Strategic outsourcing: a lean tool

of healthcare supply chain

management
Cristina Machado Guimaraes and Jose Crespo de Carvalho
Lisbon University Institute, Lisbon, Portugal
Abstract
Purpose Considering lean thinking inside and beyond the organisations boundaries, in the
extended supply chain, this paper aims to ll a literature gap clearly stating some outsourcing
practices as lean practices and establishing a deployment evolution parallel between both practices.
Design/methodology/approach A literature review was carried out collecting cases of lean
deployment in healthcare, from both scientic and grey literature. Cases were classied according to
lean deployment taxonomy in healthcare settings, showing some differences in lean journey stages in
15 countries.
Findings There is an alignment between SCM thinking in healthcare and lean thinking that places
a SCM decision as outsourcing as a lean practice serving not only strategic intent but solving
operational efciency. There is a match between different outsourcing drivers (transactional, strategic
and transformational) and lean maturity levels. The main constraint to deployment of both lean and
outsourcing practices are cultural differences.
Practical implications Understanding lean and outsourcing different deployment maturity levels
under the national cultural umbrella can open new perspectives to study lean sustainability factors
and better outsourcing relationships in healthcare organisations.
Originality/value This paper presents a merger between the state-of-the art of both lean and
outsourcing practices in healthcare settings and suggests an outsourcing and lean evolving pathway.
Keywords Business improvement, Service design, Supplier or partner selection
Paper type General review
1. Introduction
A key strategic issue of both outsourcing and lean adoption is whether an organisation
can achieve a sustainable competitive advantage on an ongoing basis (McIvor, 2000;
OShannassy, 2008), which implies continuously delivering value to the customer
( Jrgensen et al., 2007).
The scope of lean implementation is not restricted to the boundaries of the company,
but to the entire value chain, and thus to the extended supply chain (Cudney and Elrod,
2011; Womack et al., 1990). However, several misconceptions surround lean
deployment such as considering it a downsizing method, completed or not by
outsourcing decisions. Some studies (e.g. Cudney and Elrod, 2011) reveal the necessity
of outsourcing adopters (including healthcare services) and extend their lean practices
to their suppliers in an attempt to align cultures. But was their outsourcing decision a
lean practice in the rst place? Apart from eliminating redundant work or nding
knowledge specialisation, outsourcing presents several more benets and continues to
drive organisations from vertical to virtual integration (Bowersox et al., 2000). Some
claim that through outsourcing at a strategic level, a company can do more with less
(Insinga and Werle, 2000). Others posit that by outsourcing activities and processes,
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1753-8297.htm
SO
6,2
138
Strategic Outsourcing: An
International Journal
Vol. 6 No. 2, 2013
pp. 138-166
qEmerald Group Publishing Limited
1753-8297
DOI 10.1108/SO-11-2011-0035
organisations supply chains become more exible, lean and agile, and deliver better
value to the customer (Mohammed et al., 2008).
However, the linkage between outsourcing and lean literature has not been made
clearly. This paper aims to ll that gap, clearly stating some outsourcing practices as
lean practices and establishing a deployment evolution parallel between both practices.
Some lean thinking literature misjudges supply chain many constraints, in terms of
value appropriation, as a result of the different power structures that are visible when
mapping the value chain (Cox, 1999). By misperceiving the causal factors of successful
appropriation of the value that lies in the hierarchical distribution of power in a supply
chain, panacea decisions can reveal themselves to be disastrous. However, it is crucial
to understand whether each decision serves only operational efciency or a real
strategy, even knowing that all strategies will collapse, over time, into operational
efciency (Porter, 1996; Prasad, 2010). Considered by some to be a mega-trend in
supply chain management (SCM) decisions (Bowersox et al., 2000), outsourcing
evidence in the healthcare sector shows some differences and similarities among
different countries with different healthcare systems (Guimaraes and Carvalho, 2011).
Those differences are grounded, as we posit in this paper, on cultural aspects.
This paper presents a merger between outsourcing practices in the healthcare sector
(Guimaraes and Carvalho, 2011) and lean deployment in healthcare sector. Moreover, it
sets out to argue the following key points:
.
only some outsourcing drivers t into the lean concept, and therefore only some
kinds of outsourcing can be a lean tool;
.
outsourcing and lean, in healthcare settings, have both hard and soft sides
related to short- or to long-term orientation and depth of scope;
.
the lean journey is a state of mind construction that starts with practices, and so
is the outsourcing journey in the evolution of the relationship; and
.
common lean and outsourcing drivers are related to cultural dimensions that
distinguish the different maturity deployment stages of different national
cultures.
The common elements of lean deployment and outsourcing practices are enhanced
considering the usual context of both phenomena i.e. organisational change. This
paper is aligned with the view that short-term wins encourages change process, but
what make change stick, in the long-term, is to pursue in daily basis the new shared
values, rooting behaviour to a culture building (Kotter and Cohen, 2002). Therefore, the
culture construction is explained throughout Lean and outsourcing common cultural
elements and illustrated by the state-of-the art of both practices in Healthcare settings.
2. Outsourcing as a strategic lean tool
2.1 A strategic decision in supply chain management
Denitions of supply chain management (SCM) in the literature appear mostly with a
strategic frame, such as that in Mentzer et al. (2001):
. . . the systemic, strategic coordination of the traditional business functions within a
particular company and across businesses within the supply chain, for the purposes of
improvement the long-term performance of the individual companies and the supply chain as
a whole.
Strategic
outsourcing
139
In fact, and as postulated by Christopher (1997), the competition is not between
companies but between supply chains. Thus, organisations core capabilities lie in their
ability to design and manage their supply chains in order to have maximum advantage
in a continuously changing market (Marcus, 2010). This ability, or supply chain
management thinking, implies that supply chain design and management should be
considered key strategic issues for obtaining competitive advantage.
As strategy emerges from a decision process (Eisenhardt, 1999), the result of the
strategic evaluation of make or buy (Ohmae, 1982) is often to transfer activities (along
with related resource management decisions) to third parties, i.e. outsourcing (Greaver,
1999). Outsourcing also refers to activities not previously performed in-house and it
differs from subcontracting and contracting-out by having the premises of long-term
relationships and the obligation of not only means but also results (Kakabadse and
Kakabadse, 2003). The starting point for analysis is the disaggregation of the value chain
into pieces subject to allocation geographically (offshoring) and organisationally
(outsourcing) (Contractor et al., 2010). This exercise requires a process-oriented view
(Davenport and Beers, 1995; Hammer, 2007; Kohlbacher, 2010).
Outsourcing has become a multifaceted phenomenon with a broader set of issues
(i.e. motivation, scope, performance, decision making, contract, and more recently,
partnership) that map the evolution of outsourcing research (Lee et al., 2000), setting a
wide spectrum of relationships (Ballou, 2003, p. 716; Franceschini and Galetto, 2003;
Sanders et al., 2007). From reviewing the literature on the conceptual background to
outsourcing and on outsourcing practices, we identied a paradigm shift (a completely
different mental framework for interpreting facts; Kuhn, 1970) from the classical
outsourcing paradigm to a new outsourcing paradigm. Kakabadse and Kakabadse (2000)
claim that this shift is due to the Westernisation of the Japanese kieretsu model, which
emphasises the exibility of lean and mean structures focused on core competencies,
leading to doing more with less. Each of the three different paradigms is supported by a
theoretical support from transaction-cost analysis (TCA; Williamson, 1979) and agency
theory (AT; Eisenhardt, 1989), to the resource-based view (RBV; Prahalad and Hamel,
1990). The RBV is in fact a knowledge- based view (KBV), especially when related to the
outsourcing of services. More recently, the transformational view (Linder, 2004a-c) has
placed outsourcing as a strategic SCM tool, allowing the redesign of the organisation
value creation process and also, sometimes, its mission (Schneller and Smeltzer, 2006).
This change of mindset regarding outsourcing theory and practices is shown in Table I.
Despite each of these three paradigms relation to the specic decade of rst visible
practices, all three are coexistent nowadays, disclosing the type of mindset of each
outsourcing organisation.
Outsourcing decisions, if only taken at the operational, level can lead to
dependencies that create strategic vulnerabilities (Insinga and Werle, 2000). On the
other hand, at a strategic level, outsourcing can present a solution for doing more with
less. Focusing on essential activities, there is the danger of losing strategic intent when
the following are not assured at the operational level:
.
alignment with business strategy;
.
clarication of core capabilities and competences;
.
identication of strategic gaps; and
.
recognition of signicant dependencies and vulnerabilities.
SO
6,2
140
I
s
s
u
e
s
T
r
a
n
s
a
c
t
i
o
n
a
l
o
u
t
s
o
u
r
c
i
n
g
(
1
9
7
0
s
a
n
d
1
9
8
0
s
)
S
t
r
a
t
e
g
i
c
o
u
t
s
o
u
r
c
i
n
g
(
s
i
n
c
e
t
h
e
1
9
9
0
s
)
T
r
a
n
s
f
o
r
m
a
t
i
o
n
a
l
o
u
t
s
o
u
r
c
i
n
g
(
t
w
e
n
t
y
-

r
s
t
c
e
n
t
u
r
y
)
T
h
e
o
r
e
t
i
c
a
l
b
a
c
k
g
r
o
u
n
d
T
C
A
A
T
R
B
V
M
B
V
R
e
l
a
t
i
o
n
a
l
v
i
e
w
N
e
t
w
o
r
k
t
h
e
o
r
y
D
e
c
i
s
i
o
n
d
r
i
v
e
r
s
C
o
s
t
(
p
r
o
d
u
c
t
i
o
n
a
n
d
t
r
a
n
s
a
c
t
i
o
n
)
r
e
d
u
c
t
i
o
n
s
t
r
a
t
e
g
i
e
s
F
u
n
c
t
i
o
n
a
l
s
p
e
c
i
a
l
i
s
a
t
i
o
n
C
o
m
p
e
t
i
t
i
v
e
n
e
e
d
s
D
i
f
f
e
r
e
n
t
i
a
t
i
o
n
s
t
r
a
t
e
g
i
e
s
M
a
r
k
e
t
a
d
a
p
t
a
t
i
o
n
/

e
x
i
b
i
l
i
t
y
C
o
m
p
e
t
i
t
i
v
e
a
d
v
a
n
t
a
g
e
I
m
p
r
o
v
e
t
i
m
e
t
o
m
a
r
k
e
t
M
i
x
e
d
s
t
r
a
t
e
g
i
e
s
(
e
x
t
e
n
d
e
d
s
u
p
p
l
y
c
h
a
i
n
)
R
e
i
n
v
e
n
t
t
h
e
b
u
s
i
n
e
s
s
K
i
n
d
s
o
f
a
c
t
i
v
i
t
i
e
s
N
o
n
c
o
r
e
a
c
t
i
v
i
t
i
e
s

P
r
o
b
l
e
m
a
t
i
c

f
u
n
c
t
i
o
n
s
S
i
n
g
l
e
f
u
n
c
t
i
o
n
C
o
r
e
a
n
d
n
o
n
-
c
o
r
e
a
c
t
i
v
i
t
i
e
s
S
e
t
o
f
a
c
t
i
v
i
t
i
e
s
M
u
l
t
i
-
f
u
n
c
t
i
o
n
C
o
m
p
l
e
t
e
p
r
o
c
e
s
s
(
B
P
O
,
b
u
s
i
n
e
s
s
p
r
o
c
e
s
s
o
u
t
s
o
u
r
c
i
n
g
)
K
i
n
d
s
o
f
a
g
r
e
e
m
e
n
t
s
C
o
s
t
/
e
f

c
i
e
n
c
y
e
v
a
l
u
a
t
i
o
n
D
e
c
i
s
i
o
n
b
a
s
e
d
o
n
p
r
i
c
e
a
n
d
m
a
r
g
i
n
b
a
r
g
a
i
n
S
h
o
r
t
t
e
r
m
(
u
p
t
o
t
h
r
e
e
y
e
a
r
s
)
A
g
e
n
t
-
p
r
i
n
c
i
p
a
l
r
e
l
a
t
i
o
n
s
h
i
p
I
n
d
i
v
i
d
u
a
l
o
u
t
s
o
u
r
c
e
r
V
a
l
u
e
c
o
m
p
l
e
m
e
n
t
a
r
y
e
v
a
l
u
a
t
i
o
n
D
e
c
i
s
i
o
n
c
e
n
t
r
e
d
i
n
t
a
n
g
i
b
l
e
,
i
n
t
a
n
g
i
b
l
e
a
n
d
p
r
o

t
s
h
a
r
e
L
o
n
g
t
e
r
m
(
t
h
r
e
e
t
o
s
e
v
e
n
y
e
a
r
s
)
S
y
n
c
h
r
o
n
i
s
e
d
r
e
l
a
t
i
o
n
s
h
i
p
s
M
u
l
t
i
p
l
e
v
e
n
d
o
r
s
V
a
l
u
e
c
r
e
a
t
i
o
n
e
v
a
l
u
a
t
i
o
n
A
l
l
i
a
n
c
e
s
a
n
d
p
a
r
t
n
e
r
s
h
i
p
s
C
o
o
p
e
r
a
t
i
v
e
r
e
l
a
t
i
o
n
s
h
i
p
(
t
e
n
t
o
1
5
y
e
a
r
s
)
V
i
r
t
u
a
l
o
u
t
s
o
u
r
c
e
r
(
n
e
t
o
r
s
e
r
v
i
c
e
c
l
u
s
t
e
r
s
)
S
o
u
r
c
e
s
:
B
e
t
t
i
s
e
t
a
l
.
