In today's economy many not-for-profit organizations have seen reserves eviscerated due to the stock market tumble. While the stock market has started to rebound, many not-for-profit agencies have also taken a hit on the philanthropic side. Donors are not able to be as generous as they have been in the past. The reserves that not-for-profits have been able to rely on to supplement operating funds are not there anymore. This has forced many organizations to look for other ways to reduce costs. While many of the costs that go into the operations of a not-for-profit are driven by regulations, there are ways to make these operations more efficient. This paper discusses one way to avoid waste during any process, thereby reducing costs.
Lean Manufacturing is an operational strategy oriented toward achieving the shortest possible cycle time by eliminating waste. It is derived from the Toyota Production System and is designed to increase value-added activity by eliminating waste and reducing incidental work. The lean technique often decreases the time between a customer order and shipment but its principles are adaptable to any process as long as that process has a beginning and an end point. Lean manufacturing is designed to radically improve profitability, customer satisfaction, throughput time and employee morale. Each of these factors are important in an organization whether the end goal is a profit or a not-for-profit return. The benefits of Lean Manufacturing are generally lower costs, increased quality (already high on the list for regulated organizations), and shortened lead times.
The term Lean Manufacturing is very apt because the emphasis is to cut out the waste in any process. In terms of Lean, waste is defined as anything that does not add value to the customer. It could also be defined as anything the customer is not willing to pay for. The reduction or elimination of many types of waste is the driving force behind Lean. In Lean, waste is called MUDA, which comes from the Japanese term for waste. There are seven distinct types of waste that are identified when performing a lean exercise. They are:
For example, all blood and biologic organizations are regulated in some manner. Each has document control and training requirements that must be followed. Manual/paper-based solutions to these regulations are fraught with waste. For instance, customers are not willing to pay for the copying, shipping and storage of paper procedures or training records (waste of motion) and employees that have to stop, locate a manual, find a procedure and walk back to their work station are adding cost to every process they engage in. Moving documents electronically and making them more readily accessible via computer or completing training online versus stopping production for classroom learning all allow employees to focus on more value-added tasks.
While not all of these types of waste are applicable in a blood and/or biologics organization, there are several that are: conveyance, correction, motion and waiting are all wastes that can be eliminated from a process. The first step is to identify waste by performing a value stream map of a process. You can start the map by identifying the process's beginning and ending points. (If you don't pick a process with a distinct beginning and end then your project will have too much drift and it will be hard to identify the key stakeholders of the process). Continue building your value stream map by identifying every step in the process. After you have identified all the steps and personnel in a process, go back and ask what steps in the process are value-added. For instance, ask yourself what steps in a process is a customer willing to pay for. Generally you will have few value-added steps within the overall process.
The next task in the process is to identify the type of wastes represented in the non value-added steps. Once this has been completed, begin to develop your plan to eliminate the waste. It may as simple as relocating an instrument or refrigerator or as complex as purchasing a software system to error-proof a process. As the process changes are identified, each change needs to be assigned and tracked by members of the team. A project champion needs to be assigned. This person will be a driving force to keep progress headed in the right direction and will hold individuals accountable to complete tasks as assigned. At some point you will begin operating under your new process. It is important to take measurements pre- and post-implementation to track the efficiency of your changes and celebrate your success.
Lean Manufacturing is not a singular event. As you see the process improve, you can rework it again, which results in a drive for less waste in the system. Lean Manufacturing is an operational strategy that if implemented properly will provide a new dimension to cost savings.