Continuous Quality Improvement

One of the seven wastes identified in the Toyota Production System is waste of product or inventory on hand. Although not clearly seen as a problem in health care usually, manufacturers and retailers clearly understand the problem with excess inventory. Too much inventory means valuable space is being taken by the inventory that could be used in production or in sales.


Does this type of waste apply to health care? Yes it does! Consider these situations:
Nurses on a hospital ward hoard supplies that they think they might run out of. The problem with that is that other staff might be short of the supplies being hoarded. Further, some supplies that they are hoarding may be used rarely and the supply passes its ‘use by date’ and expires. If a hoarded supply expires, it becomes a cost to the hospital.


Administrative staff at an ambulatory site stock up on printer cartridges for their ink jet printers because they can get a good deal from their supplier. Sounds like the right thing to do. The problem is that if much of the supplies for the office are bought on special pricing events or bulk price discounts, there can be an excess of inventory that crowds out space that could be used for better purposes, such as work space for staff or other needed supplies.


Each time someone from patient room supplies-bedding, etc.-delivers supplies to a patient floor they take as much as they can so they can save time and trips. They think they are saving the hospital money by taking fewer trips to the floor. The problem with this line of thinking is that the space being used for excess supplies could be better used for other, more critical supplies.


Rarely used medication (some of which can be very expensive) are stocked in the hospital pharmacy. Too much of it passes its ‘use by date’ and must be discarded. This can be very expensive.


Surgeons ask to have tools available that they rarely use in a procedure. They want the tool on hand though, just in case they need it. They do not trust that the hospital staff can readily deliver it in case it is needed. The problem is that these tools are not often used but become un sterile, needing to be either discarded or sterilised again, costing the hospital time and money.


With the right systems in place the losses due to excess storage and hoarding need not occur. One of the systems that must be in place is a process that supplies needed inventory at just the right time in the correct amount. This is a kanban system. I do not want to go into too much detail here, but in a kanban system a signal of some kind indicates when a supply is running low and needs to be replenished. Then, someone who is responsible for supplying the needed inventory replenishes it in just the right amount. The right amount is determined by a team of those who use it and those who supply it.


Perhaps you are skeptical about excess inventory as a source of waste. Park Nicollet Health System in Minneapolis, a recognized leader in Lean Health Care, had at one clinic 628 containers of medication, 28% of which were rarely used, and had a value of $32,513. A team at the site reduced the amount of medication by 29% and the cost by 50%. In order to do this, they developed a kanban supply system and employed 5S, a method of organizing inventory while eliminating unused inventory.
In 5S the first step is to sort out and weed out. Items in a storage area are examined and any item not used in the past 3 months (for example, office supplies) or other appropriate period is removed from the storage area. Out of date product should be tossed; other inventory should be placed in another storage area that is used for less frequently used inventory, or donated to charity. After the inventory is sorted the remainder is then neatly organized with standard placement of items in the inventory. While this is being done the area is cleaned thoroughly. After this initial assessment of the inventory storage area, the team involved maintains its organization and cleanliness.


To make management of inventory work requires input from front line employees with support from top-level management. Since the management of inventory is an ongoing process, including cleaning and organizing storage areas, a continual input of ideas is required from employees. The goal for management should be to get ideas which will continually improve inventory management. An idea system from the best manufacturers and retailers generate 11 or more ideas per employee per year, most of which are implemented. The ideas may only make modest improvements, but with this many small improvements per employee per year, the overall impact is quite large, such as at Park Nicolette.


Inventory is often an unrecognized source of waste in healthcare settings. Clinical service providers rarely are trained to recognize it. Administrative and other employees often do not understand the correct management of inventory. Using the Toyota Production System methodology health care facilities can greatly reduce the losses due to poor inventory management, thus improving the bottom line. The efficient management of inventory requires continual, incremental improvements with ideas generated by front line employees with support from management.

Learn more on continuous quality improvement.