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Introduction

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"Either you manage your constraints or they manage you."

—CHRIS ZEPHRO, CONSTRAINTS MANAGEMENT EXPERT

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Throughout popular discourse, little has been publicized about Constraints Management applications in service industries, especially in healthcare. Since there is much information published about the application of Lean and Six Sigma in healthcare, in Chapter 1 their descriptions were kept relatively brief. On the other hand, Constraints Management applications in the medical field and related publications have been quite slow to gain recognition, particularly in the United States. This chapter will detail the evolution of Constraints Management, adapt its terminology to the healthcare environment, and elaborate on its applications: thinking processes, buffer management and supply-chain logistics, critical chain project management, and finance and measures.

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The Evolution of Constraints Management

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Constraints Management emerged as a management discipline more than 25 years ago, and since then, hundreds of success stories have been published about its application in the manufacturing industry. While the adoption of Constraints Management into service industries has been evident, it has not been as rapid nor as visible as it had been in manufacturing. Yet Constraints Management is now applied in distribution, engineering, hospital design, prisons, government, banks, software development, finance, legal services, cell phone companies, retail, education, insurance, marketing, sales, strategy, and change management, as well as various other services and enterprises.

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The body of knowledge for Constraints Management applications has evolved, expanding in depth and breadth significantly since its inception. These applications, with examples from healthcare, will be summarized under four categories: thinking processes, critical chain project management, supply-chain solutions, and finance and measures. But first it might be helpful to review some early applications of Constraints Management in healthcare to introduce its terminology more generally.

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Early Applications

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The first healthcare application of Constraints Management that we are aware of dates back to 1991 in South Africa. It was pioneered in an outpatient department by Dr. Antoine van Gelder, who is a professor of medicine at the University of Pretoria Medical School and head of the Department of Internal Medicine at the Pretoria Academic Hospital. As detailed in the 2004 edition of The Goal, Dr. Gelder applied the buffer management solution, which in just six month's time reduced the department's waiting list from about eight months to less than four months. In another application at a 600-bed private hospital, Dr. Gelder's use of Constraints Management enabled a transition from a 20 percent budget shortfall to a profitable operation within a year. Despite these successes, very few applications in healthcare were reported until quite recently.

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One of the earliest reported applications of Constraints Management in U.S. healthcare was at the University of Michigan Hospital. The hospital's admission and discharge system was inefficient, resulting in an average of three hours' delay in accepting incoming patients, who waited for their rooms to be prepared. Constraints ...

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