Making it Lean: Shands at AGH Lab Process Improvement and Layout Redesign
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1 Making it Lean: Shands at AGH Lab Process Improvement and Layout Redesign By Mary Hageman and Lauren Milne, Shands HealthCare Abstract Shands at Alachua General Hospital is the community hospital of Shands in Gainesville. The Core Lab at Shands at AGH, a 367-bed community hospital in central Florida, has been struggling to meet their demand due to inefficient workflow processes. The main objectives for this project are to identify process improvement opportunities, design an optimum layout and determine the required staffing level to meet workload demand. Lean concepts of waste reduction were used to improve the process flow by allowing employees to execute tasks completely, encouraging employee involvement and shortening distances traveled by technicians. Systematic Layout Planning methods were also used to evaluate optimum locations of all equipment in the Lab. Layout alternatives were developed for long and short-term recommendations. Finally, a workload analysis was conducted to compare the current staffing level to benchmark standards. Layout design, process improvement, and employee cross-training recommendations are expected to result in more efficient utilization of lab technicians time and elimination of unbudgeted hourly part time staff as well as cost avoidance of 1.0 FTE to cover night shift demand. Short-term recommendations are estimated to result in annual cost savings of $1691 per year from reduction in labor and maintenance expense. Total annual savings of $71,282 (maintenance cost savings and short-term labor savings) are achievable from longterm recommendations. Total project cost is estimated to be $277,907 with contingency and other fees, and total project savings is estimated to be $71,831 (maintenance cost savings and long-term labor savings). The simple payback period for proposed recommendations is estimated to be 3.9 years assuming sequential implementation of long-term and short-term recommendations. Introduction The Core Lab at Shands at AGH consists of both Chemistry and Hematology areas. These areas are responsible for processing all blood and body fluid specimens collected from patients in the hospital as well as in outpatient clinics in the Ayers Medical Plaza. Selected specimens are not processed in the Core Lab at AGH but are sent to Rocky Point, an offsite lab, for processing. Chemistry and Hematology areas are currently located in separate rooms across the hall from each other and process all blood and body fluid specimens collected from patients in the hospital as well as other outpatient clinics, such as Ayers Medical Plaza. Phlebotomists and other couriers transport specimens from all units within the hospital and from clinics to the lab s front desk. The specimens are then accessioned and transported to the appropriate processing area for testing, either Chemistry or Hematology. In Chemistry or Hematology, the specimens advance through different test procedures depending on the test(s) ordered and the type of specimen deposited. In September 2004 a consulting group external to Shands conducted a benchmarking analysis, comparing the lab s staffing levels to benchmark standards. As a result of the study, the lab was required to implement staffing levels base on benchmark standards. Through attrition, the lab was able to reduce staff. However, inefficiencies in the operational processes created the need for improvement in order to maximize staff utilization and increase employee retention. Problem Statement After implementing staff reductions in the Core Lab, inefficiencies in operational processes and layout design has resulted in overworked and dissatisfied staff. Management identified the need for improvements to efficiently meet workload demands with the current staff levels and as a result increase staff satisfaction. Project Objectives This project focused on finding ways to make the AGH Core Lab more efficient by streamlining processes. The main objectives for the project are to: Identify process improvement opportunities to increase core lab efficiency. Determine required staffing levels based on peak workload analysis. Design improved Core Lab layout. Quantify financial impact from improvements. `
2 Methodology SWOT Analysis The first step taken by Management Engineering Consulting Services (MECS) was to interview each Core Lab employee. Each employee answered the same set of questions through a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Responses revealed employee perceptions of problems and opportunities in the Lab. Results of the SWOT analysis were shared with the Lab Director and the Core Lab Manager. Lab management used the survey to address staff concerns. MECS used survey results to focus on operational problems and opportunities identified by the staff. It was found that the top eight concerns where (listed in descending order): 1. Not having enough staff at the busy times of the day 2. Fears from the recent bad press 3. Having Chemistry and Hematology split in two rooms was difficult 4. Lack of good communication 5. Multiple processing areas of specimens 6. Staff leaving their current positions 7. Low staff morale 8. Lack of cross training Lean Methodology Lean concepts where applied in conducting process flow analysis and layout redesign analysis. The lean concepts used were: Eliminate waste, allowing employees to improve job performance. Encourage employees to become more involved with their roles by cross training, providing higher job satisfaction. Reduce labor costs through reduction of steps required to process lab specimens. Eliminating