LESSONS FROM Toyota

Toyota has built a solid reputation as a world-class production and manufacturing organization through the application of quality principles referred to as “lean thinking.” At Toyota, lean thinking concepts have resulted in better quality, improved efficiency and reduced costs, and they have helped the automaker become a manufacturing model of excellence.

Toyota has standardized its production processes using carefully created documents and checklists to support and guide daily work. The company also relies on “built-in quality,” meaning that inspection occurs throughout the assembly process, not just at its end. This concept has fostered a greater sense of ownership and quality accountability among Toyota’s workers.

Developed for use in the manufacturing setting, lean quality concepts have spread to service-based businesses and health care providers. Major health care organizations such as Wellmark Blue Cross/Blue Shield, Virginia Mason Medical Center and the University of Michigan Health System have adopted lean approaches with impressive results: better outcomes, reduced waste and improved patient satisfaction.

In fact, in the endless quest for good process management, the principles of lean thinking can provide most companies with powerful tools and techniques for fundamental process improvement from beginning to end.

It’s Time to Go Lean

The term “lean” refers to the concept of doing more with less — less human effort, less time, less equipment and less space — while consistently providing customers with exactly what they need. Lean thinking focuses on:

• Reducing waste;
• Designing processes based on the customer’s requirements;
• Achieving standardized work;
• Reducing rework;
• Eliminating bottlenecks; and
• Reducing lead times, wait times, and process times.

Another major focus within a lean approach involves finding any problems as quickly as possible, identifying the root cause and correcting it so that the problem does not reoccur. The root cause emphasis is worthy of attention because it is not uncommon for managers or employees in any company to work on eliminating the symptoms of problems rather than attacking their true cause.

Part of the appeal of the lean approach is that it is based on designing and improving processes from the customer’s perspective. Too often, quality-minded improvement projects tend to take an inside-out perspective instead of an outside-in perspective. Lean requires that we view each process and each transaction through the eyes of our customers, both internal and external.

Lean Comes Home

Can the HME industry benefit from the lean approach? The short answer is a definite yes.

Given the difficulties of the current HME environment with increasing costs and decreasing reimbursement, providers need standardized, efficient processes, zero defects, reduced rework and minimal waste.

Now is the perfect opportunity for HME providers to look to Toyota and other health care organizations and apply the same lean techniques to become more efficient, more customer-focused — and better positioned to deal with tighter margins and rapidly changing market conditions.

In one example, MedEquip, the University of Michigan Health System’s HME department, recently incorporated lean methods in the redesign of a cumbersome intake process that was riddled with inconsistent communication. The revised process involved implementing cells of intake teams as well as changing the office layout, which resulted in better communication and coordination among staff.

A lean tool known as “value stream mapping” was used to understand the current process as well as design the ideal process. Under the new process, incoming calls were more directly routed to the appropriate area. Customer service improved, and phone wait times decreased by nearly 30 percent during peak call periods.

MedEquip also used a lean concept known as “5S” to revamp its equipment processing and testing area. This involved creating a neat and highly organized work environment where workflow was made more visible. Tools and other materials were neatly arranged using clear signage and labeling.

This approach was based on Toyota’s obsession with cleanliness and workplace organization. The reorganization played a part in an 18 percent productivity gain and improved staff performance, as less time was spent searching for tools, forms and equipment.

