Making “Lean” Concepts Work for You
By Elizabeth Hilla
You’ve probably heard the term “lean” in reference to various business processes. Some healthcare and business leaders use the term to describe any efficient practice, while others are specifically referring to sophisticated “LEAN/Six Sigma” methods to root out waste and improve processes.
No matter which kind of “lean” we’re talking about, it’s a popular concept, and your provider customers most likely see it as a good thing. And that’s terrific, because when you think about making processes simpler, with less inventory, fewer touches, and less waste, distribution naturally comes to mind.
How can you take advantage of the growing prevalence of “lean” thinking in healthcare? First, understand why distribution is inherently lean, and second, learn to use lean ideas and terminology in your conversations with customers.
Lean = Less inventory
In lean business models, inventory is an enemy. That’s because inventory that’s just waiting to be used has no value to the end customer – in this case, the patient.
Minimizing inventory is core to distribution value. Distributors consolidate inventory storage in their warehouses so that their provider customers can access inventory just when they need it, without having to carry the inventory themselves.
Lean = Fewer touches
Another hallmark of lean management is process improvement, reducing the number of steps in a process and eliminating unnecessary “touches.”
Again, that’s what distributors do. Providers who use a single prime vendor partner can manage thousands of line items with a single order, a single shipment, and a single invoice. That means fewer touches all around – fewer suppliers to contact, fewer bills to manage, fewer pallets and cases and boxes to receive, unload, put away, and track.
Lean = Less waste
Lean-thinking organizations focus on minimizing non-value-added processes and eliminating waste. And once more, one important way to do so is by using distribution. Distributors help healthcare providers reduce waste. One very literal example of waste reduction can occur when providers adopt a low-unit-of-measure program with their distributor: customers typically receive deliveries in reusable totes, which eliminate corrugated cardboard waste. Distributors also help providers minimize the waste that comes from product expiration, overstock inventory, and unnecessary staff time devoted to supply management.
Hitch Your Wagon to Lean
With the use of lean methods increasing in healthcare, now is a great time to understand these concepts and embrace them. You can appropriately position your distribution company as a lean partner to your customers, and use that positioning to strengthen your long-term business relationships.