Northwestern Memorial Hospital: Smoothing Material Flow through the Receiving Area
(7 pages of text)
In 2016, the supply chain manager at Northwestern Memorial Hospital recognized that many problems occurring throughout the hospital originated at the hospital receiving area. Some problems had reached epic proportions: overstocking at par locations, stocking at temporary locations, misplaced items, expired items, and inaccurate inventory records. Most of the problems could be traced to the receiving area’s procedures and average three-day dock-to-stock lead time. A value-stream mapping kaizen event revealed that a big contributor to the long lead time was the receiving area’s reliance on batch-oriented processing. The supply chain manager recognized the severity of the situation and urgent need to do something to improve operations in the receiving area and shorten the lead time from package arrival to final delivery. He felt that reducing the lead time from three days to one day would reduce or eliminate many of the problems, and it seemed a reachable goal. The supply chain manager intended to approach this challenge using the lean production practices he had successfully employed elsewhere.
This case is appropriate for an advanced undergraduate-level course on operations management, lean production, or supply chain management. It is also appropriate for a graduate-level course on health-care management or service operations management. The case introduces students to the challenges of managing material flow and the ramifications of not doing it well. It also introduces them to the general concepts of single-piece flow and value-added versus wasteful steps in processes, as well as the application of value-stream mapping for assessing processes and guiding process improvement. After completion of this case, students will be able to
- understand the concepts of material flow, smooth flow, batch processing, and single-piece processing;
- know the universal applicability of operations and supply chain concepts such as material flow and inventory, as well as the ramifications of these concepts to organizational performance and customer satisfaction; and
- understand the applicability of concepts associated with lean production such as just-in-time, a kaizen event, value-stream mapping, value-added versus wasteful activities, visual management, and standard work.
Health Care Services
United States, Large, 2017
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