The Others Are Starting to Get It

by BILL WADDELL

Lots of great lean stories are cropping up – too bad few of them are in manufacturing management.  And the stories aren't about superficial lean – they are stories about people that really get it.

For starters, health care is embracing lean at an incredible rate.  A doctor by the name of Joseph Guarisco who runs seven hospitals in New Orleans decided that the "left without being seen" metric was (1) a critical measure of performance, and (2) way too high.  He focused on cycle time, constraints, and took an overall process view.  The result: "Dr. Guarisco says the changes have effectively doubled capacity in the unit and cut costs per patient visit in half. Average waiting times to see a provider have been slashed to about 33 minutes from hours previously, and the left-without-being-seen rate is below 1%."  Focus on throughput instead of cost – and cost goes down and customer service improves – radically. 

Same thing is going on at Banner Health whose 21 hospitals in Phoenix are working with something they call "Door to Doc" – a cycle time focus.  The "program cut the rate of patients who left before being seen to 0.5% last winter from 8% in 2007, although the volume of patients in the department rose 4%."

At my lean management seminars I used to get an occasional health care person, who would ask naive questions.  Now they attend in force and often ask more penetrating questions than the manufacturing people who have been at lean for years.

Then there is a Brit by the name of Neil Warman at  HML – a big UK financial services company.  Warman said, "Some senior managers view ‘lean’ as the latest management fad and dismiss it as being only relevant to the manufacturing industry, but nothing could be further from the truth. In a market where it’s very difficult for financial institutions to create highly differentiated products and services, lean processing ensures the focus remains on delivering customer value, which not only helps increase sales but also ensures that non-essential and wasteful processes are eliminated."

Remarkable insight!  He says, "it’s about preserving value while at the same time reducing the work involved and therefore eliminating waste. If customers don’t place value on a process then the obvious question is ‘why do it’? The logic is irrefutable ..."  I couldn't have said it better myself.

Then most refreshing is a quote from Bob King – the president of the UAW.  As incredible as it seems, he said, “We have rejected rigid work rules and a litigious grievance culture that had evolved.  The only true job security comes from producing the best value products.”

What makes King's statement so startling is that I doubt many of the managers at the auto companies understand the point he made.  The term 'value' has not been part of the Detroit vocabulary.  Instead they have whined for years that their quality was as good as that of Toyota and Honda – and quality is measured in Detroit based on defects reported in the first 90 days after a car is sold.  King, at least, seems to understand that value is more than that.

Zeroing in on cycle time and value are reflective of a deep understanding of lean.  Everyone knows that lean is about eliminating waste.  Most manufacturers still define waste, however, as direct labor and supplier purchase prices – and use lean tools to 'improve' things that have nothing to do with customer value and factory flow. These people – the doctors, the banker and the union guy – see waste as anything that does not add customer value, and anything that slows down the flow.  As a result, they can apply lean tools to the right things.

Refreshing to read indeed.  I hope manufacturing can keep up.