applying lean to medical device; - generis · emphasis on enabling organic growth through customer...

© Copyright 2011, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved.

Applying LEAN to Medical Device;

Tools or Competitive Strategy

William Owad

SVP Operational Excellence

2© Copyright 2011, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved.

Session Objectives

• The debate – tools vs management system

• A framework to consider

• A few comments / examples

• Closing thoughts


Who Is This Guy

Early Career

Pharmacy / Health Care admin

$1.5B IDN

FQHC Turnaround

Corporate Quality

Cardinal Health

Pharma Supply Chain

Medical Supply Chain

Pharma Manufacturing

Med device Manufacturing

Retail Pharmacy

Specialty Pharmacy

Corporate Leadership


Essential facts

• Leading provider of products and services across

the healthcare supply chain

• Extensive footprint across multiple channels

• Delivering products to ~60,000 customers daily

• More than 30,000 employees with direct operations

in 10 countries

• #1 on the Gartner Health Care Supply Chain Report – 3

consecutive years

Broadest view of the healthcare supply chain


Alphabet Soup

Value Stream

5S TOC

taKt

GembaDMAIC

P-D-C-A

Operational Excellence

KanBan

LEAN

Kaizen

High Reliability


6

Transformational Improvement

• Combination of daily

improvement and Value

Stream alignment create

the capacity for

transformation change

• It’s not cost cutting; it’s

value creation heavy

emphasis on enabling

organic growth through

customer driven, customer

focused improvement

Transformational

improvement

Step change

improvement

Incremental

improvement

Time

Imp

rovem

en

t


Time

INSTABILITY

(No sustainable

Improvement)

STABILITY

(Sustainable

Improvement)

OPERATING SYSTEM CHANGE

- Pull, Flow

- Standardization

- System learning & focus

Std Work

Problem Solving

Flow

Visual Controls / Transparency

Future Operating System

IMPROVEMENT FOREVER

•Get control of quality

•Get to schedule

Leadership for Excellence

Source: Lean Enterprise Institute


5 Paradigms

Focus both on results (what) and behaviors (how)

Behaviors flow from principles that govern

outcomes

Principles enable sustaining over the long term

Alignment to principles shapes how people behave

Methods and Tools are enablers to allow systems

to achieve improved results and behaviors


Four Dimensions

Where are you

spending

your time?

Create ValueMeasure what Matters

VisionAs clear as Possible

ASAP 2 ?As Simple As Possible

ASAP 1 ?As Safe as Possible


Guiding Principles

1. Respect Every Individual – it all starts and ends with People

2. Lead with Humility – to enable change and innovation

3. Seek Perfection – No problem is a big Problem

4. Embrace Scientific Thinking – seek to understand to be

understood

5. Focus on Process – Poor processes result in poor outputs

6. Quality at the Source – Stop and Fix

7. Flow and Pull Value – True measure of value transfer

8. Think Systematically- Understanding how things work together

9. Maintain Constancy of Purpose – Why does the organization exist

10.Create Value for the Customer – Only the customer can define

value

Ideal Results Require Ideal Behavior

Beliefs and Systems Drive Behavior

Principles Inform Ideal Behavior


Authority by leaders of organizational units (vertical delegation)

with cross-function disputes referred to higher levels of authority

Managers measured on end-of-the period results for their span of

control, primarily Financial.

Planning and Direction is from Top Down

A good Plan produces the desired Results (justifying a

compliance/blame focus.)

Decisions made far from the point of value creation, by analyzing

data.

Problem solving and improvement conducted by staffs, often

through Programs.

Strong emphasis on the vertical flow of Authority, looking upward

toward the CEO

Traditional - Directing


Leading in a very different way:

By setting the vision (more why than how)

Setting challenging expectations at the individual level

By cascading responsibility (Transparency)

Creating Empowerment

By letting others to take initiative (Performance)

Coaching and teaching

By making information available

Creating horizontal decision making

Lean - Coaching


What do we know about how people learn?

Through experience

Through mistakes

Through trail and error

How can we build structured opportunities for

people to learn the way they learn most naturally?

Rapid Improvement as a model for OPERATIONAL

LEARNING

A System for Operational Learning


PROCESS

IMPROVEMENT

Continuous,

real, practical

changes to

improve the way

the work is done

CAPABILITY

DEVELOPMENT

Sustainable

improvement

capability

in all people

at all levels

- Value-Driven Purpose -

“WHAT PROBLEM ARE WE TRYING TO SOLVE?”

Basic Thinking, Mindset, Assumptions

That drive this transformation

Responsible

Leadership

MANAGEMENT

SYSTEM

Lean Transformation Model

14

Source: Lean Enterprise Institute


Transformation Questions - LEI

1. What is our purpose or what problem are we

trying to solve, what value to create?

