A Tip from Toyota: Sun Prairie Clinic Embraces Japanese-Style Inventory Management

The UW Health Sun Prairie Clinic is running lean and mean after adopting a "just-in-time" inventory management system inspired by Toyota.

First implemented at the clinic in late 2007, the new system has since reduced inventory waste at the clinic, increased staff productivity, and saved thousands of dollars in supply costs.

In fact, it's been so successful that it serves as a training model for other UW Health clinics, and has the potential to save tens of thousands of dollars system-wide.

The Kanban Idea, Translated

The inventory management system is influenced by the "just-in-time" production processes first developed at Toyota over 20 years ago. In manufacturing, "just-in-time" means making only what is needed, when it is needed, and in the amount needed.

More specifically, the system revolves around a concept called Kanban—a Japanese word that loosely translates as "signal." A Kanban—in this case, a laminated, color-coded label for each supply—serves as a visual reminder when it's time to replenish an item.

Here's how the system works at Sun Prairie:

1. First, clinic staff created a master list of every item-and the quantities of each-needed in its exam rooms. This list is standardized so that each room is set up exactly the same.
2. From this list, staff created laminated labels that correspond to every item. These labels are placed with each item, and list the item name, how many should be stocked in the exam room, at what point the item should be restocked, and its location in the supply room.
3. When clinic staff see that an item needs to be restocked, they place the label in a basket at the nursing care team.
4. Several times a day, another staff member checks the baskets and replenishes supplies as indicated.

The clinic uses the same process for supplies in its treatment rooms. In addition, it made up kits containing all the supplies needed for specific procedures. These kits are stored centrally at the nursing care team, and as they are used, staff signal for restocking just as they would for exam room supplies.

According to Clinic Manager Cynthia Haase, the system is easy to understand, teach, and use. "Once you see the labels, it's very self-evident. For example, I've had floats work in the clinic, and after I show them one of the labels, they understand right away."

Saving Space, Time, and Money

The biggest benefit of the system, according to Haase, is that it manages the flow of supplies through the clinic. "We only have to order supplies once a week now," she said. "And when we do, we only order what we need."

Not only does that save space and staff time, it saves money. "In our clinic we initially saved $150 per exam room by not ordering too many supplies up front. When you have 21 exam rooms, that adds up," Haase said. "Plus, we have yearly savings because we're not overstocking on items that might expire before we use them."

As a bonus, the system also simplifies the yearly inventory process. "If everything in the room is stocked, all we have to do is count rooms," said Haase. "The rest we can pull from our master list."

Encouraging System-Wide Implementation

If the Kanban system can save one clinic a few thousand dollars, imagine what it could do if it were implemented in other UW Health clinics. That's why Haase has been asked to lead training sessions with clinic managers throughout the organization.

She emphasized that each clinic will need to invest time and energy up front, but the system itself is relatively easy to implement. In fact, she shares her master lists, kits, and labels so each clinic can adapt them to their own needs.

Haase also added that the Sun Prairie Clinic was not the first to adopt this type of inventory management system. The idea was pioneered nationally at Virginia Mason Medical Center in Seattle, and here at UW, was first piloted at the Odana Atrium Clinic.

Ultimately, the more clinics that learn about this system, the greater the savings. "As an organization, we always need to find ways to cut costs and be more efficient," Haase said. "Everyone is taking a hard look at lean management, especially in this economy."