Improvements in the Manufacturing Industry vs. Healthcare Industry

Industries need to focus on their Similarities to Learn How to Improve Customer Value and to Reduce Costs

Introduction

Every industry has a need to make continuous improvements in their working processes to create more value for their customers at reduced costs. In recent times, different industries are collaborating to learn from each other based on their similarities to fulfill that need. Lean management, Just-In-Time, and Total Quality Management systems are examples of those systems that industries are actively employing in different ways to meet their important needs. Every industry should focus on how similar it is from other industries to learn the systems other industries are using to improve their work processes and customize those systems to fit their operations.

Applying Lean Management, Just in Time, and Total Quality Management to Healthcare

Lean Management System

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Presently, industries are encouraged to establish how similar they are to each other so that they can learn from each other how to manage their own challenges (McConnell, 2012). For example, the Toyota Company’s Lean manufacturing system has enabled other manufacturing firms and other industries to recognize the concept of making continuous improvements in their working processes (Bogle & Fairweather, 2012). In the healthcare industry, the concept started being employed when hospitals began to be held legally accountable for any negligence found in patient care. The concept of continuous improvements in healthcare is aimed at ensuring that the care delivered provides more benefits to patients than harm by using the best information available when care is being delivered (Barzi & Mikhail, 2012). Focusing on Lean management that has enabled manufacturing firms to succeed for a number of decades now, the system is thought to be useful in healthcare. Lean management is described as a system that works by eliminating waste to ensure that all the work is done, only adds to the customers’ value. To achieve that, the system aims at identifying the processing steps adding value to the system and maintain them, while eliminating the ones are not adding value. Even though the working processes in the healthcare and manufacturing industries are different in many ways, they all work towards the same goal, which is to create value for customers. Allowing waste of supplies, time, goodwill, money, and other resources decrease customers’ value. Therefore, the use of lean systems in healthcare organizations can help them have meaningful uses of their resources to improve the value they provide to patients. To achieve that, healthcare leaders determine which value is needed by a user/patient and determine how each processing step is adding to that value and eliminating the ones that do not add value. Therefore, it is only when value-adding processes flow throughout the organization that the organization becomes more productive and exceeds patient satisfaction and at reduced costs. For example, working with talented and experienced staff and the use of evidence-based practice can be considered as lean operations that improve user/patient value (Institute for Healthcare Improvement, 2005).

Just-In-Time system

Li (2015) also agrees that the objectives to improve quality patient care and to reduce costs are among the most pressing issues in healthcare. Another system that the healthcare industry can borrow from the manufacturing industry to achieve its important objectives is the Just-In-Time system that was also discovered by the Toyota Company in Japan. As it is in Lean management, Just-In-Time system considers any overstocked inventory in the supply chain that adds no value to the finished product as a waste. Holding such an inventory attracts storage and insurance costs and that hinders organizations to be cost-effective. In addition, there is a risk of incurring losses when the inventory becomes damaged or obsolete. The healthcare industry is more complex than the manufacturing industry because it is not easy to forecast healthcare demands and that attracts the need for high levels of inventory. However, the Just-In-Time system can be employed where healthcare organizations are guided to develop a good relationship with a few suppliers that are able to help them reduce the cost of holding inventory.

Total Quality Management System

In regards to quality improvements, Total Quality Management (also a Japanese system) is found to be applicable in healthcare organizations just as it is in the manufacturing industry. That is because customers in both industries evaluate the quality of services they get following a certain criterion which includes reliability, responsiveness, competence, accessibility, courtesy, communication, credibility, security, and understanding. The quality expectations customers have and their perceptions of quality are analyzed using a number of dimensions. The dimensions include tangibility (appearance of facility/personnel/equipment), reliability (ability to deliver as promised), responsiveness (willingness to provide prompt assistance), and assurance (what employees portray to inspire confidence and trust in their customers). Empathy is another dimension that looks at how employees are able to provide individualized assistance to customers (Balasubramanian, 2016; Barzi & Mikhail, 2012). Li (2015) defines Total Quality Management as a proactive approach of improving quality and sustaining it while reducing costs, which is achieved by addressing quality issues at their root cause.

Overall, industries especially the healthcare industry can be said to be quite different from others in terms of how it is complex, chaotic, and sometimes difficult to manage. Nevertheless, there are manufacturing and quality improvement systems that have been developed that are applicable in all industries regardless of how different their characteristics are, mainly for continuous improvement purposes. The increased applications of the systems in different industries have continued to create new advanced methodologies that are important for the success of the industries (Li, 2015).

Conclusion

The Toyota Company in Japan created effective systems that are applicable in all industries since all industries have certain similarities, which are the work processes aimed at improving value to customers at reduced costs. Therefore, the principles that have worked in manufacturing are transferable to the healthcare industry that is seen to be unique from others in terms of complexity and other characteristics unique to this industry. In healthcare, Lean management system adds the value required by the internal customer to improve systematically the value required by the external customer, which is slightly different from the way it is used in the manufacturing industry. The Just-In-Time system in healthcare makes use of suppliers to reduce an organization’s inventory costs. Total Quality Management system seems to be employed in a similar manner in both industries.

References

Balasubramanian, M. (2016). Total Quality Management (TQM) in the healthcare industry- Challenges, barriers, and implementation developing a framework for TQM implementation for a healthcare setup. Science Journal of Public Health, 4(4), 271-278. 

Barzi, S. A. & Mikhail, O. (2012). Integrating quality and safety in health care organizations: General concepts in quality. London: Jones & Bartlett Publishers.

Bogle, D. & Fairweather, M. (2012). 22nd European Symposium on computer-aided process engineering: Realizing continuous improvement on pharmaceutical technical operations- Business process model in Roche’s parental production Kaiseraugst. New York: Elsevier. 

Institute for Healthcare Improvement (2005). Going Lean in healthcare. Retrieved from https://www.entnet.org/sites/default/files/GoingLeaninHealthCareWhitePaper-3.pdf.

Li, J. (2015). Just-in-Time management in healthcare operations. Retrieved from https://digitalcommons.wku.edu/cgi/viewcontent.cgi?referer=http://www.google.co.ke/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=2ahUKEwi3zsr4ybjeAhUqJcAKHaCSA_YQFjAEegQIBhAC&url=http%3A%2F%2Fdigitalcommons.wku.edu%2Fcgi%2Fviewcontent.cgi%3Farticle%3D1537%26context%3Dstu_hon_theses&usg=AOvVaw0N-zDuKvBBFPOSg0MeGY6S&httpsredir=1&article=1537&context=stu_hon_theses.McConnell, C. R. (2012). Learning from other industries: Lessons and challenges for healthcare organizations. The Health Care Manager, 31(1), 65-74.

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