Reduce Operating Costs

Operating costs are something else that can be dramatically affected by eliminating many of the different types of wastes that currently exist in our healthcare system.

Inventory

For instance, many healthcare products are controlled by lot numbers and expiry dates but since staff are already very busy, inventory management is often done by estimating requirements and leads to excessive inventory that expires before it is needed. The additional orders require extra space to store this excess inventory. Or, new stock is just dumped on top of old items to fill a bin which causes the older items on the bottom to not get used and then the older supplies end up being scrapped or written off. This over stocking creates financial pressures/cost but also increases the risk of using an expired product.

By designing a simple First In, First Out (FIFO) system that operates with a Just In Time philosophy, you will be able to:

• Save dollars on the inventory


• Re-allocate the expensive hospital real estate being used by excessive inventory


• Eliminate cost for off site storage


• Reduce the amount of time and effort required to manage inventory


• Eliminate or reduce the opportunity for dispensing expired product


• Reduce the scrap cost caused by damage and replacement by improved products

Standardization

Another example of how Lean can decrease operating costs is by working with standardized processes. A standardized system provides consistency in the process so errors are not only decreased but are difficult to make. Also, a well designed standardized system/process allows for error trapping and easier identification of the root cause of errors.

Healthcare grade materials are very expensive and having to rework defects increases costs by the amount of these expensive materials wasted and the wasted time and effort of staff. Rework is expensive and it increases staff frustration levels which decrease morale and productivity. This type of environment leads to more errors and more frustration for both the client and staff. We need to get out of this vicious circle.

As you go through your processes and systematically eliminate wastes, you will see that the biggest waste of all has been of your number one asset - your people and their talents. The amount of time staff spend reworking, waiting, excessively walking or completing other unnecessary, but currently required, tasks is frustrating to everyone involved. Once the non-value activities are reduced or eliminated, then the staff will regain their sense of pride and satisfaction with the end result being better, less costly service to the client.