Lean Six Sigma
Cardinal Health began its lean journey as part of an initiative to drive collaboration in the health care supply chain, with the goal of achieving zero errors, zero waste and zero lost revenue. That initiative involved thousands of ...
Lean Six Sigma
Cardinal Health began its lean journey as part of an initiative to drive collaboration in the health care supply chain, with the goal of achieving zero errors, zero waste and zero lost revenue. That initiative involved thousands of kaizen events, and led to the order error rate dropping by 30% over a three-year span. But that was just the beginning of Cardinal's journey.
Over the past 30 years, the percentage of the U.S. GDP devoted to logistics costs has dropped from 17.9% in 1980 to 8.3% in 2011, which is a testament to how smart companies have gotten at reducing waste out of the supply chain. It's a far different story, though, for U.S. health care costs, which have soared from 9.0% of the GDP to 17.6%.
Cardinal Health, a $103 billion distributor of health care products, has been a close observer of both trends as it sits right in the middle of the health care supply chain, points out Andy Keller, the company's vice president of inventory management. "We're a critical link in the supply chain because we talk to both suppliers and health care providers," he says, adding that the company handles one-fourth of all medications prescribed every day, and delivers to 60,000 sites daily. One daunting problem facing not only Cardinal but all of its partners is that there is a lack of common tools and approach in the health care supply chain.
Cardinal Health began its lean journey in 2007, as part of an initiative to drive collaboration in the health care supply chain, with the goal of achieving zero errors, zero waste and zero lost revenue. That initiative involved thousands of kaizen events, and led to the order error rate dropping by 30% over a three-year span. But that was just the beginning of Cardinal's journey.
"While we've made progress internally, we realize inefficiencies still exist in the health care supply chain," Keller says, "such as redundant warehouse assets, excess inventories leading to losses and write-offs, and mismatched demand/supply locations." The next step, then, was to extend the scope of the lean Six Sigma effort to Cardinal's supply chain partners.
"Lean Six Sigma provides the structure, the tools and a common language" conducive to collaboration, Keller says, noting that because it is data-driven, it also adds an element of trust to the relationships. Cardinal works closely with key supply chain partners on lean Six Sigma workshops to learn, educate and problem solve.
He notes that people often fail to ask, "What do you really need?" from their supply chain partners, which makes it that much more difficult to gain efficiencies because the specific goals are unclear. Through the workshops, though, Cardinal has been able to determine exactly what is crucial and what is just "nice to have." For instance, does a hospital absolutely require next-day deliveries, or would a less time-sensitive – and less expensive – alternative be sufficient?
Attend Technology Days, a free event to foster innovation. See mature NASA technologies ready for commercialization, network with new supply chain partners & create new business opportunities. Learn more.
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A strategic plan is only as good as the thinking that goes into it. Strategic thinking happens in a number of different ways, formal and informal but fundamentally affects your ability to execute on your long term process improvement objectives. Therefore, when the plan is lacking, we need to step back and consider the thinking. Even thinking is a process. IW Best Plants Conference 2012 Special Event at Lucas Oil Stadium:
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Over the past 30 years, the percentage of the U.S. GDP devoted to logistics costs has dropped from 17.9% in 1980 to 8.3% in 2011, which is a testament to how smart companies have gotten at reducing waste out of the supply chain. It's a far different story, though, for U.S. health care costs, which have soared from 9.0% of the GDP to 17.6%.
Cardinal Health, a $103 billion distributor of health care products, has been a close observer of both trends as it sits right in the middle of the health care supply chain, points out Andy Keller, the company's vice president of inventory management. "We're a critical link in the supply chain because we talk to both suppliers and health care providers," he says, adding that the company handles one-fourth of all medications prescribed every day, and delivers to 60,000 sites daily. One daunting problem facing not only Cardinal but all of its partners is that there is a lack of common tools and approach in the health care supply chain.
Cardinal Health began its lean journey in 2007, as part of an initiative to drive collaboration in the health care supply chain, with the goal of achieving zero errors, zero waste and zero lost revenue. That initiative involved thousands of kaizen events, and led to the order error rate dropping by 30% over a three-year span. But that was just the beginning of Cardinal's journey.
"While we've made progress internally, we realize inefficiencies still exist in the health care supply chain," Keller says, "such as redundant warehouse assets, excess inventories leading to losses and write-offs, and mismatched demand/supply locations." The next step, then, was to extend the scope of the lean Six Sigma effort to Cardinal's supply chain partners.
"Lean Six Sigma provides the structure, the tools and a common language" conducive to collaboration, Keller says, noting that because it is data-driven, it also adds an element of trust to the relationships. Cardinal works closely with key supply chain partners on lean Six Sigma workshops to learn, educate and problem solve.
He notes that people often fail to ask, "What do you really need?" from their supply chain partners, which makes it that much more difficult to gain efficiencies because the specific goals are unclear. Through the workshops, though, Cardinal has been able to determine exactly what is crucial and what is just "nice to have." For instance, does a hospital absolutely require next-day deliveries, or would a less time-sensitive – and less expensive – alternative be sufficient?
Attend Technology Days, a free event to foster innovation. See mature NASA technologies ready for commercialization, network with new supply chain partners & create new business opportunities. Learn more.
European Commission Rejects French Call to Monitor South Korean Auto Imports Automaker BMW is Brazil Bound with Plans to Build a New Factory Michelin Reports 5.
Global Workforce Management: Trends and Strategies for U.S. Manufacturers Data and Decision-Making: Connecting the Big Disconnect UPS 2012 Change in the (Supply)
Project costing in ERP is difficult in project industries like oil and gas, utilities and mining. IFS North America Business Software Consultant Carrie Ghai discusses why this is the case and offers tips for selecting software equal to the task. Can the ERP you are considering truly capture all project costs, and handle actual costing as well as offer visibility into committed cost?
A strategic plan is only as good as the thinking that goes into it. Strategic thinking happens in a number of different ways, formal and informal but fundamentally affects your ability to execute on your long term process improvement objectives. Therefore, when the plan is lacking, we need to step back and consider the thinking. Even thinking is a process. IW Best Plants Conference 2012 Special Event at Lucas Oil Stadium:
After a long day of learning at the conference, attendees took over the field -- having their pictures taken with the Lombardi trophy, touring the Colts locker room, kicking field goals, throwing passes, and enjoying a live band.
AAF offers world-leading HEPA filtration solutions, repairs, maintenance, spare parts and equipment replacement. In fact, nobody brings more experience to gas turbine filtration than AAF. Learn more!
Today's manufacturing requires greater efficiency and productivity while improving worker safety on the job. Download this free white paper with easy solutions to get it all.
You've reaped the benefits of Lean production practices in your manufacturing operations. Now implement Lean strategies to back office areas such as IT, engineering, product development, and more.
Demand Solutions shows you how easy it is to deliver a more effective forecast. Download our Guide to Improved Forecast Accuracy today and learn how you can create a better demand plan.IndustryWeek.
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