1. When The Big Ten Meets The Big Three, The Successes Add Up

2. Agenda • GM Perspective • UM Perspective

3. Agenda • GM Perspective • GM’s Lean History • Challenges Within GM • Applying GMS In The Supply Chain • Lessons Learned • Results • UM Perspective

4. Lean History • GM and Toyota negotiate • NUMMI joint venture • Toyota Production System • Manufacturing in the United States

5. Lean History • Years of learning • Hundreds of plant tours • Executive development programs • Short term and two year assignments • Multiple interpretation • Localized implementation

6. Jack Smith former GM Chairman “All GM plants are a part of the same company and must operate with one production system with common elements” Run Common and Run Lean

7. Lean History Eisenach

8. Lean History • GM Global Manufacturing System • General Motors’ interpretation and application of Lean best practices • Deliver improved business performance

9. J.D. Power and Associates2006 Initial Quality Study Results

10. 2006 Top 15 North/South America Plants North/South America Plant Average 65 PPH Based on Defect/Malfunction 7 of Top 15 PP100

11. Wins • Oshawa 2 received the Gold North/South American plant award for the 2nd consecutive year • 5th consecutive year that a GM plant has won this award • Magna Steyr’s Graz, Austria plant, which builds the Saab 9-3 convertible, received the Gold European Plant Award • 2 segment winners – Grand Prix and Silverado Light Duty Pickup • 11 segment leaders (top 3) • Swept the Large Pickup segment • Corvette among top 10 models in industry • Seven of the top 15 plants in North/South America, more than any other manufacturer

12. Top Ten Vehicle Assembly Plants - HPV Sable, Taurus Allure, Grand Prix, Lacrosse Altima Malibu Altima Grand Am, Malibu Monte Carlo, Impala Camry, Solara Frontier ION

13. A Leaner GM • GM then: • 600,000 employees around the world • 460,000 in the United States • Sold 5.2 million cars and trucks globally • GM now: • 327,000 employees worldwide • 140,000 employees in the United States • Sold 9.2 million cars and trucks globally

14. Challenges… • Increase in competition • $5.3 billion for health care in 2005 • Largest private purchaser of health care • 1.1 million employees, retirees and dependents

15. Initial Collaboration Efforts • Continuous improvement workshops • Traditional supply base and health care • Area of focus • Quality improvement • Productivity increase • Inventory reduction • Lead time reduction

16. Lean History • Five Lean Principles: • People Involvement • Standardization • Built-in Quality • Short Lead Time • Continuous Improvement

17. GMS PeopleInvolvement ContinuousImprovement Standardization ShortLead Time Built-in Quality

18. Goal… • Building Value and Eliminating Waste

19. 1996 Global Manufacturing System • Assembly Plants • Metal Fabrication Plants • Powertrain • Engineering • Sales and Marketing • HR • Finance • Purchasing… 2003 Global Manufacturing System Application Of GMS

20. Global Application 2006 Global Manufacturing System • Engineering • Sales/Marketing • HR, Finance • Purchasing • HealthCare • Mfg. Plants • Service Centers • Parts Warehouses • Mock-Up/Prototype • Suppliers’ Operations… Administrative Environment Operations Environment

21. Supplier GMS (S-GMS) • Improve QUALITY through a Shop Floor Management Process • Teach, Coach, Mentor Leadership behavior • Engage Team Members • Develop Leaders as Teachers • Apply the “What – How – Why – Thinking” • Incorporate PDCA – Plan-Do-Check-Act

22. Collaboration

23. Lean Leadership Culture of Learning Commitment To Lean People focused on improving processes using GM-GMS Cross-functional Involvement Problems as Opportunities Problem Solving Plan-Do-Check-Act

24. Lean Leadership Culture of Learning Commitment To Lean People focused on improving processes using GM-GMS Cross-functional Involvement Problems as Opportunities Problem Solving Plan-Do-Check-Act

25. Lean Leadership Culture of Learning Cross-functional Involvement Problems as Opportunities Commitment To Lean People focused on improving processes using GM-GMS Problem Solving Plan-Do-Check-Act

26. Lean Leadership Culture of Learning Cross-functional Involvement Problems as Opportunities Problem Solving Commitment To Lean People focused on improving processes using GM-GMS Plan-Do-Check-Act

