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lean philosophy.

Discussion in 'Business, Careers & Education' started by slycedbred, Jul 18, 2011.

  1. slycedbred

    slycedbred Senior member

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    Thoughts on this? I'm new to this, and so far have been extremely impressed with how well it works. In fact, lean philosophy aligns very closely with my personal philosophy of how life should be lived. However, I fear that I'm overestimating its value simply because it aligns with my value system. For those who have experience with lean, what are your thoughts?

    In my industry (healthcare/hospitals), there seems to be HUGE resistance from top leadership. I don't understand this, considering how beneficial it could be.
     
    Last edited: Jul 18, 2011
  2. landshark

    landshark Senior member

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    Perhaps you could briefly explain and summarize what lean philosophy is for those who are uninformed.
     
  3. tj100

    tj100 Senior member

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    In manufacturing I can easily argue the merits of the 'lean philosophy' - but in healthcare, I can understand the concerns of leadership or people with a lot of experience. We hold healthcare to a different standard than we do other industries. If a once-in-a-generation event happens, and Ford has to shut down production for two weeks (because, say, an earthquake hits their supplier of a critical component), they lose some money, everybody is inconvenienced a bit and life goes on. If a once-in-a-generation event happens in a hospital environment and they're unprepared, people die. And outrage ensues (see Hurricane Katrina).

    From managements' perspective, it's all about planning for events that are a couple of standard deviations away from 'normal'. In manufacturing, you'd say that the costs of preparing for an event X standard deviations from normal is more costly than the impact of that event, so you're willing to take the risk on that hit. You keep parts inventories low, knowing the odds of a shortage and the impact of a shortage. In a hospital environment, the odds of a shortage might be the same, but the impact is likely much worse, so you have to constantly plan for sort of a doomsday scenario - which is exactly the opposite of what your 'lean' philosophy would want.
     
  4. brokencycle

    brokencycle Senior member

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    I disagree tj, From my understanding (I'm currently in an MBA class discussing lean), it is all about eliminating waste. In a hospital setting, it could be as simple as moving the patients who need much more frequent attention closer to the nursing station (reducing unnecessary movement by the nurses). Lean is all about constantly making small improvements to eliminate waste.
     
  5. slycedbred

    slycedbred Senior member

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    If I may add something as a response to TJ, you're point is valid and I think that a lean response would be to still reduce inventory levels, but not necessarily to the extreme levels of a manufacturing company. As it is, hospitals' materials management systems are essentially non-existent. Because of this, there are actually frequent stock-outs of certain things that really should never ever be stocked-out (ex: baby monitoring wristbands or radionuclides for certain time-sensitive tests). Also, the cost savings potential is huge. It's possible to take $80 mil worth of inventory, reduce it to $40 mil and still have less chance of stocking out in anything than we currently do.

    And to brokencycle, that's mostly the kind of project that I've been doing. My past two projects are going to save the hospital millions (if sustained) a year through saved time alone. On top of that, the increased throughput potential will actually be generating new revenue that previously was not possible to capture since my hospital is constantly at capacity. If I might add something as well, we actually increased staffing and everyone is much happier as a result of the changes. It's not simply 'make people work harder and faster'. It's allow your coworkers to make any changes necessary to work in a coordinated, intelligent manner and never create a system that has some people working unnecessarily hard while others have a relatively lax job load.

    My question is: Is lean truly the revolutionary approach that people make it out to be (myself possibly included), or has it always been done and just never given a name? From my viewpoint, it really hasn't been done in most industries since everywhere I go is full of ridiculously high levels of waste and errors that would have been eliminated within months of using some of the lean principles.

    I'm lucky enough to have the choice to completely revamp entire floors and systems, completely at my discretion. So my thought is...Why not use the principles that are generally thought of as the best ideas that current operational philosophy has to offer?
     
  6. globetrotter

    globetrotter Senior member

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    I have an interest in this - one of the selling points of what I sell is that it supports lean philosophy in Hospitals. so I am all for it.
     
  7. scarphe

    scarphe Senior member

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    i doubt it original honestly i have never head of it have gone to business school but we i was doing my Apprenticeship it was done that way. if you honeslty think about how do yu think people tried to maximize the time of their workers and save money on things?
     
  8. tj100

    tj100 Senior member

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    So I think I would argue (as you hypothesize) that a lot of "lean" management is really just "management" with a buzzword in front of it. Most organizations could benefit from having some management consulting done to improve their operations, but they can only justify the budget on the consulting if it's for a "lean" consulting project - so they call it "lean", even if it's just process improvement.

    Your inventory example is one where good management as opposed to lean management saved the day. You replaced a system that was broken with a system that works, and saved money/capital in the process, but what was really 'lean' about it? I can certainly see the application of some 'lean' philosophies to hospitals - but I'd argue that these are mostly sort of 'lean lite' eliminations of waste. When you get to true lean optimization with just-in-time inventories (of personell as well as supplies), there tends to be just too much risk in the hospital environment.
     
  9. yjeezle

    yjeezle Senior member

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    why does this sound a lot like six sigma?
     