(
1
9
9
2
)
,
B
r
o
w
n
a
n
d
W
i
l
s
o
n
(
2
0
0
5
)
,
B
u
s
t
i
n
z
a
e
t
a
l
.
(
2
0
1
0
)
,
C
o
a
s
e
(
1
9
8
8
)
,
C
o
n
n
e
r
a
n
d
P
r
a
h
a
l
a
d
(
1
9
9
6
)
,
E
i
s
e
n
h
a
r
d
t
(
1
9
8
9
)
,
F
o
r
d
(
1
9
9
0
)
,
F
r
a
n
c
e
s
c
h
i
n
i
a
n
d
G
a
l
e
t
t
o
(
2
0
0
3
)
,
G
r
a
n
d
o
r
i
(
1
9
9
7
)
,
K
a
k
a
b
a
d
s
e
a
n
d
K
a
k
a
b
a
d
s
e
(
2
0
0
0
,
2
0
0
3
,
2
0
0
5
)
,
K
e
l
l
e
y
(
1
9
9
5
)
,
K
u
l
k
a
r
n
i
a
n
d
H
e
r
i
o
t
(
1
9
9
9
)
,
L
a
c
i
t
y
e
t
a
l
.
(
1
9
9
5
)
,
L
e
e
e
t
a
l
.
(
2
0
0
0
)
,
L
i
n
d
e
r
(
2
0
0
4
a
-
c
)
,
L
i
u
(
2
0
0
7
)
,
L
o
n
s
d
a
l
e
a
n
d
C
o
x
(
1
9
9
7
,
2
0
0
0
)
,
M
a
d
h
o
k
(
2
0
0
2
)
,
M
o
w
e
r
y
e
t
a
l
.
(
1
9
9
8
)
,
M
u
l
l
i
n
(
1
9
9
6
)
,
P
e
i
s
c
h
(
1
9
9
5
)
,
P
r
a
h
a
l
a
d
a
n
d
H
a
m
e
l
(
1
9
9
0
)
,
Q
u
i
n
n
(
2
0
0
0
)
,
Q
u
i
n
n
a
n
d
H
i
l
m
e
r
(
1
9
9
4
)
,
S
a
n
d
e
r
s
e
t
a
l
.
(
2
0
0
7
)
,
W
i
l
l
i
a
m
s
o
n
(
1
9
7
9
)
Table I.
Outsourcing paradigm
shifting
Strategic
outsourcing
141
This strategic intent means more than the t between resources and current
opportunities; it seeks the mist between resources and long-term ambitions (Hamel
and Prahalad, 1989). Likewise, the outsourcing decision, when serving strategic
intents, brings broader results at the organisational performance level, instead of only
pursuing the tactical and punctual purposes of cost reduction (Willcocks et al., 1995;
DiRomualdo and Gurbaxani, 1989).
There are yet other reasons for outsourcing that cannot be called strategic but can
be called isomorphism within an economic sector (DiMaggio and Powell, 1983).
According to DiMaggio and Powell (1983), this isomorphism can assume three
different aspects:
(1) a coercive isomorphism, when driven by government stipulations such as a
privatisation program;
(2) a mimetic isomorphism, where a set of changes in environmental factors
provokes a standard response; and
(3) a normative isomorphism, when members of a sector look at outsourcing as the
strategy to pursue.
This isomorphism can serve institutional legitimacy purposes (Martin and Bourgeois,
2007) in a sort of bandwagon attitude. However, and according to Hannan and
Freeman (1984), following the leader without any efciency concerns in ongoing
outsourcing practices shows organisational inertia.
Hence, not all outsourcing arrangements can be called strategic relationships. In
Sanders et al.s (2007) study in manufacturing and services settings, outsourcing
relationships can be classied according to the scope of the activities (from
out-tasking to full outsourcing) and criticality (from tactical to strategic) spectra.
Thus, non-strategic transactions encompass low criticality tasks with limited scope,
usually commodities with higher levels of standardisation; contractual relationships
refer not to tasks but activities and processes and reect the need for greater
supplier control and dependency even for low criticality activities; partnerships now
include critical tasks in a narrow scope but involving a great deal of trust; and
nally, alliances are the most comprehensive outsourcing relationship, entailing
high levels of criticality and scope involving high commitment, trust, risk and
investment in resources and relationship management. Throughout a two-year
study, Johnston and Staughton (2009) dened strategic relationships as long-term
commitments of mutual co-operation, shared risks and benets with much greater
parity and power sharing between the parties as opposed to transactional
relationships.
Analysing the different outsourcing drivers, the kinds of activities and outsourcing
agreements, one can nd the evolution of the paradigm shift that led to better
satisfaction with outcomes when the strategic intent matches the adopted practice. It is
accepted that successful business strategies result mainly from a shared
understanding of a particular state of mind (Ohmae, 1982).
However, a strategys outcomes are inuenced by several constraints that are
typical of a sector or even a nation. In a thorough literature review of outsourcing
practices in the healthcare sector in different countries, Guimaraes and Carvalho (2011)
present a full perspective considering the following dimensions:
SO
6,2
142
.
decision rationale constraints and drivers;
.
risk/benet assessment for clinical and non-clinical activities; and
.
the particular national health system context.
In this cross-national outsourcing assessment it became clear that healthcare
organisations outsource for the same reasons as in other sectors (Quinn and Hilmer,
1994), mostly in an organisational change context. Healthcare has been considered a
low-volatility sector (Goepfert, 2002) but one that also has riotous periods as a result of
alterations in regulations, more informed and demanding patients, and broader
networking for a bigger care offer range. In the literature on healthcare outsourcing
reviewed, the most cited outsourcing drivers were:
.
cost reduction;
.
risk mitigation; and
.
rapid change without compromising internal resources (value mapping and
value chain reconstruction) (Roberts, 2001).
Cost reduction expectations may not be achieved due to insufcient evaluation of
indirect costs (procurement, transition, bad contracts and monitoring) and social
costs (low morale, low productivity and high turnover) (Kremic et al., 2006).
Outsourcing is also part of a volume exibility strategy (such as in larger
organisations like academic medical hospitals) trying to respond to demand
uctuation, increasing care complexity, and to the linkage between clinical
performance and act volume ( Jack and Powers, 2006). In fact, according to some
authors (Atun, 2006; Campos, 2004), in some European countries that are more
politically reluctant to privatise (the UK, Sweden, Spain and Portugal) outsourcing
of clinical services was a response to waiting lists. Through contracting agreements
with public and private providers (including public-private partnerships; PPPs),
healthcare systems looked for access, quality, equity and efciency advantages
(Abramson, 2001; Liu et al., 2004). Apart from nancial, technological, strategic and
political drivers, organisational and national culture were identied as inuencing
factors. Hence, a well-designed strategy has to consider the organisational and
national culture contexts as deployment constraints.
2.2 Outsourcing and lean drivers in healthcare settings
There is an alignment between SCM thinking, a way of thinking that is devoted to
discovering tools and techniques that provide for increased operational effectiveness
and efciency throughout the delivery channels that must be created internally and
externally to support and supply existing corporate product and service offerings to
customer, and lean thinking, illustrated by Toyotas way of managing relationships
with customers and suppliers (Cox, 1999). Cox (1999) underlines the literature stream
on strategic SCM through collaborative and co-opetitive relationships cohesiveness
with eight dening characteristics of the lean paradigm understood not only in terms
of operational lean production and supply efciency, but also as a different way of
thinking about business strategy. In fact, it is clear in the literature that one of Toyotas
key strategic decisions, the make or buy decision, is a SCM one (Ohmae, 1982; Cox,
1999; Womack et al., 1990, Liker, 2004).
Strategic
outsourcing
143
Thus, when taking a broader view, leanness can be conceptualised in terms of a
quest for structural exibility involving restructuring and outsourcing (Womack and
Jones, 2003; Green and May, 2005). If, from one perspective, outsourcing serves the lean
purpose of doing more with less, meaning fewer xed costs and fewer owned
resources, on the other hand, through outsourcing it is possible to obtain the exibility
a lean organisation requires (Milgate, 2001). The author lists six major building blocks
of a lean organisation:
(1) core competences;
(2) strategic outsourcing;
(3) strategic alliances and partnerships (sorts of outsourcing according to Sanders
et al., 2007);
(4) new management disciplines;
(5) partnership culture; and
(6) technological enablers.
Similarly, other authors (Emiliani, 2004; Maleyeff, 2006, among others), discussing lean
practices in a services setting, identied outsourcing, technology initiatives and
cross-functional collaboration with a perfect ow of information, as key methods to
reduce cost and improve efciency. Illustrating how to pursue lean public
administration in the healthcare sector, Milgate (2001) presents an Australian case
of a regional hospital outsourcing project. It is suggested, in this reported case, that
having as an initial driver accomplishing the 1994 government privatisation
encouragement program, the outsourcing solution assured real added value to
customers (both internal and external). The objectives of seamless integration of
services, the delivery of high-quality health services, cost reduction, risk mitigation
and positive externalities by encouraging health education and training were achieved
and patients could choose between public or private services. In terms of added value
to the nal customer, the rst sceptical reactions were softened by the success of this
project. Nevertheless, the author stresses that this success took ve years of operation.
