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n his inauguration speech, President Obama called for improving health care quality and reducing costs. In 2008, U.S. health care costs exceeded $2.4 trillion and are expected to climb to $3.1 trillion by 2012, according to the National Coalition on Health Care.

Of these costs, 25 percent to 40 percent are caused by unnecessary delays, defects, and deviations that can be easily corrected with lean Six Sigma. That’s $600 billion to nearly $1 trillion dollars a year in unnecessary costs.

Although most visits to the emergency department (ED) take two to four hours (from admission to discharge), the Robert Wood Johnson University Hospital in Hamilton, New Jersey, a 2005 Baldrige Award winner, does it in 38 minutes for a discharged patient. The hospital offers a 30-minute door-to-doctor guarantee. The staff accomplished this by rethinking the emergency experience from the patient’s point of view.

The clinical side isn’t the only issue to be addressed. Health care operations—billing, ordering, and so on—waste even more money. Insurance companies are quick to reject claims and slow to pay the claims they do accept, which causes more problems. One health care provider found ways, using lean Six Sigma, to reduce denied claims by $330,000 a month.

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n emergency response organization differs substantially from our usual public health organization for day-to-day business. However, as the spring 2009 H1N1 (also referred to as swine flu) outbreak highlighted, usual public health processes are fundamental for effectively responding to a public health emergency. The key challenge we will face in the fall and winter of 2009 is not the planning for an H1N1 outbreak but the establishment of clear criteria for the public health workforce to determine priorities in their jurisdictions.

The federal government grants for emergency preparedness to states and local jurisdictions include a program element that requires a Homeland Security Exercise Evaluation. A key aspect of this requirement is an improvement plan based on learning from required exercises of the preparedness plans. However, a 20-page after-action report may not be helpful in real-time decision making. The challenge is to make these reports actionable and nimble. Using quality improvement (QI) methods and tools alongside our situation status reports as actual information and data unfolds can be an invaluable way to determine next steps in our response cycle.

To Chris Collins, lean and Six Sigma, just like government and business management, go hand in hand.

In Erie County, where he fiercely advocates that a lean government can and will save taxpayers millions of dollars, Chris Collins became the first county executive in the nation to implement lean Six Sigma in a government setting.

A businessman with 35 years of private sector experience, Collins runs Erie County like a business, with what he calls “The 3 Rs”—reforming Erie County government—rebuilding the local economy—and ultimately, reducing taxes. Needless to say, the road to getting there is paved by lean Six Sigma all the way. To date, 19 Erie County employees are trained and certified Six Sigma Green Belts. Forty employees earned Yellow Belts and more than 250 employees are trained in lean Six Sigma. Bill Carey, a lean Six Sigma Black Belt, is the program director of the county.

The lean and Six Sigma methodologies have helped the county accrue savings of nearly $144,000 by streamlining social services application workflow. The county reduced the cost of repairing of park equipment by $95,000 annually. It has reduced the backlog of child support enforcement cases from 7,281 to 103 cases in less than one year.

“It’s a messy world,” says Dusty Gibbs while walking past piles of copper wiring and kitchen sinks in the warehouse of Kirschbaum & Krupp (K&K) Metal Recycling LLC. “But this is about as clean and organized as it gets.”

Gibbs would know. As the new co-owner of K&K—and a longtime co-owner of Residual Materials, another scrap metal recycling operation in Grand Forks, North Dakota—he has been in the metal recycling business for more than 30 years. He purchased K&K in 2006 with Mitch, his brother, and Henry Wang, a business partner in China. In an effort to improve K&K and drive industry standards into the 21st century, they have spent the better part of two years making the company as lean—and green—as possible.

It seems to be working. One year after purchasing the business, the owners saw revenues balloon from $48.4 million in 2006 to $83.6 million in 2007. Current sales are as much as five million pounds of metal a month, and the company saves about 55 million pounds of nonferrous metals from landfills every year.

Why did the current financial crisis occur? Among other things, we could point to greed, ethics, and policy creation. However, could we also consider commonplace business management systems and their metric-creation practices as a source for encouraging and amplifying these and other unhealthy behaviors?

