Topics and Discussions That Help Clinical Laboratory Managers Improve Their Operations

Sustaining Lean Six Sigma Beyond the Honeymoon Phase

 

I sometimes say that starting a lean journey is like starting a marriage.  In the first few months, the honeymoon phase, we are super-motivated and very disciplined about keeping the fire alive, whether it is lean or our new marriage.  We have that "lovin' feeling."  But then, reality sets in and the going gets a little tougher.  

 

Perhaps you have completed a 5S project, but now you realize it is time to take a deeper dive into your operations.  Perhaps you are starting to realize how hard it is to get people to let go of old habits and learn new ones.  I remind my clients that, just as in a marriage, it is important to push through challenges - to rekindle that "lovin' feeling."

Try to find something to anchor you back to those early, happy feelings:  before and after photos of 5S, memories of lean team experiences or pictures of freshly organized cabinets.  I hope they remind you how far you have come and help motivate you to push on towards more good feelings.

I look forward to your comments.

Leslie Sprick

We Have Lean Tools for That--The Current State, That Is!

 

For those of you just starting out on a Lean journey, these are the Lean tools you should use to perform a thorough assessment of the current state:

Tool 1:  Value Stream Mapping (For a review of how to do this read the Blog article: Value Stream Mapping-a Lean Assessment Tool)

Tool 2:  Spaghetti Diagramming 

Tool 3:  Calculate Customer TAKT Time

Tool 4:  Tube Travel Diagrams

Tool 5:  Count and Photograph Inventory--Specimens, Consumables, Reagents

Tool 6:  Calculate Your Current Production Cycle Time

The findings from this assessment will help you and your team brainstorm process improvement opportunities (kaizen events) over the span of about one year.  The next year, you do it all over again......continuous process improvement.  

The Financial Benefits of Lean Six Sigma

 

OK--here is the reality--when we, as managers, permit waste to remain in our value streams, we are literally throwing hard-earned money out the doors, vents, windows, cracks, and crevasses of our companies.  Think about it.  The following financial categories improve when we use the Lean philosophy and tool kit to improve value stream processes:

1. Revenues increase 
2. Labor costs decrease
3. Benefit costs decrease
4. Supply costs decrease
5. Facility costs decrease
6. Profit or contribution margins improve
7. Cash tied up in inventory decreases
8. Cash asset increases

So what's the rationale for the improvements in each of these financial categories?  The answers, in the table below, account for the financial improvements.  They form the basis of a Lean business case that your C-suite executives will want to see!

   

Financial Category	Lean  Driver 1	Lean  Driver 2	Lean Driver 3	Lean Driver 4
Revenues	Improved customer satisfaction-Voice of the Customer focus	Improved competitive stance	Improved billing & AR processes	Improved customer retention
Labor and Benefit costs	Less wasteful work is required	Productivity leap-frogs all benchmarks	Improved processes throughout the value stream	Overtime rate significantly decreases
Supply costs	Quality is improved-less defects & repeats	Less obsolesce	Improved materials management	Improved vendor relationships
Decreased facility cost	Tight coupling of sequential process steps	Lean facility design	Lower utilities and maintenance cost	Elimination of excess inventory & motion frees up space
Profits	Increased revenue from more customers	Improved customer retention	Low cost provider status	War on waste removal
Inventory	Lean kanban materials management	Just in time materials management	Less inventory obsolesce	Improved business relationships  with vendors
Cash	Less $$ spent on inventory	More cash on hand from profitable operations	Less cost of goods sold	Improved business processes

You may have additional thoughts or experiences with accounting results associated with Lean.  I invite you to share them with the readership community and me.

Sue Stegall     

6 Steps to Understanding Your Current State Production Cycle

 

As a refresher, Customer TAKT time is the available amount of production time (in seconds) divided by the number of patient specimens tested during that time.  Click on this link to read more about this topic. The Power of TAKT

Planned Cycle Time (or Planned Production Time), by convention, is 80% of your calculated TAKT time--it provides a little wiggle room when production deviates from the expected.

This is all well, fine, and good, but most lab managers do not know what their current production cycle time is.  By following the six steps below, you can ascertain your current state production cycle time.  If you find out your current production cycle time is greater than your Customer TAKT time (a.k.a, your customer service promise), you should use the lean tool set or an on-going Lean transformation to eliminate wastes, create better flow, and shorten your production cycle time.

Here are the six steps to determine your current state production cycle time:

Step 1:  Log the time that your morning phlebotomy run starts each day for 31 consecutive days.

Step 2:  Log the number of patients drawn and the total number of specimens received for the same 31 consecutive days.

Step 3:  Log the time that the last specimen from the morning run is resulted and verified to the floors for the same 31 consecutive days.

