Go Lean in 2010: Reducing Waste in Construction

Getting lean is the quintessential New Year's resolution. But when you think lean in 2010, don't think diet—think hospital management and savings in time and money. To help get your year off on the right note, I'm taking a two-part look at using Toyota's Lean Process Improvement and how your facility could benefit from it. This week, we'll look at how one Seattle-based hospital used "Lean" tenets when constructing a new facility.

Lean management isn't a new premise, it's been around for decades, but in these challenging economic times, implementing such an approach can be the answer to some tough financial questions. Seattle Children's Hospital has embraced the canon of Toyota's Lean Process Improvement and this July they will open a newly constructed outpatient facility built by applying those principles to the design and construction process.

Most CFOs have heard of Lean Management, still it's not yet in application at most facilities. Simply, Lean is a strategy for cutting costs and boosting productivity with an emphasis on eliminating waste from the hospital and improving processes while providing more value to customers. The American Society for Quality conducted a study of 77 hospitals and found that 53% of hospitals have some type of Lean initiative and 42% are using a similar management program called Six Sigma (which looks at reducing variations in processes, products, and services).

Perhaps you've been trying to enact one of these programs at your facility, and still more likely you haven't completed the process. The same American Society for Quality study reported that only 4% of hospitals have full deployment of Lean. The issue is that in order for Lean management to truly be effective it has to be driven by a unified team mindset—everyone has to believe and act Lean. Unfortunately the study found that 30% of hospitals are still lacking leadership buy-in, while 59% are lacking resources. But in this economy, creating an environment that embraces the reduction of waste can really help a hospital's bottom line.

For Seattle Children's Hospital, leadership buy-in wasn't a problem. Children's has been using a modified version of the Toyota Lean Process Improvement, which is called Continuous Performance Improvement, to evaluate and improve healthcare from the patient and family point of view. So it only made sense that when they approached new construction, they would try to implement the same methodology.

With an estimated 12,785 admissions annually, the Washington-based, 250-bed Seattle Children's Hospital serves as the pediatric referral center for Washington, Alaska, Montana, and Idaho. Evans says the main campus had already reached 80% capacity in their exam rooms when they decided to build, and regardless of the economy they still needed to do so.

"We had to get creative to get ahead of the curve or we would be unprepared for when the recession ends. We are interested in serving the needs of the region, so this project always had the green light," says Cindy Evans, vice president of ambulatory and regional services and medical specialties at Seattle Children's Hospital.

However, while they had the green light to proceed, the economy was causing a change in scope. In late 2007 when they begin to look at constructing the new outpatient facility, Seattle Children's Hospital was approaching the process in a traditional way. They estimated that they would need approximately 110,000 square feet to accomplish their goal of improving access to pediatrician sub-specialties and to increase their presence on the east side of King County.

Just months later, in March 2008, the reality of the economic crisis took hold and that meant taking another look at their plans for the facility. It was then that they decided they should be approaching their construction in a different way—a Lean way. They gathered the major stakeholders in the project, including medical and management staff, the architectural firm, the contractors, and the construction manager, and discussed how they could not only take the project Lean and fast-track it.

"When we were in the planning phase, we were in the recession so we knew we had scale back. We started by reducing the square footage by 30% to 75,000 square feet, but by using Lean in our design process we were able to keep the facility the same programmatically; we ended up exactly where we started just by getting rid of the waste," explains Evans.

How did they find the "fat"? By challenging all the stakeholders in the $75 million project to come up with ideas to reduce delays and cost, Evans says. That translated into an unusual and creative approach to their design plans.

Rather than have the team continually review and alter the architects' paper design plans, which often takes facilities months, they decided to take the design to scale and finish the process in two weeks. The architect and contractors measured out and built a version of a patient room and sections of the floor to scale. The medical and administrative teams then toured the mock-up and tried out the design. Design flaws could be swiftly spotted and modified on the fly allowing the hospital's team to test out suggestions and changes.

Being able to see and touch the space helped everyone see where the inefficiencies in the layout were from the location of the patient bed to where the equipment should be positioned. They went so far as to analyze storage space, determining the exact size of the supply closet based on the historical supply data—thereby eliminating the need for large supply closets with unused space that was badly needed for exam rooms. The team mapped the flow of patients, supplies, and providers and even counted the actual number of physical steps it would take for different processes to be completed, such as a nurse gathering needed supplies.

"Usually when you construct a facility you do it generically, you reduce variations. But some areas are serving different needs and those may need more or less space. By using Lean thinking, and having the mock-ups we got a true picture of what we needed," says Evans. "We ended up with five of these macro mock-ups before we finalized the plan, and the team really found them beneficial. There's just no way we could have gotten all that by looking at a paper plan."

Toyota's Lean Model has been used for nearly every type of business, so it's not unusual that it made its way into construction. What is unique to Seattle Children's Hospital is the extensive application of the tenets.

By taking one extra step of creating a life-size mock up to test out the inefficiencies in their design, they were actually able to trim time from the architectural design process as well as prevent delays during construction by addressing new ideas in the mock-up phase and not the building one. The Lean process has proven successful for Seattle Children's Hospital, the project is on budget, and is expected to open on schedule this July.