LEAN HEALTHCARE SUPPLY CHAIN MANAGEMENT: MINIMIZING WASTE AND COSTS
Catia M. L. Machado
Faculdade Dom Alberto - FDM, Brazil
E-mail: catia.machado7@gmail.com
Annibal Scavarda
Federal University of the State of Rio de Janeiro - UNIRIO, Brazil
E-mail: annibal.scavarda@unirio.br
Guilherme Vaccaro
University of Vale do Rio dos Sinos - UNISINOS, Brazil
E-mail: guilhermev@unisinos.br
Submission: 15/06/2014
Accept: 27/06/2014
ABSTRACT
The purpose of this research is
to investigate the management models applied in the supply chain providing
services in healthcare organizations, considering the lenses of lean. The aim
of this is to develop a model of supply chain management focusing on the
identification and minimization of waste, assisting in decision making and
contributing to the quality of services and as a consequence the reduction of
the costs involved in healthcare supply chain. The philosophies of continuous
improvement and lean techniques have a role to play in helping healthcare to
provide quality service and support to reduce costs in the current budget
constraints. In the supply chain of hospitals the financial costs can be around
40% of its budget (MASOUMI et al. 2012; SOUZA et al., 2013). This article sheds
light on the improvement in decision making and the effect of reducing costs in
the healthcare supply chain. In this sense, the research intend to expand
knowledge related to supply chain management in the area of provision of
healthcare services through the use of the philosophy of continuous improvement
and lean principles, helping healthcare to provide quality service within their
current budget constraints.
Keywords: Supply Chain
Management, Lean principles, Healthcare.
1.
INTRODUCTION
Nowadays
is competitive market, changes occur very quickly and the performance of the
companies alone is no longer enough to ensure their survival (KIPPER et al,
2011; BORH et al., 2012; GIBBONS et al., 2012). The alternative for business
management cases include options beyond organizational frontiers, that is,
companies feel the need to organize themselves in the form of chains or supply
networks, due to that originated the expression supply chain, which emerged in
the manufacturing, when companies began to organize themselves in order to
reduce the risk of lack of production inputs (ASHBY et al., 2012).
Recent
economic trends have created highly complex supply chains and supply design,
organization, interactions, skills, capabilities and management of supply
chains have become key issues (GOLD et al., 2009).
Organizations
providing healthcare services are essential to the community, in special in peoples
lives, and the management of these organizations offers uncommon character,
there are few manufacturing processes as complicated as organizations providing
healthcare services because of the relative risks to health. In this way these
organizations must continually balance the need to assistance to their
patients, along with an attention to financial constraints as the transfer of
funds from private health plans and the Unified Health System (Sistema Único de
Saúde - SUS) Brazilian public. The SUS is one of the largest public health
systems in the world. It ranges from simple outpatient care to organ
transplantation, ensuring comprehensive, universal and free to the entire
population of the country access. Supported by a broader concept of health, the
SUS was created in 1988 by the Brazilian Federal Constitution (Constituição
Federal Brasileira), to be the health system of more than 180 million Brazilians.
Although
demonstrating notable advances in technology and treatment, the healthcare
industry is fraught with inefficiencies and errors (TANER et al., 2007).
According
to the statistics of Brazilian Hospital Federation (Federação Brasileira de
Hospitais - FBH) in 2008 was appointed 7,540 hospitals. Four years later in
2012 the FBH conducted further research and found that the number of hospitals
in Brazil was 6,690 units. Analyzing the statistical data from 2008 to 2012
there was a reduction of 12.7% of hospitals in Brazil. According to Souza
(2013), the supply chain in hospitals may account for the consumption from 25%
to 40% of monthly financial resources.
Therefore,
hospitals should develop their own supply chains to deliver drugs and other
materials coming from suppliers to their patients or clients. Consequently, the
presence of two chains in the supply management of the health sector is
observed: one external, one internal to the organization (RIVARD-ROYER et al.,
2002).
