Mid-size clinical laboratory optimizes workflow, processes specimens faster, and saves $1.5 million in excessive reagent material use and billing system corrections.
The highly competitive nature of the medical-testing industry means that any process hiccups and failure to keep customer promises can result in lost business or jeopardize future business opportunities. Applying the same lean principles used in manufacturing plants to boost reliability and efficiency while improving productivity, this case study reviews TBM’s work with a midsize lab to optimize workflow and meet customers’ early morning delivery requirements.
Promising results by 7:00 a.m. the next day, the pathology lab faced the daunting task of processing up to 30,000 specimens overnight. Throughout the late shift, over 120 employees scurried about trying to process all of the samples, which the operation received through the late afternoon and into early evening. Despite significant overtime and hiring more people—who only added more chaos and further reduced productivity—the lab regularly exceeded the target delivery times by one to two hours.
Initial observations by TBM quickly identified some of the challenges. The specimens arrived at the lab in uneven “drops,” some much bigger than others, creating an unbalanced production flow that often resulted in bottlenecks.
Challenge: Serving hospitals, doctors and other health care providers, the lab struggled to deliver results by 7:00 am. the next morning. The operation had to receive, split and test specimens (up to 30,000) that it received through the late afternoon and early evening. Excessive reagent use was costing the lab $2 million per year.
The arrival of every batch would trigger a flurry of activity, with material handlers traveling from workstation to workstation to deliver recently received samples or move them to another bench for additional processing. Test operators could often be found walking around looking for supplies or something to do when they ran out of work. Large amounts of work-in-process would regularly accumulate in the work areas, indicating a lack of flow and an imbalanced workload.
Another challenge was the poorly controlled use of reagents. Excessive calibrations, workers disposing of vials that still had some usable material in them, and expired reagents that then had to be discarded added up to several million dollars in material losses per year.
Solution: Through kaizen events, TBM worked with lab managers and workers to analyze and optimize reagent use and design workflows to eliminate wasteful activity and improve productivity.
TBM worked with the lab to arrange for smaller, more frequent pickups of specimens within a 200-mile radius. The lab is also transferring the process of receiving specimens from more distant locations to its collection centers. This strategy, combined with the frequent local pickups, was expected to help level production and reduce excessive inventory.
Regarding reagent use, TBM worked with a cross-functional kaizen team to determine how many pieces of equipment were essential—and therefore required calibration—during testing processes. In addition to optimizing equipment usage, the lab workers came up with a simple method for monitoring reagent usage and waste. They placed bins near the workstations for discarded reagent vials. The process improvement team then created a log sheet to record discarded items. This helped managers track how much reagent was being used and wasted.
Results: More reliable delivery ultimately improved customer satisfaction rates, and productivity improvements earned the lab more business from a sister facility. Reagent material savings and a billing system correction saved $1.5 million per year.
Initial measurements, process changes and controls, combined with several other refinements to reagent procedures, saved the lab more than $500,000 a year. During the initial project, the team also discovered a software glitch in the billing process. If any one of a series of tests did not execute properly – even if all the other tests for the patient were successful – a glitch in the system would not bill the entire series. Correcting the error enabled the lab to recoup more than $1 million annually.
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