In a similar context of lack of public funds, static revenues, accumulated debt and
the need to take weight off public providers in the economy, different healthcare
systems, having more or less public weight, looked for lean solutions, sometimes
through outsourcing. However, from some cross-national health system studies (Elling,
1980a, b; McPake and Mills, 2000, Guimaraes and Carvalho, 2011, among others) one
common conclusion is that context differences are crucial to understanding the
advantages and risks of outsourcing in each healthcare system framework.
There is, indeed, a growing pressure on public health services to increase their
efciency by adopting concepts and methodologies more commonly associated with
private enterprise, whether it can be called reengineering by some (e.g. Champy and
Greenspun, 2010) or lean management by others (e.g. Radnor et al., 2011).
In 2003, Womack and Jones (2003, p. 289) introduced the application of lean thinking
in medical services, establishing the difference of putting the patient in the foreground
and owing him through the system, in contrast to leaving him in the background
facing a forest too full of trees. Some authors advocate lean practices in healthcare
services to eliminate delays, and to reduce length of stay, repeated encounters, errors
and inappropriate procedures (Fillingham, 2007; Kollberg et al., 2007; Manos et al.,
SO
6,2
144
2006). Presented as an antidote to muda (waste), converting muda into value, lean
thinking, coined by Womack et al. (1990), stands as a ve-principle improvement
philosophy:
(1) specify value;
(2) identify the value stream;
(3) make the value-creating steps for specic products ow continuously;
(4) let customers pull value from the enterprise; and
(5) pursue perfection.
Waste is dened as any element of a process that adds time, effort or cost but no value
and, in healthcare settings it can assume different forms: over-production of diagnosis
tests (so-called defensive medicine), transportation (patients, equipment, etc),
inventory (clinical and non-clinical supplies) and work in progress (tests waiting
distribution), processing (excessive documentation), waiting (patients being patient),
correction/defects (prescription errors, incorrect information, incorrect diagnosis) and
motion (looking for missing patient information, sharing medical equipment/tools).
Attempts to reduce these wastes are described in the literature with several examples.
In his literature review, Brandao de Souza (2009) presents a taxonomy to classify the
existing published work on lean in healthcare settings. The following classication
given by the author to the empirical cases reported presents an evolution in the scope
of the deployment of lean:
.
Managerial and support addresses cases describing lean approaches in
support services as administrative departments, usually with a single tool (5S) as
department or room-tidying programs.
.
Manufacturing-like classies those cases where there is the use of
manufacturing techniques (single tool of set as 5S, value stream mapping,
poka-yoke devices and visual control) on material management and material
logistics, which thus cannot be called complete lean applications because they do
not including the patient pathway management, the core activities.
.
Patient ow those cases of the elimination of unnecessary steps by
streamlining the patient pathway, usually leading outcomes such as reducing the
length of stay (LOS) and waiting lists as well as quality results for the real
presence of ow and pull concepts.
.
Tools like 5S are used in the standardisation of healthcare practices. An iconic
case is the patient safety alert system ( jidoka) in the Virginia Mason Medical
Centre (USA) (Furman, 2005).
.
Organisational classies cases such as the Theda Care Impovement System
(TIS) (American; Miller, 2005) and the Victoria Mason Production System
(VMPS) and Flinders Medical Centre (Australian) (Weber, 2006; Kaplan and
Patterson, 2008; Ben-Tovim et al., 2007), reported as having an organisational
lean approach. The Bolton Improving Care System (BICS) in the UK (Fillingham,
2007) also shows a broader perspective with the extension of lean to the sector,
and describes the lean journey starting with the managerial and support case,
passing to the manufacturing-like and then patient ow, to become
organisational for reporting lean deployment as the result of a strategic plan,
Strategic
outsourcing
145
thus covering the whole organisation. On the other hand, it would be misleading
to classify the case of Pittsburgh Health Systems (Grunden, 2008) good results
as full lean deployment, according to Brandao de Souzas (2009) classication.
If one emblematic case can serve as a reference to lean deployment in the same
healthcare national system, apparently it is not enough to dene a trend or a
predominant lean scope. It seems important to examine the accuracy of some authors
statements that in terms of application worldwide, Healthcare organisations are at a
stage equivalent to the late 1980s and early 1990s in automotive manufacturing
(Radnor et al., 2011). The pathway described by Hines et al. (2004) clearly suggests an
evolution from shop-oor based tools to a process view, and nally a holistic
understanding of inter-organisation pathways. Hence, a systematic search in electronic
databases (ABI/Inform, B-On, PubMed) was conducted with the purpose of gathering
information and examples from both the scientic and grey literatures (Farace, 1998)
that could show a full picture of lean practices in healthcare. We have excluded articles
concerning hybrid approaches (such as lean Six Sigma) and included all articles that
reported successful or unsuccessful deployments of lean in healthcare organisations, in
peer-reviewed and grey publications using the keywords lean thinking, lean
healthcare, Toyota Production System and lean services. A cross-reference search
encompassing the eligible rst selection was carried out. Cases were classied
according to Brandao de Sousas (2009) taxonomy showing some differences in lean
journey stages in 15 countries, as presented in Table II.
Relating lean maturity levels (LMLs) with outsourcing drivers (ODs) described in
section 2.1, it is possible to establish a relation with the main drivers of transactional,
strategic and transformational outsourcing and the above cases of lean outcomes
regarding each lean maturity stage (Figure 1).
The diagonal darker shade in Figure 1 suggests that transactional ODs seem to be
more related to earlier stages of lean deployment, strategic ODs with the three last
stages, and transformational ODs with full lean deployment or the last stages of lean
deployment. In fact when analysing lean case outcomes in healthcare settings (Table II)
these relations are notorious. Also, the criticality of each kind of activity outsourced,
from ancillary activities (non-clinical) to activities closer to the patient (clinical), can be
matched with the lean scope of each intensity level. Nevertheless, one possible
exercise is to consider an organisation at the beginning of the lean journey, recurring to
outsourcing as a result of a VSM evaluation and have a different outsourcing
arrangement (transactional, strategic or transformational) for each activity in scope
and criticality, and conduct lean auditing of internal and outsourced activities. If lean
deployment stays at a tool and techniques level, the hard level, it might be improving
time or costs, for example, but it can be still far from presenting a better value
proposition. Likewise, if outsourcing presents itself as a shopping practice, as a must
do because of a lack in resources, it will not bring real long-term benets in terms of
the value proposition.
3. Outsourcing and the hard and soft sides of lean in healthcare settings
As reected in (not so many) reported unsuccessful cases, the starting point of in-depth
evaluation of an organisations value chain, common to lean deployment and outsourcing
decision-making (Contractor et al., 2010) is not per se the main success factor, although it
SO
6,2
146
C
a
s
e
s
t
u
d
i
e
s
C
o
u
n
t
r
y
M
a
n
u
f
a
c
t
u
r
i
n
g
-
l
i
k
e
M
a
n
a
g
e
r
i
a
l
a
n
d
s
u
p
p
o
r
t
P
a
t
i
e
n
t

o
w
O
r
g
a
n
i
z
a
t
i
o
n
a
l
U
S
A
T
o
w
n
e
(
2
0
0
6
)
,
B
u
s
h
e
l
l
e
t
a
l
.
(
2
0
0
2
)
,
S
e
r
r
a
n
o
a
n
d
S
l
u
n
e
c
k
a
(
2
0
0
6
)
,
R
u
t
l
e
d
g
e
e
t
a
l
.
(
2
0
1
0
)
,
B
u
e
s
a
(
2
0
0
9
)
,
P
o
o
l
e
a
n
d
M
a
z
u
r
(
2
0
1
0
)
,
K
i
m
e
t
a
l
.
(
2
0
0
7
)
,
H
a
s
s
e
l
l
e
t
a
l
.
(
2
0
1
0
)
,
D
i
c
k
s
o
n
e
t
a
l
.
(
2
0
0
9
b
)
,
Z
a
r
b
o
e
t
a
l
.
(
2
0
0
9
)
,
D

A
n
g
e
l
o
a
n
d
Z
a
r
b
o
(
2
0
0
7
)
,
C
a
n
k
o
v
i
c
e
t
a
l
.
(
2
0
0
9
)
,
R
a
a
b
e
t
a
l
.
(
2
0
0
6
)
K
e
n
t
(
2
0
0
8
)
,
M
a
z
u
r
a
n
d
C
h
e
n
(
2
0
0
9
)
W
e
b
e
r
(
2
0
0
6
)
,
M
e
l
a
n
s
o
n
e
t
a
l
.
(
2
0
0
9
)
,
D
i
c
k
s
o
n
e
t
a
l
.
(
2
0
0
9
a
)
,
P
a
t
e
a
n
d
P
u
f
f
e
(
2
0
0
7
)
,
F
u
r
m
a
n
(
2
0
0
5
)
S
t
o
l
l
e
a
n
d
P
a
r
r
o
t
t
(
2
0
0
7
)
,
L
a
n
g
a
b
e
e
r
e
t
a
l
.
(
2
0
0
9
)
,
W
o
m
a
c
k
e
t
a
l
.
(
2
0
0
5
)
,
T
o
n
k
i
n
a
n
d
B
r
e
m
e
r
(
2
0
0
9
)
,
G
r
a
b
a
n
(
2
0
0
7
)
,
L
u
m
m
u
s
e
t
a
l
.
(
2
0
0
6
)
,
M
a
z
u
r
a
n
d
C
h
e
n
(
2
0
0
8
)
C
a
n
a
d
a
P
a
n
c
h
e
k
(
2
0
0
5
)
W
i
l
l
o
u
g
h
b
y
e
t
a
l
.
(
2
0
1
0
)
T
a
n
i
n
e
e
z
(
2
0
0
5
)
U
K
L
o
d
g
e
a
n
d
B
a
m
f
o
r
d
(
2
0
0
8
)
,
F
i
l
l
i
n
g
h
a
m
(
2
0
0
7
)
,
W
a
l
l
e
y
(
2
0
0
3
)
,
H
e
r
r
i
n
g
(
2
0
0
9
)
H
e
a
t
h
a
n
d
R
a
d
c
l
i
f
f
e
(
2
0
1
0
)
D
e
c
k
e
r
a
n
d
S
t
e
a
d
(
2
0
0
8
)
,
E
s
a
i
n
e
t
a
l
.
(
2
0
0
5
)
,
K
u
l
l
a
r
e
t
a
l
.
(
2
0
0
9
)
B
u
r
g
e
s
s
e
t
a
l
.
(
2
0
0
9
)
,
P
a
p
a
d
o
p
o
u
l
o
s
e
t
a
l
.
(
2
0
1
1
)
,
B
r
a
n
d
a
o
d
e
S
o
u
z
a
a
n
d
P
i
d
d
(
2
0
1
1
)
,
P
a
p
a
d
o
p
o
u
l
o
s
a
n
d
M
e
r
a
l
i
(
2
0
0
8
)
,
E
s
a
i
n
e
t
a
l
.
(
2
0
0
5
)
,
R
a
d
n
o
r
e
t
a
l
.
(
2
0
1
1
)
,
E
s
a
i
n
e
t
a
l
.
(
2
0
0
8
)
,
R
a
d
n
o
r
a
n
d
H
o
l
w
e
g
(
2
0
1
0
)
,
W
a
r
i
n
g
a
n
d
B
i
s
h
o
p
(
2
0
1
0
)
,
B
u
r
g
e
s
s
a
n
d
R
a
d
n
o
r
(
2
0
1
0
)
,
R
a
d
n
o
r
a
n
d
W
a
l
l
e
y
(
2
0
0
8
)
,
L
o
d
g
e
a
n
d
B
a
m
f
o
r
d
(
2
0
0
7
)
T
h
e
N
e
t
h
e
r
l
a
n
d
s
v
a
n
V
l
i
e
t
e
t
a
l
.