Based
on the assumptions reduction of 12.7% of hospitals in Brazil, the supply chain
in hospitals is responsible for 40% of financial resources, the work was
developed through exploratory and descriptive methodology in seeking to meet
models management supply chain of adhering to lean, aiming to propose a model
of supply chain management focusing on the identification and minimization of
waste in the process aiding in decision making and contributing to the quality
of services and as a consequence the reduction of costs involved in this chain.
This
research is divided into eight sections, including this introduction, next section discussed the importance of the
supply chain from the perspective of healthcare. Section 3 explains the lean
principles, focus on the customer and teamwork, in section 4 explains the seven
wastes in the area of healthcare, in section 5 explains the methodology used in
the research. Section 6 explains the analysis of selected articles and the
results found. Section 7 explains the proposed model and practice management
for the process of change lean healthcare. Finally, the conclusion presents and
findings of our research.
2.
SUPPLY CHAIN IN THE HEALTHCARE PERSPECTIVE
The
supply chain includes a set of management techniques, performing the
integration and coordination of business processes and strategy alignment
throughout the production chain in order to satisfy end customers in the supply
chain and reduce costs (MENTZER et al., 2001).
In
hospital organizations, the tendency to reduce all problems of supply is due to
insufficient budgetary resources, although, in fact the effects of lack of
shortages are caused by problems in budget execution. However, they are also
notorious waste and misuse of supplies and equipment, the limited qualification
of professionals in the field of supply and little attention to logistics
planning in service organizations in healthcare.
The
procedures in healthcare are complex, layered on top of a supply chain that
incorporates sequences of actions defined for the generation of their products
and services. Each procedure requires a specific combination of products and
services, their composition may vary between different organizations and even
according to the different types of patients and professionals from the same
organization. Not only the products offered in health care organizations are
complex involving high-skill, but the inputs used in their production are
increasingly sophisticated, with numerous high costs (JAHRE et al., 2012).
3.
LEAN PRINCIPLES – FOCUS ON THE CUSTOMER
AND TEAMWORK
The
principal challenge for organizations is the identification and involvement of
delivering value every customer and interested parties. Meet this challenge
requires ability to be lean. (CARVALHO, 2012).
Is
not new preoccupation of organizations with the efficiency and effectiveness of
their processes. This begins in the studies of Taylor, focusing on the times
and movements that changed the way the world production (GAPP et al., 2008).
The same authors report that soon after, in Fordism had become a new revolution
in the mode of production based on the series production. Currently the model
of lean production also known as the Toyota Production System, using as
proposed focus on minimizing waste, but that the organizational mentality
should be expanded.
For
Womack and Jones (1998), is lean because it is a way to do more with less and
at the same time offer customers exactly what they want. This means using less
human effort, equipment, time and space to increase the value and minimize
waste simultaneously. Five are the general principles of lean thinking as
shown:
1. Specify
value from the standpoint of the end customer by product Family
2. Identify
all the steps in the value stream for each product family, eliminating whenever
possible those steps that do not create value.
3. Make
the value-creating steps occur in tight sequence so the product will flow
smoothly toward the customer.
4. As
flow is introduced, let customers pull value from the next upstream activity.
5. As
value is specified, value streams are identified, wasted steps are removed, and
flow and pull are introduced, begin the process again and continue it until a
state of perfection is reached in which perfect value is created with no waste.
Figure 1: Five Lean Principles
Source: Adapted from
Womack and Jones, 2004
According
to Womack (2005), when compared to other industries, hospital management has
been slow to identify who the customer really is. Due to the complexity of the
health system, the processes are often designed to meet the needs of internal
customers - doctors, hospitals, insurers, government payers. The author
emphasizes that it is extremely important that the value will be set by the
patient's primary customer.
The
secret to successful implementation of lean system is transparency. This system
will only bring benefits to the company, for employees and for customers
consecutively through the implementation of a work team who understand this new
culture, so you can use this philosophy in the most optimized way possible
(BRANDI, 2012).
