5 Steps to a Lean Company

Peyman Zand, Partner

Peyman Zand, PartnerAuthor: Peyman Zand, Partner, Strategic Services Executive – CFCHE

Before we dive into a discussion on transforming your healthcare organization via Lean methodology, let’s first examine what exactly “Lean” means. Lean is the set of tools and techniques used to enhance customer value while minimizing excess from the organization. A “Lean Company” is one that has succeeded in operating with fewer resources while increasing customer value in a sustainable manner.

In The Machine that Changed the World, published in 1990, James Womack and Daniel Jones examined automobile production across the world.  They revealed that Toyota’s distinct operational advantage stemmed from two things: (1) a relentless focus on waste elimination and (2) a commitment to customer satisfaction. In the follow-up book, Lean Thinking, Womack and Jones identified the following five steps to take your company Lean:

  1. Determine Value: Understand what value your customers place on your product/service and what they are willing to “pay.” This can be in either time, dollars, etc.
  2. Map the Value Stream: This is defined as all of the actions required to produce a product/service from concept to delivery. Identifying how your organization delivers value and eliminates waste along the entire flow of a product/service’s value stream is critical.
  3. Create Flow and Eliminate Waste: Ensure your product/service navigates without interruption through the entire value chain. This requires a shift from conventional thinking. Rather than focusing on the organization’s needs, you now focus on the product/service’s lifecycle.
  4. Establish a Pull System: Deliver your product/service only when the customer wants it. The goal is to synchronize flow with customer demand to avoid overproduction.
  5. Strive for Perfection: Relentlessly pursue perfection – this is the key attitude of “going Lean”. Once the value stream has been improved, do it again!

A relentless focus on eliminating waste will lead to improved operating performance. In a time when many healthcare organizations are strapped for resources, implementing Lean methodology is an efficient way to receive the maximum benefits from the investments you are making in the future of your organization.

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