Virginia Mason Medical Center And The Toyota Production System

2479 words - 10 pages

Part 1 - Kaplan's Goal and Rationale in Adopting TPSDr. Gary Kaplan very much believed in the corporate culture of Virginia Mason Medical Center (VMMC) and in the case study states that it was the collaborative team approach that attracted him to VMMC. However, when he took over as CEO in 2000, the medical center was losing money for its first time in history. Kaplan had to move VMMC to become a learning organization that could be lean, and compete within a very competitive industry during a period of poor economic conditions. Transforming any organization is a formidable task and in VMMC's situation, there were two major impediments. First, VMCC had well entrenched practices of doing things the way they have always been done referred to as "routines".1 From the heuristic perspective, the routines and minor incremental changes to the routines had worked well for the VMMC through the years with the physicians retaining their sense of entitlement and autonomy without much involvement in setting organizational goals and little requirement to work for the greater good rather than themselves. However, now there was a change in the economic and competitive environment that required a new business model that could adapt to its environment. Second, VMMC was a large facility and large organizations can be slow to change and become learning organizations. The technological environment in health care had changed rapidly and Kaplan recognized that VMMC had become inefficient. For example, improvements were needed in overall layout of the facility's treatment areas and in vital services as lab and pharmacy. Under contingency theory, technology and task interdependence factors best describes why VMMC had become stagnant - the homogeneous and stable environment of the past was gone and VMMC was not adapting to the new environment. 2 Kanter believes that larger companies must become insolvent and leave the industry to be succeeded by a new entity better adapted to its environment. 3 However, Kaplan certainly did not agree with this belief and he decided to turn VMMC around. He decided that the formal structures of VMMC had to be de-linked from its current money losing activities. His initial steps in his turnaround strategy required immediate action. Kaplan carefully formulated VMMC's vision and created a strategic plan through input from all levels of the organization. VMMC's mission would put the patient first and the hospital would become a quality and safety leader through collaboration and embracing change. What he needed was a systematic method to achieve these goals. The Toyota Production System (TPS) has been interpreted as a model comprising vision, principles, toolbox, and the ability to learn as an organization.4 Kaplan studied the TPS and saw that Toyota's goals were aligned with VMMC's goals. Central to TPS's core principles is that an organization must take on a philosophical sense of purpose. Kaplan felt he could leverage the unique VMMC...

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