(
2
0
1
0
)
S
w
e
d
e
n
S
e
t
i
j
o
n
o
e
t
a
l
.
(
2
0
1
0
)
K
o
l
l
b
e
r
g
a
n
d
D
a
h
l
g
a
a
r
d
(
2
0
0
7
)
,
J
a
c
o
b
s
s
o
n
a
n
d
A
h
l
s
t
r
o
m
(
2
0
1
0
)
,
M
a
z
z
o
c
a
t
o
e
t
a
l
.
(
2
0
1
0
)
,
T
r
a
g
a
r
d
h
a
n
d
L
i
n
d
b
e
r
g
(
2
0
0
4
)
L
i
n
d
s
k
o
g
a
n
d
N
i
l
s
s
o
n
(
2
0
1
0
)
G
e
r
m
a
n
y
S
h
a
r
m
a
e
t
a
l
.
(
2
0
0
7
)
F
r
a
n
c
e
B
a
l
l
e
a
n
d
R
e
g
n
i
e
r
(
2
0
0
7
)
S
p
a
i
n
C
o
r
r
e
a
e
t
a
l
.
(
2
0
0
5
)
I
t
a
l
y
P
o
r
t
i
o
l
i
-
S
t
a
u
d
a
c
h
e
r
(
2
0
0
8
)
D
e
n
m
a
r
k
N
i
e
l
s
e
n
a
n
d
E
d
w
a
r
d
s
(
2
0
1
0
)
,
L
a
u
r
s
e
n
e
t
a
l
.
(
2
0
0
3
)
A
u
s
t
r
a
l
i
a
B
e
n
-
T
o
v
i
m
e
t
a
l
.
(
2
0
0
7
,
2
0
0
8
a
,
b
)
,
K
i
n
g
e
t
a
l
.
(
2
0
0
6
)
S
r
i
L
a
n
k
a
W
i
t
h
a
n
a
c
h
c
h
i
e
t
a
l
.
(
2
0
0
7
)
I
r
a
n
R
a
h
i
m
n
i
a
a
n
d
M
o
g
h
a
d
a
s
i
a
n
(
2
0
1
0
)
B
r
a
z
i
l
A
r
a
u
j
o
e
t
a
l
.
(
2
0
0
8
)
Table II.
Lean healthcare cases
literature taxonomy
classication
Strategic
outsourcing
147
is the one to which both academics and practitioners have given more attention. Some
lean applications to services are claimed to be lean service, but are just applications of
Lean production to materials processing tasks in service companies. Moreover, pursuing
lean principles as standardisation might seem paradoxical in service settings due to the
variability introduced into operations by customers (Kosuge et al., 2010). As reported in
the literature, healthcare organisations started the lean journey by the application of a
set of specic tools and techniques with prominence to VSM, and kaizen blitz or rapid
improvement events (RIEs) (Radnor et al., 2011). In Virginia Masons case (Spear, 2005),
the results if RIEsare described as dramatic improvements in quality, customer
satisfaction, staff satisfaction and protability. On the other hand, Radnor and Walley
(2008) point out the difculty of sustaining quick RIE wins that are not integrated into
the overall strategic objectives of the organisation. When they are part of the strategy
improvement program, RIEs themselves can be a powerful means to both engage and
motivate the workforce and allow a number of small changes to occur, producing a sort
of a buttery effect. Organisations often run a series of RIEs and call them lean or
process improvements, whereas in reality it is just kaizen (continuous improvement).
According to Barraza et al. (2009), in continuous improvement (kaizen) events the length
of implementation varies according to the extension of activities. In healthcare settings,
Proudlove et al. (2008), suggest that medium-/long-term achievements in lean
implementations are due to:
.
standardisation training;
.
measuring employers engagement with the company and with the customer;
.
monitoring results; and
Figure 1.
Outsourcing drivers (OD)
versus lean maturity
levels (LML) in healthcare
SO
6,2
148
.
management commitment and ownership to maintain and improve gains and
also to learn from external support how to develop internal mechanisms to
sustain improvement.
Having longer (based on the traditional Japanese quality management system) or
shorter dimensions, continuous improvement events are part of a journey to a lean
enterprise as lean-kaizen events (Manos, 2007). Hines (2010), among others, posits that
pure and simple tool deployment to achieve quick wins lead to short-term lean results
and often a return to the comfort zone, whilst systematic lean approaches of culture
changes show long-term results. Using the iceberg metaphor, the author shows that
sustainability does not come from working only the visible part of the iceberg
(technology, tools and techniques and process management), but mostly work below
the waterline with much bigger and real sustainability keys such as:
.
strategy and alignment;
.
leadership; and
.
behaviour and engagement.
The lean literatures focus shifting from how to go lean to how to stay lean
(Hines, 2010; Lucey et al., 2005) suggests that once the technical part of lean
deployment is solved it is necessary to understand lean sustainability factors. The
main reason pointed out in the literature for the failure of lean programs is the
absence of work on the soft side, the relational aspects of lean deployment such as
communication and the leadership that is essential for building a lean culture
(Brandao de Souza and Pidd, 2011; Hines et al., 2008). Working the soft side
achieves peoples involvement through mutual respect and team work (Badurdeen
et al., 2011). Others address the lean maturity and sustainability issue through the
edication of a proactive lean culture expanded outside the organisations
boundaries in real lean inter-organisational network building ( Jrgensen et al.,
2007). Forrester (1995) links the sustainability of Lean deployment to human
elements and advises consideration of elements such as:
.
organisational style and structure (a people-centred process, with involved,
motivated and accountable teams and leader empowerment, and a at structure
focused on processes not hierarchies);
.
staff selection (based on management and leadership skills, and giving clear and
individual performance targets); and
.
training (solving problems and other individual continuous development
programs).
Womack and Jones (1996) point out the importance of lean principles when all interact
with one another in a virtuous circle, as the goal is not playing individual notes but a
tune.
This view is consistent with the relational sustainability factors of a strategic
outsourcing relationship (Dyer and Singh, 1998; Luvison, 2010). Luvison (2010) posits
that outsourcing requires the collaborative styles necessary to develop trust and
commitment and the replacement of operational behaviours by boundary spanning
behaviours. In a simplied statement, outsourcing management has two sides:
Strategic
outsourcing
149
(1) the hard side, referring to the contract; and
(2) the soft side, referring to trust and a partnership philosophy (Barthelemy, 2003;
Shepherd, 1999).
Addressing the objective/hard and subjective/soft factors in transactions, Butter and
Linse (2008) distinguish between internal soft factors (the effects of decisions on
existing jobs, reputation, and corporate culture and risk aversion) and external soft
factors (cultural differences, political and economic differences and environment).
In healthcare settings, where people are the key to every process, the change
issue takes on a special relevance. From analysing the literature on both
outsourcing and lean in healthcare settings, the existence of a pathway of change is
clear in outsourcing as in lean deployment, rst through a tool and technique
experiments in several healthcare systems, with a sort of trial and error execution
and evolving, in time, to the creation of a mindset where the real benets of change
are more visible. Referring to Brandao de Souzas (2009) lean healthcare cases
taxonomy and Sanders et al. s (2007) outsourcing relationships classication, it is
possible to dene an outsourcing and lean pathway evolution considering the scope
of phenomena and the hard and soft factors described in this section (see Figure 2).
Following the arrow, the lean journey is very similar to the evolution of the
outsourcing relationship, starting on the hard side with a broad scope (several
suppliers and ancillary services transactions), and going through a paradigm shift
of the crescent importance of the soft side.
4. The construction of a lean culture
As stated by Atkinson (2010), lean is a cultural issue. The lean philosophy implies
transformations not only in processes and tools but in people and organisational
culture (Bhasin and Burcher, 2006). However, most of the literature on lean services
does not properly cover people aspects and behaviour issues in organisations, even
though they are crucial to lean implementation success. As Spear (2005) concludes:
Figure 2.
Outsourcing and lean
evolving pathway
SO
6,2
150
. . . in health care, no organisation has fully institutionalised to Toyotas level the ability to
design work as experiments, improve work through experiments, share the resulting
knowledge through collaborative experimentation, and develop people as experimentalists.
In spite of this disappointing conclusion regarding lean deployment in healthcare, it is
possible to identify in several countries a deeper extension of lean deployment in
healthcare organisations and evidence of a lean organisational culture. Lean
deployment cases in the UK, USA and, with less expression, in Australia, prove that
the lean journey in these countries achieved a higher lever, i.e. the edication of a lean
culture. In fact, the cultural context can explain differences in the maturity levels of
lean deployment in healthcare settings.
In order to understand the lean cultural process, some background concepts need to
be visited. Culture, the collective programming of the mind which distinguishes the
members of one human group from another (Hofstede, 1980, p. 25), manifests itself in
many ways, such as symbols, heroes, rituals (also labelled as practices) and values
(Hofstede, 1998) and can be dened at four main levels:
(1) society;
(2) organisational;
(3) small group; and
(4) professional (Hofstede, 2000).
While national cultures differ mostly at the level of values, organisational cultures
differ at the level of practices, i.e. symbols, heroes and rituals (Hofstede, 1998; Hofstede
et al., 2010, p. 347). This statement apparently contradicts some management literature
that presents organisational culture as a matter of values (Peters and Waterman, 1982).
Hofstedes (1998) position is that within an organisation, members values depend
primarily on broader levels of culture such as gender, nationality, class and education,
and through the socialisation process they learn the organisational practices.
Within the organisational level, the culture change issue can be seen in two opposite
ways, i.e. one that takes the position that change should start at the less visible and
tacit part, with assumptions and then values, until it is visibly manifested in artefacts
and practices; and the other holding that rst the most visible part should be changed,
and through new practices and the repetition of behaviour, the culture gradually
changes. This last view is defended by practitioners in the lean literature, and also by
academics like Schein (2009). Schein himself describes culture as the pattern of basic
assumptions that a given group has invented, discovered or developed in learning to
cope with its problems of external adaptation and internal integration and that have
worked well enough to be considered valid, and, therefore, to be taught to new
members as the correct way to perceive, think, and feel in relation to those problems.
Examining the culture building process as described by Schein (1992, 2009) and
Shook (2010), lean culture construction in healthcare settings appears to have its
starting point in hard deployment, using tools and techniques in less core activities
and evolving to the activities ones, to the patient path, until the daily practices take
over the whole organisation. Contrary to this view of culture as consequence, the
culture construction in the system view defends a dynamic top-down/bottom-up
process across all levels of culture (i.e. global, national, organisational, group, and
individual) placing culture as a cause (Leung et al., 2005). In Hofstede et al.s (2010)
Strategic
outsourcing
151
work, several national cultural dimensions were studied as causes of organisational
practices. The authors claim that although culture is a soft characteristic, changing it
requires hard measures (Hofstede et al., 2010, p. 375). Hence, considering culture as
both a cause and consequence, if in one perspective outsourcing practices contribute to
the edication of a lean enterprise, on the other hand, when only working on soft
aspects it will be possible to create a real lean culture in a sustainable way.
Through a thorough assessment of lean literature in healthcare settings it is
possible to identify those national cultural characteristics that are linked to the
maturity stage of lean deployment:
.
collectivism can be related to the ow concept;
.
masculinity can be related to willingness to change;
.
power distance can be related to empowerment;
.
uncertainty avoidance can be related to problem solving; and
.
long-term orientation can be related to sustainability.
