It’s June 2001, and I’m standing on the production floor of the Toyota Car Company in Toyota City, Japan. I’m awestruck at the level of organization I see at every turn. Tools are color-coded and placed at arm’s reach, and the employees are performing a well-choreographed dance of seamless production. Nothing is wasted; nothing is overlooked. On this day the company is running at 98 percent efficiency, with less than one percent defects and only ten minutes of operating inventory at any given time.
The production manager tells me that Toyota’s organizational secret is actually very simple. “We view production problems as opportunities, not inconveniences. Of course, there is more to the organizational equation, but this is the most basic and important lesson to learn,” he says. I begin to realize the simplicity of this message and how easily it can be applied to the O&P industry. And the benefit of this organizational secret begins in the most often neglected aspect of many O&P clinics-the production lab.
Revealing Potential Profits
For instance, a common lab production problem that is seen as a major inconvenience is misplaced tools. If we take a closer look we can see exactly how this common problem can detract from a company’s efficiency and profit margin. Let’s take an employee who earns $17 an hour and estimate that this employee wastes 15 minutes a day looking for misplaced tools. At $17 an hour, this is costing the company an estimated $3,000 dollars a year.* It’s scary when you start doing the math. Misplaced tools comprise a relatively simple problem with many possible solutions, but why are so many O&P production labs “living with” this problem? As insurance reimbursements get lower and lower each year, it’s hard to ignore the potential profits hiding in the simple ways of fixing these inconveniences.
I have been reading business organization books for years and have had some degree of success integrating their theories into my workplace. But the way I view O&P lab production management changed that June in Japan when I studied with a consulting group directed by Takeshi Kawabe. Mr. Kawabe was the pupil of Taiichi Ohno- the father of Toyota’s production system and the man who brought Toyota’s simple secret, called “lean manufacturing,” to the modern world. In a nutshell, lean manufacturing is based on the principles of zero defects, one-piece flow (completing one job at a time) and just-in-time inventory.
On this trip, our group also toured Toyo Pneumatics, Neosys, Takagi, Toyota Home, and Denso-all large companies that have been practicing lean manufacturing for many years with great success. Their success is based on the philosophy that organization is the culture and that viewing problems as opportunities and solving them is rewarded and expected as part of the job, as opposed to the philosophy of living with problems that most companies follow. In the upcoming articles in this series, I will present real-world solutions my employees and I have found as we have worked together to solve problems in our O&P fabrication lab. I will focus on components of lean manufacturing and other simple methods of lab organization, such as improved company communication, tool organization, inventory functionality, and efficient workspaces. These solutions have produced improved profit and cost savings, more production with less effort, better patient care, and more effective employee teamwork.
*These figures can change, based on company pay variables. I estimated these figures on the basis of: $17 an hour employee labor @ 80 hours per month, based on 26 pay periods. Other costs added in were figured on the basis of our company’s benefits costs: 401K, health insurance, Social Security taxes, LNI payments, paid break times, paid vacation, and bonuses.
Greg Mattson, RTPO, is production manager for Cornerstone Prosthetics and Orthotics, and co-owner of Fabtech Systems, both in Everett, Washington. He works with a Japanese consulting group called Gemba, which specializes in lean manufacturing and Kaizen principles. He has been a speaker at O&P conferences and seminars, presenting on “Standards and Structure for Lab Management.”