4.
SEVEN WASTE IN THE HEALTHCARE
The
basic concept of lean is to eliminate waste within companies. According to Ohno
(1988), waste refers to all elements of production or service provision that
only increase costs without adding value, that is, are the activities that do
not add value to the product from the point of view of the customer, but are
performed within the production process.
According
to Shingo (1996), classifies waste into seven types:
1. Overproduction: Is related to
the fact that they produce more than the quantity demanded by the market. We
can mention the health of testing beyond what is a necessary, unnecessary test
for lack of preparation of the team.
2. Transportation: Regarding
transport for distances greater than necessary, as an example of excessive
transport patients, equipment and drugs operations.
3. Processing: Corresponds to
processing activities that do not add value to the product. We can cite
excessive treatment time by difficulty in establishing standard procedures,
excessive corrections and inspections.
4. Rework: Corresponds to construct items out
of specification. We can cite medication errors, infection of patients in
hospital.
5. Motion: Related to the movement useless in
the execution of activities, that is, the inefficiency of the operation itself.
We can cite excessive movement by hospital healthcare professionals.
6. Waiting: Related to issues of
synchronization of production or provision of high batch processing due to the
high preparation time tasks, or failures in the information system of the
organization. We can mention the patients waiting for diagnostics, treatments
and surgeries.
7. Inventory: related to the
existence of high stocks or lack of product. We can mention inputs and outputs
in excessive or unnecessary.
In
lean focuses primarily on minimizing waste, defined as everything that is not
necessary in the production cycle of a product or service. Thus the
understanding and identification of wastes within the hospital chain, will
provide the alignment of value-generating activities, seeking to provide
customers exactly what they need.
To
achieve the goal proposed by the lean, it is necessary to apply some tools that
will assist in achieving the results. In organizations management methodologies
with more modern they are always real for it to turn knowledge into value need.
Therefore companies should take care that the knowledge generated in the
organization is not dispersed. These tools are instruments used for the
implementation of lean philosophy, which dictate "how to" follow its
principles (FERNANDES et al., 2012.), According to the authors:
·
Value
stream mapping (VSM): is the identification of all activities / specific
tasks that occur throughout the value stream for the product process. An
example is the mapping of the input from the patient, all activities,
procedures, diagnoses made until discharge from the hospital.
·
Total
Productive Maintenance (TPM): the basic concept of TPM is to
redesign and improve the business structure from the restructuring and
improvement of people and equipment, involving all levels of organizational
change and posture, in order to achieve the goals of "zero
breakdown", "zero defect" and "zero accident"
(NOGUEIRA et al., 2012). Example is planning maintenance of equipment.
·
Takt
Time (TT): The takt time is the time available for work in a
given period by the demand in that period (SANTOS et al., 2011.).
·
Just
in Time: is a set of activities aimed at high volume
production using minimal inventories of raw materials, intermediate and
finished goods inventory. Nothing is produced until it is needed (REBELATO et
al., 2012).
·
5S: The
five senses that name the 5S program are derived from the initials of the
Japanese words Seiri, Seiton, Seiso, Seiketsu, Shitsuke are known to the senses
of use, organization, cleanliness, health and self-discipline. (GAPP et al.,
2008).
·
Poka-Yoke:
Means "failsafe", and seeks to minimize the defects caused by
failures by human and ideal distraction ever produce faultless. The poka-yoke
in services is applied both for employees and for customers to avoid both
commit human faults that generate losses in the process or rework (NADAE,
2009).
·
Kaizen:
Singles improvements made by frontline staff, targeted for certain occasions
where there are losses in the process.
·
Visual
Management: Allows for quick and clear visualization of
production progress so that management of the system more responsive, by
presenting partial results in wall so that all employees can monitor the
process.
·
Setup: Aims
to achieve reductions in the time required to perform the setup activities on
machines or equipment that involve exchange of tools or materials and,
therefore, imply the need to stop them (COSTA et al., 2012).
