What Hospitals Can Learn from the Auto IndustryA few years ago, the Clinton Global Initiative announced a national program aimed at helping schools, hospitals and other nonprofits stretch their dollars further.

I took special note of this because the program was in partnership with Toyota and featured the Toyota Production System (TPS).

The initiative, TPS was successfully applied at a New Orleans recovery organization, a community food pantry in New York City, and a hospital in Pittsburgh.

Having had success with TPS at the core of our company I couldn’t agree more with the experts who believe it can be applied to other organizations.

TPS is designed to reduce cost by eliminating wastes with the goal to have the highest quality product at the lowest cost possible with the shortest lead-time.

Five Ways Hospitals Can Learn from the Auto Industry

Becker’s Hospital Review outlines five key principles that hospitals - or any organization - can learn from the auto industry.

  1. Eliminate waste. One key principle of lean management is the elimination of any activity that does not add value to an organization's end product. For hospitals, this refers to any activity that is not necessary in providing excellent patient care.
  2. Keep inventory low. Another principle of lean management is using what is referred to as a "just-in-time" (JIT) inventory strategy, which aims to reduce inventory and associated carrying costs. Not overstocking supplies can help reduce supply costs associated with supplies that expire before they are used and the cost of storing extra supplies.
  3. Embrace technology. The use of technology to improve processes and eliminate waste is embraced by TPS. Technology can reduce the manual labor involved in many processes that take place within an organization and improve overall efficiency.
  4. Value employees and develop people. Lean organizations differ from traditional organizations in putting the power of improving an organization into the hands of the employees that directly interact with the end product, rather than management. Lean organizations train employees in lean processes and entrust them with developing the organization.
  5. Continually improve. The largest difference between traditionally managed organizations and lean organizations is their focus on systemic improvement. Lean organizations focus on identifying the root causes of all problems and adjusting processes to stop the same problems from occurring in the future.

Lowering costs, increasing employee value, and a dedication to continuous improvement should be a priority for any successful leader. In turn, it is what will help create successful companies.

What steps can your company make to begin applying Toyota Production System (TPS)?

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