A brief discussion on transforming healthcare organizations via Lean methodology

1. 5 Steps to a Lean Company
By: Peyman Zand, Vaco Healthcare Partner
Before we dive into a discussion on transforming your healthcare organization via Lean methodology,
let’s first examine what exactly “Lean” means. Lean is the set of tools and techniques used to enhance
customer value while minimizing excess from the organization. A “Lean Company” is one that has
succeeded in operating with fewer resources while increasing customer value in a sustainable manner.
In The Machine that Changed the World, published in 1990, James Womack and Daniel Jones examined
automobile production across the world. They revealed that Toyota’s distinct operational advantage
stemmed from two things: (1) a relentless focus on waste elimination and (2) a commitment to
customer satisfaction. In the follow-up book, Lean Thinking, Womack and Jones identified the following
five steps to take your company Lean:
1. Determine Value: Understand what value your customers place on your product/service and
what they are willing to “pay.” This can be in either time, dollars, etc.
2. Map the Value Stream: This is defined as all of the actions required to produce a
product/service from concept to delivery. Identifying how your organization delivers value and
eliminates waste along the entire flow of a product/service’s value stream is critical.
3. Create Flow and Eliminate Waste: Ensure your product/service navigates without interruption
through the entire value chain. This requires a shift from conventional thinking. Rather than
focusing on the organization’s needs, you now focus on the product/service’s lifecycle.
4. Establish a Pull System: Deliver your product/service only when the customer wants it. The goal
is to synchronize flow with customer demand to avoid overproduction.
5. Strive for Perfection: Relentlessly pursue perfection – this is the key attitude of “going Lean”.
Once the value stream has been improved, do it again!
A relentless focus on eliminating waste will lead to improved operating performance. In a time when
many healthcare organizations are strapped for resources, implementing Lean methodology is an
efficient way to receive the maximum benefits from the investments you are making in the future of
your organization.
Peyman manages the healthcare consulting practice for Vaco Healthcare. As a senior level executive for
a variety of companies, including Tenet Healthcare, UNC Health Care System, Dow Chemical and his own
firm, Peyman solves the unique challenges facing clients within the healthcare industry. Peyman holds a
Bachelor’s of Science in Computational Mathematics and Engineering from Michigan State University
and a Master’s in Business Administration from the University of Michigan.