27. Lean Leadership Culture of Learning Cross-functional Involvement Problems as Opportunities Problem Solving Plan-Do-Check-Act Commitment To Lean People focused on improving processes using GM-GMS

28. Lessons Learned • The principles of GMS can achieve results in health care • Leadership commitment is key • Long term change and sustainability requires more than quick hit workshops

29. Lean Leadership Culture of Learning People focused on improving processes using GM-GMS Cross-functional Involvement Problems as Opportunities Problem Solving Plan-Do-Check-Act Results

30. Agenda • GM Perspective • UM Perspective • Who We Are • Where We Want to Go • Why We Need Lean to Get Us There • How GM Got Us on the Right Road • Where We Are Now

31. Who We Are Integrated Academic Health System, within major public research university: • UM Hospitals and Health Centers • 817 beds • 1.6 million outpatient visits • 10,000 employees • UM Medical School • 1500 faculty physicians • 995 resident physicians • 690 medical students • M-CARE Health Plan

32. Mission Synergy Education PatientCare Research

33. Good-to-Great in Health Care “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter conscious choice and discipline”. ---Jim Collins, AuthorGood to Great

34. How an Academic Medical Center Adds Value Produces ‘social goods’ of value effectively and efficiently: • Competent, compassionate physicians and nurses • Medical knowledge, new treatments and better models of care • Unique services not available elsewhere • Safety net services for the poor and uninsured

35. How an Academic Medical Center Adds Value Delivers value as defined by multiple stakeholders: • Our patients have the ideal healthcare experience • Our students obtain a superb education • Our faculty have rewarding academic careers • Our staff satisfaction is high • Our researchsponsors get more out of our work and…

36. How an Academic Medical Center Adds Value • Those who pay the bills for healthcare • General Motors, Blue Cross, Medicare, Medicaid, and people like you receive high quality, cost effective, patient- satisfying care

37. Why Health Care Needs Lean Thinking Traditional Health Care (or, the way I was trained) • Episodic • Requires patient initiation • Not well coordinated (patients & doctors) • Sporadic communication among clinicians • Sporadic patient education • Variable process of care • Clinicians’ opinions drive decisions • Systems do not prevent errors • Outcomes not measured • Expensive

38. Where Do We Want to Go? Our future state vision: Based on Institute of Medicine Report “Crossing the Quality Chasm”Care that is: • Safe • Effective • Patient-Centered • Timely • Efficient • Equitable

39. Crossing the Quality Chasm • The IOM “Chasm” Report gives us a vision of where to go • Lean Thinking gives us tools and methods to get there

40. Crossing the Quality Chasm • The IOM “Chasm” Report gives us a vision of where to go • Lean Thinking gives us tools and methods to get there

41. Burning Platform for Change?

42. Burning Platform for Change? Gaps at UMHS: • Quality: Not all diabetic patients on statins, aspirin • Safety: - Wrong site surgery - Fatal medication errors - Preventable wound infections • Efficiency: Days waiting for a CT scan • Appropriateness: Generic drug rate around 55%

43. Burning Platform for Change? • Bottlenecks • ORs • Inpatient beds • Stress of overwork (muri): • Physicians, nurses, clerks running faster • Nurse and physician shortage • Financial pressures • Troubled State economy • Health care costs burden employers • The uninsured

44. New Way of Thinking • Cultivate • Accountability • Collaboration • Teamwork • Weed out • Silos • Tribalism • WASTE and unnecessary complexity

45. “Act your way to a new way of thinking”. ---John Shook, Ph.D. Senior Advisor, Lean Enterprise Institute Author, Learning to See

46. “Find it, Fix it” “Cultivate a ‘Find it, Fix it’ mentality for overcoming challenges in your area”. ---G. Richard Wagoner, Jr. Chairman and CEO

47. How Did GM Get Us on the Right Road? • Provided GMS training • GM University (Pontiac, MI) • Lansing Grand River visit • Shared GMS materials, tools and templates • Coached initial learning projects • Provided training for UMHS coaches • Introduced UMHS to lean experts

48. Lansing Grand River Visit

49. Purpose: To Teach an overview of the Five Principles of GMS and some of the Elements through an Interactive Exercise UMHS Leadership Day 2005 People Involvement Continuous Improvement Standardization GM-GMS Short Lead Time Built-In-Quality GMS Exercise

50. UMHS Leadership Day 2005 GMS Exercise