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The Toyota Way, LEAN, and Six Sigma: A Possible Achilles Heel

Posted Feb 18 2010 12:00am

My previous blog notes have been somewhat critical of one aspect of the Lean and Six Sigma approach to lab management. I have no problem with these management techniques as long as they are viewed as only one facet of a total lab management program and do not crowd out other approaches such as strategic planning. Here's a quote from a note I posted last October (see: Some Laboratory Managers Getting Carried Away by Lean/Six Sigma Projects):

...[L]ab personnel who spend most of their time worrying about "how" or "comment" questions may be too involved with improving daily work processes and perhaps avoiding some of the more challenging "why" or "pourquoi" questions....In order to begin to explore some of these strategic "why" questions, it might help to begin with consideration of the four rapidly developing fields that I think will pose the greatest challenges for labs in the upcoming years: (1) molecular diagnostics; (2) information technology; (3) digital pathology; and (4) ultra-fast histology processing. Here's another "why" question. Is your lab a regional or national leader in these four areas?

Toyota's recent car quality issues have put a spotlight on the "Toyota way" and elicited a new set of questions that previously went unanswered when this approach to management and quality was beyond reproach. Here is an excerpt from one article that takes this tack (see: Toyota’s Blind Spot, subscription required)

Comfortably preoccupied with rooting out internal weakness, the Toyota Way is lost when it comes to contending with outside threats. For such an intense system to function properly, employees have to blindly adhere to it; overconfidence is the natural outcome of this arrangement. Yes, any worker is empowered to stop the assembly line because he spots a flaw. But if a flaw does get through, the company as a whole is loath to admit that the system broke down. The drawbacks of the Toyota Way are unique, but the experience of rising to a peak in business, only to suffer a precipitous fall, isn’t. In the early ’90s, America Online leveraged its Everyman attitude toward the intimidating Internet into a dominant position, only to almost destroy itself in a disastrous merger with Time Warner. An aggressive Web pioneer couldn’t sustain innovation while simultaneously being the No. 1 destination for digital media.

All clinical lab executives need to attend to three key aspects of business: operations, strategy, and fiscal management. An effective strategy, in turn, requires attention to the "outside threats" mentioned in the article above. For me and focusing on the practice of surgical pathology, the major current opportunity/threat is digital pathology and the development of in-house histology labs (see: Corrected Definition for a Pod Lab and a Look at In-Office Labs). The latter are being developed by large clinical group practices, usually GI and GU, who then hire pathologists as contractors to diagnose all of the group's small biopsies. Bringing such work inside takes it away from local hospital-based pathologists and also from the for-profit national surgical pathology reference labs.

These two trends are linked in my mind because I believe that these large clinical groups will rapidly adopt digital pathology/telepathology in order to seek the services of reference lab pathologists for their in-house specimens. The groups will process these tissue specimens themselves, retaining the profitable technical component (TC). Such groups have ready access to capital and sophisticated managers. Their managers are paid to maximize practice revenue and will jump on any new technology that provides better margins and a strategic advantage for the group. Hospital-based pathology groups need to move in this same direction.

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