The Elements in St Jamess New Approach - Research Paper Example

Introduction St James’s Hospital (SJH) in Leeds in the north of the United Kingdom, is the largest Teaching Hospital in Europe. Under increasing pressure to reduce costs, to contain inventory and improve service, the Supplies Department has undertaken a major analysis of its activities to try and adopt some of the ideas from the Just-in-Time (JIT) approach. The aim of this paper is to identify the elements in St James’s new approach that could be seen as deriving from JIT and Lean principles of manufacturing. This paper will also hint to further ideas from JIT and Lean manufacturing that could be applied in a hospital setting such as St James’s and finally provides conclusions about the applicability of JIT and Lean manufacturing concepts to a service operation. Just in Time Methodology “Just in Time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated costs.” (Wiki Encyclopedia, 2007). JIT is a division of Lean Manufacturing. It offers scope for reducing inventories and introducing ways and means to improve productivity by planning optimal use of resources by elimination of all activities that do not add value and/or are safety nets, maximum use of scarce resources like capacity, manpower and capital becomes achievable. (road.uww.edu, 2007) It also results in value addition for the customer, improved bottom line, elimination of wastage and enhanced productivity of employees (road.uww.edu, 2007). This is the ultimate objective of Lean Design. The primary elements of Just-in-Time (road.uww.edu, 2007) are: to improve quality to zero defects; to have only the required inventory when needed; to reduce lead times by reducing setup times, queue lengths, and lot sizes; to incrementally revise the operations themselves; and to accomplish these things at minimum cost In contrast, other methods try to automate current business process and while implementing, there is a risk of simply automating the waste. With them quality is an issue that is left for other standards like ISO etc. Just in Time is also a simple method to implement as we will identify some of the main elements of it in our case study, it also maximizes the velocity of service and improves customer needs. For these reasons, Just in Time is now a widely adopted focusing philosophy for on customer value adding activities through eliminating wastes and striving towards continuous improvement (Wiki Encyclopedia, 2007). JIT can be applied to the service industry, like hospitals, as these too need to work on timelines and deliver value for money. The elements in St James’s new approach that could be seen as deriving from JIT and Lean principles of manufacturing Presently at St James a system is offered that has some measures of savings as well as bringing about economies in workloads. The areas currently covered are purchases and admission procedures of one surgical ward. For cost effective measures it has already adopted some lean technologies, specifically the Just in Time (JIT) system and some Kanban methods have been adopted to streamline supplies as per requirements. 1. Cost Reduction A cross functional task force of personnel from medical and supply staff found that as many as 20 glove types were purchased for use by surgeons at a cost £ 1 per pair supplied by several suppliers. This was brought down to 20 pence per pair, by standardizing and buying fewer types and sourcing from one supplier who reduced prices due to higher quantities required. Likewise a single source was used for anesthetic items and these too could be bought for at lower cost. It was found that single sourcing coupled with volume purchases brought down the costs substantially. There was one more development. The supplier was happier to deliver small quantities against a bulk order. This resulted in low inventories and reduced wastage. This also made material handling a lot easier for both inward and outward movements. 2. Increase Accuracy Another area that was experimented with was admissions in the Urology department. The entire system was bogged down due to lack of information and absence of proper communication. The information was lodged at a place which was at some distance from the ward. As a result almost a third of non-surgery patients had their appointments cancelled as the ward did not find time to attend to them. The information cell was moved next to ward and planning of appointments was coordinated prior to confirmation being sent to patients, In this way the patients got attended to at appointed times. There were as many as 59 processes between arrival and admission of a patient until the commencement of the operation. By introduction of planning procedures these were reduced to 13 resulting in the reduction of total cost to the hospital and increasing the reliability factor many times over. With the success of these experiments SJH is now looking to introduce the JIT system all over the hospital to cover every activity. 3. Reducing the time for operations However in this age and time the traditional method of mass production at low cost is not enough. It is no longer sufficient for firms to be high-quality and low-cost producers or service providers. Today, they must be able to deliver products and services to the customer swiftly. To compete in this new environment, the cycle of order-to-delivery must be significantly reduced. JIT is the new weapon of choice today to reduce the time of this cycle (road.uww.edu, 2007). This is equally applicable in the service sector like a large hospital as the operations there are mostly repetitive like in an assembly line operation. In our case study, the streamlining of the admissions process also proved fertile ground for improvement along JIT principles. For example, in the Urology Department, one-third of patients for non-urgent surgery found that their appointments were being cancelled. One reason for this was that in the time between the consultant saying that an operation was required and the patient arriving at the operating theatre, there were 59 changes in responsibility for the process. The hospital reorganized the process to form a ‘cell’ of four people who were given the complete responsibility for admissions to Urology. The cell was located next to the ward and made responsible for maintaining all records, planning all operations, ensuring that beds were available as needed and telling the patient when to arrive. As a result, the 59 handovers are now down to 13, and the process is faster, cheaper and more reliable. Ideas from JIT and Lean manufacturing that could be applied in a hospital setting such as St James. 