Reference no: EM132213071

Gary Kaplan, CEO of Virginia Mason Hospital, was responsible for integrating lean production that transformed the efficiency of the hospital. By 2012, Virginia Mason had transformed into a more efficient, customer-responsive organization where medical errors during treatment has been significantly reduced. Among other gains, lean processes reduced annual inventory costs by more than $1 million, reduced the time it took to report lab tests to a patient by more than 85%, freed up the equivalent of 77 full-time employee positions through more efficient processes, and reduced staff walking distance by 60 miles a day, giving both doctors and nurses more time to spend with patients. These, and many other similar changes, lowered costs, increased the organization’s customer responsiveness, improved patient outcomes, and increased the financial performance of the hospital.

1. What do you think were the underlying reasons for the performance problems that Virginia Mason Hospital was encountering in the early 2000s?

2. Which of the four building blocks of competitive advantage did lean production techniques help improve at Virginia Mason?

3. Lean production was developed at a manufacturing firm, Toyota, yet it is being applied in this case at a hospital. What does that tell you about the nature of the lean production philosophy for performance improvement?