These Lean concepts, that are above all lean success factors, as explained in the
preceding sections, are in fact common to outsourcing success factors. Hence, it is
possible to admit national cultural constraints in outsourcing cases in healthcare
settings in different countries (Guimaraes and Carvalho, 2011). This will be addressed
in the following section.
5. Merging national mindsets
In line with Hofstede et al.s (2010) view that culture changes very slowly, culture has
been treated in the literature as a relatively stable characteristic, reecting a shared
knowledge structure, values, behavioural norms and patterns. Hence, it seems suitable
to address cultural elements to identify some deployment patterns over a large date
range in lean and outsourcing deployment in healthcare.
A common mindset can be identied in successful lean and outsourcing practices in
the healthcare sector (Guimaraes and Carvalho, 2011), and that is long-term orientation.
The 14 lean management principles outlined by Liker (2004) underline basing
management decisions on long-term philosophy. Hines et al. (2008) suggest that
generally lean systems take between three and ve years to develop, and between ve
and seven years to implement.
The importance of a long-term view is not only claimed for strategic planning, but
also for implementation. As outlined in the outsourcing literature, evolving from a
tactical to a strategic level means thinking and building relationships on a long-term
basis, as only a long history of interacting allows higher levels of trust to emerge (Dyer
and Chu, 2000). The signicance of trust in relationships is either claimed inside or
outside organisations boundaries. Taking the Japanese management style, trust is the
basis of supplier-purchaser partnerships, whether the supplier is an afliated company
kankei-gaisha (bellowing to keiretsu) or an independent company
dokuritsu-gaisha enabled by a long-term perspective (Dyer and Ouchi, 1993). Dyer
and Chus (2000) study of the determinants of trust in supplier automaker relationships
in the USA, Japan and South Korea found that the social embeddedness perspective is
only important in Japan, while the process-based perspective has importance in the
SO
6,2
152
three countries studied. Thus, the sociological determinant of trust appears as a
Japanese cultural mark.
In terms of the cultural dimension long-term orientation, persistency in hard
aspects and strong relationships seem, according to the literature, to lead to successful
approaches.
Analysing the results of the review by Guimaraes and Carvalho (2011), and them
comparing to this reviews results, is possible to nd some distinctive lean marks in
outsourcing practices in the healthcare sector in Germany (GER), Australia and New
Zealand (AUL), the USA and the UK(GBR) (leaving Greek results out of this merger for
lack of lean cases). Taking these four countries, some results that are common to both
lean and outsourcing reviews can be summarised. For instance, in German cases cost
drivers are more clearly stated, while in other countries the same driver appears as a
given. Lean purposes are more clearly stated in British cases, with frequent use of
terms such as standardisation, exibility and lean thinking. Australian and New
Zealand cases follow a British path, although many fewer cases show an earlier stage.
Conversely, in the USA countless cases of either outsourcing or lean show an emphasis
on outsourcing contract management and manufacturing-like predominance in lean
cases, in spite of some iconic cases of full lean organisational deployment. It was
possible to match outsourcing cases with lean cases and place their nationalities in a
classication chart, as presented in Figure 3.
6. Discussion and conclusions
This paper presents a merger between outsourcing practices and Lean deployment in
the healthcare sector. All relevant literature on both topics was thoroughly analysed
with special emphasis on the dimensions of outsourcing and lean drivers, outcome
scope, and the soft and hard deployment aspects. The growing pressure on the
healthcare sector has forced the adoption of new process improvement methodologies
and a change in the supply chain management decisions paradigm. One of the major
decisions is make-or-buy, which, when looked at at a strategic level, has its starting
point in the value chain analysis, just as in lean thinking. To summarise, outsourcing
serves lean thinking, as it is a strategic decision to improve performance in the value
Figure 3.
Outsourcing and lean
state-of-the art merger
Strategic
outsourcing
153
chain by focusing on what the organisation does best and omitting redundant activities
or activities that require less expertise to experts in that area. Hence, through
outsourcing, an organisation gains exibility and ability to be more nimble and
competitively adaptive, and thus leaner. It is clear from the reported healthcare cases
that some outsourcing benets, such as exibility, access to world-class expertise, cost
reduction and a focus on core activities serve lean organisations in terms of reducing
waste (muda), and by reducing non-value adding activities, variability (mura) and poor
work conditions (muri ).
However, outsourcing cannot always be classied as a lean option, as it is sometimes
more of a downsizing option, a transaction option or even a mimetic practice in a sort of a
sector bandwagon. When looking at the drivers of each outsourcing paradigm, not all
outsourcing drivers seem to t lean thinking perfectly. In this paper, we found a
spectrum of crescent strategic intent and relationship intensity when moving from a
transactional outsourcing paradigm to strategic and transformational paradigms with
correspondence of drivers and the benets of a crescent lean deployment maturity. In
fact, healthcare organisations in the early stages of lean have the same quick-win
purposes with a bigger visibility in decreasing costs as in transactional outsourcing. It
was also possible to identify national patterns where the matching of outsourcing drivers
with lean maturity levels is almost perfect. By reviewing the reported cases in healthcare
settings, an evolution pattern in outsourcing and lean deployment from a narrow to a
broader scope, from short-term to long-term benets, is visible in a trial-and-error
learning process. In this losing weight program, the risk of becoming anorexic is the
same of losing critical competences when outsourcing on a large scale.
Another important factor is the importance of hard and soft domains when
pursuing both lean and outsourcing organisational change processes. The success of
both outsourcing and lean is associated not only with a thoroughly planed and
implemented strategy, but mostly with the people involved in the planning and
implementation. Hard aspects are tied to soft aspects of the strategy implementation. In
fact, real lean is made up of two key principles:
(1) continuous improvement, reecting the hard side of the deployment of tools and
techniques; and
(2) respect for people, reecting the soft side that enables lean sustainability.
When exploring the soft side it becomes evident that outsourcing and lean outcomes
are a result of cultural factors that inuence peoples decisions and deployment. In
healthcare organisations the human factor plays the most important role as a
determinant not only of performance but also of change processes. If lean deployment
stays at a tools-and-techniques level, the hard level, it can be still far from presenting a
better value proposition. Likewise, if outsourcing presents itself as a shopping practice,
it will not bring real long-term benets in terms of the value proposition.
This paper is aligned with the view that short-term wins encourage the change
process, but what makes change stick in the long-term is to pursue on daily basis the
new shared values, rooting behaviour to a building a culture where the soft aspects
cannot be neglected. However, the change process behind lean deployment in
healthcare, as in building an outsourcing relationship, should be the object of deeper
research, which, considering the idiosyncrasies of this sectors culture, it was not
possible to address properly in this paper.
SO
6,2
154
The focus in this paper was national culture and its relation to organisational and
individual behaviour. Considering culture as both a cause and consequence, in one
perspective, outsourcing practices contribute to the building of a lean enterprise; while
on the other hand, only working on the soft aspects it will be possible to create a real
lean culture. Lean thinking is, from its national origins, viewed by academics and
practitioners as a philosophy. The original Japanese lean concept only supercially
presents cost reduction as its main purpose, putting the accent on sharing costs and
risks with much more than arms-length suppliers. In this mind set, trust plays a main
role and not all organisations, for cultural reasons, are able to play it quite in the
Toyota way. Building strong relationships is not only a matter of cultural
willingness but a matter of time. In the lean journey the rst steps are usually made at
a tool deployment level and as most learning by doing changes paths, time will help to
turn those practices into culture. Similarly, healthcare organisations with longer
experience in outsourcing take more benets from it, not only for expanding activities
beyond to the core and clinical activities, but also to experience a more cooperative
environment with their suppliers. Even the term supplier loses its rst meaning
when facing new forms of externalising activities and processes such as strategic
alliances and joint ventures, called partnerships.
Long-term orientation plays an important role in thriving on the lean journey, in
which practices such as outsourcing, and other lean tools, are only just the beginning.
Finally, and as our main conclusions, it can be stated that:
.
Only some outsourcing drivers t into the lean concept, and therefore only some
kinds of outsourcing i.e. those that seek long-term relationships and true
competitive advantage can be a lean tool by allowing focus on value-adding
activities.
.
Outsourcing and lean, in healthcare settings, have both hard and soft sides
related to short- or to long-term orientation and depth of scope, but what makes a
strategic change stick is the soft side, especially in healthcare, where the
human factor, as in most services, is the key factor.
.
The lean journey is a state of mind construction that starts with practices, and so
is the outsourcing journey in the evolution of the relationship. This journey
implies a change process as deep as the maturity stage achieved.
.
Common lean and outsourcing drivers are related to cultural dimensions that
distinguish different maturity deployment stages of different national cultures,
which differ in collectivism, masculinity, power distance, uncertainty
avoidance and long-term orientation.
In sectors such as healthcare, where a strong public character inhibits
managerialisation, good SCM practices allied to the construction of a lean
organisational culture result in strategic advantages. Practices such as outsourcing
will be, as this paper suggests, much stronger lean weapons and will be aligned with
the wider strategy, as far the national and organisational culture allow them to be.
It would be interesting, however, to understand the linkage between national culture
and organisational culture to explore the change process of the deployment of lean in
the healthcare sector.
Strategic
outsourcing
155
Another area that will require further scrutiny is the construction of a lean culture in
healthcare settings, assessing the inuence of hard aspects in that construction as well
as soft aspects.
References
Abramson, W.B. (2001), Monitoring and evaluation of contracts for health service delivery in
Costa Rica, Health Policy and Planning, Vol. 16 No. 4, pp. 404-411.
Araujo, C., Figueiredo, K. and Silberstein, A. (2008), Principios enxutos aplicados rem servicos
de saude: cinco casos Brasileiros, Proceedings of SEGet Simposio de Excele ncia em
Gesta o e Tecnologia, 20-22 October.
Atkinson, P. (2010), Lean is a cultural issue, Management Services, Vol. 54 No. 2, pp. 35-41.
Atun, R.A. (2006), Privatization as decentralization strategy, in Saltman, R.B., Bankauskaite, V.
and Vrangbk, K. (Eds), Decentralization in Health Care: Strategies and Outcomes,
European Observatory on Health Systems and Policies Series, McGraw-Hill/Open
University, Maidenhead, pp. 246-271, available at: www.euro.who.int/__data/assets/pdf_
le/0004/98275/E89891.pdf
Badurdeen, F., Wijekoon, K. and Marksberry, P. (2011), An analytical hierarchy process-based
tool to evaluate value systems for lean transformations, Journal of Manufacturing
Technology Management, Vol. 22 No. 1, pp. 46-65.
Balle, M. and Regnier, A. (2007), Lean as a learning system in a hospital ward, Leadership in
Health Services, Vol. 20 No. 1, pp. 33-41.
Ballou, R.H. (2003), Business Logistics/Supply Chain Management, 5th ed., Pearson Prentice Hall,
Upper Saddle River, NJ.
Barraza, M.F.S., Smith, T. and Dahlgaard-Park, S.M. (2009), Lean-kaizen public service: an
empirical approach in Spanish local governments, The TQM Journal, Vol. 21 No. 2,
pp. 142-167.
Barthelemy, J. (2003), The hard and soft sides of IT outsourcing management, European
Management Journal, Vol. 21 No. 5, pp. 539-548.
