Lean services: Wikis

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Lean services is the application of the lean manufacturing concept to service operations. It is distinct in that Lean services are not concerned with the making of ‘hard’ products.

To date, Lean principles of Continuous Improvement and Respect for People have been successfully applied to call center services, health care, higher education, software development, and public and professional services. Conceptually, these implementations follow very similar routes to those in manufacturing settings, and very often make use of the same tools and techniques. There are, however, many significant distinctions.

Contents

Understanding of Service

'Service’ in this context is not limited to ‘the office’ or ‘administration’ that have been the focus of several publications, but also wider service situations that are not necessarily repetitive, where ‘takt’ time is not applicable, and where task times may be both long and variable. Service in this context could mean anything from a hospital to a university, from an office process to a consultancy, and from a warehouse to field service maintenance.

It is important not confuse 'service operations' with the economic definition of service sectors (as distinct from manufacturing sectors), since many ‘service sector’ organisations have manufacturing-like operations in that they produce regular outputs along value streams.

Instead, ‘service’ refers to the ‘service concept’ or ‘product service bundle’, which are all the activities that provide value to the customer along a value stream.

Aspects of Lean Service

Lean Service has its origin in the the Toyota Production System (see Lean manufacturing). Lean in the Service sector is subject itself to continuous improvement, and as such there are an increasing number of concepts that may or may not be included as part of Lean Service.

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The Service Wastes

The original seven wastes (Muda (Japanese term)) were defined by Taiichi Ohno, the father of the Toyota Production System. These wastes have been often been redefined to better fit new organisations, industries, or external pressures.

One redefinition of these wastes for service operations by Bicheno and Holweg (2009) is as follows:

  • 1. Delay on the part of customers waiting for service, for delivery, in queues, for response, not arriving as promised. The customer’s time may seem free to the provider, but when she takes custom elsewhere the pain begins.
  • 2. Duplication. Having to re-enter data, repeat details on forms, copy information across, answer queries from several sources within the same organisation.
  • 3. Unnecessary Movement. Queuing several times, lack of one-stop, poor ergonomics in the service encounter.
  • 4. Unclear communication, and the wastes of seeking clarification, confusion over product or service use, wasting time finding a location that may result in misuse or duplication.
  • 5. Incorrect inventory. Being out-of-stock, unable to get exactly what was required, substitute products or services.
  • 6. An opportunity lost to retain or win customers, a failure to establish rapport, ignoring customers, unfriendliness, and rudeness.
  • 7. Errors in the service transaction, product defects in the product-service bundle, lost or damaged goods.

Bowen & Spear's 4 principles

For Lean to be successful, HBS professor Kent Bowen and Steven Spear (HBS DBA '99) have defined a framework of 4 principles, based on the Toyota Production System :

Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.

Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.

Rule 3: The pathway for every product and service must be simple and direct.

Rule 4: Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

Value Demand and Failure Demand

One of the central concepts that distinguishes lean services from lean manufacturing is the concept of value demand and failure demand (Seddon, 2003).

Value demand is the demand for service from customers, while failure demand is the demand caused by a failure, to do something right for the customer. Failure demand is thus demand that only exists because initial demand was not satisfied properly. For example, a large proportion of calls that call centres receive are either chasing up enquiries made earlier, or to correct earlier work that was not done properly. As one of the key aims of "lean" is to eliminate waste, failure demand represents a first and obvious type of waste in service organisations.

By treating failure and value demand alike in statistical analysis, failure demand can help give a quite false impression of greater productivity. This merely reinforces the need to look in, from the customer's perspective, and ask what he or she might think of the service.

Lean Sigma

In recent years, some major practitioners have combined Lean and Six Sigma principles to yield a methodology commonly known as Lean Six Sigma. One of the earliest and most successful adopters of this is Honeywell, which calls its program Six Sigma Plus. Like some other major practitioners, GE has developed a very rigorous lean six sigma training program in which certain employees are chosen to become certified in this area.

Criticisms of Lean Service

5S in the Office

5S has been widely and successfully applied in office environments, however this has received some criticism for resulting in workplaces that are too clinical or impersonal.

Application of Lean in creative environments

Critics of Lean Service have suggested that problems arise when companies try to apply "Lean principles" to areas where creativity, ability to react to rapid external changes, need to spend an extensible amount of time to convince external parties (typically lobbying) or ability to successfully negotiate are needed; and that downsides of Lean are reduced / eliminated creativity and ability to cope with the unexpected.

Proponents of Lean Service, however, suggest that these criticisms are a response to attempted Lean implementations that have failed properly to address customer purpose or need, and where tools from Leans manufacturing have been applied inappropriately.

See also

References

  • Bicheno, J. and Holweg, M. (2009) The Lean Toolbox: The Essential Guide to Lean Transformation, PICSIE Books, ISBN 978-0954124458
  • Bicheno, J. (2008) The Lean Toolbox for Service Systems, PICSIE Books, ISBN 978-0954124441
  • Seddon, John (2003) Freedom from Command and Control: A Better Way to Make the Work Work, Vanguard Press.
  • Womack, J.P., Jones, D.T., (2005) Lean Consumption. Harvard Business Review 83 (3), 58-6, "
  • Sarkar, Debashis (2007), Lean for Service Organizations and Offices - A Holistic Approach for Operational Excellence, ASQ Press [1]
  • Hanna, Julia - HBS - Bringing "Lean" Principles to service industry, published 22 October 2007, Author Julia Hanna

For a case study of Lean in transaction-intensive services, see also: Swank, C.K. (2003). The Lean Service Machine. Harvard Business Review 81 (10), 123-129

External links

Consulting Organisations


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