Lean Six Sigma Implementation And Optimization In Hospital Management

Task A: Lean Six Sigma in Industries and Task B: Winemaker Modelling

In recent years there have been significant incidences in hospital management area. Most of the countries have introduced diagnostic related group for standardising the patient treatment and lower the cost variation. Therefore, the cost of hospital management got strong and systematic. In this condition, the objective is making more automated and structural such that, the outcome will be process oriented. In this condition, targeted service, cost reduction as well as quality service, all are simultaneously improved. This kind of development is happening from a long time in industries, but for hospital system, the implementation and optimisation is still in immature stage. This report is regarding the implementation and optimisation in hospital management area, we will discuss how, the LSS is being implemented and got benefitted in the healthcare industries.

Edward Deming, one of the forefathers of modern quality management, has coined the phrase that “Those who don’t not know the whole processes in the company, he does not control the company ‘‘.  J Hill, 2017 (J, et al., 2017), urges that, the most important process in health care industries general OPD. Not only because of high number of patients in this section but also due to transparency required in processing the activity in general OPD section. The location, the doctor’s availability and all become very important for day-care schedule. One more important factor is process orientation in the hospitals (J, et al., 2017).

The process orientation in the hospital is more important today because the Structure organization splits into more and more individual organizational units with the goal of better control. This creates frequent interfaces, i.e. a change in responsibility and competency. The trisection of control areas and responsibilities in the medical, nursing and administration sectors reinforces this interface problem in the autonomous healthcare organisation.

The increasing diagnostic and treatment processes, on the other hand, helps to overcome interface problems. However, the “classical” architectural features of a clinic with many individual buildings often counteract this process thinking, because they rather hinder an integrated overall process. This is especially true when treatment processes and patient transports degenerate into “jogging on the clinic grounds”. In addition, the spatial proximity of individual structural units in the process can also have a positive effect on cooperation, the level of expertise and thus the quality (Zhu, et al., 2018).

Elimination of interfaces and simplifying procedures not only reduces sources of error, but also increase the throughput speed and promote quality, and simultaneously improve the cost element. So, here’s the chance to get better, faster and leaner at the same time. This begins, e.g. the master data of each patient and his indication and treatment-related data – comprehensively and fully documented are communicated not only between individual medical departments, but also between the three clinical areas at an appropriate information technology level. A process is a temporal sequence of activities, i.e. as work steps in a contextual situation and in which upstream activities in a transformation process input factors for downstream activities as result and impact factors. Each process has question, who is our external customer, e.g. the patient or referring physician, or even an internal client, e.g. it can be another department in the hospital. If a process does not have a customer, then, strictly speaking, the entire process is up for grabs, as the receiver and the benefit are undetectable.

Submission Requirement

Through a clear analysis and improvement of processes and processes in the hospital, not only the demands on the quality but also on the patient orientation can be improved e.g. through shorter waiting times and more friendliness and service quality, better measuring and controlling. At the same time, possible risk factors can be better measured and reduced. Quality and risk management therefore achieve a higher level of content and results through process management. The interaction of several sub processes with the phases Input – Transformation – Output represents a process chain. The goal is to achieve the required level of results in the form of a defined added value in every single process and over the entire process chain.

By comparison, the Six Sigma approach concentrates on value creation processes from the outset, with demonstrably more frequent deviations of critical customer requirements (Critical to Quality Characteristics – CTQs) and thus high error costs due to insufficient quality occur. With this process-oriented improvement concept, the comprehensible variation, i.e. the average deviation from the mean, which has occurred in a process, should be reduced. This approach is based on the term sigma, coined and shaped by the German mathematician Carl Friedrich Gauss, as mathematical sign σ indicates the standard deviation in a normal distribution. The goal is to minimize deviations from the given target value with is practicable zero-defect quality. The σ Value can thus be identified as a dimensionless quality index for each process. This requirement and this result can be expressed in specific quantities relative to a product or e.g. to express a service in the hospital. Based on an extrapolated and thus assumed – volume of 1 million units services may then – in absolute numbers – only 3.4 faulty process outputs.

