Implementing operations strategy through Lean processes within the South Africa’s healthcare system :The example of NHS in the UK by: Olga Matthias and Steve Brown
School of Mechanical, Industrial and Aeronautical Engineering University of the Witwatersrand Johannesburg, South Africa -2018-
Abstract: The purpose of this paper is to investigate how operations strategy and lean concepts can be applied within the south Africa’s healthcare organisations and the degree to which both Lean and operations strategy are understood by senior-level National Health Service (NHS) personnel, based on the process of ongoing longitudinal cases studies. Further interviews and data analysis will examine actual performance of Lean capabilities within the NHS.
For this explanatory multiple-case study project the authors collected data through semi-structured interviews with executives in the NHS to understand how operations strategies are developed in the NHS and implemented in NHS hospitals. The unit of analysis is the hospital. Multiple (22) interviews took place over 12 months with senior-level personnel responsible for implementing change via operations strategy goals, and incorporating Lean initiatives. In addition, to triangulate data, the authors examined healthcare reports and strategy policy documents from each case hospital. This forms stage 1 of a longitudinal study which will examine the actual performance of Lean within the NHS hospitals across a range of operations parameters and explore links between such capabilities and the role and importance of operations strategy in more detail.
Operations can provide a competitive advantage for an organisation through 5 objectives. These being quality, speed, dependability, cost and flexibility. The South African public healthcare system is popular for poor quality standards no speed at all, not dependable, inflexible and very costly to the tax payer (who actually purchases private care for themselves) – though at minimal to no cost to the consumer of the service. With government’s plan to implement NHI, with somewhat similar principles to NHS, it would be encouraging for the current consumer of private healthcare if the public sector differentiated themselves through some of the performance objectives, indicated above.
In general, a big portion of the South African budget is consumed by the Department of Health, meaning there is a big chunk of the Taxpayer’s money directed to this aspect of the economy. Service delivery remains suspect. Customer care (patient care) is poor. Same customer is a Stakeholder (tax payer), and gets no value, rather gets taxed more with each year to fund same inefficient business. Application of best practice tools (i.e. Lean techniques) and expertise available (broader Industrial Engineering skills) to the rest of private sector has not been embraced and optimally utilised to the realisation of efficiencies in the public sector.
This article engages on how an operations strategy, capitalising on well-tested quality principles (Lean) could be implemented at a part of the country that consumes much from the fiscus. The learnings and/or findings in the article could be very well used in South Africa to establish the extent to which an operations strategy through Lean processes could be deployed, being cognizant of such factors as the UK being a developed country with an established healthcare system, versus the ‘developing world’ status that South Africa holds, amongst others. A win on this aspect could contribute to an improved utilisation of the fiscus, thus possibly growing the economy.
3. Problem Statement
Study the adoption of operations strategy and improvement practices in relation to key strategic objectives:
-Improving service delivery, customer satisfaction, and reducing costs.
-The application of operations strategy and lean concepts within healthcare organisations.
-The degree of understanding of both operations strategy and lean by senior management.
-Longitudinal studies (this is the first study, the second would focus on the actual Lean performance and examine the links between this performance and Operations.
-Healthcare reports and strategy policy
-Semi-structured interviews with Executives. 22 Interviews over 12 months with senior-level staff – questionnaires.
-Unit of analysis: Hospitals – sample of 6.
4. Market requirements and Operations resource analysis of NHS
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5. Benefits of an Operations strategy
- Development of an operations strategy will assist NHS with long-term capacity decisions considering :
- Customer (patient) experience – expectation.
- Population growth (noting emigration).
- Lifestyle changes and increasing burden of disease.
- Technology changes.
- Economic performance (currency exchange rate fluctuations) – Macro level analysis
- Political climate – macro-level of analysis
- Aligned employment rate, thus the ability to pay for healthcare services
- Supply chain – should NHS be establishing strategic partnerships with suppliers (HCP, equipment suppliers, medicine suppliers, etc)?
- Executives interpreting macro information to create a business strategy (Top-down)
- Senior managers translating the daily operations experiences of customers and suppliers, and feeding these executives (Bottom-up).
- Reconciliation of market requirements (performance objectives) with appropriate resources.
- Identification and implementation of key market differentiating capabilities.
- Embracing best-practice and well established techniques such as Lean thinking to implement change.
- Creation of an operations capability (Capacity, Supply chain, Process technology and organisational development) that responds to market requirements (quality, speed, dependability, cost and flexibility).
- NHS would differentiate themselves to their stakeholders by focussing and delivering on their key performance objectives. Lean would facilitate this differentiation.\
- Cost benefit derived resulting in less funds flowing from the fiscus, possibly influencing less taxation of the public.
 Operations and Information Management, University of Bradford School of Management, Bradford, UK
 Business School, University of Southampton, Southampton, UK