Step 4:  Calculate the average, minimum, and maximum number of patient draws and total number of specimens per day.

Step 5:  Subtract the time in Step 3 from the time recorded in Step 1 each day and convert into seconds-your production cycle duration for that day.  Calculate the average, minimum, and maximum number of seconds for the 31-day period.

Step 6:  Divide the average production cycle (in seconds) by the average, minimum and maximum number of specimens for the month to understand your current state production cycle times.  Compare and contrast these to your Customer TAKT time and your Planned Production Cycle Time (80% of TAKT).   Take action to eliminate waste if you are not meeting your service promise.  An Excel form has been developed for your use-click the following link to download it:  Production Cycle Time

My thanks to Marsha Cooper, Vice President at Alverno Clinical Laboratories, for forcing me to think through this concept and making it a useful metric to measure, take action, and monitor.  Share your comments and thoughts about this blog below.

Best regards,

Sue Stegall

Name That Lean Waste--Developing "Kaizen Eyes"

 

The real key to becoming a Lean thinker is to develop the ability to see and name the waste.  This quiz is designed to help you develop the ability to see and name waste.  Remember, value-adding activity happens when you change the form, fit, or function of the specimen or service to provide results or other information to your customer.  Everything else is wasteful activity.  If you can see it and name it, you can eliminate it-being able to see wastes is an excellent skill to develop.

Situation 1:  An acute care laboratory has the practice of storing routine urines in the small department refrigerator until there is a STAT urine ordered.  At that time, all routine, batched urines are analyzed along with the STAT one.    

Identify all Lean wastes you can think of in this example.

 

 

Situation 2:  An independent laboratory is attempting to keep the cost of transportation at a minimum by limiting the number of routes it staffs.  Each route is four hours long from start (pickup at first client site) to finish (delivery of all specimens at the testing laboratory).  Each workday six couriers deliver their collected requisitions and specimens between 6:30 PM and 7:00 PM.  For the next five hours the entire laboratory is a bustle of activity in all areas-specimen processing at first and then the testing areas.   Identify all Lean wastes you can think of in this example.

Situation 3:  In a large metropolitan area there are two competitors vying for the physician office laboratory work. 

• The smallest hospital-based outreach program has taken an information technology approach to order entry and result reporting. All of its physician clients order tests on line and receive results into their office-based electronic medical records system. No tests are missed, ABNs are always received, and front-end billing is clean.
• The largest sized national competitor accepts both paper and electronic requisitions-40% paper and 60% electronic. It has a combination of connectivity approaches including web-based applications and interfaces for reporting with physician offices so that results are delivered in a timely fashion. Reports are also delivered via morning couriers. The front-end billing staff works eight hours each day and there are seven of them on-site Monday through Friday. Each day they must work 5,000 third-party requisitions; they begin the process with a sort based on insurance company name/type-Medicare, Medicaid, BC/BS, etc.... It is their job to ensure all tests have been ordered, all required ABNs have been received and located, and all insurance information has been validated prior to actual billing. 

Identify all Lean wastes you can think of in this example.

Click the link to check your answers against mine [ANSWERS].  Let me know if you find this type of blog exercise useful.  Let me know if it has enabled you see waste and develop your "kaizen eyes."

8 Lean Wastes--3 Optional Metrics for Each

 

Base line measurements are necessary to track process improvement gains over time.  These measurements are usually made during a current state assessment.  Lets look at each Lean waste and brainstorm at least three measurements that can be made and re-measured to show process improvement and waste removal.  As a review, the 8 lean wastes are:

• Overproduction
• Transportation (conveyance-moving with something)
• Unnecessary motion (moving but not transporting anything)
• Waiting
• Unnecessary processing
• Excess inventory (specimens, supplies and reagents)
• Defects (corrections)
• Not using the knowledge and intellectual ability of staff (ignoring talent)

 Metrics to measure overproduction:

1. Number of specimens delivered per hour
2. Number of batches per shift
3. Batch size passed between each process step

Metrics to measure transportation waste:

1. Steps associated with tube-travel diagrams
2. Time and distance specimens spend in courier cars
3. Distance your staff travels carrying reagents and supplies

Metrics to measure wasted motion:

1. Travel distance associated with completing all process steps one time
2. Spaghetti diagrams of your staff during peak operation times.
3. Walking distance to areas where materials, supplies, and/or specimens are obtained.

