THE DEVELOPMENT OF LEAN READINESS INDEX: AN ADOPTION OF MANUFACTURING SUCCESS FACTORS TO HOSPITAL APPLICATIONS

Abstract

Budget constraints, increasing number of patients and demand for more efficient and quality health services are among the challenges faced by the Ministry of Health Malaysia (MOH). In this regard, the MOH has decided to adopt the Lean method to improve the quality of its service delivery across 133 public hospitals throughout the country, following the success of several Lean healthcare pilot projects in 2014. The decision led to question if the hospitals are ready to implement Lean, as lack of readiness can lead to lack of sustainability in the long run. While most previous works had focused on Lean implementation and less emphasis on readiness; this has been identified as an empirical gap and had been the motivating factor for conducting this research. This research recognise the objective to assess Lean implementation readiness for Malaysian public hospitals thus proposed the development of Lean Readiness Index (LRI). The index is used to gage hospital’s level of readiness which are important to support Lean implementation successfully. In this research, a survey was conducted within Malaysia public hospitals to map the organization behaviors with Lean manufacturing critical success factors. Data were obtained from 118 hospitals with 88.7% response rate. A Lean readiness model was developed using structural equation modeling (SEM) and the relevant constructs were identified using confirmatory factor analysis. The final structural model consists of nine constructs and 31 items were identified, and the results proved that hospital organizational behavior and Lean manufacturing critical success factors were significantly applicable in determining Lean readiness in Malaysian public hospitals. Finally, the Lean Readiness Index (LRI) was formulated and a ruler in-associate with the LRI were proposed as to meet the objective of the research. The obvious finding to emerge from this research is that only 10.1% of Malaysian public hospitals have ‘good’ readiness status. The research also revealed the overall LRI’s value was 0.617 and, the majority of the hospitals were categorised as having ‘fair’ (49.5%) and ‘weak’ (32.7%) readiness status. Further assessment found that three constructs mainly communication, training, and organizational culture were the highest contributor to the low LRI thus recommended for improvements. This research helps determine whether the hospitals have sufficient foundation to implement Lean. The two contributions of the research are: (1) it derives lean readiness factors via structural equation modelling; (2) it demonstrates the readiness level for Lean implementation in Malaysian public hospitals. The theoretical and managerial findings in this research have added to the existing literature on Lean in integrating its applications in manufacturing and service industry.