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"In our operating room, we take care of infants who weigh less than 1 kilo to adolescents who are morbidly obese," said Dr. Max Langham, Chief of the Division of Pediatric Surgery and Medical Director of Pediatric Surgery at
Le Bonheur Children’s Medical Center. "Since the size of the patient dictates the types of tools and materials we use, we have an exceptionally wide range of supply items to manage."

Indeed, the Le Bonheur Operating Room stocks more than 6,000 unique sterile supply items, plus 600 different types of surgical instrument kits. But its supply chain management wasn’t up to the task. As Dr. Joel Saltzman, Medical Director of Anesthesiology, recalled, "To make sure we didn’t run out of supplies, well-intentioned people would constantly order things. And instead of ordering one, they’d order a box. If they couldn’t find it next week, they ordered another box. And if they couldn’t find that, they ordered another. Pretty soon, we’d have three boxes and two of them would be outdated." The situation was costly for the hospital and wearing on the staff, which was constantly hunting for what it needed. "People there were just working ten times harder than they needed to," said Dr. Saltzman.

A project in the laboratory had recently demonstrated Lean’s ability to cut costs and speed operations. As David Schlappy, Vice President of Quality Management at Le Bonheur, explained, "We’ve adopted Lean as one of our cornerstone strategies for quality management. After we saw the success in the lab, we said, ‘Let’s see if it will work on some of our OR problems.’"

Le Bonheur invited ValuMetrix Services to provide consulting and mentoring for this second Lean project. "Eventually, we should be able to do things like this on our own, but we still need a little more experience," said Sheon Lynch, Administrative Director of Operations. "Also, having an outside paid consultant makes it clear that this is a priority. It commits us to completing the project within the given timeframe."

As a first step, ValuMetrix Services came to Le Bonheur to conduct an assessment. A consultant videotaped part of the patient flow, as well as staff activity and the consumption of supplies. "The assessment does two things," explained Schlappy."It helps us understand whether or not the project is worthwhile and how long it’s going to take. But also it allows us to set a goal and hold ourselves accountable for real results." Based on its analysis, ValuMetrix projected a one-time inventory reduction of $250,000 and an ongoing labor savings of 3.2 FTEs. Guided by a ValuMetrix consultant, a five-member Lean team scrutinized the inventory process. It videotaped the current steps for unpacking supplies, assembling a case cart, and turning over a room for the next case. It combed through order records for the previous 18 months.

A minute-by-minute anal-ysis of the videotapes confirmed Dr. Saltzman’s impression that people were working harder than necessary. Because the storeroom aisles were so narrow, for example, nurses left their carts outside and made multiple trips inside to gather supplies. In one instance, a nurse assembling a single surgical case took 15 minutes and walked 750 feet to pick up 22 separate items.

The sources of waste went beyond layout to the overall approach to inventory management. "Because we had no standardized process, we’d order the same item from three different vendors," explained Lynch. "One vendor might package 10 items to a box while another might sell boxes of 100. So you might order what you thought was 100 items and get 1,000. It was years of that kind of confusion that got us where we were." In many cases, the same supply item would be stored in five different places. A systematic inventory found over $100,000 worth of expired stock.

Once the team identified key sources of waste, the initial fixes were relatively quick and straightforward. Le Bonheur:

• Established a master location for each supply, with smaller on-site reserves (usually one day’s worth) in the ORs.

• Established a double-bin system to ensure that older stock is on top and consumed first. An empty bin provides a visual cue, well in advance, that the item needs replenishment.

•Redesigned the storeroom so that cart can move easily between the aisles. LeBonheur installed additional doors to allow more direct access.

Organizing 6,000 separate inventory items took a little more doing. "For 12 weeks, the five team members worked 8 to 5, Monday through Friday, just going through the list," explained Schlappy. "For each item, they’d ask, ‘Do we still use this? How many do we need?’ One person might say, ‘Dr. So-and-So uses that. Check with her.’ And they’d discover that no, she doesn’t use it anymore. Strike that from the list." The team identified 819 items that no longer needed to be stocked, as well as $204,890 worth of still-usable inventory that could be transferred, sold, or donated to other facilities. For each of the remaining 6,000 items, the Lean team created a laminated kanban card, inserted at the point where that item should be reordered. The card includes a photograph of the item, contact information for the authorized vendor, a part numbers and a pre-set reorder quantity.

Once the Lean changes were implemented,the ValuMetrix estimates from the assessment proved to be conservative. Instead of a $250,000 reduction in standing inventory, Le Bonheur found $449,297 worth of unneeded supplies. And once the supply chain process was Leaned:

• The amount of time needed to build a case cart fell from an average of 12 minutes to just six minutes, a 50% reduction.

• This meant that fewer people were needed to assemble case carts, allowing the OR to reassign the 3.2 FTEs that ValuMetrix had projected.

• The reductions in unneeded inventory resulted in a first-year savings of $243,828. "These are hard dollars that went to the bottom line," Schlappy stated. When Le Bonheur prepared its operating budget for the following year, it formally allocated $200,000 less for supplies.

"Not only does this save us a lot of money by getting rid of redundant and outdated supplies," noted Dr. Saltzman. "But on a going-forward basis, it’s going to prevent us from ordering all that stuff." Indeed, as the OR continues to trim its inventory over the coming two years, it is expecting an additional $50,000 reduction. That will bring the total savings from this one Lean project to $293,828.

The Lean changes have also reduced the stress level in the Le Bonheur OR. "Nurses know exactly where to go to get things," said Dr. Langham. "That allows them to spend less time worrying about what I need and more time on patient care. It also decreases the surgeon’s level of frustration, because when you ask for an instrument it’s going to be there faster." Dr. Saltzman has also noticed the change. "Thirty percent of our workload is unscheduled add-on cases," he said. "Lean let us get to more of those add-ons, so we’ve actually increased our level of care."

As you might expect, managing 6,000 inventory items with 120 FTEs takes some upkeep. As part of this Lean project, the ValuMetrix consultant helped Le Bonheur establish an audit system. A Patient Care Coordinator conducts daily audits of each OR, making sure inventory procedures are being followed. The coordinator conducts similar audits in the storeroom.

The daily audits make it easier to identify and address the causes of problems, as Lynch explained, "Recently, someone didn’t follow policy and ordered a wrong quantity. The audit caught it right away, so we knew exactly who that person was and were able to speak to them." Surprisingly, this is saving time at the OR’s monthly departmental meetings. Administrators can speak with individual employees who are not following procedures, instead of taking up the entire staff’s time with reminders.

The daily audits are reinforced with weekly audits by supervisors. And at the end of the year, a comprehensive review fine-tunes inventory levels and weeds out more items that are no longer being used. That, of course, leads to further inventory savings.

This may all sound like a lot of work, but Schlappy thinks it’s well worth the effort. "Yes, it takes energy, money, and people to keep this going," he said. "But the amount of energy it takes to keep it fixed is much less than the energy it would take to fix it again in the future."

Dr. Saltzman con-cured, saying, "When you consider the amount of work that we’re doing auditing and maintaining the system minus the amount of work that we’re saving with Lean, we’re way ahead."

What does Le Bonheur plan to do after this second successful Lean project? "One of the key products that came from the ValuMetrix assessment was a value stream map," said Lynch. "It showed us more than 100 opportunities to make process improvements in our operation."

Le Bonheur has used that map to develop a master plan for moving the OR forward over the next two to three years. For example, nurses often open an entire sterilized set of supplies when only one of the items is needed. A future Lean project may explore subdividing these kits, so that an entire set doesn’t have to be resterilized.