·
Kanban: Is
any mechanism to communicate the time to replenish or produce exactly what is
being requested and the amount due, enabling the production flow is pulled
(JUNIOR et al., 2008; SLACK, 2008).
·
Layout: It's
the best use of available space in a productive area resulting in the
transformation of raw materials into finished product more effectively by lower
distance traveled in the production plant in the shortest possible time, with
the highest quality product , and mostly keeping the welfare and safety of
workers.
According
to the authors (SHAH, 2009; KONING, 2007; JAHRE 2012; SHAMAH, 2013) reported
that lean tools help identify and combat waste found. The authors emphasized
that these tools have contributed to the solution of problems and provided the
organizations providing health services in a different view, helping to
hospital decision making.
5.
METHODOLOGY
The
search procedure used in this paper was based on the method of classification
defined by Lage and Godinho Filho (2010), adapting the empirical-analytical
analysis, doing a scan in the literature with to the keywords supply chain
management, healthcare and lean on periodic bases as Emerald Insight, SciELO.
To
achieve the objective of this paper, a bibliometric analysis was performed on
83 selected articles, which are prioritized based on criteria: a) be the area
of supply chain management and b) and be applied in healthcare. In the second
phase analyzed, the 83 articles, which could be characterized as near this
study, considering the keywords supply chain management, healthcare, lean,
within these set of 20 items, which were all analyzed completely found.
6.
ANALYSIS
OF SELECTED ITEMS
As
a result of the survey of the academic literature on supply chain in
healthcare, there has been a variety of research related to the area of
supply chain management in providing health services companies, as follows:
·
Aronsson et al. (2011), developed a model for the
supply chain in healthcare, using a combination of lean philosophy with supply
chain management (SCM) and supply orientation (SCO) chain, was working the
issue of splitting process with sub-processes together with the guidance as a
whole, the focus of the model is the teamwork and organizational transparency.
·
Agwunobi et al. (2009), uses the strategy of
commodities and lean for improving the management of the supply chain with low
purchase volume, which benefited from the reduction of inventories.
Rationalization layers of the supply chain and using bulk buying to reduce
prices can save money.
·
Bhakoo et al. (2011), used the lean implementation of
e-business in the supply chain of several companies. The lack of consistent
patterns of global identification throughout the supply of healthcare, and poor
quality of data maintained by the project participants, were the problems
encountered in this project.
·
Chen et al. (2013), the proposed model demonstrates a
series of interaction results that are relevant, specifically, the influence of
trust in the exchange of knowledge is greater when a hospital facing uncertain
environmental conditions.
·
Guimarães (2013), presents an attempted merger between
outsourcing and lean, using practices of both outsourcing in health services which
suggests an evolution.
·
Jahre et al. (2012), the authors propose the use of
simple tools to reduce inventory, lead time, and secondly, there was a lack of
product for winning product in stock. The use of simple tools such as lean,
helped combat the lack of product in organization studies.
·
Kafetzidakis et al. (2012), conducted a survey in some
hospitals in Greece, where it was observed that there was no structured SCM
department. Despite the fact that the logistics departments or departments with
similar structures, the proposed model worked with partnerships and
implementation of lean tools such as Just in Time, the relationship of the
above methods of adaptation remains at low levels according to the lean.
·
Koning (2007), using multiple teams to identify and
improve the management of a hospital in Israel, several tools have been used
but with greater focus on Lean Six Sigma and the DMAIC (Define, Measure,
Analyze, Improve and Control), and tools as the main lean 5s, MFV.
·
Virtue (2013), propose the use of simulation modeling
along with the tools and methodology of lean to help health planners to map the
processes of identifying where improvements.
It
may be observed a different view with regard to seeking a closer relationship
with the industries organs service providers in health, in order to reduce
costs, particularly in the supply chain.