 Metrics to measure the waste of waiting:

1. Telephone time spent waiting to relay a critical results
2. Length of time patients wait for outpatient phlebotomy
3. Length of time technologists spend waiting for specimens

Metric to measure the waste of over processing:

1. Count the number of times specimens are sorted in specimen processing
2. Count the number of times technologists sort specimens before placing them on an analyzer
3. Count the number of times specimens are sorted before being placed into storage

Metrics to measure the waste of inventory:

1. Measure staff hours spent on ordering
2. Measure staff time spent on rotating stock
3. Measure the amount of consumables you have stored in the laboratory vs. in the store room

 Metrics to measure defects passed downstream:

1. Track defects passed downstream from process step to process step
2. Count the number of corrected reports per day
3. Count the number of specimens that required clean-up (re-spun, redraw, re-label, etc.) prior to analysis per analyzer

 Metrics to measure foregone use of staff talents: 

1. Count the number of process improvement suggestions received each day from staff
2. Measure staff morale and satisfaction levels
3. Count the number of continuing education hours devoted to training your staff on process improvement methodologies and and project management 

These are just a few of the many baseline measurements that can be used to follow your process improvement journey.

I'd like to hear from other Lean advocates out there about your favorite Lean metrics when starting from a baseline position.

 

Lean six sigma process steps.

5 Truths about Lab Outreach

 

 

Leslie Sprick, my business partner, and I do a lot of outreach planning in the laboratory industry.  As I think about 2010 and lessons learned during 2009, a few thoughts come to mind about Lab Outreach.  I decided to share five of these thoughts with you--the title of this article is 5 Truths about Lab Outreach.

Truth 1:  Real outreach programs are operated as a business--top line, expenses, and profit or loss.  Any other business model, while maybe noble or charitable, is not a real business.

 Truth 2:  When you decide to enter the market with an outreach service line, know, absolutely, that one or more of your competitors are already providing services to your target market--find and use your competitive advantage from program launch!

Truth 3:  Customer churn has been going on in the U. S. market place for many years--I can no longer count the number of times Quest Diagnostics and Lab Corp have bought and lost the same book of business over the past 25 years.  At least Quest has decided to explore new market expansion outside of the U. S. mimicking Sonic.

Truth 4:  If you cannot measure top line net revenue, expenses, and bottom line profit or contribution to fixed, you cannot manage it. 

Truth 5:  You can earn a lot of money for your stakeholders if you figure out a way to error proof your outreach support systems.  The biggest opportunity, in my opinion, is electronic order entry and result reporting.  Millions maybe billions of dollars are being wasted because of paper requisitions.  Front-end billing staff is 100% wasted expense--I challenge you to do something about it!

 Share your comments with me and other blog readers--I know some of you have actually worked through these issues very successfully.

Have a prosperous and healthy New Year!

 

Lean Six Sigma: Improving Jet Way Flow with Smaller Batch Sizes

 

I have been thinking about Lean for six years now:  reading, learning myself, then teaching, and facilitating the adoption of Lean methodologies in labs across the country.  I think so much about Lean that I see waste everywhere I go; I see opportunities to create flow and fix bottlenecks, even in my everyday life.

For example, I get so frustrated with the boarding process that the airlines use, including Southwest.  On most flights, there is a pre-boarding ritual that entails queuing travelers up at the gate area near the entrance to the jet way.  It doesn't bother me that customers are lining themselves up for the cattle call.  If they want to stand there waiting for the boarding process to begin, that's their call.

What bothers me is that the airlines can't seem to figure out how to implement small batch sizes of travelers to improve flow and board the plane in the fastest way.  We all know the drill. The gate agents call first for seniors and passengers traveling with small children.  Next, the agent calls for first class travelers and then passengers by zones.  Passengers feed into the jet way as quickly as possible, but there is no consideration given to the fact that halfway into the jet way, the line to the plane stops everyone cold.  In the summer, travelers may stand for 15-20 minutes in the heat on the jet way, waiting to board, having left the comfort of the terminal and often carrying baggage and other items.

As I'm waiting in these lines, I think about how to improve the flow so the agents can get the plane boarded and pushed back from the gate on time.  I don't think it would be difficult to set up a system where passengers were sent down the jet way at a pace that equaled how quickly they settled into their seats.  I'd love to see an airline try this so their customers wouldn't have to cue up in the transport tubes, i.e. jet ways and board like a cattle call.

I always counsel my clients that working with smaller batch sizes improves flow.  This is a key component of Lean, and I never tire of seeing this concept hit home in our Lean Boot Camps.

  

Lean and Six Sigma--Comparing and Contrasting the Process Steps

 

 I have had the opportunity to be trained in both Lean and Six Sigma methodologies.  While the outcomes of the two methodologies are similar (operational cost savings in one form or another), the actual process steps are in a different order, at least from my perspective.

