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Such is the case with Lean manufacturing and Six Sigma, two management improvement programs hitched at the hip that have reformed operations outside of healthcare for decades at some high-profile companies.

Because of their success in other industries, a growing number of healthcare organizations, primarily product manufacturers and distributors, have implemented Lean principles and promoted management personnel to become grounded in Six Sigma quality performance tools.

What companies like BorgWarner, Cardinal Health, DHL, Firestone Industrial Products, Johnson & Johnson, Panasonic, Philips, Teleflex and Toyota have done for years is starting to trickle into healthcare provider facilities to improve clinical service and supply chain management – including sterile processing.

But how do you explain the Lean management and Six Sigma programs as they pertain to supply chain operations, extrapolating the subtle and not-so-subtle nuances that define and delineate them from other programs?

Healthcare Purchasing News tapped three key experts grounded in Lean management and Six Sigma to briefly share their insights on the distinguishing characteristics, applications and endurance of these concepts in healthcare supply chain management.

Some might be quick to dismiss Lean principles and Six Sigma as just another management-flavor-of-the-month to extract more output and work out of employees to shore up the bottom line and improve the revenue stream. Just like the total quality management (TQM) and continuous quality improvement (CQI) programs of the 1990s.

But that would sell either "problem-solving systems" far short of their value to operations, as well as their inherent worth, experts say.

"Lean Management and Six Sigma are two different, but complementary methodologies [that] when linked together into a unifying process called LEAN Six Sigma have helped thousands of companies and hundreds of healthcare organizations dramatically improve their quality and increase their bottom line," said Robert T. Yokl, president and chief value strategist of Strategic Value Analysis in Healthcare, and a staunch proponent of both. "What makes Lean management and Six Sigma different from TQM/CQI is their highly disciplined approach, their focus on waste and inefficiencies in the supply chain, speed and reducing the wide variances in products, services and processes employed and then controlling them – forevermore."

Robert T. Yokl

Whether you’re referring to Lean, Six Sigma, Lean Six Sigma, TQM or CQI, all are "problem-solving systems," according to Forrest W. Breyfogle III, who heads Smarter Solutions Inc., a coaching and consulting firm that specializes in Lean Six Sigma training. But Lean and Lean Six Sigma can have their own process challenges.

"Lean Six Sigma and Lean are to have an underlying management system for determining which problems are the most important to work on next," Breyfogle noted. "However, with these deployments the sophistication and effectiveness of determining which problems to work on next, which affect the business as a whole, can often
be challenged. This is especially true after a Lean or Lean Six Sigma deployment has been in existence for some time in an organization. [For example] at first the projects most important to work on are obvious – later this is often not the case."

Carl DeVore, director, Lean Healthcare California, indicated that breadth and depth define the differences and similarities. Lean/Six Sigma and TQM/CQI emerged from work done by such names as Deming, Shingo, Ohno, Shewhart and others in helping Japan become a world leader in productivity, according to DeVore. The bulk of this labor became known as the "Toyota Production System" or TPS. [Lean/Six Sigma and TQM/CQI] represent sets of principles, concepts and tools that are geared to solve problems, increase quality, and improve overall business processes, he added.

"For Lean/Six Sigma, the Lean arena is broader in coverage and Six Sigma is deeper," DeVore said. "For TQM/CQI, TQM is broader and CQI is deeper. Any combination of these disciplines can be used by skilled practitioners in healthcare environments to improve care delivery and patient satisfaction. In basic terms, Six Sigma addresses reduction in errors, and Lean focuses on reduction of waste."

While they all may have the same goal – that is, to improve the quality of products, services and processes in an organization, Lean and Six Sigma include something that TQM and CQI do not, according to Yokl. "[With employing] Lean or Six Sigma systems, they will have a toolbox of strategies, tactics and techniques to do so," he said. "Whereas, in my opinion, TQM/CQI lacks specific power tools to get the job done. More importantly, TQM/CQI hasn’t been able to sustain quality improvements over the long-term. Lean Six Sigma has been time-tested to control the variation in products, service and processes."

DeVore recalled how these systems developed in parallel educational and think-tank worlds, but applied to varying degrees in different industries before crossing over. The differences primarily are in the details of the methodology and tool sets each school of thought presents, according to DeVore. For example, The Lean methodology was enhanced and developed by Womack and Jones at the Lean Enterprise Institute. Six Sigma, which is somewhat based on Statistical Process Control techniques, was developed into an overall process improvement toolkit by Motorola in the mid 1980s and later rolled out to other industries to aid them in making improvements. Since then, Lean and Six Sigma have developed a lot of areas of overlap and have become informally joined under the blanket term Lean/Six Sigma (LSS), he said.

Meanwhile, TQM/CQI has evolved somewhat in parallel with LSS and was adopted early on by the healthcare industry as the tools for improvement practices, while LSS was used primarily in industry, DeVore continued. "Due to the different environment in which the TQM/CQI and LSS were being used, the concepts and methodologies evolved slightly differently in that TQM/CQI does not use the Japanese-based terminology as much as LSS. Also, LSS developed some tools which greatly enhance the implementation at the level of delivery, such as Value Stream Mapping (VSM)." (For questions or more information, email DeVore at cdevore@cmtc.com).

While Lean, Six Sigma and Lean Six Sigma may be prominent outside of the healthcare industry and inside the healthcare manufacturing and distribution segments, they can be applied in hospitals and other healthcare facilities, as well. In fact, Yokl contends that Lean management or Six Sigma principles are "ideal" for healthcare supply chains because they involve "transaction-based" functions.