  10. yerfdog

    yerfdog Senior member

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    It's similar. In US government management instruction, they are often taught together and sometimes confused.
     
  11. brokencycle

    brokencycle Senior member

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    The system has been around for a few decades now. It was popularized by Japanese companies like Toyota with the name kaizen, and as a result, it is much more popular in manufacturing applications. Lean is also about continuous small improvements not rapid overhauls of entire systems generally. It is slowly catching on in places like IT (modular data centers, hot rooms, etc) and the service industry, especially health care.

    I am no expert on the subject matter - as I said, I'm taking my first course on things like lean. To me though, it seems like lean is different than six sigma. Six sigma in my limited experience always seemed hokey. When I was an intern at a large company, they had six sigma consultants come in. Most of the lectures and workshop stuff was "if you eliminate defects, you'd save money."

    Why does management resist it? Fear of the unknown? Inertia? An important thing I think to making it work is getting workers on board (although if management is opposed, it won't happen). The best way to get and keep workers on board is make sure they understand that improving efficiency or eliminating waste won't eliminate their positions. If you use this stuff and cut a percentage of your employees after a big improvement, suddenly not only will you get no support, but workers may intentionally become less efficient.
     
  12. slycedbred

    slycedbred Senior member

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    Six sigma, imo, is the retard's lean. It has all the lean principles that aren't important.

    Lean took a failing company (toyota), and made it into the dominating auto manufacturer in terms of cost, quality, and employee satisfaction. This lasted for decades. It was also built upon the teachings of Deming, a brilliant philosopher/statistician. I'm not aware of any other management philosophies that have these sort of credentials, but would love to hear about them.

    Personally, I view management as a mostly useless profession that at worst hurts companies and at best creates "steady growth". If I'm going to be a piece of overhead, I don't want anyone in the organization to ever have a single inkling of doubt as to the value of me being there.
     
  13. brokencycle

    brokencycle Senior member

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    While I agree with most points. Tell Intel that management is useless - the executive level wanted to continue selling DRAM instead of moving toward an emphasis on processors. Management went ahead and switched to processors back in the 80's. Without that, Intel probably wouldn't exist today.
     
  14. yjeezle

    yjeezle Senior member

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    does apple's tyrannical rule under steve jobs count as a philosphy? :happy:

    also disagree with management... management deals with a lot of problems but aren't visibly seen among office grunts..
     
  15. slycedbred

    slycedbred Senior member

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    Which is why it isn't efficient in the least. The 'office grunts' could be dealing with these problems themselves. You could say it's impossible, and you'd be right the way most businesses are run. It doesn't have to be that way.
     
  16. austinite

    austinite Well-Known Member

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    Hospitals get to pass internal costs directly to the patient, and the patients don't see the price until after the service has already been rendered.

    What is the point of being efficient?
     
  17. scarphe

    scarphe Senior member

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    because if it hospitla is private it is a business. and businesses do what? make money if there are mens to increase profits it is the duty of the hospital to enage in that acitvity that does that.

    yes they can pass the cost on to the the patients but let use an example
    if a hospital uses an estimated x amount of product b a year. liek any business that uses material to provide services be they hospitals machine shops or factories, the idea of having certain y amount of product b is important in case of an accident that dmages a percentage of the material or misuse of it that requires or unexpected in crease in dmeand for that service.
    now amount y needsto be calculated no? if you buy too much you cut into your profits, if you buy to little you cut into your profit by not be able to provide the service.
    and that is jsut dealign withe the logistic of materials.

    the point in short is
    mo money mo money mo money.
     
    Last edited: Jul 21, 2011
  18. brokencycle

    brokencycle Senior member

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    While there is defiantly price insensitivity, not only due to no upfront billing but also third party payments, they still want to control costs to maximize profit. Think about it, if an insurance company pays $10,000 for a knee replacement and it costs them $9000 to do, and they can knock that price down to $8500, now if they do 300/yr that's $15,000 in pure profit. Sure $15k might not be much to a hospital, but every little bit helps, and I'm sure they do way more than a few hundred procedures every year.

    Also, if the government goes to a single payer system (which there is fear of happening) their reimbursement rates may get sliced hard. I suspect they are trying to get out in front of this.
     
  19. slycedbred

    slycedbred Senior member

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    And because reimbursements are moving towards capitation. This means that for any given DRG (diagnosis related group), all hospitals will get a set amount of money. If their costs are more than that, too fucking bad for them. So efficiency is very important.

    Besides all that, there are some people in this world who could give two shits about the success of the hospital. Instead, they realize that >50% of their revenue is coming from government payments and would rather cost as little to society as a whole as possible. Granted, there aren't many people in power with that kind of attitude, but those people will eventually come to power and dominate the losers who only care about money.
     
  20. Piobaire

    Piobaire Senior member

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    Just wait until you see ACOs.

    Btw, "lean" and staffing = does not compute in service industries. Labour is not an item that can be inventoried.

    Also, I love how management is always the problem for young hot shots. Because, you know, you end up in a C-suite be sheer fucking happenstance.
     

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