How Can a Kanban System Improve Health Care?

Defining kanban

In Japanese, the term kanban means “visual signal” or “card.”

At first glance, it’s hard to believe that a process perfected in a supermarket chain would have implications for health care. In the 1940s, employees from Toyota observed the way that U.S. supermarkets consistently provided their customers with the food they wanted at the time they wanted it — without holding on to massive amounts of inventory. The supermarkets stocked their shelves and coolers with a first-in-first-out (FIFO) system, stocking supplies from the back instead of the front, and placed visual signals in their stockrooms to let employees know when and how much to order as the stock was depleted.

Toyota successfully applied this kanban system to the manufacture of automobiles, to increase the organization’s efficiency. Much later, Virginia Mason applied a similar kanban system to make health care processes much more efficient and cost-effective.

How does it work in health care?

Before implementing the kanban system, Virginia Mason was like most health care systems — relying on the employee in charge of ordering supplies to operate on gut instinct, with no data. The result was that for some supplies, availability was scarce, and many employees felt the need to hoard supplies so they could access the items they needed to care for their patients. For other supplies, the stockrooms were overflowing, taking up space that could have been used for patient care.

Since the kanban system was implemented, however, Virginia Mason employees have learned to find what they need, just when they need it. In the supply cabinets in orthopedics, for example, there’s a two-bin system. Items are consistently stocked from the back, using the FIFO approach. When the first bin runs out, the employee who uses the last item places the empty bin in a common area. Then, because Virginia Mason has developed a very effective replenishment process with its supply-chain vendors, the card on that bin is scanned the same day, activating a new order of supplies that will fill up that bin. While the team waits for the new supplies to arrive, there’s already a full bin on the shelf — it’s been there waiting behind the previous bin — and it’s ready for the next employee who walks in. When the new supplies arrive, they’re placed in the empty bin, and the bin filled with new supplies is stocked behind the current bin.

With such a system, the supplies don’t run out, and because supplies are stocked from the back, the supplies are not on the shelf long enough to expire. This not only makes the organization’s system more efficient, but it also drastically reduces the inventory, saving costs. Even more, employees now have trust in a system that gives them what they need, when they need it.

“What if there’s a better way? What if you can trust a new system to give you what you need, when you need it?”

– Marlon Borbon

What is the biggest barrier to creating a kanban system?

In a system that is chaotic, employees have learned not to trust that they will have the supplies they need to do their job. If you ask them why they hoard supplies, you’ll hear, “I remember when an item ran out 10 years ago, and I can’t let that happen again.”

But then ask them this question: “What if there’s a better way? What if you can trust a new system to give you what you need, when you need it?”

What’s the best way to successfully implement kanban in a health care system?

Changing a health care supply system to a kanban system takes work. It’s a system that needs to be created by the frontline employees in collaboration with the purchasers and vendors. At Virginia Mason, our supply-chain vendors even participate in our improvement events to help us create and sustain reliable kanban systems that keep getting better year after year.

Keep in mind that there’s no one easy formula for all supplies, and different suppliers have different response times. For example, it may take seven days to receive a box of gloves but only two days to receive a box of masks. For these two items, assuming a similar consumption rate, the amount of items on hand in the supply closet will be different as the team waits for the new items to arrive.

When choosing which employee should work with the purchaser to make the kanban system a success, choose someone who knows the process, has experience ordering supplies and is open to change. For some employees, it is hard to let go of a process that is based on years of experience and gut instinct, but letting go of an unreliable process is the best way to start creating a process that will improve care for patients and improve job satisfaction for employees.

What’s the best way to get started?

Step back, and keep it simple. Try it first with noncritical items — ones that don’t pose a safety issue — in a small, controlled area. For example, start with an office supply like paper. If during the testing, the paper runs out, you can borrow some from another department without a problem.

To prevent running out of an item during the testing of more critical items, you can use safety stock — a minimum amount of an item to keep on hand in order to accommodate for variation.

After you test the process and refine it, then you can create standard work and get everyone on the same page. After that, you can spread the system to different departments so that the whole organization benefits from improved efficiency, lower costs and reliability that providers and staff can depend upon.

What’s stopping you from trying a kanban system today?

Marlon Borbon, PT, MBA, LSSBB, is a sensei at Virginia Mason Institute. For health care leaders and providers worldwide, he leads numerous improvement events with a focus on cultural transformation and sustainment. Prior to joining Virginia Mason Institute, Marlon managed start-up clinics, developed community wellness programs, led process redesigns and integration of complex ambulatory programs with hospital services, and coached physicians and executive leaders in change management. Marlon is certified in the Virginia Mason Production System®. He is a Lean Six Sigma Black Belt and is board certified in health care management as a fellow of the American College and Healthcare Executives (ACHE).