Monday, November 5, 2012

Focus and Leverage Part 161

In my last posting I introduced you to some of the more important elements of the Affordable Care Act including how hospitals might be penalized for readmitting patients before 30 days have passed and how Medicare reimbursements might be reduced based upon patient satisfaction scores.  In this posting I want to start a discussion on how hospitals might use TOC, Lean and Six Sigma to improve the flow of patients through places like the emergency room and surgery which could have a very positive effect on patient satisfaction, especially as it relates to patient wait times.
I’ve talked many times about the concept of the system constraint and why it’s so important to identify it so that it can be the focus of your improvement efforts.  For those of you new to my blog I want to back-track a bit and give you the basics of just what a physical constraint looks like.  For those of you already familiar with these concepts, please be patient.  Figure 1 is a cross-section of a very simple piping diagram with varying diameter pipes with water flowing through this system via gravity.

Figure 1

Water enters this system through Section A and continues flowing through Section B and so forth all the way through the system to the vessel below where the water collects.  The question I always ask is this.  If the rate at which water flows through this system is not sufficient to meet your needs (i.e. you want more), what would you have to do to increase the rate of flow of water through this system.  The answer is, of course, that you would have to increase the diameter of Section E.  The next question I always ask is, what would determine how large to make the new diameter of Section E?  The obvious answer is that it would depend upon how much more water you would need to flow through the system.  My next question concerns the other diameters.  Would increasing the diameter of any other Section increase the flow of water through this system?  The answer is no, because Section E controls the flow of water.  In other words, Section E is the system constraint.  So now let’s say that you opened up Section E’s diameter to what you see in Figure 2.

Figure 2

Once we opened up the diameter of Section E, more water exited the system, but look what’s happened to our piping system.  Section B is now controlling the flow of water.  In other words, the constraint has moved from Section E to Section B.  So if we wanted even more water to flow through this system, we would have to focus our efforts on the new system constraint, Section B.  What we have just experienced is the Theory of Constraint’s process of on-going improvement (POOGI).  Dr. Eli Goldratt developed this methodology back in the mid 1980’s and wrote about it in his block buster book, The Goal.  In this book he introduces his now famous Five Focusing Steps:

Step 1: Identify the system constraint.

Step 2: Decide how to exploit the system constraint.

Step 3: Subordinate everything else to the above decision.

Step 4: If necessary, elevate the system constraint.

Step 5: Return to Step 1, but don’t let inertia cause a new constraint.

In our piping diagram we have completed Steps 1 and 2, identify and decide how to exploit the system constraint.  We exploited it by increasing its diameter.  Step 3, subordinate, happened automatically since water was forced to flow at the same rate as the system constraint.  Step 4 merely means that if the simple things we do to improve or exploit the system constraint does not result in enough system throughput, then we might have to spend some money to break the system constraint.  Elevating the constraint simply means that we are increasing the capacity of the constraint to at least match the demand placed on it.  In Step 5, when the constraint moves, we simply move our improvement effort to it, but we need to review the changes (e.g. policies, procedures, etc.) to make sure it does not have a negative effect on the system.  That’s what Goldratt meant by not letting inertia cause a new constraint

So in this simple 5-Step process of on-going improvement we have increased the capacity of our system.  This same process can be used effectively to improve the throughput of widgets in a manufacturing process or even people in a healthcare environment.  As I’ve said many times here, this approach is much more effective than attempting to “solve world hunger” by attempting to reduce waste and variation everywhere within the process or system.  Just like the large diameters in our piping system, widening their diameters would have zero impact on the throughput of water, so to it applies to any system where system throughput improvement is the objective.

One last point I’d like to make before closing this posting.  It is extremely important to determine whether a constraint is internal or external to your organization.  An external constraint occurs when the demand for your products or services is less than your capacity to supply them.  In other words, you could take on more orders, or in the case of healthcare, more patients than you currently have without incurring any additional expenses.  An internal constraint is exactly the opposite in that the demand for your products or services exceeds your capacity to deliver.  In healthcare this would mean that you are unable to process and satisfy the number of patients desiring your healthcare service.  Knowing whether your constraint is external or internal is important because the actions you take to relieve the constraint are completely different for each type of constraint.

In my next several postings we’ll expand upon the concept of the system constraint and demonstrate how TOC might be used to improve patient flow in a healthcare setting.  We’ll take a look at how POOGI might be used to improve the flow and synchronization in processes like a hospital emergency room, a surgical unit, or maybe even a hospital clinic that treats outpatients.  Stay tuned.

 Bob Sproull

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