In the January issue of the Southern Business Journal, one of my colleagues at Southern Illinois Healthcare reviewed the concept of identifying waste in Lean business practices. Another important Lean concept is distinguishing value-added vs. non-value-added activity.
A simple explanation of value-added activity is something your customer is willing to pay for. A good health care example most of us can relate to is going to a hospital or lab for blood tests. All the customer wants, or is willing to pay for, is the test results. However, many steps occur in a typical lab experience to get those results. The customer signs in, goes through registration and insurance verification, etc. before the actual blood draw. Waste, or "non-value-added" activities, is often baked into those steps - such as movement to different stations to complete registration, waiting for a registration person, waiting for a room to open for the blood draw, moving to the room and then waiting for a phlebotomist to draw the blood.
A typical blood draw takes two or three minutes. If the customer has a 30-minute total experience at the lab, 27 of those minutes are non-value-added, as are all the additional steps by the patient and staff. Once you identify these non-value-added steps, you can begin to eliminate, reduce or simplify them.
By focusing on the customers and what they are willing to pay for, you perform an important first step. This mindset is often a breakthrough in thinking for many businesses. Currently, the accepted wisdom is that everything is "value-added" because it is "how we do it." However, 95 percent of typical activity in any process is non-value-added. Businesses can experience significant productivity gains and happier
customers by identifying and creatively chipping away at those non-value-added steps.
Let us go back to our 30-minute lab experience. Would you wait 30 minutes for a hamburger at a fast-food restaurant? Of course not. Most well-run, fast-food chains already eliminated a significant portion of non-value-added steps from their food service processes. That's why you get your meal in a couple of minutes.
Health care is moving toward Lean thinking and practice to accomplish more with less in the years ahead. With an aging population and health care reform looming, heath care systems must provide higher quality services using fewer resources. Eliminating waste and non-value-added steps is the only way that can be accomplished.
Lean practitioners create current state and future state value stream maps to help teams visualize waste and non-value-added steps.
Many online resources can help businesses begin to explore the value stream map concept. Looking at your business practices though the eyes of your customers, and what they are ultimately willing to pay for, is a simple first step in starting your Lean journey.
- Stace England is on the staff of Southern Illinois Healthcare.