waste in a work place eliminates unnecessary actions that do not add value to the final product. This is the ultimate objective in lean concepts. Excess waste in an office leads to physical and emotional fatigue, increased stress and decreased selfworth among other problems. According to Don Tapping and Tom Shuker, there are seven deadly wastes that were considered when looking into possible recommendations: 1. Overproducing producing more than or before something is needed 2. Waiting waiting for people, paper, machines or information, having idle time 3. Overprocessing redundant activities, checking someone s work or excessive reviews 4. Inventory excess stock 5. Motion unnecessary work movements, ineffective job processes and layout, extra walking, reaching or bending 6. Defects or Correction producing defective work that needs to be re-done 7. Transport transporting something farther than necessary, temporary storage (Tapping and Shucker 2003) Process Flow Analysis Detailed flowcharts of different areas in the Lab were developed in order to identify bottlenecks and opportunities for improvement. Flowcharts were developed for the following areas: Lab Front Desk Hematology Chemistry: Primary Tests Chemistry: Other Tests Facility Layout Analysis In the current layout, Chemistry and Hematology areas are located in separate rooms across the hall from each other. Because of the proximity of the two areas, cross coverage is difficult when the lab is short staffed. Systematic Layout Planning (SLP) techniques were used in developing different layout alternatives. A relationship diagram was first created to identify which machines or devices are required and desired to be located close in proximity to each other. From the process flow analysis, relationship diagram, and interviews with management, improved layout designs were developed. Short-term as well as long-term layout alternatives were created and evaluated for effectiveness with the help of the Core Lab staff and management. Figure 1: Current Core Lab Area (Hematology on left, Chemistry on right) 1
3 In developing short and long-term layouts for the Chemistry and Hematology areas, consideration for reduction in travel distance and provisions for cross coverage were incorporated into the design. The paths for the most frequently run tests have been mapped out in the current lab layout and in the proposed layout. The most frequently run tests that were mapped are CBC, CBC Diff, PT, PTT, Basic and Comprehensive. Body fluid and gram stain tests were also mapped out because these two types of tests, while less frequent, will be significantly affected by the proposed changes. Short and long-term layouts and travel distance analysis can be seen in the appendices. Workload Analysis The core lab is budgeted for FTEs and is currently staffing FTEs due to two vacancies. In order to improve staffing scheduling in the lab, a workload analysis was developed. The volume of tests run by the Core Lab and the benchmark standard time to perform a test (provided by the external consulting group) were used to calculate required workload by hour and day of week. The benchmark standard used in the Core Lab is.082 hr/test. Actual number of FTEs were then compared to calculated required number of FTEs by hour of day and by day of week between September 6, FTEs Benchmark vs. Actual FTEs September 19, Time of Day Figure 2: Benchmark Comparison to Actual Workload Recommendations Actual FTEs Benchmark FTEs Short-term Recommendations Hematology 1. Move the heat block, which is used for fixing slides, closer to main workstations for spinal fluid with gram stain tests in Hematology. This should reduce the amount of walking to and from the heat block. Place the heat block next to the cytospin. When the cytospin is replaced, place heat block in current cytospin area on a shelf so it is close to staining area and out of harms way. on July 20, Lean waste reduction of transport time was possible by decreasing the distance that is required to move slides to and from the heat block. 2. Obtain a new head for the slide stainer to replace the cytospin machine, which is fairly old and requires frequent maintenance. The original cytospin has cost the hospital a total of $534 in parts and 29 hours of maintenance over the past 5 years. on July 30, As a result of the replacing the cytopsin, there has been lean waste reduction of motion by allowing for the equipment to be rearranged to a central location. There will also be realizable savings in maintenance costs. 3. Provide additional storage location for body fluid supplies next to the microscope in the urine area. Technicians will have supplies if they work in the old area or the new area closest to the microscope. on August 1, Day shift and night shift work slightly different so having body fluid supplies in two locations help both shifts equally. This reduces the amount of walking between the work area and microscope, which is the next step in the process. Lean waste reduction of waiting is achieved with two supply locations. Lean waste reduction of transport time is achieved because the specimens will undergo the least amount of movement. 2
