Part I:Process Improvement - Saving $500K utilizing iGrafx and Design of Experiments

Have you ever been faced with having to make a large capital expenditure without knowing the impact to your business? Wouldn't it be helpful for you to be able to analyze the process improvement before making the decision without having to spend a lot of money or drastically changing your operating procedure?

Lets take a look at how process improvement helped this hospital save $500K and improve quality.

Current challenge is that a hospital has a problem with getting urgently needed medication to patients in a timely, reliable, and low-cost fashion.

The current process structure has a main pharmacy with satellite pharmacies each serving several floors in the hospital. The staff would like to reduce the time required to obtain the urgently needed medication, and have a better chance of the medication being available in the satellite pharmacy. In addition, the current process occasionally delivers the wrong medication to the floor. The staff would like to eliminate this opportunity for error.

The current process is modeled on the left side of the process diagram. A potential (new) process using a medication "Vault" system is modeled on the right side of the diagram.

This new process examines the following:

• There is an opportunity to install a vault dispenser for medications on each floor, and remove the satellite pharmacies. The medications would be stored on each floor of the hospital in the specialized dispenser.


• The pharmacy would be contacted for a prescription, but rather than dispensing a medication (med for short), they would provide the nurse an authorization code to access the proper bin in the vault and extract the med.


• The pharmacy would keep status of each dispenser real-time and update each dispenser (4) times daily

Should the hospital invest time and money in improving the current process (e.g., by improving the chance the satellite pharmacy has the needed med), or by implementing the proposed Vault System.

Model Design

The model has two distinct processes. This is done to allow for direct comparison in the experiments. The left path is the current satellite prescription (Rx), or "As-Is", process. The right hand path is the proposed process utilizing the vault system.

The new process only utilizes components of the current process when the medication is not available in the vault dispenser. In that case, the main Rx is used to fill the order.

In Part I of this article we will look at the Responses and model those utilizing iGrafx. Next week in Part II we will take a look at the Factors, and create a design of experiments to analyze the process alternatives with regard to cost, cycle time, and Rolled Throughput Yield.

Responses

The responses of interest are:

• Time: How can we get the med to the patient most quickly; i.e., what is the shortest cycle time? Which process, current or proposed, has the shortest cycle time?


• Cost: Which process, current or proposed, is the lowest cost?


• Defects: What is the Rolled Throughput Yield (RTY) of each process? Each defect endangers patients, potentially in a life-threatening way; so it is critical to minimize defects.

Factors

The factors of interest are:

• Which process? Does the Satellite Rx, or the Vault, process provide the best responses?


• Immediate Med Availability?What's the impact of immediate med availability on the current and proposed process? The Satellite Rx method currently has an 85% chance of having the med. What effect would increasing the availability of the med in the Satellite Rx to 95% have? How does that compare to an 85% or 95% chance that the Vault has the med available?

Utilizing iGrafx we design the process follows as can be seen by clicking here.

Running the process simulation returns us with the following:

• Satellite Rx Process: 659 Defects out of 131,037 opportunities. RTY is 99.4984% at a total cost of $1,116,775.07.


• Vault Dispenser Process: 98 Defects out of 131,036 opportunities. RTY is 99.9252% at a total cost of $646,575.81.

Looking at just the simulation data we can quickly see that the Vault dispenser will not only decrease the number of defects, but also cut the operating expenses almost by half!

In Part II we will explore the optimum settings for the Vault Dispenser through a design of experiments that will give us process alternatives with regard to cost, cycle time, and RTY.

Hawaii Business Consulting is the Value Added Reseller of in Hawaii. If you need to be able to quickly analyze your business processes and identify new solutions, iGrafx is the software package you need. It will enable you to quickly model, simulate, and analyze your data similar to what we have shown in the article. The software starts at $500 and that includes an initial training session with Hawaii Business Consulting.

Give us a call at (808) 224-0470 and we will create a free high-level model of your business process and identify ways in which your business could be saving money through process improvement.