(Gabrielle, et al., 2018) indicates that, errors and omissions in the input factors have a negative impact on the quality of the output factors. Thus, the “performance” of the process and the benefits to the customer, e.g. the recovery of the patient, as well as overall the success of these content-related activities for the hospital itself. To achieve this performance through a process as a link between the input and the output, in addition to the actual transformation, additional potential factors, such as a specific qualification of the employees or special technical devices, as well as steering activities, like e.g. a work plan or leadership performance required to translate factual input into desired output. Since the “input” in a hospital always involves humans and the transformation is always a service in the form of diagnostic and treatment, the associated requirements for process control and the perceived quality of results are significantly higher or different than for physical technical production processes of industrial companies. In addition, there must also be more empathy in the hospital for service, which is more difficult or measurable only through indicators. For a process and its temporal sequence of activities as components the general demands on the efficiency and the effectiveness of the achieved apply value addition (Aline, et al., 2018).

Impacts of Lean Six Sigma over organizational sustainability

The factors of efficiency demand and the result is greater than the criteria of value creation. The relation between output and input must therefore be greater than value creation thus indicates a positive relation between output (achieved result) and input (used resources) in the technical sense (productivity, for example measured in numbers) and in the business sense (economy, for example measured as value in currency). If the relation between output and input is less than 1, then the targeted efficiency is not given and there is reactive power. An increase in value for the company comes about only when the customer is willing to pay the asking price because the value he receives with this market service is “worth it”. Even with patients in hospital, who do not pay for their treatment, thinking in these benefit categories is becoming more and more prevalent. Within the framework of individual performance contracts between hospitals and health insurance, thinking is intensified in value creation categories. In addition, a poor process and result quality leads to renewed, expensive for the health insurance treatments of patients and affects their satisfaction with their health insurance; the more the deficiencies of the process and result quality of them are recognized. The criterion of effectiveness is then met when the effect of the result achieved as high as possible. The realized output is then equal to 1 in relation to the previously established goal. This ensures the required outcome as a result effect in the form of the medical service for the recovery of the patient as well as the care and service quality for the well-being of the patient (Werner, et al., 2014).

By the central power processes in the clinic, the business processes are controlled referring to the strategy defined in the business fields of the hospital and will be achieved by the direct or indirect business objectives goals. It is conveniently processing usual division into three core processes, management processes, and collapsing and resource-developing process by management of business processes basis for the entire process landscape in a hospital. In this condition, Critical Success Factors (Key Success Factors) are the criteria that position the hospital well in the marketplace and in competition. They are therefore to be expanded as externally oriented control parameters. For example, they refer to a high level of patient satisfaction, which leads to an increasing demand for the offered market services of the clinic and thus improves their competitive position. They lead to qualitative and quantitative increases in value. This includes, for example, a high satisfaction of the referrers and payers as additional addressees (Martin, et al., 2018).

Implementation of Six Sigma Method in Small and Medium Enterprises

First, the question arises, which general concepts for process optimization are available and where and how the tools in process optimization is to be set. Basically, all activities of a process optimization are based on the strategy and thus the strategic goal of a hospital. The thinking and analysis approach for the design of the entire process is necessary.

This is given below is the flow chart which can be traced in Fig. 1. According to the analysis direction, these are determined by the strategy defined in the strategy. The core businesses of the clinic, i.e. their defined activity fields on the health market, core processes and core activities are defined. In them, the externally directed, critical success factors on the market as well as the internal value drivers are worked out. From this, the required core competencies can be defined as critical success capabilities and then strengthened it. In line with the conflicting design direction, these core competences are again required to align the core businesses with future market success.

The question arises that which general concepts for process optimization are available and where and how the lever in the process optimization is to be set up. Basically, all activities need for process optimization strategy on the state of the art, goal setting to base a hospital. The thinking and analytical approach to the design of the entire process community is the in Fig. 1 traceable from flow chart is given above. According to the analysis towards the advertising of the strategy in the fixed-written core businesses of latest technology, so its defined activity of hospital in the healthcare market processes and customer derived core activities. In them, the externally directed, critical success factors are market. Therefore, the internally-oriented value drivers identified. From this, the required core competencies working as a mission, to define and amplify critical skills. If an orthopaedic clinic wants to specialize in hip surgery, then the medical expertise of the surgeons must be established at an early stage, especially the infrastructure related to the technical equipment and the correspondingly qualified personnel. This requirement and view are not new. However, it is now derived from a self-contained clinic strategy and with all its consequences

As Fig. 2 shows, the starting point is always define, measure and analysing the actual process. This phase is important in every process optimization, but not critical. In practice, this often too much time and resources are used, which are missing for the later steps. The six sigma professionals thus become a past-oriented accountant of inadequate procedures that are supposed to be overcome. Therefore, it is more appropriate to limit these actual shots to essential facts and contexts and to precede only a little more precisely when measuring the previous contributors. We are looking at a more effective approach to the Lean concepts.