4 technician. The standardized layout of bins should be posted clearly for all employees to see. 3 Figure 3: Top Current Path for Body Fluid Tests; Bottom Proposed Path for Body Fluid Tests without Cytospin 4. Continue storing blood bank control samples in the freezer for Acid Elutions in Hematology. The controls are needed for each Acid Elution done by the techs. Storing the controls in the Hematology freezer reduces the occurrences of a tech walking to the blood bank. Impact: The Lab currently is continuing this process. Lean waste reduction in waiting and transport time to gather controls before each Acid Elution. 5. Relocate a label printer from the front desk area to send-out area. The printer will be moved close to the person in charge of sending specimens out to other labs. This person has to print many labels for send outs and currently has to walk almost the entire length of the lab to do so. on August 31, Lean waste reduction of motion and travel time to retrieve specimen labels. Chemistry 6. The incubator in Chemistry that is rarely used should be moved to storage in order to provide additional workspace. on July 27, Lean waste reduction of inventory is possible by eliminating the excess inventory that is currently taking up potential workspace. 7. Standardize the layout of the receiving workstation at the Chemistry window. Place the most frequently used supplies closest to the Figure 4: Standardized Receiving Workstation Layout Impact: Lean waste reduction of defects will be possible by using the standardized placement for the supply bins and posting a placement map for reference. There is also a lean waste reduction in motion by reducing the length and amount of reaches. Long-term Recommendations 8. The long-term recommendation involves combining Chemistry and Hematology into one room. The proposed change would involve extending the Chemistry lab area into the current Phlebotomy area. Relocate Phlebotomy directly behind the front desk area in order for Phlebotomy to provide backup support to the front desk. Convert the remaining space in the current Hematology area into a break room and an office for the part time Lab Supervisor. Place machines to provide space for centralized storage. Hematology will be located close to the Blood Bank. Impact: Staff satisfaction will be increased with the addition of a break room, a more functional phlebotomy area, and Chemistry and Hematology in one room. By having a single core lab room, individuals who are working alone during night shifts can provide cross coverage. Lean waste reduction of motion and decreased travel time can be achieved with the improved layout. Lean waste reduction of transport for eliminating temporary storage and centralizing the main storage areas (refrigerators) can also be achieved. An additional benefit of the new layout is the ability to achieve lean waste reduction of waiting with the opportunity for cross training Hematology and Chemistry employees. There is gained efficiency and labor savings from having a combined Core Lab area. There are currently only two people scheduled during the night shift. If one-person calls-in or is on PTO,
5 there is only one person covering Hematology and Chemistry. Three people would be required to meet peak demands between 1am - 5am as well as provide backup coverage if the rooms were separated. With a combined Core Lab area, one person can cover both Chemistry and Hematology. Because the Core Lab has already cut one position from the nightshift, they will not have to budget for an additional position if the long-term renovations are implemented. 4 Phlebotomy may also be trained to provide coverage for the front desk staff. As a result, workflow in all areas will be more continuous. Figure 6: Proposed Break Room and Phlebotomy in the place of current Hematology 9. Each analyzer in the lab requires a printer to print test results. At least four of the existing printers can be stacked on two printer stands with two printers per stand. Impact: Stacking the printers will save space and also provide lean waste reduction in motion by having the printers centrally located. 10. Tests that require the triage meter use specimens that originate from Hematology. Relocate the triage meter from Chemistry to Hematology. Within Hematology, locate the triage meter next to the drop off area centrifuge. Impact: Lean waste reduction of specimen transport may be achieved. 11. It is evident that the workload exceeds current staffing resources between the hours of 2am and 5am as well as between the hours of 10am and 7pm. Fill the vacant technician position with someone who will be able to cover a swing shift to work the hours of 11am to 7:30pm. Spread out phlebotomy draws between 1am - 5am in order to decrease the early morning peak demand. Figure 5: Proposed Chemistry and Hematology in the place of current Chemistry and Phlebotomy Impact: Lean waste reduction of waiting time may be achieved because patients will not have to wait as long for results. Providing as swing shift and spreading out demand increases staff satisfaction, improves communication and increases efficiency.
6 12. Eliminate 0.25 PRN FTE because they are no longer required with gained efficiencies from long-term recommendations. Impact: This recommendation results in unbudgeted labor savings. Financial Impact Short-term Financial Impact The only cost associated with short-term recommendations is the cost of the new head for the slide stainer, which is $1895. Financial savings are expected to come from avoiding maintenance costs on the old cytospin. General maintenance cost for the cytospin is an average of $275 per year. Short-term process and layout recommendations are expected to reduce the travel distance to complete certain tests. The tests affected by the recommendations are tests that involve body fluids and gram stains. The time saved per year from these recommendations of decreased steps is hours, which results in $1416 annual labor savings. The total savings from avoiding maintenance and labor costs are Short Term Cost New Stainer Head $1,895 of hours per year, which translates into estimated annual labor savings of $11,003. These labor savings come from not having to hire PRNs to assist technicians with the