Getting Lean in the Service Sector

Getting Lean in the Service Sector

Today, every organization is looking into ways to reduce cost while maintaining or increases revenues. One way many organization are accomplishing this, is by adapting "lean" operating systems. The four main principles of a lean operating system are, eliminate waste, increase speed ad response, improve quality, and reduce cost. While these principles seem simple, an organization that attempts to adapt these principals will require discipline and application of good operations management tools. Lean operating principals are very common within the manufacturing sector and are becoming very increasingly common within the service sector.

An example of how lean operating principals are being introduced into the service sector is when the University of North Carolina Health Care System recently faced a challenge. The length of stay per patient at the nonprofit health system and academic medical center was longer than it needed it to be. If administrators could figure out how to cut the length of stay by an average of just ten percent, without compromising patient health, the system could add tens of millions of dollars to its operating budget and, most important, provide care to more patients.

Reducing UNC Health Care's length of stay without affecting quality required analyzing every aspect of patient care, identifying inconsistencies and redundancies, and finding ways to improve the service, according to Jon Scholl, a partner and managing director at The Boston Consulting Group (BCG). One step involved setting goals for shorter stays and putting a whiteboard in every room. "The nurse writes daily goals on the board," says Scholl, who helped guide the health system through its successful initiative."This involves patients in their own care. Now they have a sense of what needs to happen before they'll be discharged, and what progress they've made." It gives them goals to strive for and most importantly gives them the sense that their health is improving.

Additional steps that were taken involved daily care-plan meetings and improved communications based on centralized, accessible data. "One Friday, the Orthopedics care coordinator had a meeting about a patient," says Scholl. She and the nurse noticed that everything on the care plan was completed and the patient was in good health, except for one last thing: a final visit to physical therapy. "So the nurse took the initiative to contact PT, which changed its schedule to accommodate the need. This freed up a bed on a Friday instead of a Monday" and shortened the patient's length of stay. No one had to work more hours. No new hires were needed. In other words, UNC Health Care did more with less, a great example of the definition of "lean".

As one can see, there was no assembly line or products being produced in the