Back to Resource Center

Lean Six Sigma for Dental Inventory Management – An Intro to the Japanese Methodologies

June 8, 2021

Blog Articles

Throughout the years, giants such as Toyota and Motorola have given birth to methodologies that aim to help guide organizational improvements. Although initially born out of necessity for manufacturing efficiencies, the principles and methods have proven universally effective and have since been adopted to at least some degree for businesses of all sizes and by almost every industry. 

Why should the dental industry be any different? Procurement may not be your core competency, yet how you manage your dental practice’s expenses significantly impacts your bottom line. This makes keeping it real and getting it just right even more vital to your practice’s health, your employees’ state of mind, and your patients’ smiles.

Some of the most notable organizations that have successfully implemented these practices include Amazon and 3M. Motorola itself claims to have saved $16 billion for its Six Sigma efforts.

Toyota Production System (TPS), Six Sigma, and the culmination of the two, Lean Six Sigma, are just as much philosophies and mindsets as they are tools and methodologies. For those well versed, terms such as 5S, Kanban, and Kaizen represent the fundamentals of how they work.

These same basic principles are what Method was founded on, a systematic approach to driving out costs through better dental inventory management and dental procurement practices. There are valuable lessons and tools to be garnered from each, so let’s review.

Lean

The father of Lean, TPS, was developed by Taiichi Ohno at Toyota to improve manufacturing and logistics, minimize cost, and reduce waste of all kinds, including removing time from processes and improving flow. Lean became a generic version of TPS, and although often used synonymously, there is a difference to the very discerning eye.

Lean uses PDCA— Plan, Do, Check, Act/Adjust as a process improvement method.

Kaizen

Kaizen (roughly translated to “continuous improvement.”) is a core principle of TPS focused on setting a gradual adoption of small but significant improvements by involving all employees and building a company culture of continuous improvement. Objectives include standardizing work, elimination of waste, and just-in-time (JIT) inventory practices.

The core beliefs of kaizen are:

  • Focus on improving the process rather than hitting your end goal.
  • Changes must be data-driven and evidence-based.
  • Employees should be empowered, and ideas for possible improvements or innovations can and should come from any member of your team, regardless of position.
  • Continuous improvement means just that; there is always something to be improved upon, kaizen never truly ends.

Six Sigma

In 1986, Mikel Harry and Bill Smith from Motorola invented Six Sigma and the DMAIC improvement method—Define, Measure, Analyze, Improve and Control—which guides practitioners to systematically define and address the root causes of process problems and then maintain the gains. 

As well as a method for process improvements, Six Sigma is a philosophy, a mindset, a goal, and a measurement system. The data-driven approach aims at limiting the number of errors or defects in a process to what is considered to be near perfection, a maximum of 3.4 occurrences per million opportunities (units or events.)

For dental practices, six sigma can be used for such things as improving material flow (the movements of your supplies) and gain better organization, allowing you to quickly and easily find what you need when you need it.

Lean Six Sigma

As you’ve probably guessed, Lean Six Sigma is the melding of the two continuous improvement methods. It provides a vast tool kit of problem-solving tactics and reaps the benefits of both systems. 

Lean Six Sigma benefits include:

  • A stronger customer focus
  • A more engaged workforce
  • Problem-solving by the root
  • Error reduction
  • Increased capacity
  • Improved efficiency
  • Reduced costs
  • Maximized profit
  • Operational excellence

Your Employees

These philosophies and business methods not only improve profits but engage employees, value their intricate knowledge of business activities and processes, and recognize them as the best resources for analyzing and enhancing procedures. Getting your buy-in and empowering employees to positively affect their work environment makes for happier employees and better margins.

These principles are evidenced throughout Method, which was designed with the goal to streamline and improve upon dental purchasing processes, increase efficiencies, and decrease the costs of dental procurement. They’re reflected in the dental inventory control methods and procurement analytics that allow you to lean out your inventory and improve your cash flow. The purchase order entry process minimizes time requirements and eases workflow throughout the Procure-to-Pay (P2P) cycle while reducing losses for your dental practice or DSO. And of course, they are the main driver behind our at your fingertips market pricing and request for quote management process.

Regardless of the industry, lean tools can be used to gain quantifiable improvements through minimizing inventory levels, reducing waste, limiting losses, improving workflows, and reducing the likelihood of human error.

Partner With Method Today

A dental practice is, of itself, a business, and like any other business, a dental practice looking to improve its EBITDA needs to drive quantifiable improvements. Enter Lean Six Sigma. Further powered by the automation Method brings, these methodologies are the backbone of profit-enhancing procurement practices. Taking it one step further by implementing the principles and utilizing the tools you see fit into the fabric of your organization can help you meet the challenges you are facing today while propelling your growth for your tomorrows.

Contact Method Procurement Technologies today to get more information on how we can help you streamline your dental practice procurement strategy.