Lean Applications for HMEs

• Use the “Five Whys” approach to understanding the root cause of a problem. The problem: Chronic late deliveries. Why? Drivers leaving the warehouse late. Why? Difficulty pulling orders and supplies. Why? Stock shortages and excessive time spent searching for items. Why? Inconsistent purchasing patterns. Why? Lack of performance standards and accountability for purchasing staff. Remember that the lean approach involves correcting the true cause of the problem. An example of attacking a symptom of late deliveries instead of addressing the root cause would be to assign additional staff to help load or stage orders. While providing extra staff to help pull and load may result in improved driver start times, the true cause of those late deliveries (purchasing performance) is sill an issue.
• Standardized work can become more of a reality through the use of task-specific checklists that ensure all work is completed before moving to the next step in the process. Insist on “quality at the source” in order to reduce costly rework elsewhere in your value stream. Quality at the source means that inaccurate or incomplete work is not passed on. An ideal focus for this concept in any HME is the intake process, where incomplete and inaccurate work often seems to sneak through. Standardized checklists and frequently updated intake forms that reflect changing payer guidelines can help ensure clean claims at the end of the process. A typical checklist should include every task or requirement that is needed to ensure an order can be converted to a successful claim. Providers can benefit from having payer-specific requirements and intake performance standards clearly displayed at workstations and/or in a central location. Ideally, this information would also be available in an electronic format for staff.
• The layout of the office should be based on the actual, logical flow of work, not only on function according to an organizational chart. If two different departments perform certain aspects of their work in conjunction with each other, then consider a layout that will facilitate communication, reduce footsteps and enhance cooperation. For example, providers might benefit from having a billing specialist work in closer proximity to the intake area. Billing personnel can provide near real-time assistance with questions about quantity issues, coverage guidelines and non-billable vs. billable items for payers. Getting the correct payer-specific information up front can prevent unnecessary headaches later on at the claims submission point and beyond.
• Implement a “pull system” when downstream tasks begin to back up and create bottlenecks. For example, when the number of customer calls reaches a certain volume, additional staff can be automatically assigned to assist. The same approach can be used when call wait times exceed a certain limit. Many phone systems have associated software that allows call volumes to be monitored in real time. Smaller providers may want to consider focusing on cross-training and cross-coverage in order to get more flexibility with staff and become more responsive to customers. Providers should also find ways to free up employees from doing routine, repetitive and time-consuming tasks such as filing, fax processing and taking routine re-supply orders via the phone. Streamline these tasks with a desktop fax software program. A document scanning system should be used so files can be digitized and easily managed. The use of an online ordering system for patients can also help reduce the amount of time spent on the phone for routine re-supply orders. A well-designed and informative Web site can be an efficient method of providing patients with product and service information. Automating as many tasks as possible will give small providers more flexibility to use their people for more productive tasks.
• Don’t overload downstream processes with excess work. Each step of a business process should be designed in a way that can effectively absorb the volume of work being sent from the previous step. If you are processing 100 orders per day upstream, then make sure you can adequately and consistently process the same volume at each downstream step. Small and large providers alike should consider eliminating as much paper as possible. For each paper-based transaction, carefully assess whether the transaction could be carried out electronically. Reducing the dependence on paper can help prevent other steps within a process from becoming overloaded.
• Work leveling is essential to maintaining the required throughput. Designate “floats” or “rovers” who can be rapidly (and automatically) redeployed to assist in any area that is encountering delays. For example, allowing confirmation paperwork to pile up can have devastating effects within the last part of the business process. Encourage everyone involved to become an inspector and aggressively monitor confirmation work-in-progress and other key metrics such as UPS orders (mail orders) and total orders processed. Use the floater to assist when work begins to pile up. For a large provider, work leveling might mean assigning designated staff to an area where paperwork is proliferating, such as filing, shipping and receiving or order confirmation. A smaller provider can designate when high-priority and low-priority tasks should be worked on. Filing and routine paperwork should occur at the slowest time of the day, for example. All providers need to make sure employees have a good sense of work prioritization. Employees can quickly become overwhelmed with their workload and may require some additional structure for their daily work routines.
• Pick proficiency for mail orders can be improved by adopting Toyota’s method of having quality built in as part of the process. Toyota’s inspection checks take place throughout its production process, not at the end of the assembly line. Inspecting work only at its completion can mean many errors before they are eventually (and hopefully) caught.

In addition, employees have little incentive to get it right the first time if they know that mistakes will be caught prior to actual ship-out. In other words, inspection should take place shortly after products have been picked, not near the end of the day when everyone is rushed and thinking about going home.

HME companies should consider including “order picked by” information in each package to help foster a sense of ownership and responsibility among employees. Businesses that use this approach report higher customer satisfaction and greater order accuracy than those that don’t.

The Role of Leadership

Planning to build a lean culture is the easy part. Implementing and sustaining it can be a difficult task for providers if the company is not properly prepared to go lean.

In order for a lean culture to take hold, top leadership commitment is absolutely essential. Lean thinking is often referred to as a culture change because it is about so much more than just the tools and the techniques.

Most successful quality initiatives have unwavering leadership commitment within the context of a performance-based organization. If these two dynamics are missing, chances are that a lean initiative will come up short.

Lean is a way of thinking, and it should become a fact of daily organizational life. The lean concepts that have been the most successful, such as quality at the source, are those that have been ingrained into the people that actually carry out the daily work.

HME providers can learn valuable lessons from their colleagues in the broader health care sector and those in manufacturing that have successfully implemented Toyota’s lean thinking approach. After all, increased efficiency, improved service and reduced waste are worthy goals for all companies, regardless of industry.

With an MBA and a master’s degree in organizational management, Chris Calderone is a project manager at the University of Michigan Health Systems’ Home Care Services division, and founder of Lean Homecare Consulting Group, Jackson, Mich. He can be reached at 734/709-5487, at [email protected], or through www.leanhomecare.com.

Lean Thinking

Lean thinking is a quality-focused approach designed to improve processes and:

• Improve quality and efficiency
• Reduce rework, bottlenecks and defects
• Decrease wait time and process time
• Achieve process standardization

Lean thinking is lean because it provides a way to do more with less:

• Human effort
• Human equipment
• Time
• Space

Lean Tools

• 5S – Creating a visual workplace to improve productivity, safety and quality. A 5S workplace will also impress accreditation visitors.
• Value Stream Mapping – Helps to “see” waste in the form of waiting, rework and bottlenecks, and serves as a plan for the improvement initiative.
• Root Cause Analysis – Helps to identify and eliminate the true cause of problems.
• Error Proofing – Helps to prevent errors and costly downstream rework.

The 5S Workplace

• Sort – Keep only what is needed.
• Straighten – Make sure everything has a place.
• Sweep/Shine – Clean areas can help expose abnormal conditions.
• Standardize – Develop methods to monitor and maintain the first three S’s.
• Sustain – Use self-discipline to maintain the 5S workplace.

More Lean Tips

• Utilize document imaging to reduce searching time and storage space.
• Implement desktop faxing for efficient document management.
• Electronic alerts can facilitate communication across the entire business.
• Carefully consider printer and copier placement to minimize footsteps.
• Maximize software capability (and use an auto-populate function).
• Get rid of the clutter in warehouse and office space.

Getting to Lean

• Begin implementing 5S in the warehouse/equipment processing area with signs and labels. Clean and organize the entire area.
• Start small. Select a manageable value stream/process to map out.
• If nothing else, map out processes so staff can gain a better appreciation of the company’s flow of work.
• Address the process first, not the people. Lead an effective root cause analysis.