Bettis, R.A., Bradley, S.P. and Hamel, G. (1992), Outsourcing and industrial decline, Academy of
Management Executive, Vol. 6 No. 1, pp. 7-21.
Ben-Tovim, D., Bassham, J., Bolch, D. and Martin, M. (2007), Lean thinking across a hospital:
redesigning care at the Flinders Medical Centre, Australian Health Review, Vol. 31 No. 1,
pp. 10-15.
Ben-Tovim, D., Dougherty, M., OConnell, T. and McGrath, K. (2008a), Patient journeys: the
process of clinical redesign, Medical Journal of Australia, Vol. 188 No. 6, pp. S14-S17.
Ben-Tovim, D., Bassham, J., Bennett, D., Dougherty, M., Martin, M., ONeill, S., Sincock, J. and
Szwarcbord, M. (2008b), Redesigning care at the Flinders Medical Centre: clinical process
redesign using lean thinking, Medical Journal of Australia, Vol. 188 No. 6, pp. S27-S31.
Bhasin, S. and Burcher, P. (2006), Lean viewed as a philosophy, Journal of Manufacturing
Technology Management, Vol. 17 No. 1, pp. 56-72.
Bowersox, D.J., Closs, D.J. and Stank, T.P. (2000), Ten mega-trends that will revolutionize
supply chain logistics, Journal of Business Logistics, Vol. 21 No. 2, pp. 1-16.
Brandao de Souza, L. (2009), Trends and approaches in lean healthcare, Leadership in Health
Services, Vol. 22 No. 2, pp. 121-139.
Brandao de Souza, L. and Pidd, M. (2011), Exploring the barriers to lean health care
implementation, Public Money & Management, Vol. 31 No. 1, pp. 59-66.
SO
6,2
156
Brown, D. and Wilson, S. (2005), The Black Book of Outsourcing: How to Manage the Changes,
Challenges and Opportunities, Wiley, New York, NY.
Bushell, S., Mobley, J. and Shelest, B. (2002), Discovering lean thinking at progressive
healthcare, The Journal for Quality & Participation, Summer, pp. 20-25.
Butter, F.A.G. and Linse, K.A. (2008), Rethinking procurement in the era of globalization,
MIT Sloan Management Review, Vol. 50 No. 1, pp. 76-80.
Bustinza, O.F., Molina, L.M. and Gutierrez-Gutierrez, L.J. (2010), Outsourcing as seen from the
perspective of knowledge management, Journal of Supply Chain Management, Vol. 46
No. 3, pp. 23-39.
Buesa, R.J. (2009), Adapting lean to histology laboratories, Annals of Diagnostic Pathology,
Vol. 13, pp. 322-333.
Burgess, N. and Radnor, Z. (2010), Lean paradox: can lean inuence healthcare?, Proceedings of
the 17th International Annual European Operations Management Association (EurOMA)
Conference Managing Operations in Service Economies, 6-9 June, Porto.
Burgess, N., Radnor, Z. and Davies, R. (2009), Taxonomy of lean in healthcare: a framework for
evaluating activity and impact, Proceedings of the 16th International Annual EurOMA
Conference, Go teborg, 14-17 June.
Campos, A.C. (2004), Decentralization and privatization in Portuguese health reform,
Revista Portuguesa de Sau de Pu blica, Vol. 4 No. 7, pp. 7-20.
Cankovic, M., Varney, R., Whiteley, L., Brown, R., DAngelo, R. and Zarbo, R. (2009), The Henry
Ford production system: lean process redesign improves service in the molecular
diagnostic laboratory, Journal of Molecular Diagnostics, Vol. 11 No. 5, pp. 390-398.
Champy, J. and Greenspun, H. (2010), Reengineering Health Care - A Manifesto for Radically
Rethinking Health Care Delivery, Pearson Education, Upper Saddle River, NJ.
Christopher, M. (1997), Marketing Logistics, Butterworth-Heinemann, Oxford.
Coase, R.H. (1988), The Firm, the Market and the Law, The University of Chicago Press, Chicago,
IL.
Conner, K.R. and Prahalad, C.K. (1996), A resource-based theory of the rm: knowledge versus
opportunism, Organization Science, Vol. 7 No. 5, pp. 477-501.
Contractor, F.J., Kumar, V., Kundu, S.K. and Pedersen, T. (2010), Reconceptualizing the rm in a
world of outsourcing and offshoring: the organizational and geographical relocation of
high-value company functions, Journal of Management Studies, Vol. 47 No. 8,
pp. 1417-1433.
Correa, F.A., Gil, M.J.A. and Red n, L.B. (2005), Benets of connecting RFID and lean principles
in healthcare, Working Paper 05-44, Business Economics Series 10, July, Universidad
Carlos III de Madrid, Madrid.
Cox, A. (1999), Power, value and supply chain management, Supply Chain Management, Vol. 4
No. 4, pp. 167-175.
Cudney, E. and Elrod, C. (2011), A comparative analysis of integral lean concepts into supply
chain management in manufacturing and service industries, International Journal of Lean
Six Sigma, Vol. 2 No. 1, pp. 5-22.
DAngelo, R. and Zarbo, R. (2007), Measures of process defects and waste in surgical pathology
as a basis for quality improvement initiatives, American Journal of Clinical Pathology,
Vol. 128, pp. 423-429.
Davenport, T.H. and Beers, M.C. (1995), Managing information about processes, Journal of
Management Information Systems, Vol. 12 No. 1, pp. 57-80.
Strategic
outsourcing
157
Decker, W. and Stead, L. (2008), Application of lean thinking in health care: a role in emergency
departments globally, International Journal of Emergency Medicine, Vol. 1, pp. 161-162.
Dickson, E., Anguelov, Z., Vetterick, D., Eller, A. and Singh, S. (2009a), Use of lean in the
emergency department: a case series of 4 hospitals, Annals of Emergency Medicine, Vol. 54
No. 4, pp. 504-510.
Dickson, E., Singh, S., Cheung, D., Wyatt, C. and Nugent, A. (2009b), Application of lean
manufacturing techniques in the emergency department, The Journal of Emergency
Medicine, Vol. 37 No. 2, pp. 177-182.
DiMaggio, P.J. and Powell, W.W. (1983), Institutional isomorphism and collective rationality,
American Sociological Review, Vol. 48, pp. 147-160.
DiRomualdo, A. and Gurbaxani, V. (1989), Strategic intent for IT outsourcing, Sloan
Management Review, Summer, pp. 67-80.
Dyer, J.H. and Chu, W. (2000), The determinants of trust in supplier-automaker relationships in
the US, Japan, and Korea, Journal of International Business Studies, Vol. 31 No. 2,
pp. 259-285.
Dyer, J.H. and Ouchi, W.G. (1993), Japanese-style partnerships: giving companies a competitive
edge, Sloan Management Review, Vol. 35 No. 1, pp. 51-63.
Dyer, J.H. and Singh, H. (1998), The relational view: cooperative strategy and sources of
interorganizational competitive advantagge, The Academy of Management Review,
Vol. 23 No. 4, pp. 660-679.
Eisenhardt, K.M. (1989), Agency theory: an assessment and review, Academy of Management
Review, Vol. 14 No. 1, pp. 57-74.
Eisenhardt, K.M. (1999), Strategy as strategic decision making, Sloan Management Review,
Vol. 40 No. 3, pp. 65-72.
Elling, R.H. (1980a), Concepts, Methods and Data Sources, Cross-national Study of Health
Systems, Vol. II, Gale, Detroit, MI.
Elling, R.H. (1980b), Countries, World Regions and Special Problems, Vol. III, Cross-national
Study of Health Systems, Gale, Detroit, MI.
Emiliani, M.L. (2004), Improving business school courses by applying lean principles and
practices, Quality Assurance in Education, Vol. 12 No. 4, pp. 175-187.
Esain, A., Angel, L. and Robertson, K. (2005), Solutions for problems: the NHS, lean thinking
and Six Sigma, Cardiff Logistics & Operations Management Working Papers, available
at: www.cardiff.ac.uk/carbs
Esain, A., Williams, S. and Massey, L. (2008), Combining planned and emergent change in a
healthcare lean transformation, Public Money & Management, February, pp. 21-26.
Farace, D.J. (1998), Foreword, Proceedings of the 3rd International Conference on Grey
Literature, Luxembourg, 13-14 November, Grey Literature Network Service, Amsterdam.
Fillingham, D. (2007), Can lean save lives?, Leadership in Health Services, Vol. 20 No. 4,
pp. 231-241.
Ford, D. (1990), Understanding Business Markets: Interaction, Relationships and Networks,
Academic Press, London.
Forrester, R. (1995), Implications of lean manufacturing for human resource strategy,
Work Study, Vol. 44 No. 3, pp. 20-24.
Franceschini, F. and Galetto, M. (2003), Outsourcing: guidelines for a structured approach,
Benchmarking, Vol. 10 No. 3, pp. 246-260.
SO
6,2
158
Furman, C. (2005), Implementing a patient safety alert system, Nursing Economics, Vol. 23
No. 1, pp. 42-45.
Goepfert, J. (2002), Transformational outsourcing helping companies adapt to a volatile
future, IDC White Paper, September, available at: www.idc.com
Graban, M. (2007), Lean in the laboratory, Lean Manufacturing, pp. 53-57.
Grandori, A. (1997), An organizational assessment of interrm coordination modes,
Organizational Studies, Vol. 18 No. 6, pp. 897-925.
Greaver, M.F. (1999), Strategic Outsourcing, AMACOM, New York, NY.
Green, S.D. and May, S.C. (2005), Lean construction: arenas of enactment, models of diffusion
and the meaning of leanness, Building Research &Information, Vol. 33 No. 6, pp. 498-511.
Grunden, N. (2008), The Pittsburgh Way to Efcient Healthcare: Improving Patient Care Using
Toyota-based Methods, Healthcare Performance Press, Cambridge, MA.
Guimaraes, C. and Carvalho, J.C. (2011), Outsourcing in the healthcare sector - a state of the art
review, Supply Chain Forum: An International Journal, Vol. 12 No. 2, pp. 140-148.
Hamel, G. and Prahalad, C.K. (1989), Strategic intent, Harvard Business Review, May/June,
pp. 63-76.
Hammer, M. (2007), The process audit, Harvard Business Review, Vol. 85 No. 4, pp. 111-121.
Hannan, M.T. and Freeman, J.H. (1984), Structural inertia and organizational change, American
Sociological Review, Vol. 49, pp. 149-164.
Hassell, A., Glass, C., Yip, C. and Eneff, P. (2010), The combined positive impact of lean
methodology and Ventana Symphony autostainer on histology lab workow,
BMC Clinical Pathology, Vol. 10 No. 2.
Hines, P. (2010), How to create and sustain a lean culture, Training Journal, June, pp. 28-32.
Hines, P., Found, P. and Harrison, R. (2008), Staying Lean: Thriving, Not Just Surviving, Lean
Enterprise Research Centre, Cardiff University, Cardiff.
Hines, P., Holweg, M. and Rich, N. (2004), Learning to evolve a review of contemporary lean
thinking, International Journal of Operations & Production Management, Vol. 24 No. 10,
pp. 994-1011.
Heath, G. and Radcliffe, J. (2010), Exploring the utility of current performance measures for
changing roles and practices of ambulance paramedics, Public Money & Management,
May, pp. 151-158.
Herring, L. (2009), Lean experience in primary care, Quality in Primary Care, Vol. 17,
pp. 271-275.
Hofstede, G. (1980), Cultures Consequences: International Differences in Work Related Values,
Sage Publications, Beverley Hills, CA.
