As a follow up on my last post  identifying waste as described by Lean methodology, I’d like to emphasize what is not waste.


As anyone with experience in Lean workouts knows, there can be quite a feeling of exuberance in identifying areas for improvement and seeing cost savings materialize as a result. The challenge is to ensure that we don’t get carried away.

Waste in Real Life

I work with a hospital who had spent millions of dollars to have a team of Lean consultants identify cost out opportunities.  As part of a Kaizen workout, they identified supply closets as poorly organized, with some supplies overflowing from a shelf and empty bins labeled with supplies that were MIA.

In what seemed like a logical exercise, they polled the staff about the frequency with which they used each of these items and correlated their responses to the ordering and par levels that had been established in purchasing.

After this exercise was complete, they found an old Arctic Sun device, buried under half opened packages and covered in dust.  Since no one could remember using it, and Biomed had never performed annual maintenance on it, the consultants recommended throwing it out to make space for items that would be more “valuable”.

Unfortunately, when a few months later a patient with a spinal injury was admitted to the ICU and required core cooling for the therapy prescribed by the medical team, there was no equipment available to support this protocol. Fortunately for the patient, they had this system in the ED, but this situation resulted in the hospital purchasing a new fleet of warming/cooling systems at a tremendous cost because the cost of stocking multiple types of blankets was prohibitive.


Is this optimization?

Just because an airplane can fly faster and more efficiently when 10% of its fuel is discarded in response to certain flying conditions, it doesn’t follow that eliminating the other 90% will yield proportional gains in efficiency.

The danger in utilizing Lean and other programs in the hospital setting is that the observations that support making the changes are snapshots in time.  It is nearly impossible to know whether the baseline for operations over the last year will be at all representative of the conditions in the next 12 months.  The inclination to create a totally “Lean” efficient system is very compelling, but without leaving slack to accommodate an ever changing environment, you can hyper-engineer your processes.  This can create competing incentives within your processes, and leave the hospital unable to be flexible.

Where are the trade-offs?

Operational leverage—by which I mean leveraging the efficiency of the organization against the risk of perturbations to the system.  An example of this in everyday life is road construction.

When planning for a road is done, the plan is to make it completely efficient based on the number of cars that will use it. Once the road is completed, the initial conditions may change dramatically.  For instance, because the road provides access to previously unoccupied land, businesses may come in and line the road causing backups at exits, and increased traffic between exits.  In a very short period of time the road that was sufficient to support this route as it was at the time of planning is woefully inadequate.

Bottom Line

The point here is that there are likely a great number of things that are done well at your hospital.  Moreover, it is human nature to hedge—by putting a few extra dressings in a special drawer for emergencies for instance.  Make sure that by streamlining your processes, you are not eliminating the human element.  With a holistic understanding of your hospital, you can marry process to expertise to culture and create a truly optimized organization.