"One big lesson we have learned from Toyota, the creators of Lean Management, is that purchasing departments can have as much as 50 percent non-value-added activities – [those] activities customers wouldn’t pay for if they knew about them – that can be reduced by as much as a third by employing the Lean Management methodology," Yokl noted. "In this age of doing more with less we in supply chain management need to embrace these proven concepts so we can optimize our resources just to keep pace with the changing healthcare marketplace."

It’s all about reducing defects and waste in supply chain management, according to Breyfogle. "Process documentation and refinement, along with value stream mapping, can be used to make systems so that they are more mistake proof and more robust to differences between people and machines," he added.

DeVore argues that while some supply chain issues may overlap healthcare and non-healthcare industries, "the LSS methodology needs to be tweaked in order to be effective in the unique situations and conditions presented by healthcare delivery" … to prevent making "adaptations on-the-fly from standard industry concepts."

Yokl, Breyfogle and DeVore all believe Lean, Six Sigma and Lean Six Sigma offer healthcare supply chain managers a variety of roadmaps, strategies and tools to move their operations forward.

Yokl indicated that they provide "a disciplined, standardized, repeatable and measurable system to reduce their cost and improve their quality" that can be applied to inventory management, physician preference items, standardization, utilization or any other initiatives. Furthermore, he called the concepts a "magic bullet" for "faster, better and more consistent" supply chain operations.

Basically, the VSM tool in LSS focuses on areas of wasteful processes "where effort and resources will pay the greatest dividends in the shortest amount of time," DeVore said. "TQM/CQI relies to a certain extent on the hope that problem areas will be apparent to the casual observer in order to select target projects and improvement events. However, sometimes the extended consequences of a change are not obvious at first glance, and LSS has better methods of avoiding those consequences. Thus, in dealing with supply chain issues – either goods or sub-provider services – LSS can more quickly and more effectively get a handle on such problems as late deliveries, poor quality of care, dissatisfied patients at other providers, etc."

So why aren’t more than a small number of healthcare providers – supply chain management operations, in particular – adopting and implementing these concepts if they’re so valuable?

For Yokl, it boils down to time. "I believe that the reason that more supply chain managers haven’t adopted these concepts is their belief that they it will take too much of their time for them to learn, manage and sustain these new ways of doing things," he said. "When in reality these concepts will actually save thousands of hours per year in reduced time, effort and expenses for supply chain managers." Moving materials managers to more active from passive roles requires education, he added.

For Breyfogle, it’s the big picture viewpoint. "It has been described how process improvement activities (whether they are Lean Six Sigma, TQM, CQI, etc.) frequently do not affect the big picture," he said. "Hence, management rightfully so is hesitant to undertake the effort and expenditure."

Forrest W. Breyfogle III

Breyfogle described process improvement using a refinishing-furniture analogy, where the furniture’s appearance relates to how well the organization is performing in total revenue and profitability. "What typically happens in all the above process improvement efforts are a polish-the-handle then sand-a-leg, and then sand-a-side of the furniture approach," he added. "With this approach, we can expend a lot of effort and the furniture still does not look good."

As a result, his organization developed an "Integrated Enterprise Excellence" system that uses "Define, Measure, Analyze, Improve and Control" as the benchmarks starting with a performance improvement metric at the 30,000-foot-level that creates individual process improvement projects.

For DeVore, it’s about demonstrating value at the management level in many cases. "While TQM/CQI has been in use for a long time, the results have been spotty in many cases and the benefits may not show up in terms of improved financials or even higher patient satisfaction ratings," he said. "Because patients are not always skilled observers and evaluators of the details of patient care, surveys and questionnaires may not pick up on improvements that have been made by TQM/CQI implementations. Unless executive managers of different provider organizations communicate the benefits to each other, it is difficult for staff at the delivery level or even outside consulting organizations to make a compelling case for the benefits."

Amid all the colorful talk about Black Belts, Yellow Belts and Green Belts, the way to drive Lean Management and Six Sigma adoption and implementation is to offer and promote the necessary education and training from the ground up and the top down, experts noted.

To get workers to understand, accept and implement needed change, they need to participate in and complete formal training programs "so they can become members of project work teams that do the actual quality and savings work," Yokl said.

You have to involve the workers in creating and implementing changes so they take ownership in the processes and results, Breyfogle echoed.

But DeVore cautioned that sometimes training is not effective, "either because the training organization has not developed a well-organized curriculum or because it is sometimes difficult for delivery staff to devote enough time and attention to really grasp and internalize the principles." By far, the biggest problem as DeVore sees it is the "failure of senior management to reinforce the programs and communicate the commitment at the delivery level," he said. "Successful programs require a lot more than training classes," he added, with a "Lean Core Team" responsible for programs, events, reporting and communication of results.

So how do you prevent eye-rolling at the mere mention of Lean Management and Six Sigma?

"Much eye-rolling about Lean Six Sigma deployments is justified," Breyfogle noted. "What organizations need is more than the problem-solving system of Lean Six Sigma, where there is a push for a project creation system, [as in] let’s brainstorm for which project to work on – perhaps some [one] is going to class and needs a project. What is needed is a business system where metric improvement needs pull for project creation."

Skeptics don’t surprise DeVore. "To the extent that any change-management initiative has been tried and failed, there will be resistance to any suggestion of ‘yet another improvement program,’ which is seen as a waste of time," he said. "In such a case, there will need to be preliminary work to ‘plow fresh ground’ where the senior management conveys a concise, credible and sincere message that any new program will be handled differently than in the past. Frequently, establishing credibility will require that executive management first set an example by initiating, and sustaining, a meaningful change in some process at the top level, which is then communicated with enthusiasm and positive reinforcement at the delivery level. Failure to sustain the transformation is quite common and must be addressed in order to see success."