Hofstede, G. (1998), Think locally, act globally: cultural constraints in personnel management,
Management International Review, Vol. 38, pp. 7-26.
Hofstede, G. (2000), Organizational culture: siren or sea cow? A reply to Dianne Lewis, Strategic
Change, Vol. 9, pp. 135-137.
Hofstede, G., Hofstede, G.J. and Minkov, M. (2010), Cultures and Organizations: Software of the
Mind: Intercultural Cooperation and its Importance for Survival, 3rd ed., McGraw-Hill,
New York, NY.
Insinga, R.C. and Werle, M.J. (2000), Linking outsourcing to business strategy, Academy of
Management Executive, Vol. 14 No. 4, pp. 58-70.
Strategic
outsourcing
159
Jack, E.P. and Powers, T.L. (2006), Managerial perceptions on volume exible strategies and
performance in health care services, Management Research News, Vol. 29 No. 5,
pp. 228-241.
Jacobsson, T. and Ahlstrom, P. (2010), Factors that hinder the implementation of process ow
solutions in healthcare: empirical ndings from four emergency departments,
Proceedings of the 17th International Annual European Operations Management
Association (EurOMA) Conference Managing Operations in Services Economies,
6-9 June, Porto.
Johnston, R. and Staughton, R. (2009), Establishing and developing strategic relationships - the
role for operations managers, International Journal of Operations & Production
Management, Vol. 29 No. 6, pp. 564-590.
Jrgensen, F., Matthiesen, R., Nielsen, J. and Johansen, J. (2007), Lean maturity, lean
sustainability, Advances in Production Management Systems, Vol. 246, pp. 371-378.
Kakabadse, N. and Kakabadse, A. (2000), Critical review outsourcing: a paradigm shift,
Journal of Management Development., Vol. 19 No. 8, pp. 670-727.
Kakabadse, A. and Kakabadse, N. (2003), Outsourcing best practice: transformational and
transactional considerations, Knowledge and Process Management, Vol. 10 No. 1,
pp. 60-71.
Kakabadse, A. and Kakabadse, N. (2005), Outsourcing: current and future trends, Thunderbird
International Business Review, Vol. 47 No. 2, pp. 183-204.
Kaplan, G. and Patterson, S. (2008), Seeking perfection in healthcare. A case study in adopting
Toyota Production System methods, Healthcare Executive, Vol. 23 No. 3, pp. 16-20.
Kelley, B. (1995), Outsourcing marches on, Journal of Business Strategy, Vol. 16 No. 4, pp. 38-42.
Kent, A. (2008), Leaning towards efciency, Health Management Technology, Vol. 29 No. 4,
pp. 20-23.
Kim, C., Hayman, J., Billi, J., Lash, K. and Lawrence, T. (2007), The application of lean thinking
to the care of patients with bone and brain metastasis with radiation therapy, Journal of
Oncology Practice, Vol. 3 No. 4, pp. 189-193.
King, D., Ben-Tovim, D. and Bassham, J. (2006), Redesigning emergency department patient
ows: application of lean thinking to health care, Emergency Medicine Australasia,
Vol. 18, pp. 391-397.
Kohlbacher, M. (2010), The effects of process orientation: a literature review, Business Process
Management Journal, Vol. 16 No. 1, pp. 135-152.
Kollberg, B. and Dahlgaard, J. (2007), Measuring lean initiatives in health care services: issues
and ndings, International Journal of Productivity and Performance Management, Vol. 56
No. 1, pp. 7-24.
Kollberg, B., Dahlgaard, J.J. and Brehmer, P.O. (2007), Measuring lean initiatives in health care
service: issues and ndings, International Journal of Productivity and Performance
Management, Vol. 56 No. 1, pp. 2-24.
Kosuge, R., Modig, N. and Ahlstrom, P. (2010), Standardization in lean service: exploring the
contradiction, Proceedings of the 17th International Annual European Operations
Management Association (EurOMA) Conference Managing Operations in Services
Economies, 6-9 June, Porto.
Kotter, J.P. and Cohen, D.S. (2002), The Heart of Change Real Life Stories of How People Change
Their Organizations, Harvard Business School Press, Boston, MA.
SO
6,2
160
Kremic, T., Tukel, O.I. and Rom, W.O. (2006), Outsourcing decision support: a survey of
benets, risks, and decision factors, Supply Chain Management: An International Journal,
Vol. 11 No. 6, pp. 467-482.
Kuhn, T. (1970), The Structure of Scientic Revolutions, University of Chicago Press, Chicago, IL.
Kulkarni, S.P. and Heriot, K.C. (1999), Transaction costs and information costs as determinants
of the organizational form: a conceptual synthesis, American Business Review, Vol. 17
No. 2, pp. 43-52.
Kullar, P., Harris, F., Briggs, J., Willis, J. and Axon, P. (2009), The use of lean thinking
techniques in implementing the Department of Health, UK, 18-week waiting time directive
for cochlear implantation, Cochlear Implants International, DOI: 101002/cii418.
Lacity, M.C., Willcocks, L.P. and Feeny, D.F. (1995), IT outsourcing maximises exibility and
control, Harvard Business Review, Vol. 73 No. 3, pp. 84-93.
Langabeer, J.R., DelliFraine, J.L., Heineke, J. and Abbass, I. (2009), Implementation of lean and
Six Sigma quality initiatives in hospitals: a goal theoretic perspective, Operations
Management Research, Vol. 2, pp. 13-27.
Laursen, M.L., Gertsen, F. and Johansen, J. (2003), Applying lean thinking in hospitals
exploring implementation difculties, working paper, Centre for Industrial Production,
Aalborg University, Aalborg.
Lee, J.N., Huynh, M.Q., Chi-wai, K.R. and Pi, S.P. (2000), The evolution of outsourcing research:
what is the next issue?, Proceedings of the 33rd Hawaii International Conference on
System Sciences (HICSS-33), 4-7 January, Maui, HI, IEEE Computer Society, Washington,
DC.
Leung, K., R, S., Bhagat, N., Buchan, R., Erez, M. and Gibson, C.B. (2005), Culture and
international business: recent advances and their implications for future research, Journal
of International Business Studies, Vol. 36 No. 4, pp. 357-378.
Liker, J.K. (2004), The Toyota Way: 14 Management Principles from the Worlds Greatest
Manufacturer, McGraw-Hill, New York, NY.
Linder, J.C. (2004a), Transformational outsourcing, Supply Chain Management Review, Vol. 8
No. 4, pp. 54-61.
Linder, J.C. (2004b), Transformational outsourcing, MIT Sloan Management Review, Vol. 45
No. 2, p. 58.
Linder, J. (2004c), Outsourcing for Radical Change: A Bold Approach to Enterprise
Transformation, AMACOM, New York, NY.
Lindskog, C. and Nilsson, F. (2010), Outcome of lean in Swedish healthcare rationalization or
increased patient value?, Proceedings of the POMS 21st Annual Conference, Vancouver.
Liu, J.J. (2007), The core business of an enterprise can also be outsourced taking the software
industry as an example, China-USA Business Review, Vol. 6 No. 1, pp. 63-66.
Liu, X., Hotchkies, D.R., Bose, S., Bitran, R. and Giedion, U. (2004), Contracting for primary
health services: evidence on its effects and a framework for evaluation, The Partners for
Health Reformplus Project, Abt Associates Inc., Bethesda, MD, available at: www.who.int/
management/resources/nances/ContractingPrimaryHealtServicesEvidence.pdf
Lodge, A. and Bamford, D. (2007), Health service improvement through diagnostic waiting list
management, Leadership in Health Services, Vol. 20 No. 4, pp. 254-265.
Lodge, A. and Bamford, D. (2008), New development: using lean techniques to reduce radiology
waiting times, Public Money & Management, February, pp. 49-52.
Lonsdale, C. and Cox, A. (1997), Outsourcing: risks and rewards, Supply Management, Vol. 3,
pp. 32-34.
Strategic
outsourcing
161
Lonsdale, C. and Cox, A. (2000), The historical development of outsourcing: the latest fad?,
Industrial Management & Data Systems, Vol. 100 No. 9, pp. 444-450.
Lucey, J., Bateman, N. and Hines, P. (2005), Why major lean transitions have not been
sustained, Management Services, Vol. 49 No. 2, pp. 9-13.
Lummus, R., Vokurka, R. and Rodeghiero, B. (2006), Improving quality through value stream
mapping: a case study of a physicians clinic, Total Quality Management, Vol. 17 No. 8,
pp. 1063-1075.
Luvison, D. (2010), The behavioral consequences of outsourcing: looking through the lens of
paradox, Journal of Applied Management and Entrepreneurship, Vol. 15 No. 4, pp. 28-52.
McIvor, R. (2000), A practical framework for understanding the outsourcing process, Supply
Chain Management, Vol. 5 No. 1, pp. 22-36.
McPake, B. and Mills, A. (2000), What can we learn from international comparisons of health
systems and health system reform?, Bulletin of the World Health Organization, Vol. 78
No. 6, pp. 811-820.
Madhok, A. (2002), Reassessing the fundamentals and beyond: Ronald Coase, the transaction
cost and resource-based view theories of the rm and the institutional structure of
production, Strategic Management Journal, Vol. 23, pp. 535-550.
Maleyeff, J. (2006), Exploration of internal service systems using lean principles, Management
Decision, Vol. 44 No. 5, pp. 674-689.
Manos, A. (2007), The benets of kaizen and kaizen events, Quality Progress, Vol. 40 No. 2,
pp. 47-48.
Manos, A., Sattler, M. and Alukal, G. (2006), Make healthcare lean, Quality Progress, Vol. 39
No. 7, pp. 24-30.
Marcus, I. (2010), Agile supply chain: strategy for competitive advantage, Journal of Global
Strategic Management, Vol. 7, pp. 5-17.
Martin, A. and Bourgeois, C. (2007), Le role des facteurs institutionnels dans la decision
dexternaliser, Management International, Vol. 11 No. 4, pp. 17-29.
Mazur, L. and Chen, S. (2008), Understanding and reducing the medication delivery waste via
systems mapping and analysis, Health Care Management Science, Vol. 11, pp. 55-65.
Mazur, L.M. and Chen, S.G. (2009), An empirical study for medication delivery improvement
based on healthcare professional perceptions of medication delivery system, Health Care
Management Science, Vol. 12, pp. 56-66.
Mazzocato, P., Aronsson, H. and Thor, J. (2010), Towards better operations in a Swedish
paediatrics accident and emergency department, Proceedings of the 17th International
Annual European Operations Management Association (EurOMA) Conference
Managing Operations in Services Economies, 6-June, Porto.
Melanson, S., Goonan, E., Lobo, M., Baum, J., Paredes, J., Santos, K., Gustajson, M. and
Tanasijevic, M. (2009), Applying lean/Toyota Production System principles to improve
phlebotomy patient satisfaction and workow, American Journal of Clinical Pathology,
Vol. 132, pp. 914-919.
Miller, D. (2005), Going lean in health care, IHI Innovation Series white paper, Institute for
Healthcare Improvement, Cambridge, MA, pp. 1-21.
Milgate, M. (2001), Alliances, Outsourcing and the Lean Organization, Quorum Books, Westport,
CT.
Mentzer, J.T., DeWitt, W., Keebler, J.S., Min, S., Nix, N.W., Smith, C.D. and Zacharia, Z.G. (2001),
Dening supply chain management, Journal of Business Logistics, Vol. 22 No. 2, pp. 1-25.
