigma: 1 st generation = defect reduction 2 nd generation = cost reduction 3 rd 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. 4

6 Principles of Lean Enterprise Specify 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,

7 Lean Enterprise Institute - 6

8 Lean Created by 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. 7

9 Lean and Value Creation Add 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. 8

10 Theory of Constraints Lean 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. 9

11 Lean Example - Specimen Processing Most 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. 10

12 Current State SPECIMEN 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. 11

13 Receiving Station - Current State Accept bag containing samples (blood filled glass tubes) and requisitions from courier. Place samples into a plastic bucket. Place plastic bucket into the refrigerator. 12

14 Order Entry Station - Current State 1. 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. 13

15 Order Entry - Current State Unbag Req Place req back in bag 14

16 Aliquot - Current State 1. 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. 15

17 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. 16

18 Why Try to Reduce Lead Time? Long lead times hide problems! Waste in processes Overburden Level loading Defects and errors Long lead times starve, and then, overwhelm downstream processes One 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. 17

19 Current State Value Stream Map Mornings Customer Demand: 1600 Reqs per Day (Takt Time 47.3 seconds) Inf ormation & Sample Doctor Information Courier Microbiology Lab Request Data 7.5 minutes of work, yet 55 minutes to go from courier drop off to the lab Centrif uge Receiving Station 0 pcs Total C/T = 360 seconds Total C/T = 20 seconds 15 pcs Order Entry Aliqout 15 pcs 30 pcs Total C/T = 45 seconds Total C/T = 40 seconds 11.8 mins mins mins. Lead Time = 55 mins mins mins. 6 mins mins. VA / T = 7.75 mins. 18

20 Current State Value Stream Map Evenings Customer Demand: 1600 Reqs per Day (Takt Time 47.3 seconds) Inf ormation & Sample Doctor Information Courier Microbiology Lab Request Data Work In Process makes the lead time long Centrif uge 278 minutes of lead time in the evenings Receiv ing Station 88 pcs Total C/T = 360 seconds Total C/T = 20 seconds 120 pcs Order Entry Aliqout 15 pcs 120 pcs Total C/T = 45 seconds Total C/T = 40 seconds 69.3 mins mins mins mins. Lead Time = 278 mins mins mins. 6 mins mins. VA / T = 7.75 mins. 19

21 Kaizen Goals One 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) Throughput (Total Units) 4. Space (sq ft) 5. Set-Up Time (minutes) 6. Lead Time Day (Minutes) Lead Time Afternoon (Minutes) Lead Time Evening (Minutes) People Travel (Feet) 8. Product Travel (Feet) Volume (Units) 10. Crew Size (Number) 11. Safety (# of issues) 12. Label Defects Please Note The 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. % Change 20

22 7W (Wastes) Approach 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. 21

23 Examples of 7W for This Project Overproduction (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. Inventory Large amounts waiting to sort due to arrival times. OE gets ahead and specimens backing up re aliquot. Motion Samples not properly stored causing someone to search. Aliquot person must constantly move up and down. 22

24 Examples of 7W (cont.) Waiting Specimens 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. Transportation Must walk specimen from desk to fridge. Must pickup specimen from fridge and move to next work station. Defects Wait times impact specimen integrity. Client submits mislabeled specimen. Client req has unclear order. 23

25 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. 24

26 6S System Sorting - 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. 25

27 Sort - Remove Unnecessary Items Bulletin boards should be neat and organized, so that they are easy to read and communicate necessary information. 26

28 Cleaned, Organized Bulletin board with only essential, current information. 27

29 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. 28

30 Clean, Organized, Labeled 29

31 Receiving - After 30

32 New Process for Receiving Eliminate 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. 31

33 Summary of Outcome and Process Significant 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 4 th Kaizen event. 32

34 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 sixmonth segments but not ideal. 33

35 Lean Value - Balanced Scorecard Perspective Quality Performance Improved flow through pre- and postanalytic processes Improved flow of info in tech/admin processes Improved performance via standardization of processes and implementation of best practices Financial Performance Reduction in cost associated with non-value added activities Improved capture of revenue via process improvement Improved operating margins Customer Service Improved process cycle time Reduction in overall turnaround time Improved customer satisfaction Work Culture Improved employee satisfaction Reduction in turnover and improved retention Improved ability to attract new employees 34

36 Value and Lean Six Sigma Value is created via: 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 35

37 Lean Impact on Value Creation Value Proposition viewed via Balanced Scorecard Perspective Value Proposition - We Must Grow This Space Quality Customer Finance People Lean forces us to focus on more than finances! 36

38 Sources of Lean Six Sigma Support Gemba Research 37

39 Follow-up Any questions or comments regarding this presentation can be forwarded to 38