extra workload. Cost avoidance of $60,278 from having to hire 1.0 FTE to meet night shift demand and provide backup coverage is possible with the proposed long-term layout. Total annual savings of $71,282 are achievable from long-term recommendations. Other intangible benefits from the long-term recommendations are increased staff satisfaction and maintained throughput without additional staff. Total project cost is estimated to be $277,907, and total project savings is estimated to be $71,831. The simple payback period for proposed recommendations is estimated to be 3.9 years assuming sequential implementation of long-term and short-term Long Term Cost Furniture Movement 3 $ 15,000 Construction 4 Room 1554 and 1556 area $ 113,000 Room 1504 and 1512 area $ 63,000 Construction Subtotal $ 176,000 + Building Permit (5%) $ 184,800 + Architect Fee (10%) $ 203,280 + Architect Fee (7%) 217,510 + Facilities Development Fee (20%) $ 261,012 Total Construction Cost $ 261,012 5 Total Short Term Cost $1,895 Short Term Savings Steps Reduced in: Time (hrs/yr) Labor Savings ($/yr) Body Fluid Test $ 1,257 Gram Stain Test 6.90 $ 159 Total Labor Savings, PRN Lab Tech Costs 1 $ 1,416 Foregone Maintenance on Cytospin Parts (charged to Lab) $ 107 Time (charged to Facilities Maintenance) 4.8 $ 168 Total Maintenance Savings 2 $ 275 Total Short Term Savings estimated to be $1691. Figure 7: Estimated Short-term Financial Impact 1,691 Long-term Financial Impact Implementation of long-term recommendations should follow implementation of short-term recommendations. The long-term layout redesign will require asbestos abatement that is expected to drive the cost of the renovation higher than normal. The total cost of the construction and furniture movement for the long-term layout has been estimated to be $267,012. The new layout provides labor savings from reduction in travel time for certain tests. The travel distances for proposed paths are shorter allowing faster processing of tests. Cumulatively, there is a timesaving $ recommendations. Total Long Term Cost $ 276, Long Term Savings Steps Reduced in: Time (hrs/yr) Labor Savings ($/yr) Body Fluid Test $ 765 Gram Stain Test 3.33 $ 77 CBC Test $ 620 CBC with Diff Test $ 718 PT Test $ 2,048 PTT Test $ 1,240 Basic Test $ 3,670 Comprehensive Test $ 1,866 Total Labor Savings, PRN Lab Tech Costs 5 $ 11,003 Labor Cost Avoidance, 1.0 FTE Lab Tech Position 6 $ 60,278 Total Long Term Savings Figure 8: Estimated Long-term Financial Impact Conclusion 71,282 This project was reactive to a loss in staff. The staff reduction has already taken place, and this study was aimed at assisting the lab in improving operational efficiency and increasing staff satisfaction. Analysis of the processes, staffing levels and layout of the lab lead to several short-term and a long-term layout recommendations. The simple payback period for proposed recommendations is estimated to be 3.9 years $
7 assuming sequential implementation of long-term and short-term recommendations. Total Project Cost and Savings Total Project Cost 7 $ 277,907 Total Project Savings 8 $ 71,831 Simple Payback Period (years) * Notes and Assumptions * Implementation of short-term recommendations are assumed to be followed by long-term recommendations. 1: Labor savings from reduction in travel time. Reduction of PRN hourly costs at $23/hr average salary. 2: Maintenance Costs provided by Pam Core. 3: Furniture movement estimates provided by Herman Miller 4: Construction subtotal estimates provided by Charlie Boles, Project Manager, Facilities Development. Final project estimate for budgeting 5: FTE Savings = 2080 hours/year * $23.00 /hour + 26% benefits Average Salary and benefits provided by Pam Core. The cost avoidance is calculated for not having to budget for an additional 1.0 FTE which prior to this study has already been cut. The workload analysis based on current demand shows that additional 1.0 FTE would be required to provide additional support for the night shift with the current layout (Chemistry and Hematology separated) as well to provide back-up for unscheduled call-ins and PTO. Currently, 2 FTEs are on nights, but one person is always required to cover Blood Bank. If someone calls in, there would be no designated person in Chemistry and Hematology. 6: Labor savings from reduction in travel time. Reduction of PRN hourly costs at $23/hr average salary. 7: Total Project Costs = Total Short-Term Cost + Total Long-Term Cost 8: Total Project Savings = Maintenance Savings on Cytospin + Total Long Term Savings 9: Simple Pay Back Period = Total Project Costs / Total Project Savings Lauren Milne began working with MECS in May 2004 and will graduate with a Bachelors of Science May She is active in the University of Florida s student chapter of Institute of Industrial Engineering. Mary Hageman began working with MECS in September 2004 and will graduate Magna Cum Laude with a Bachelor of Science in December She is active with the local Institute of Industrial Engineering Society, Alpha Pi Mu and recently joined SHS. 6 Figure 9: Project Financial Impact, with Notes and Assumptions for all Financial Implications Acknowledgements The would like to thank Christy Ulm, Pam Core, Tom Jensen and the rest of the lab technicians at AGH Core Lab for their valuable assistance that made the completion of this study possible. References Don Tapping and Tom Shucker Value Stream Management for the Lean Office. New York, NY: Productivity Press. Biographical Sketch Lauren Milne and Mary Hageman are Interns with (MECS) at Shands HealthCare. They are both students majoring in Industrial and Systems Engineering at the University of Florida.
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