Pacific Northwest Organization Development Network Lean & Green Jeff McAuliffe December 15, 2008 This module is intended to be a review on some of the basic performance improvement concepts that are common to lean and other PI methods.

Principles of Process Improvement The customer is the focus of the work Quality outcomes are a result of good processes Improving processes requires engaging the talent of those impacted Data should drive decision making Use scientific methods (PDSA) It’s a journey, not a destination When we move to the realm of process improvement, there are another set of key principles that drive process improvement activities. These principles are common to all process improvement, quality improvement and lean improvement approaches.

PDSA PLAN DO STUDY ACT Correct Improve Maintain Determine Goals/ Targets Identify Methods & Measures Educate on Implement Plan Review Methods Used Examine Results Achieved PLAN DO STUDY ACT Plan-Do-Study-Act (originally called Plan-Do-Check-Act) is the foundation for any approach to improvement. We will use this as a foundational concept throughout the class. Walk through the nine steps. Key point – Act is a decision point based on the outcome of the Study step. There will be a choice to pick: Maintain – if your study concludes that you’ve reached your goal (and your chosen method is what allowed to goal to be attained), then you must now determine how to maintain the gains that you’ve achieved. This leads into the SDSA cycle (Standardize-Do-Study-Act). Correct – if your study concludes that you have not reached your goal(s), then you must correct the situation and “turn the wheel” again (i.e., go through the PDSA cycle again). Improve – if your study concludes that you have reached your goal (or partially reached your goal) and you want to strive for the next level of performance, you will “turn the wheel” again with a new goal/target.

Elements of a Process (SIPOC) Inputs Outputs Sequence of steps This graphic illustrates the five key aspects to any process that one may study: S = Suppliers I = Inputs (that the supplier provides) P = Process (a sequence of steps that transform inputs into outputs) O = Outputs (that the process provides for the ….) C = Customers (those that receive the output(s) of the process Things being passed along Suppliers Customers Source: Institute for Healthcare Improvement

“Lean Thinking” Defined Request Revenue Value Stream Time Line 1. Value - define precisely what delights customers 2. Value Stream - identify all processes that create value 3. Flow - make value steps flow by removing waste in every form 4. Just-in-Time - provide precisely what customers want precisely when they want it 5. Perfection - pursue through Daily Management What is the first word or feeling that comes to you when you hear the phrase, “Lean Management?” “Lean” was coined by Jim Womack during his MIT Study of the global automobile industry. It was discovered that Toyota through a man named Taiichi Ohno rewrote the rules on manufacturing through the development of what is called the Toyota Production System. It was as significant a revolution as Ford’s development of the mass-production moving assembly line that transformed the expensive, hand-crafted product industry into the mass production industry. With lean came the idea of mass customization we enjoy today -- something for everyone at the right price. Value stream represents the complete path within the walls of a healthcare facility and even between facilities from the customer - the patient - to the service providers. Begin in your own building. The point about perfection is that the dramatic improvements from lean methods are in large part due to envisioning a perfect, ideal, waste-free work environment and giving people license to strive to create that perfect world -- again and again I.e., continuous perfection Source: Womack & Jones 5

Definitions Value added = an activity that changes the form, fit or function of a product or service; something the customer would be willing to pay for. Non-value added = waste These distinctions are much easier to make in manufacturing than health care. What is considered value-added versus non-value added can be more of a “gray” discussion versus an obvious “black & white” distinction. Give an example from manufacturing – e.g., milling a block of metal versus inspecting it. Now give an example from health care – e.g., diagnosing a patient’s condition versus asking for their name and DOB for the fourth time. 6

Value from the Customer’s Perspective Value is always defined by the customer (patient). In acute care, the few value steps are actually very simple and straightforward. Any activity that is represented by the green triangles is all non-value added from the patient’s perspective. Ouch! Person becomes patient Patient finds out what’s wrong Patient gets effective treatment Patient becomes person Source: Swedish Medical Center 7

A Taxonomy of 8 Wastes  Over-producing & Over-processing - Producing things the customer doesn’t want, unwanted redundant activities, inspecting/checking other people’s work (e.g., H&P’s)  Correction - Redoing or reworking, managing customer complaints, disrupting normal processes to deal with errors and mistakes.  Inventory - Visible work-in-process (idle or finished), excess or unneeded stock, supplies, files, or copies; and “hidden inventory” -- all information and knowledge-in-process required to complete visible work-in- process  Waiting Time - Delays and queues of all types; waiting for calls, signatures, supplies, equipment, meds, labs, people and other resources. Walk through each waste and give a healthcare example of each one. 8

