Monday, 10 December 2012

Lean in Supply Chain

Lean Supply Chain contribution toward Lean Health Care

Edly Ferdin Ramly
Principal for EFR Management, Malaysia


Lean systems allow a supply chain to not only to be more efficient, but also faster. We can get our sufficient supplies at right time, right quantity without any shortage or excess inventory with effective lean supply chain. As the culture of lean takes over the entire supply chain, all links increase their velocity. A culture of rapid response and faster decisions becomes the expectation and the norm. However leans supply chain always being left out during lean implementation in health care.

Keywords: Lean Health care, Just in time, Value Stream Map

Lean thinking are applicable anywhere there are processes to improve, including the entire supply chain. A lean supply chain is one that produces just what and how much is needed, when it is needed, and where it is needed.
The underlying theme in lean thinking is to produce more or do more with fewer resources while giving the end customer exactly what he or she wants. This means focusing on each product and its value stream. To do this, organizations must be ready to ask and understand which activities truly create value and which ones are wasteful. The most important thing to remember is that lean is not simply about eliminating waste—it is about eliminating waste and enhancing value.
The objectives of this paper is to discuss the benefit and strategy ti implement lean supply chain effectives. This synthesis based on single action base research enables even small supplier or contractors to participate in the results of lean efforts.

The main issues in health care is increase of cost in medical supplies. The supplies included scientific supply, medical supplies, linens, dietary, medical records, Patient transportation and many more. All this supplies need to be deliver in many areas in hospital including ward, clinics, laboratory and theatres.Many supplies are everywhere and duplicate in many location. Sometime excessive stock will lead to Out-of-date stock, less stock will have erratic ordering, too many replenishment of supplies.
What benefit the hospital when the hospital improve the supply chain? The hospital will able to managed the supply chain effectively hence the expected results are:
          Reduce purchasing cost
          Reduce inventory
          Reduce storage area
          Improve warehouse control
          Reduce lead time
          Transportation cost
          Reduce error
A strong supply chain enables the hospital to align themselves with each other and to coordinate their continuous improvement efforts. Competitive advantage and leadership in the global marketplace can only be gained by applying lean principles to the supply chain. Thought, commitment, planning, collaboration, and a path forward are required. A lean supply chain is proactive and plans for the unexpected by positioning all resources for effectiveness. Downturns in demand can be addressed without layoffs or significant productivity losses. What benefits the organization as a whole benefits the supply chain.

Supply chains that want to grow and continue to improve must adopt lean. Lean concepts require an attitude of continuous improvement with a bias for action. The concepts of lean apply to all elements of the supply chain, including support departments such as product development, quality, human resources, marketing, finance, purchasing, and distribution. The challenge is to bring all of these areas out of their traditional silos and make them work together to reduce waste and create flow. Duplication and a lack of appropriate and timely communication run rampant in these traditional organizations. All chain partners have to be on the same playing field, and the lean concept is intended to let everyone reach new levels of efficiency and effectiveness. Supply chain leaders should not delay—it's urgent to act now to implement lean concepts in the supply chain.
The strategy relies on VIC strategy. The first strategy is to develop the value stream mapping (V). The value stream map (VSM) able to identify the process, the supplier. However the supply chain detail, is not identify in first level and second level of VSM. Additional information need to be integrate (I) to the VSM. The detail may included the type of supply required for each process, quantity required, pull or push system, and supermarket. The final strategy is to control the supplies.
Figure 1: Material flow symbol (Rother and Shook, 1999)


The team from Hospital A are eager to implement lean. Almost all the service have been analyses using value stream map. The first strategy has been completed. However the format of value stream map, have the problem on identify the supplier. The solution is use the VSM proposed by Nash and Poling (2008). The supplier sysmbol have eliminate and start with the “patient”

Figure 2: The example of VSM for diagnostic imaging

The second strategy was to integrate the the supply chain information VSM. Most of common VSM don’t have space to identify the supplies required for the process. There are suggestion to use simple process mapping but the ideas not able to see the connection of the supplies to the process and other department. The team decided to used the bottom of process to list out the supplies for each process. Example during preparation of patients, all the items are listed and quantity required is quantified and at the same time the number stock kept and the way of the stock replenished is added.

The last strategy is to identify the way to control the stock. The pull with Kanban system and visual management is always the best solution. But there were some cases where the supplies can be eliminate at all for example film type of diagnostic change with electronic imaging. 5S control was implemented and minimum stock especially for consumable supplies i.e. paper table, drape exam sheet, glove, gauze; medical supplies i.e. Kenalog, prep pad alcohol etc.


With VIC (VSM – Integrate -  Control) strategy, the lean supply chains have implemented effectively on the internal stock control. The value stream mapping provide more visual diagram of the supplies flow in health care process. Since in health care main focus is patient, and to provide more value to patient, sometime the stock control not been capture in VSM. The additional integration was used to capture the supplies and stock current and futire practices. The next challenge of the hospital is extend the implementation to purchasing, central store and lean supplier for example on just in time, reduction of batch size (minimum order quantity) and pull system.


The author would like to thank EFR Management, Malaysia Productivity Corporation, National Iranian Productivity Organization, Asia Productivity Organization, and management and staff of Hospital A, Hasheminijad Kidney Centre, Tehran, Moheb Hospital, Tehran  that provide the financial and resources support in this research.


Rother M and Shock J (1999), “Learning to See”, Lean Enterprise Institute
Arter D.R. (2008).  Mapping the total value stream mapping”, Productivity  Press

Presented in 

International Conference on Continuous Value Adding based on Lean Thinking in Hospital Management, Tehran, Iran,

30 Nov – 1 Dec 2011

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