Before answering this question, consider another aspect of the issue: Do you think that the cliché “Tell me how you measure me and I will tell you how I will behave” describes a stimulus that could have contributed to the destructive behaviors that led to our economic problems of the day? I believe that many current business system metrics and resulting actions to achieve measurement goals did contribute to our current economic problems.

One week in May, I spoke on “Risk in the Supply Chain and Other Changes” at the World Conference on Quality and Improvement (WCQI), the Macon, Georgia, ASQ section, and the Atlanta, Georgia, ASQ section.

My message was that many business rules and assumptions have changed radically since September 2008, especially those in supply management. I would almost say that most business rules have been “reset.” Harvard Business Review says that we need to understand and live with the new “normal.”

The new “normal” in supply management

Let’s look at some of the changes. We are moving from global stability to global uncertainty. We can see this everywhere we look, with the increasing unemployment rate, financial crises, and global warming. We are moving from safe trade to pirated trade. Who would have thought that we’d have Somali, Philippine, and Southeast Asian pirates, who disrupt global trade and add risk to the supply chain.

The story of how one Michigan-based automotive supplier, GHSP, embraced the quality circle process and very quickly earned a spot as a leader from one of the most demanding customers in the business 

There’s still a little surprise in Beth Koch’s voice when she talks about the Honda of America Manufacturing’s Fall 2008 Supplier Quality Circle Competition.

“We were very proud of what we had been able to do for our company,” says Koch, a quality facilitator at GHSP’s Hart, Michigan plant. “But we were very shocked when we won. Very shocked.”

She wasn’t the only one who was surprised. GHSP, a supplier of mechatronics to the global surface transportation industry, in its first appearance at the fall event, stormed in and swept the competition away, winning first place in the two main categories—problem solving and project circle—as well as first place for the best display board. It was the first time a supplier had won both categories at the competition, which was attended that year by as many as 100 suppliers to Honda and 600 people.

All the talk of health care reform has resulted in many hospitals turning to lean Six Sigma to help improve efficiency and aid in cost cutting. However, health care efficiency expert Ron Wince contends that many of these facilities are not applying the tools properly and therefore will not reap the ultimate benefits. Wince is the CEO of Guidon Performance Solutions and works with hospitals across the country helping them to improve efficiency and quality while reducing costs.

In this interview with Wince we explore the growth of the lean, Six Sigma, and similar programs in the health care industry, and how well those programs have been implemented.
  

Quality Digest: We have seen a lot of interest in hospitals and other health care facilities in implementing lean, Six Sigma, and the like. Do you see this trend continuing at the same rate, increasing, decreasing?

For some time, auto experts have reported that objective quality differences have all but disappeared across most automotive brands. Indeed, the Detroit Three automakers have eliminated or substantially reduced large differences in defect rates after 90 days of ownership—no small achievement.

Yet, surveys continue to show that consumers consider quality an important factor in deciding which vehicle to purchase—and still give the nod to the Japanese and some other foreign automakers because of the power of past quality perceptions.

We are left with an intriguing question: Why has it taken Detroit more than a quarter of a century to close the gap? If we are skeptical about the latest claims, exploring the reasons for Detroit’s long road to quality parity may shed some light on the remaining challenges Detroit faces. It can’t afford to repeat its quality mistakes.

When the Detroit automakers did demonstrate bursts of dedication to quality improvement, these periods were followed by relapses and shifting priorities.

If your team members (or you) hear “Meeting at 3:00” and think, “Here comes another waste of my time,” then it’s time for a meeting overhaul at your organization. While meetings can be important team-building and idea-generating opportunities for your employees, the key is knowing how to do them the right way.

It’s Friday afternoon, and your team is filing into the conference room, mumbling and grumbling as they take their seats for yet another meeting. An hour passes and the meeting comes to a much anticipated end, leaving everyone involved wondering why the meeting was held in the first place. After all, the usual suspects dominated the discussion, and the same ideas that came up in last week’s meeting were once again batted around. No one seemed to write anything down, and no one agreed to put anything discussed into action. If this kind of ineffective meeting sounds familiar, you’re not alone. It’s a problem that plagues many organizations—but it’s also one, she adds, that can be remedied.