A Taxonomy of 8 Wastes  Searching Time - Time spent looking for information, people, supplies and equipment.  Transport - Multiple handling steps and needless movement of people, material and information.  Space - Storage of unneeded items, excess inventory or the general “mess” that builds up over time. Excess space required due to inefficient process flow.  Complexity - Complex process flows. Product choices that confuse customers. Organization boundaries which introduce inefficiencies and frustrate customers. Source: Joan Wellman & Associates 9

Why Focus on Waste? Waste 95% Value Added 5% Cycle Time Lead Time Most processes are 90–95% non-value-added waste. Focusing on eliminating waste is the best leverage for an improvement effort. Quality and service level are enhanced. Value Added Waste 95% 5% First focus on eliminating waste, that is where the most activity is. A focus on waste can simultaneously reduce customer response time, reduce cost, and often improve quality by reducing opportunities for error (such as inherent quality problems when work is handed off from one person or department to another). Lead Time Cycle Time Source: Joan Wellman & Associates 10

Critical Use Equipment Value added vs. Non-value added 21 hours lead time Value added 2-4 min This is an example from Swedish Medical Center. It highlights how much of a process lead time is non-value added. In this analysis, the time from a pump being removed from a patient (prior to discharge) until the pump was available again for another patient was measured. The average lead time was 21 hours. Within that time, there was only one step deemed to be value-added, cleaning and zeroing out the pump. This task took 2 to 4 minutes. 74% of all work time to make pumps available was Rework 45% of rework was in nursing alone Source: Swedish Medical Center 11

Cost Accumulation-Lead Time Profile $14 $0 $2 $4 $6 $8 $10 $12 $14 Labor Before RPI (1264 mins $12.52/pump) $12 Supplies $10 Wait Area = The Profile $8 Cost Per Pump Per Room Cleaned $6 After RPI (~34 mins $0.67) This Cost-Lead Time profile shows the same process before and after a lean workshop. The relative “footprint” of the process (similar in concept to a carbon footprint) shows the cost and the lead time. When the pump cleaning process was integrated into the room turnover process, the cost ($0.67) shrank drastically as did the lead time. The big benefit was a cost avoidance since this new process created much more pump availability and held off the need to procure more pumps. $4 $2 $0 200 400 600 800 1000 1200 Lead Time (mins) Source: Tom Moench/Swedish Medical Center 12

“Waste comes cleverly disguised as useful work” Waste of Transport Patient and Nursing wait for a clean bed Oct 2002 Priscilla - ES Tech, 7SW In July ‘03 a rapid turnaround RPI was conducted to reduce the waste. This workshop was a follow up to the pump workshop. One goal was to integrate the pump cleaning into the bed turnover (BTO) process. During pilot implementation Priscilla completed 13 BTOs in one shift. She remarked to a manager that by the end of the day she was not sweaty, not tired, and did not go home and fall on the couch the way she usually does. ES search for supplies and equipment Source: Swedish Medical Center 13

Benefits to Eliminating Waste …employee commitment increased 1% HOSPITALS: 71 EMPLOYEES: 74,827 35% WASTEFUL WORK …employee perception of quality increased by 0.9% As time spent on wasteful work decreased by 1%... This research (not from a “lean” source) confirms the impact on waste in healthcare. According to this study, 35% of all activity was deemed waste in the hospitals studied. … Operating margin increased by 0.25% Improvement increased in... Source: Murphy Leadership Institute. 2003 14

Process Maturity Lean Six Sigma Maturity Stage  1 Daily Management (Tribal) Un- documented 1 Daily Management Documented 2 Standardized 3 Stabilized 4 Reliable 5 Lean Six Sigma Refer to handout on Process Maturity. The key point to this slide is to clarify when it is appropriate to use a lean approach and when it is appropriate to use the six sigma approach. Most processes requiring improvement in health care tend to fall in the Level 1 to Level 2 realm. These are excellent candidates for a lean improvement approach. If your process is documented and standardized but is still not making the performance needed (and the root cause of what keeps it from higher performance is unknown) then Six Sigma is a great set of tools. Most health care processes don’t fit these criteria.