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STANFORD
GRADUATE SCHOOL OF BUSINESS

CASE: 011-41 DATE: I 1/23/2004

PROCESS IMPROVEMENT IN STANFORD
HOSPITAL'S OPERATING Room

I'll tell ,),ou mohnIg. When ,you've got a patient ,you halkn1't got time to gel 017 Me telephone or anything. And I think that's Ithat happening. NOIV they Want its 10 1V1101117is thing, likethis paper QM] all that. Youjust have to take rare oil2our patient.
--Operating room nurse, Stanford Hospital and Clinics

The office was silent as each of the four operating room (OR) Material Flow Committee (MEV) members considered the question before them. What was the next step for process improvement in the OR? Finding an answer to this question was urgent.'Though notable progress had been made in the recent past, complaints from surgeons, nurses and technicians regarding the availability of surgical instrumentation had reached an all-time high. Executives at the highest levels of the organization were demanding a solution. The MFC had been formed to create and implement a plan of action. It was June 2004 and Martha Marsh, CEO of Stanford Hospital andClinics (SHC) was expecting an answer in just under a week; it was crucial they all be in agreement on how to move forward.

The committee consisted of Sridhar Seshadr , vice president for Process Excellence, Nick Gaich, vice president for Materials Management, Candace Reed, director of the Sterile Processing Department (SPD), and Joann Rickley, director of the OR. Seshadri was a recent additionto SFIC's senior management team. An alumnus of the Wharton School of the University of Pennsylvania. Seshadri joined SHC in June of 2003. Prior to SHC, Seshadri was the vice president and general manager of Healthcare Solutions with GE Medical Systems. Healthcare Solutions was responsible for adapting GE's Six Sigma methodology and offering it to healthcare providers to increase quality andefficiency of care delivery. His new role in SHC Process Excellence required that he integrate the ideas and concerns of all stakeholders in order to ensure a project's success. Gaich was a sixteen-year veteran of SHC. Caleb had seen change efforts come and go at SHC; he felt that it was time to embrace instrumentation sterilization and processing as a core competency and invest in the compensation andtraining of employees in that area. Reed was a former OR nurse who had since received an MBA and returned to health care as a consultant and medical sales representative. Reed had SHC as a client prior to her acceptance of the director position; thus Reed was acutely aware of which areas were most in

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Copy/ Iglu 42 2004 by the Board of frusfres of the Leland Stimbard .Junior trnhmrsity, All rights reserved To older copies request permission to reproduce materials, Gmail the Case Illriting (Vice at cuGhrgsb,stantantedu or write: Case IfiraingStatiforil GrimMine School of Business. 518 Alemorial liqv, StanfOrd University, .StahlOrd, CA 94305-5015, No part of this publication nth, he reproduced, stored in a retrieval system, used in a .5/it-eat/sheet or 7un2stnitted in anylbrin or hr any means electronic, mci,Banical, photocapyith, recording, or otherwise ----- without the permission of the Stanlind Graduate School of Business,Process Improvement in Skinflint Hospital's Operating Room 01141

need of capital investment. She believed SEC should focus on investment in additional instruments and information technology to improve efficiencies. Rickley had been with CLIC for 7 years. In her leadership position, she managed a significant portion of the OR budget and she had a unique understanding of both the surgeons' and OR...
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