SO
6,2
162
Mohammed, I., Shankar, R. and Banwet, D.K. (2008), Creating ex-lean-agile value chain by
outsourcing an ISM-based interventional roadmap, Business Process Management
Journal, Vol. 14 No. 3, pp. 338-389.
Mowery, D., Oxley, C., Silverman, J.E. and Brian, S. (1998), Technological overlap and interrm
cooperation: implications for the resource-based view of the rm, Research Policy, Vol. 27,
pp. 507-523.
Mullin, R. (1996), Managing the outsourced enterprise, Journal of Business Strategy, Vol. 17
No. 4, pp. 28-32.
Nielsen, A.P. and Edwads, K. (2010), Implementing lean in healthcare: barriers and
opportunities, Proceedings of the 17th International Annual European Operations
Management Association (EurOMA) Conference Managing Operations in Services
Economies, 6-9 June, Porto.
Ohmae, K. (1982), The Mind of the Strategist: The Art of Japanese Business, McGraw-Hill,
New York, NY.
OShannassy, T. (2008), Sustainable competitive advantage or temporary competitive
advantage improving understanding of an important strategy construct, Journal of
Strategy and Management, Vol. 1 No. 2, pp. 168-180.
Panchek, P. (2005), Lean health care? It works!, Proceedings of AME International Canadian
Regional Conference, Edmonton.
Papadopoulos, T. and Merali, Y. (2008), Stakeholder network dynamics and emergent
trajectories of lean implementation projects: a study in the UK National Health Service,
Public Money & Management, February, pp. 41-48.
Papadopoulos, T., Radnor, Z. and Merali, Y. (2011), The role of actor associations in
understanding the implementation of lean thinking in healthcare, International Journal of
Operations & Production Management, Vol. 31 No. 2, pp. 167-191.
Pate, D. and Puffe, M. (2007), Improving patient ow, The Physician Executive, May/June,
pp. 32-36.
Peisch, R. (1995), When outsourcing goes awry, Harvard Business Review, May/June, pp. 24-37.
Peters, T.J. and Waterman, R.H. Jr (1987), In Search of Excellence, HarperCollins, New York, NY.
Poole, T. and Mazur, L. (2010), Assessing readiness for lean change in emergency department,
in Johnson, A. and Miller, J. (Eds), Proceedings of the 2010 Industrial Engineering Research
Conference, Cancun, 6-9 June.
Porter, M.E. (1996), What is strategy?, Harvard Business Review, November/December,
pp. 61-78.
Portioli-Staudacher, A. (2008), Lean healthcare an experience in Italy, in Koch, T. (Ed.),
Lean Business Systems and Beyond, Vol. 257, International Federation for Information
Processing, Laxenburg, pp. 485-492.
Prahalad, C.K. and Hamel, G. (1990), The core competence of the corporation, Harvard Business
Review, May/June, pp. 79-91.
Prasad, A. (2010), Strategy as inferior choice a re-interpretation of Porters What is
strategy?, Journal of Management Research, Vol. 10 No. 1, pp. 15-24.
Proudlove, N., Moxham, C. and Boaden, R. (2008), Lessons for lean in healthcare from using Six
Sigma in the NHS, Public Money and Management, Vol. 28 No. 1, pp. 27-34.
Quinn, J.B. (2000), Outsourcing innovation: the new engine of growth, Sloan Management
Review, Vol. 41 No. 4, pp. 13-29.
Strategic
outsourcing
163
Quinn, J.B. and Hilmer, F.G. (1994), Strategic outsourcing, Sloan Management Review, Vol. 35
No. 4, pp. 43-55.
Raab, S., Grzybicki, D., Sudilovsky, D., Balassanian, R. and Vrbin, C. (2006), Effectiveness of
Toyota process redesign in reducing thyroid gland ne-needle aspiration error, American
Journal of Clinical Pathology, Vol. 126, pp. 585-592.
Radnor, Z. and Holweg, M. (2010), From tools to systems: a critical appraisal of lean healthcare
implementations, Proceedings of the 17th International Annual European Operations
Management Association (EurOMA) Conference Managing Operations in Services
Economies, 6-9 June, Porto.
Radnor, Z.J. and Walley, P. (2008), Learning to walk before we try to run: adapting lean for the
public sector, Public Money & Management, February, pp. 13-20.
Radnor, Z.J., Holweg, M. and Waring, J. (2011), Lean in healthcare: the unlled promise?, Social
Science & Medicine, Vol. 30, pp. 1-8.
Rahimnia, F. and Moghadasian, M. (2010), Supply chain leagility in professional services: how
to apply decoupling point concept in healthcare delivery system, Supply Chain
Management: An International Journal, Vol. 15 No. 1, pp. 80-91.
Roberts, V. (2001), Managing strategic outsourcing in the healthcare industry, Journal of
Healthcare Management, Vol. 46 No. 4, pp. 239-249.
Rutledge, J., Xu, M. and Simpson, J. (2010), Application of the Toyota Production System
improves core laboratory operations, American Journal of Clinical Pathology, Vol. 133,
pp. 24-31.
Sanders, N.R., Locke, A., Moore, C.B. and Autry, C.W. (2007), A multidimensional framework for
understanding outsourcing arrangements, The Journal of Supply Chain Management,
Vol. 3, p. 15.
Schein, E.H. (1992), Organizational Culture and Leadership, 2nd ed., Jossey-Bass, San Francisco,
CA.
Schein, E.H. (2009), The Corporate Culture Survival Guide, Revised ed., Jossey-Bass,
San Francisco, CA.
Schneller, E.S. and Smeltzer, L.R. (2006), Strategic Management of the Health Care Supply Chain,
Jossey-Bass, San Francisco, CA.
Serrano, L. and Slunecka, F.W. (2006), Lean processes improve patient care, Healthcare
Executive, Vol. 21 No. 6, pp. 36-38.
Setijono, D., Naraghi, A.M. and Ravipati, U.P. (2010), Decision support system and the adoption
of lean in a Swedish emergency ward, International Journal of Lean Six Sigma, Vol. 1
No. 3, pp. 234-248.
Sharma, V., Abel, J., Al-Hussein, M., Lennerts, K. and Pfrunder, U. (2007), Simulation application
for resource allocation in facility management processes in hospitals, Facilities, Vol. 25
Nos 13/14, pp. 493-506.
Shepherd, A. (1999), Outsourcing IT in a changing world, European Management Journal,
Vol. 17 No. 1, pp. 64-84.
Shook, J. (2010), How to change a culture: lessons from NUMMI, MIT Sloan Management
Review, Vol. 51 No. 2, pp. 63-68.
Spear, S. (2005), Fixing health care from the inside, Harvard Business Review, Vol. 83 No. 9,
pp. 78-91.
Stolle, R. and Parrott, D. (2007), Its not easy being lean, but scripting can help, Health
Management Technology, Vol. 28 No. 2, pp. 40-42.
SO
6,2
164
Tanineez, G. (2005), Pulling lean through a hospital, white paper, available at: www.lean.org/
common/display/?o808
Tonkin, L. and Bremer, M. (2009), ThedaCares culture of continuous daily improvements,
Target, Vol. 25 No. 1, pp. 6-12, available at: www.ame.org/sites/default/les/documents/09-
25-1-ThedaCare_Culture_Improvements.pdf
Towne, J. (2006), Going lean streamlines processes, empowers staff and enhances care,
Hospitals & Health Networks, Vol. 80 No. 10, pp. 34-35.
Tragardh, B. and Lindberg, K. (2004), Curing a meagre health care system by lean methods
translating chains of care in the Swedish health care sector, International Journal of
Health Planning and Management, Vol. 19, pp. 383-398.
van Vliet, E.J., Sermeus, W., van Gaalen, C., Sol, J. and Vissers, J. (2010), Efcacy and efciency
of a lean cataract pathway: a comparative study, Quality Safety in Health Care, Vol. 19
No. 6, pp. 1-6.
Walley, P. (2003), Designing the accident and emergency systems: lessons from manufacturing,
Emergency Medical Journal, Vol. 290, pp. 126-130.
Waring, J. and Bishop, S. (2010), Lean healthcare: rhetoric, ritual and resistance, Social Science
& Medicine, Vol. 71, pp. 1332-1340.
Weber, D.O. (2006), Toyota-style management drives Virginia Mason, Physician Executive,
Vol. 32 No. 1, pp. 12-17.
Willcocks, L.P., Fitzgerald, G. and Feeny, D.F. (1995), Outsourcing IT: the strategic
implications, Long Range Planning, Vol. 28 No. 5, pp. 59-70.
Williamson, O. (1979), Transaction-cost economics: the governance of contractual relations,
Journal of Law and Economics, Vol. 22, pp. 233-261.
Willoughby, K., Chan, B. and Strenger, M. (2010), Achieving wait time reduction in the
emergency department, Leadership in Health Services, Vol. 23 No. 4, pp. 304-319.
Withanachchi, N., Handa, Y., Karandagoda, K.K., Pathirage, P.P., Tennakoon, N.C. and
Pullaperuma, D.S. (2007), TQM emphasizing 5-S principles, International Journal of
Public Sector Management, Vol. 20 No. 3, pp. 168-177.
Womack, J.P. and Jones, D.T. (1996), Beyond Toyota: how to root out waste and pursue
perfection, Harvard Business Review, September/October, pp. 140-158.
Womack, J.P. and Jones, D.T. (2003), Lean Thinking: Banish Waste and Create Wealth in Your
Corporation, Simon & Schuster, London, (rst published 1996).
Womack, J.P., Jones, D.T. and Roos, D. (1990), The Machine that Changed the World, Rawson
Associates, New York, NY.
Womack, J., Byrne, A., Fiume, O., Kaplan, G. and Toussaint, J. (2005), Going lean in healthcare,
white paper, January/February, Institute for Healthcare Improvement, Boston, MA.
Zarbo, R., Tuthill, M., DAngelo, R., Varney, R. and Ormsby, A. (2009), Reduction of surgical
pathology in-process misidentication defects by bar code-specied work process
standardization, American Journal of Clinical Pathology, Vol. 131, pp. 469-477.
About the authors
Cristina Machado Guimaraes has a degree in Business Administration and Management from
the Catholic University of Porto, and a MSc in Healthcare Management from ISCTE-IUL (Lisbon
University Institute), where she develops leading research on lean healthcare. Having worked for
15 years in the industrial and service sectors as a supply chain manager, more recently she has
dedicated her time to consultancy projects in both industry and services settings such as
healthcare. She is also an Invited Lecturer in post-graduate programs on lean operations
Strategic
outsourcing
165
management. Additionally, she is a regular speaker at workshops and conferences. Cristina
Machado Guimaraes is the corresponding author and can be contacted at:
cristinamachadoguimaraes@gmail.com
Jose Crespo de Carvalho has a degree in engineering from IST (Technical University of
Lisbon), a MBA and a MSc in Management Information Systems and Logistics Areas, and a
PhD in Management from ISCTE-IUL (Lisbon University Institute) where, after doing his
aggregation, he has been a Full Professor since 2003. He has signed and coordinated more than
50 consultancy projects in the areas of supply chain management and strategy. He has also
published widely in books (he has already published 22 books, including one specialising in
healthcare logistics) and journals, both professional and academic. He has also received several
prizes for his career in supply chain management and strategy and has been rewarded several
times with the Best Professor of the Year award by the Management School of ISCTE-IUL.
SO
6,2
166
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.