Business models and supply chains for the circular economy

We all know that practicing lean 6σ always results in zero defect quality with reduced waste. Often, when the process is measured, the staffs already notice obvious deficiencies in the process, so that meaningful simplifications and appropriate improvements fall into a “ripe fruit”. In our scheme, however, this is only step 3. From a fundamental and strategic point of view, it is more expedient after the actual measurement, as step 2 to identify the essential CTQs (critical to quality) of the customers and thus the success factors of the hospital on the medical and / or the caretakers measuring target-leading, as Step 2 enable the most important CTQs the customers and the success factors of the hospital system is Identify a market that may relate to medical and / or nursing care. We have already carried out the analysis of the value drivers in the company as causes for the realization of the success factors. From the interaction of these two types of control criteria can make statements on the nature and level of value generators of the hospital in this business process. Along with the obvious opportunities for improvement, these analyses provide the basis for defining and measuring the desired process. Both in terms of the phases and on the implementers are more rigid in this regard. After all, it is easier and easier to integrate a department / area or activity than a parted sections. Customer-related is the improvement of the outcome from the patient’s point of view. There is no question that almost all projects for process optimization have an impact on the situation and the emotions of the employees. In principle, it is therefore advisable to actively involve employees in such change projects, even if this is not always possible or opportune in individual cases. The key question here is how these improvements in the clinic can be initiated and controlled as effectively as possible and without conflict. In the followings, we briefly go little lean management to avoid waste of resources in process based on given requirements and criteria and thus lead to cost savings. Lean 6σ avoids deviations from defined target values in processes. The aim is to increase the quality in the direction of zero-defect quality, which also results in cost savings. In both cases, the goal is to sustainably improve processes and the associated performance results, as well as optimize quality, throughput times and costs. For a deeper understanding of these two approaches, reference is made to the literature (Malek & Darshak, 2015) (Debadyuti, 2018) (Ang, et al., 2015).

Implementation of Lean Six Sigma framework with environmental considerations in an Indian automotive component manufacturing firm

Lean management involves value creation processes in their entity, Often even the entire company is “subjected” to this philosophy. The goal of eradicating waste relates to time, employees or employer both involved in activities, and above all, to use the medical equipment or infrastructure and material. This always has negative effects on the costs of the process or the entire hospital. In practice, when applying the lean management concept, 7 forms of waste can be distinguished, which are common and can account for up to 30% of the total costs as possible with error costs. The problem in business practice is not only that these costs of waste arise. Rather, another problem is that these waste costs, so reactive power in the sense of cost without value creation as corresponding consideration, in the least company perspective hospitals are at all meaningful and holistic. If you do not make the costs transparent, they cannot be influenced and eliminated. All these problems of misuse also occur in hospitals. In order to visualize and reduce the complexity and waste as a loss of value in processes, the instrument of value stream analysis and value stream design is used in lean management. The result is reduced lead times and cost savings in standardized lean processes. As is easily understood, the introduction of clinical paths makes important preparatory work and support in this regard.

The main arguments for and against greater process orientation and optimization in the hospital sector are as follows. Since hospitals were and are always highly hierarchical in comparison to most industrial and service companies, a greater process orientation leads to a series of adaptation and need of changes.

The use of linear programming, with the use of excel solver, is very common techniques now a days, one of the problems is stated below

As per details given in question,

The wine maker wants to produce, both kind of wine, in such a way that, the profit should be maximised, we z₁ is the amount of table wine and z₂ is the amount of desert wine by which the winemaker can make maximum profit, for any kind of linear programming, there are mainly three section in, decision variable, objective function and condition, on which the process should be optimized, in this condition, the decision variable is given as below.

  The labour hour labour hours

The bottling hour labour hours

The grapes required kg

Short Discussion on Winemaker Modelling

The SUMPRODUCT of decision variable with production of wine is the maximum amount of profit, which winemaker can make.

