Engineering Operational Excellence in Healthcare Supply Chains

Hospital operations are often oversimplified or dismissed as straightforward when viewed from the outside. Products are needed for patient care by nursing staff, and those products are picked and delivered by the operational team. This all seems simple enough. However, the reality is far more complex and best understood and managed through concepts and techniques borrowed from industries outside of healthcare.

“Busy but smooth” is a mantra I’ve often embraced and reinforced with operational teams. It is not frantic. It is not stressful. There are no firefights. Team members understand their roles and have specific schedules and assignments. Staff are not sitting around waiting for work to begin. This doesn't happen by accident. It is deliberate. It is thoughtful. It is difficult to achieve. But once it’s in place, days can pass with a Zen-like “flow.”

“Flow” is a key concept here and best described with a term from industry called Takt. Takt, or takt time, is the German word for pulse or heartbeat. It is a term most often used in manufacturing and is a key methodology in lean management. The concept begins by carefully assessing both operational capacity and customer demand.

As a healthcare executive, can you clearly state what capacity your operations are running at? Can you say whether you are on or off schedule each hour of the day? If change is required, can you gain immediate insights into staffing and timing impacts? In this article, we’ll explore these questions and share how Canon Business Process Services can help you achieve your optimum Takt—your Zen flow for operations.

Building a labor-tracking and optimization framework based on flow is no easy task. It starts with laying out every task that must be completed each day—across all 7 days of the week. All work must be quantified into specific, identifiable segments, including auxiliary effort such as transit time. Unexpected tasks, such as product returns, should also be given an allowance when modeling demand.

For example, consider Emergency Department bedside carts. There are 45 carts that must be filled before 9:00 AM. Each cart takes 6 minutes to fill using a parent/child cart process, and it takes 20 minutes to replenish the parent cart at the end of the day.

By mapping every task, you begin to understand demand and effort—the first essential ingredients of Takt Time.

Takt Time matches hospital customer demand (in this case, the bedside cart replenishment) with operational capacity, and then plots out the flow. Takt Time is broken down by schedule per hour, allowing hospitals to establish measurable targets for on-time delivery and percentage capacity.

We will further explore how to establish optimal flow by examining Operational Capacity, followed by the levers used to match capacity with demand.

Operational capacity begins with understanding staffing, schedules, and labor standards. Evaluating capacity requires careful observation and time studies to determine how work is actually performed in the specific environment. Capacity should be based on empirical data—how work is executed today—not on aspirational goals. (Target capacity is a future-facing effort and is addressed in a later section.)

Importantly, capacity must be assessed independently of demand. It should not be influenced by the current workload or the timing in which work is needed.

For example: A staff member begins their day at 6:00 AM and starts the picking process. From 6:30 AM to 12:00 PM, they are expected to pick 50 lines per hour. From 1:00 PM to 3:00 PM, they complete put-away tasks, with a separate target for the number of PO lines put away per hour. Based on this standard, the staff member has the capacity to process 275 picks and 40 puts during their shift.

By performing this exercise across all team members and tasks—and applying consistent labor standards—a comprehensive model of staffing capacity begins to emerge. Canon Business Process Services brings extensive experience in applying labor standards to operational workflows and can benchmark existing practices against industry best practices. This allows organizations to not only establish a baseline for current performance but also identify targeted opportunities for optimization as the process shifts toward continuous improvement.

Each hospital has its own unique service level expectations and timing pressures. Flexing demand requires careful coordination with nursing and administrative teams to balance service delivery with appropriate timing and priority.

The concept of a lever helps clarify cause and effect: if Action A is taken, then Outcome B will occur. Understanding how operations can influence demand or capacity is crucial for both strategic and tactical decision-making.

Returning to the bedside cart example—filling by 9:00 AM may not be that critical. Shifting the fulfillment goal to 10:00 AM may have minimal impact on the Emergency Department, while enabling timely fulfillment of surgical suite carts before morning procedures begin.

Some demand is fixed and essential, but much can be adjusted through collaboration and data analysis. For example, a product delivered every two shifts could have its PAR level increased to reduce the frequent restocking, reducing the required demand for picking and delivery, without impacting the customer.

Hospitals can also combine or offload tasks to affect demand. One facility, for instance, grouped pharmacy, supply, and equipment deliveries into a shared route, gaining efficiency by consolidating trips.

Operational leaders have a broad toolkit for matching capacity to demand: shift scheduling, route management, task optimization, as well as the specific SOPs for task completion.

One of the most important tools is building a fair and balanced work environment. No team thrives when work is unevenly distributed—especially when individuals feel (rightly or wrongly) that others are doing less. Understanding individual effort and visualizing hard-to-measure tasks, such as transit time, can play a big role in workforce satisfaction and efficiency.

A well-managed operation should be able to quantify work effort per staff member, recognize high performers, and reward them appropriately.

Route management and the sequencing of tasks can be another critical source of operational efficiency—one that is truly unlocked once customer demand and staffing capacity are clearly defined and overlaid using a Takt Time-based plotting of the daily work structure.

This article provides a high-level overview of labor productivity optimization in pursuit of a balanced Takt Time and a "busy but smooth" operational flow. When properly implemented, every person knows what to do and when. Work is visible. Progress is measurable. Tasks are executed with clarity and rhythm.

Organizations must balance operations while also understanding capacity and external pressures. By setting a Takt Time that includes a 10%-15% capacity buffer, leaders gain visibility into what can be absorbed on a given day—and what happens when staffing dips. Health systems that flex every available lever but still come up short have a clear, data-driven case for expanding staffing—one that is easy to explain.

Laying out the demand, engaging customers, collecting and optimizing the data, and building an effective support team is a challenging endeavor—but one that yields tremendous value. Canon Business Process Services brings deep expertise in healthcare operations and has a proven track record of helping large medical centers model labor and demand to achieve their “Zen flow”.