1. Developing successful JIT Applications Most successful JIT applications have been in repetitive manufacturing, where batches of standard products are produced at high speeds and in high volumes. In the hospital in specialized surgeries like ophthalmology, speed can be increased if all services are coordinated on a time scale. The saving on wasted time and motion will itself reduce the cycle of the operation and increase available time in the operation theatre (OT) for the next in line. 2. Problem Solving and Continuous Improvement Often the problems of an organization are hidden under its load of inefficiencies. For example, when the inventory levels are high, it is impossible to find out the quantum of wastage as there is no pressure to do so. There is always enough available and quality is sidelined. As a result low quality products keep being supplied and rejection rate remain high. Thus waste through rejection comes to notice only at the time of annual audit, but by then the loss has already occurred. JIT is a system of enforced problem solving. One approach is to lower inventory gradually to expose problems and force their solution. With no buffer inventories to rely on times of production or service interruptions, problems are highly visible and cannot be ignored. 3. People Make JIT Work A question that arises here is how JIT works. JIT has a physically powerful element of training and involvement of workers. Attitudes have to change from individual importance to team approach and team priorities. But this does not mean the end of individualism. It must be realized that the team is far more productive than any member of the team. The Japanese have understood this concept very well and have mobilized their workers to work in teams. However each team member attains fulfillment for himself by excelling in his given task and having authority to offer improvements to the overall task. This empowerment is important in realizing his full potential and contributes to team improvements. The applicability of JIT and Lean manufacturing concepts to a service operation: . JIT in Services (Examples) As in production, similarly in services, JIT aims to level the facility loads. This means elimination of unnecessary activities and reconfiguring physical layouts. It also develops a system where the emphasis shifts to demand based pull system. This means that supplies or services are pulled into the service being performed exactly when it is not considered. It is possible only when there is a proper work flow understanding and planning is based on needs of the service. The whole attitude is demand based and not supply based. The supplier does not loose importance; rather he becomes part of the demand system and is attuned to the fulfillment of the demand through the supply chain system. Under the service structure the process becomes the focal point. The framework includes avoidance of heavy inventories and recognition of the importance of people as part of the process. Standards are set and continuously upgraded as targets are matched. This continuous quest for improvement is the hallmark of JIT in services. Key Elements of JIT The main factors of JIT constitute of a synchronization of the work flows with information generated throughout the system. The process needs to be broken down to its component level, both human and mechanical, and made visible in order to spot weaknesses or problems. An analytical approach to the issue will bring forth the areas that require attention. But the solutions should be flexible and must respect the people to bring out the best in them. There has to be a focus on both equipment and people. While setting of standards is important the transaction cost on the basis of customer contact per transaction must be established. Value additions for the customer needs to be offered while transaction costs have to be brought down. Some amount of discretionary powers must be factored in and some customizations must be allowed otherwise the process will become too rigid. All this is very similar in a production type of JIT as well. Conclusion – The Future State Map With the introduction of Lean Design based Lean Operations based JIT a different future can be seen at SJH. Deming (1986) mentioned the need to attain quality results in all the process of productions. Essentially, the technical process pertains to the emphasis of quality in the different stages of operations. The rationale behind this strategy is that the continuous inclusion of quality in the process will result in highly competitive and superior services. The social process is explained by Juran (1974) in the assumptions of Total Quality Management. Future developments and changes that are taking place should also be considered as an ongoing process of improvement. (Black J.T. 1991). Finally there will be one Master Plan with predetermined objectives for one and all. Planning will bring about: Better Output per man-machine per hour and per day Lower Raw Material Inventory Levels Lesser wastage due to timely Quality Checks Better and faster deliveries and improved Logistic Management Breakdowns will be eliminated as downtime will be calculated in advance Supply chain becomes streamlined All above will result in better hospital management by first reducing and finally eliminating delays, improving the returns on investments and delivering value to the patients. . Bibliography Black, J.T., (1991), The Design of the Factory with a Future, McGraw-Hill Deming, W., (1986). Out of Crisis. Cambridge: MIT Center for Advanced Engineering. Juran, J. (1974)., The Quality Control Handbook 3rd Edition. New York: McGraw-Hill Sure R, 1998, Quick Response Manufacturing: A Company wide Approach to Reducing Lead Times, Productivity Press Inc, JIT Tutorial,Chapter 12, The Primary Elements of Just in Time, viewed on December 18,2007. Just in Time, Wiki Encyclopedia, viewed on December 18,2007. Read More