Steps:	Lean Process	Six Sigma Process
Step 1	Current State Assessment (Value Stream Map)	Define Opportunities--identify, quantify, and prioritize process improvement opportunities.
Step 2	Future State Map (Value Stream projections after Waste Reduction Kaizens)	Measure approved opportunities--current state measurements
Step 3	Identify, quantify, and prioritize process improvement opportunities	Analyze--scenarios, what-ifs, design of experiments leading to an outcome result
Step 4	Kaizen--implement the change and remeasure	Improve--implement the solution and remeasure
Step 5	Audits to sustain the gains	Control--develop control system to sustain the change.

  

With a Six Sigma approach, Master Black Belts, working with and through Senior Leaders, define in detail the various process improvement opportunities as the very first step used in the methodology.  The define phase for a Six Sigma project is a very time consuming assessment that includes a clear definition of each problem or opportunity, the associated objectives to be accomplished (and how the accomplishments will be measured), the financial business cases worth $250,000 or more in savings, the projects' scopes defined, the expected benefits to the customers from each problem/opportunity, and a high-level implementation time line.  Criteria are then used to select the process improvements that will be implemented, thrown out, and/or sent back for rework.   The focus of a six sigma project may be a value-adding work process or non-value adding work.  Note that all this work occurs at the Define stage (Step 1).  Measure is where the baseline definition for a six sigma project occurs--very similar to the lean current state assessment (Step 2).  The Analyze step (Step 3) in six sigma process looks at what the options are for improving the problem or exploiting the opportunity--very similar to the future state brainstorming within a lean process improvement engagement, but the six sigma analyze phase relies heavily on a lot of statistical calculations and on optimizing designs of experiments. 

Lean process improvement, on the other hand, begins with an assessment of the current state using a technique called value stream mapping to identify the flow of information, materials and time through each process step that creates customer value (Step 1).  Value adding work and non-value adding wastes are identified and quantified within the map.  The current state is used to identify the presence of wastes within the value stream--these identified wastes then become the process improvement opportunities captured in the future state map (Step 2).  After the future state map is developed, the opportunities are prioritized in a sequence for implementation.  Project charters and goal documents are developed prior to each Kaizen event (Step 3).  

Step 4 is very similar in each of the methodologies--six sigma names it "Improve" while Lean calls it "Kaizen."  Step 5, under each methodology, aims to sustain the gains--six sigma develops a control system while Lean uses on-going managerial audits.

I invite each of my readers to share their thoughts and impressions about these two methodologies.

Best regards.

Lean Six Sigma Transformations—The Journey’s Fun So, What’s the Problem?

 

 We are all people and we like predictability in our day-to-day lives.  Change affects all of us-throws us off kilter for a day or two-until we get use to the new way of performing work within a lean process.  There are at least five emotional stages associated with change in our lives per the book titled On Death and Dying by Elizabeth Kubler-Ross (Amazon).  Each of these stages is readily recognizable during Lean transformations or Lean kaizen events.

1. Disbelief and Denial

• "It won't happen to me."
• "If I just keep my head down, it'll be business as usual."

2. Anger and Blame

• "Why should I change?"
• Withdrawal
• Lack of concentration
• Increase in accidents, drop off in quality, absenteeism

3. Bargaining

• "If I could just have a little more time..."
• "The old way is great; let me show you the advantages of doing it the old way."

4. Depression

• Staff begins to understand the certainty of the change and become silent and withdrawn.
• Often staff members spend time crying and grieving at this stage of the change process.

5. Reluctant Acceptance / Stability Returns

• People begin to accept:  they start to explore their role; they focus on the future instead of dwelling on the past;  they seek a clear sense of their roles

What is a manager, team leader, or team member to do to manage the change process?  My business partner, Leslie Sprick, and I recommend the following change management approach:

1.    During Denial-you cannot over communicate; provide your staff with lots of information to help them prepare for the change.

2.    During Resistance-let people talk to you-they need to vent; do not tell them to snap out of it; be empathetic but stay the course.

3.    During Bargaining-Managers, team leaders, and team members must stay the course of process improvement.  Assure the staff members that if problems occur they will be fixed or you will try something else instead.  Never suggest that you will go back to the old way of doing things.

4.    During Depression-allow the staff member his/her time of grieving for the old way of doing things; continue communicating, but do not try to cheer anyone up.  This is an internal processing time.

5.    During Acceptance-give practical encouragement and support; provide training; involve staff in planning and setting goals; focus on short term wins.  The response will be good if people can see the positive impact of the change.

The five truths about change:

• Resistance to change is natural-it is not personal.
• People do what they create.
• Some people will NEVER go along.
• Killing the messenger can kill change

Remember:   "The only people who invite change are babies with dirty diapers!"