2. How do we improve the actual work?

3. How do we develop the people?

4. What role must leadership take and how

does the management system support the

new way of working?

5. What basic thinking or assumptions underlie

this transformation?


LEI’s Overall Learning Points for Leaders

1) Leadership is demonstrated by understanding the facts,

not through reports

2) You must be a coach and a learner

3) Focus on and support improving the process and through this,

developing the people.

4) Challenge organizational assumptions

5) For problems to be solved continuously, the leader must:

a) Motivate to True North

b) Create culture for problems to be brought to the surface


Three Keys to Change

Go See.

• Observe the work

Ask Why.

• Seek to Understand

Show Respect.

• Respect the people who do the work


4 Key Questions to Answer

How People Work?

Is the work specific and repeatable

How People Connect?

Communication should be clear and direct

How Processes Flow?

As simple and direct as possible

How to Improve?

Applied at the lowest level possible following scientific

methods


Essential to Excellence

Foundational Capability:

Ensure continuous improvement

and operational excellence as

part of our go-to-market strategy


Transformation Business Case

• Are we working on the “Quality” of the business or the business of quality

• “Quality” is a governance and strategic imperative

• An “Integrated” approach to Excellence is essential -it delivers what the customer values at minimum cost

• Aligning “Value Streams” will align the opportunities

• Remember the majority of work activities are deliveredat the local level


Key Elements

• A system of daily improvement

– Visual controls

– Huddles

– Methods to support daily problem solving

• A method to escalate and support problems that cross

organizational boundaries

– Kaizen

• A method to align and improve key value streams

• A integrated management system


Cardinal Health Deployment principles

Cultural objective

• Drive the business from the customers’ point of view

• Align projects and resources to key strategic drivers

• Drive continuous improvement methods broadly into all

areas of the business (the way we work)

• Embed common language / process thinking/skills /

methodology throughout Cardinal Health

• Require Lean Six Sigma as a leadership

development tool

• Achieve zealous leadership involvement and support


Result: Culture Driven Transformation

Line ofSight

CustomerLoyalty

TeamworkMindset

Empower

Culture

Employees that are:InspiredEngaged


2005

•May 2005, full deployment launch

•12 Site Assessments

•June, Sponsor, BB, Kaizen

•December summit

2004

•Pre-launch - 2004

•Process improvement

•Quality and Operations

•Sizing the opportunity

•Evaluating the capability

•Drive cost out

20072006

•January – accelerate

•June –169 BB, 297 GB, 209 KL, 1,600 sponsors,

•Shift to “Value Stream”

•Pharma Lean

•Innovation awards

•Top Gun

•Medical lean

•MBB promotions

•June - 160 BB (net of 55 “PTS), 835 GB/ KL

2008

•Shift to “Value Creation”

• Supply chain lean

•Talent Review and requirements

•Top Gun

•June - 209 BB, 1,037 GB/KL

2009

•Top Gun

•MBB promotions

•June:- +65 promotions

•Full value stream view

•Lean office

•HVN Sponsor

2010

• Enterprise capability

•Perfect processes

•Value stream alignment

•+95 promotions

•1,025 improvement projects

20122011

• Lean Road Maps- full enterprise

•MBB Internal candidates

• Shingo Assessor workshops with HVN

•Lean Leader

•300+ promotions

• > 6,000 projects

• >100 customerengagements

Operational Excellence...a Journey


Closing Thoughts


Vision – World class behaviors

• Achieve absolute customer preference built on execution

• Create a culture that relentlessly pursueswaste elimination, cycle time minimization, and customer loyalty

• Embed metrics that drive operational excellence goals and culture

• Achieve full productive utilization of resources and assets

• Drive zealous leadership participation


Lesson #1 –It will take courage to be honest and

transparent regarding the “True” quality of your organization


Lesson #2 –This is bigger than a “cost out”

program. EXCELLENCE is about

connecting the entire value chain to create value. (ie. GROWTH)


Lesson #3 –Leaders must be willing to “Break Glass”


Operational Excellence Changing how you think

• Everything I do affects the customer

• Continuous improvement mentality (we can do better)

• Question why

• Think in order of quality, delivery, cost throughout all

our work and processes

• Stop and fix mentality (see an issue, address it)

30


Lesson #4 –You must create experiences that

create a “Chip Change” – Goodbye to “That’s the way we do it”


Lesson #5 –Stay the Course, the immune response

will be strong! See and “connect” the value stream; it is vital.


Q & A


Thank You

William Owad, FACHE

SVP, Operational Excellence

7000 Cardinal Place

Dublin, Ohio 43017

614-757-2849

[email protected]

applying lean to medical device; - generis · emphasis on enabling organic growth through customer...

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