·
Qrunfleh (2013), his study finds that the strategic
partnership with supplier fully mediates the relationship between a strategy of
lean supply chain and supply chain response, and that postponement partially
mediates the relationship between a strategy of agile supply chain and supply
chain.
·
Shamah (2013), developed an instrument to measure the
impact of lean thinking in the supply chain. This instrument can be used to examine
the supply chain and thus increase the availability of value. Furthermore,
noting the potential customers, competitors and suppliers, we can increase the
performance of the supply chain.
According
Engeström et al. (2010), in most cases the knowledge required for the formation
of productive capabilities now available in the organization, but the process
for their mobilization is inefficient. One explanation for this is the lack of
a strategy for knowledge management, particularly as it relates to their
integration activities. One way to identify knowledge in enterprises can be
through the lean tools such as value stream map.
7.
MODEL
– PRACTICE MANAGEMENT FOR THE PROCESS OF CHANGE LEAN HEALTHCARE
The
changes with globalization efforts have been demanding for organizations in
search of tools able to sustain their business. The supply chain in hospitals,
as well as other types of organizations, is interconnected with all departments
and has great influence on the results and processes. The change of culture
arising from globalization has forced companies to live with suppliers, service
providers and customers from all over the world, once tied to this new
behavior, the pressure for results, best service, innovation and relationships
is inserted.
To
survive in this increasingly competitive market, companies must adopt
mechanisms as prerequisites that determine the costs of activities that develop
in order to grow administratively. In this sense, means managing costs control
them and plan them, managing them in order to reduce those unnecessary and
allocating them in those most important activities to achieve its mission.
Due
to the lean philosophy, companies today rely on logistic results to offer
competitive advantages, such as flexibility, price, quality, accuracy
purchasing, inventory and distribution, so it attract investors and enhance the
brand in the stock market.
It
appears, however, that the professional, social and organizational difficulty
of a hospital, brings a much higher requirement as regards the creation of a
management model that seeks to secure the involvement of all stakeholders. The
difficulty lies mainly in the multiplicity of interests that have to be
accommodated in the variety of technical specialties involved in the life of a
hospital, permanent coexistence of human beings with cultures, backgrounds and
completely different backgrounds.
However,
if such changes occur, it is crucial innovation with active management, in this
sense; people are the main instrument for change, with the differential for the
implementation of lean that aims transparent management. According to Drucker
(2003), the essence of effective management is the ongoing pursuit of
innovation through technology and new methodologies that is results-oriented
and cultural change in the organization.
The
largest portion of the methods employed have small improvement cycles based on
mapping the current situation, development of future situation and creating an
implementation plan for improvement. Deployments for improvement kaizen events
and employee engagement are also frequently cited.
As
a starting point, through the principles of lean yielded the following steps
described below, focusing mainly on people as a vehicle for change:
1. Definition of Customer: As the first principle
of lean seconds Womack and Jones (1996), is to determine what is value for main
customer is the patient (SHAH et al., (2008); MCGRATH et al., 2008).
2. Lean Leadership: Aronsson et al.
(2011), Koning (2007), cite the implementation of a lean management system
business is sued by a new leadership profile. Where decentralization of power
should occur in organizations seeking sustainable growth.
3. Planning and goal setting: The planning
and setting and monitoring of goals and guidelines of the company is crucial to
achieve the proposed objectives. The Balanced Scorecard (BSC) is a methodology
that allows an overview of the organization, is based on four perspectives
(customer, financial, process and learning / growth), forming a logical and
interdependent whole.
4. Focus on Value: Fourth stage is
one of the main principles of "Lean Management" as-if it determines
the connection, the strategic focus of the organization with the processes and
consequently to the improvement actions (VIRTUE, 2013).Setting the value should
always contemplate the prospects of "stakeholders" of the firm, such
as shareholders, customers, society, environment, and be well identified in the
BSC. So that processes can be properly managed by the leader and his teamwork.
