What does an automobile assembly line have to do with a two-surface composite? Quite a lot, as it turns out.
After World War II, the Japanese economy lay in ruin. In only a few decades, it quickly grew to become the second largest economy behind the United States. There are numerous explanations for what is called the Japanese Economic Miracle, and at the forefront are the industrial engineering systems that are still being studied in business schools around the world. These systems, originally attributed to the Toyota Motor Corporation, are known as the Toyota Production System (TPS).
Toyota’s approach to manufacturing was revolutionary. Their competitive advantage wasn’t that they were using some state-of-the-art equipment; it was their management philosophy. Toyota created a culture for improving efficiency and reducing waste. They systematized improvement.
Lessons from the TPS are not just for large manufacturers. Small businesses—and even dental practices—can adopt the Toyota philosophy and adapt it for their own purposes.
Terminology
Before we can discuss the applications to our profession, it would be worthwhile to familiarize ourselves with some of the jargon of the TPS.
Kaizen—This is the concept at the center of the TPS. The literal translation means change (kai) to become good (zen), but the philosophy can be translated more appropriately as continuous and incremental improvement. Managers encourage employees to discover better ways to do their jobs (bottom-up), which is quite different from telling them how (top-down).
Lean thinking—Lean concepts in manufacturing date back to a time before kaizen. The very concept of an assembly line (made popular by Henry Ford, to stay with our automobile references) is lean. What are the most efficient ways to make something? How do we reduce waste while making it?
Muda—This is often translated as waste. For manufacturers, there are many types of waste on the production line: inventory that spoils, bottlenecked systems that lead to less production, defective products that have to be thrown out . . . you get the idea. If you want to do a deeper dive, muda generally just refers to wasted product/materials. Mura refers to inconsistent workflow, which can lead to wasted time and bottlenecks. Muri refers to strain on people and equipment, which can lead to them reaching their breaking point.
Six Sigma—This is a set of statistical tools Motorola developed and used to reduce variation (mura) in the manufacturing process.
Just-in-time production (JIT)—In a perfect world, workers on an assembly line receive a new batch of raw materials only moments after they run out. This would achieve the perfect balance of inventory and efficiency. There’s no excess material lying around and no waiting for new material to come in. JIT often uses a communication system for workers to signify when materials are ready to be exchanged, which is sometimes referred to as kamban. In traditional manufacturing, a kamban was a signboard or card that created a paper trail as it was passed between workers.
PDCA (plan–do–check–act) cycle—This is also known as the Deming wheel, after Dr. William Edwards Deming, one of the American engineering experts who went to Japan after World War II to teach industrial manufacturing. The elements of the cycle are: (1) plan—identify the problem and hypothesize a solution, (2) do—test the solution, (3) check—use data to evaluate the solution, and (4) act—if the results are positive, standardize the solution; if they are negative, test a new hypothesis. This process has been referred to as the scientific method for business.
Gemba—The Japanese word for the actual place. The idea is that in order for management to discover and solve production problems properly, it has to actually go to the production line. The gemba walk is the act of executives walking around their facility to observe and interact with the workers.
We can begin to think of ways to bring these tools into the dental profession. Sure, we’re not managers overseeing an assembly line; we’re providers of a health-care service. But concepts of continuous, incremental improvement and waste reduction apply to every business. Here are some ways you can bring lean thinking into your dental practice.
Systems development
Don’t you hate it when you tell your team to start a new system and it doesn’t get adopted? You have a bright idea about decreasing your patient accounts receivable, so you sit down with your front desk personnel to get them on board. They nod their heads in agreement and the meeting adjourns. Months later, you wonder whatever happened to your new AR system, so you call another team huddle. You learn that they tried your idea, but they gave up because it didn’t really work for various reasons. Does this scenario sound familiar?
Here’s what the kaizen approach would look like. You call your front desk team together and introduce them to the PDCA cycle. After identifying the problem of poor patient collections, you ask them why they think this is a problem and how it can be solved. Let them tell you why something is broken and how it can be fixed. They are akin to the assembly line workers; they are on the front lines, so they understand the situation better than you do. Plus, when they are the ones who create a possible solution, they will have much more ownership of it. They’ll take more pride in its implementation than if you had just told them what to do.
In the following weeks, you continue to meet briefly to check on how the system is working. This is the check phase of the PDCA cycle. You can call on your local CareCredit representative to review some best practices in case presentation with your team. The system evolves. You can do a gemba walk to the front desk and watch as your team handles presenting financial plans to your patients. The system evolves again. As you run through the cycle, your new system grows through continuous, incremental steps. After a few months, with patient AR numbers dropping, you solidify the method you’ve developed in your book of systems during the act phase. In a year’s time, you bring the team back together and review the process for other opportunities for improvement. A good system is never finished!
Inventory control
Wouldn’t it be great if your material supply order came in the exact moment you squeezed out that last bit of impression material? Of course, that kind of just-in-time delivery is not possible given the vast number of products we use every day in practice. We do have to maintain some level of inventory. Inventory management is a system like anything else, and rarely do systems simply perfect themselves by accident.
First, review your current inventory with your dental assistant or whomever helps put your supply orders together. Go through each SKU (stock-keeping unit) of disposable material you maintain and assess what a proper inventory would be. Determine the minimum volume of products you need to maintain your inventory. This will eliminate any guesswork of when to order more. There are some items that you run through quickly and simply cannot do without. These SKUs should have a larger minimum volume. For example, I could easily run through four cartridges of impression material on a busy day. If it takes 48 hours from order to delivery, then a minimum volume of eight cartridges would be prudent.
Next, set a monthly materials budget. Dental CPAs and consultants recommend materials costs to be around 5%–7% of your overhead. Based on your gross income per month, you can give your team a budget for ordering materials that will help prevent unnecessary inventory. If you find you are regularly over budget, you can start to explore reasons why.
One reason may be that you are ordering too many materials out of habit and they are simply expiring. A newer generation of composite resin that is able to mimic multiple Vita shades, such as Filtek Supreme (3M), allows us the opportunity to cut down the SKUs we keep in inventory and thus reduce the risk that they won’t get used before they expire. Another reason you may be exceeding your budget could be due to wasted material. Adhese Universal VivaPen (Ivoclar) battles the bottled bonding agent problem of excess material being dispensed and wasted. Investigate dental materials that help you reduce muda by reducing inventory that can expire or be wasted.
By the 1980s, the Japanese approach to industrial engineering began to spread to manufacturers worldwide. It’s time for dentistry, both small private practices and large DSOs, to learn how to be lean. This is not about buying the cheapest materials to cut overhead. These principles represent a new philosophy for management and a cultural change for the entire dental team. It’s about celebrating the small changes we can make to improve our businesses and patient outcomes.