We have provided all the data in solver, condition is given as seen in solver, and make it to run, after few seconds, we got the solver data which is as follows.

The answer and sensitivity are given as follows

Microsoft Excel 16.0 Answer Report
Worksheet: [814490.xlsx]Solution(a)
Report Created: 10/2/2018 11:55:12 PM
Result: Solver found a solution.  All Constraints and optimality conditions are satisfied.
Solver Engine
	Engine: GRG Nonlinear
	Solution Time: 0.016 Seconds.
	Iterations: 0 Subproblems: 0
Solver Options
	Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
	Convergence 0.0001, Population Size 100, Random Seed 0, Derivatives Forward, Require Bounds
	Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume Nonnegative
Objective Cell (Max)
	Cell	Name	Original Value	Final Value
	$B$22	Total_profit	$10,672.53	$10,672.53
Variable Cells
	Cell	Name	Original Value	Final Value	Integer
	$B$3	Litres produced Table wine	1332.600989	1332.600989	Contin
	$C$3	Litres produced Dessert wine	2.343626631	2.343626631	Contin
Constraints
	Cell	Name	Cell Value	Formula	Status	Slack
	$D$16	Labour Hour Total	534.4465715	$D$16<=$G$16	Not Binding	465.5534285
	$D$17	Bottling Hours Total	400.2490219	$D$17<=$G$17	Not Binding	399.7509781
	$D$18	Grapes (kg) Total	2000	$D$18<=$G$18	Binding	0

Sensitivity

Microsoft Excel 16.0 Sensitivity Report
Worksheet: [814490.xlsx]Solution(a)
Report Created: 10/2/2018 11:55:12 PM
Variable Cells
			Final	Reduced
	Cell	Name	Value	Gradient
	$B$3	Litres produced Table wine	1332.600989	0
	$C$3	Litres produced Dessert wine	2.343626631	0
Constraints
			Final	Lagrange
	Cell	Name	Value	Multiplier
	$D$16	Labour Hour Total	534.4465715	0
	$D$17	Botteling Hours Total	400.2490219	0
	$D$18	Grapes (kg) Total	2000	5.333333295

From the above sensitivity report, the maximum profit which was made is 10672.53, and the resources which is unutilised is average 32%, the grapes are the constraints which is utilised 100%.

As per the situation, the extra labour, and other resources are available for $ 2, and the winemaker has $1000 to spend, in this condition, the winemaker has at least double kind of options, first option is he must start from the scratch, and provide new constraint as cost

If we use the six-sigma process here, then we must utilize the available resources at this point of time. Since, lot of resources in labour and bottle are still available, therefore we must use 1000 to purchase only grapes, for making this condition run I must increase the resources of grapes by 500 kg. In this condition, the solver is returning max profit which $ 13339.80

To run the solver, we have to redesign the solver as per given condition in question, the amount of table wine will be less than or equal to 600 litres and amount of Desert wine should be less than or equal to 600 litres

We must add constraints as given above in excel solver, after running the result obtained as the 73.59 % is resources unutilised, and maximum profit that can be made is 5171.

As per given condition, we must use excel solver twice and see the which one is making higher profit

After adding the constraint, we, run the solver, and result we get after running is 10672.00 is the maximum profit, the resources which got unutilised is 67.77%

For another option, we must add the solver with following constraint

After running the solver, it was found that, the unutilised resources come at 63% and profit that was made is around $ 499.99

For the above two cases, the best solution is for case (i) in which only table wine is produced, the maximum profit by producing table wine is $ 10672. Resources unutilised is 67.77 %

Conclusion

As we can see that, the implementation of 6σ in health care industries needs more lean than that of 6σ. But the benefit of implementation as whole cannot be ignored, because control on cost items is as important as waste. In fact, in health care industries, precision measurement is already an important parameter for medicine and diagnostic process, if these can be implemented in management process, definitely, it will help a lot, as the 6σ is helping in other industries. There is a scope for continues improvement even after implementation of lean 6σ. This provides us the way of future direction of research, the region especially in South East Asia; the need of such great tool like lean 6σ is very helpful, if the health care organisation starts implementing it.

Process Orientation in Hospital Management

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Process Optimization in Hospital Management

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