5. Teamwork: The authors (ARONSSON et al.,
2011; KONING, 2007; KAFETZIDAKIS et al., 2012) emphasize the importance of
involving employees who work in the operation to success deployments to break
the resistance and cultural change. The involvement of physicians in the
development of improvements is crucial to the success seconds McGrath et al.
(2008). Another factor of great importance and involvement of top management
are key factors for success (WOMACK et al., 2005).
6. Mapping the current situation and development of the
proposed improvements: The exercise of mapping processes (VSM) on staff,
provides waste and allows identification of a proposed logic minimization and
committed way, since the employees are from the area committed. Perhaps this is
the most powerful mechanism for the formation of the mental model of lean
management, creating a learning organization continuously. It is through the
sharing of skills and motivation of the people who work in a process that
experiences the lean system activities.
7. Deployment improvements and sustainability:
Jahre et al. (2012), Shamah (2013), cite examples of deployment through kaizen
events, action plans or projects. The standardization activities are a common
practice found in lean. Another important point and the maintenance of the system,
with the definition of "owner" for each stream worked with the
responsibility to maintain, review and change if necessary the activity worked.
8. Continuous Improvement: According to
Guimarães (2013), Aronsson et al. (2011), Agwunobi et al. (2009) and Jahre et
al. (2012), comment that after the implementation of the proposed improvements
down the unconditional domestic demand for excellence, where the entire
organization is focused on improving its processes, freeing both creativity and
discipline of all employees. The principle of spontaneous continuous
improvement should be supported by the organization and be one of the pillars
of the system of recognition and motivation, always observing the convergence
to the unfolding of goals and keeping consistency with the focus on value.
Lean
allows the hospital to minimize waste, reduce lead time from patients and
processed materials, increase productivity, capacity and hence its
profitability. According to Souza (2008), lean healthcare is gaining
acceptance, not because it is a "new movement", but because it leads
to sustainable outcomes for these organizations and higher quality services to
customers.
8.
CONCLUSIONS
Throughout
this research, the concepts related to supply chain approach to lean and how
these are embedded in the hospital, highlighting examples in the literature
were presented. In relation to bibliometric research, the authors (ARONSSON et
al., 2011; GUIMARÃES, 2013; JAHRE et al., 2012;. KAFETZIDAKIS et al., 2012;. KONING,
2007; VIRTUE, 2013) conclude that the concepts of lean are increasingly present
in the routine of hospitals, enhancing studies of various researchers.
The
application of lean techniques helps to identify for the minimization of waste
generated in the processes, ensuring greater productivity, and weak development
of priority issues for change, lower costs and better quality products and
services.
As
proposed by the research goal is to develop a model of supply chain management
focusing on the identification and minimization of waste aiding in decision
making that enables the improvement of quality of services and reduce the costs
involved in this chain.
The
proposed model aims to assist hospitals to identify what is important in view
of the customer (patient) through changing organizational culture, being the
main vehicle teamwork (doctors, nurses). Satisfaction of the end customer, the
patient, is only possible if the entire supply chain is compromised and
integrated into coherent and effective practices.
Figure 2: Proposed Model-Practice management for the
process of change lean healthcare
Source: Author
The
figure 2 emphasizes the importance of customer satisfaction, with the main
objective of the hospitals. Through a lean management, with strong bases such
as transparent leadership profile, planning and clear objectives (BSC), with
teamwork with vision improvement continues assisting the process as a whole.
Thus,
the lean becomes an important tool for the hospital environment, especially the
supply chain that seeks sustainability of their supply chains through efficient
management that aims at rationalizing flows, standardization of processes,
which lead the company to reduce waste and costs and increasing the quality of
services and hence customer satisfaction.
It
is necessary, therefore, that hospitals are best suited to constant change (ARONSSON
et al., 2011; KONING, 2007), reviewing their processes and modernizing their
management models (VIRTUE, 2013; SHAMAH, 2013) so that they can achieve results
that guarantee continuity by promoting health for the community.
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