Lean services

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 applied to all manner of services including 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 often use some of the same tools and techniques. There are, however, many significant distinctions and the same tools can be applied in different ways. A number of significant service sector organisations have come together to form The Lean Service Forum.[1] to share knowledge, learn from each other and understand different lean journeys.

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 ‘task’ 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 to 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. It is therefore important to realise that within a service environment you can encounter a range of situations from very repetitive work to that which involves a high degree of discretion on the part of the workforce. Each of these situations require significantly different interpretations of lean, as well as appropriate variations in management approach; this concept is explored further in The Lean Continuum.[2]

‘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 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.

The service wastes

The original seven wastes (muda) were defined by Taiichi Ohno, the father of the Toyota Production System. These wastes have been often 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:

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:[3]

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" protocol for sending requests and receiving 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 distinction between 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 centers receive are either chasing down 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 an obvious type of waste in service organizations.

Failure demand can also be defined as "the delivery or production of products and services downstream as a result of defects in the system upstream."(Shillingburg, 2011) This would include administrative rework, audits, inspections and enquires. This non value-added work can account for the majority of administrative work performed.

By treating failure and value demand alike in statistical analysis, failure demand can give the quite false impression of greater productivity. This merely reinforces the need to look at what is really going on, and ask why the service is being rendered.

The DEB-LOREX Model™

In 2007, Author and Service Lean thought leader Debashis Sarkar proposed the DEB-LOREX™ model. Targeted towards service companies, this management system is based on the philosophies of Lean and Systems Thinking. The components that make up the DEB-LOREX™ Management System are: • Leadership • Functions • Value Streams • Anchors • Lean Thinking • Results


For Lean to deliver sustained benefits, it is imperative that all the components of the Lean Management System function in harmony to deliver desired results. During Lean transformation, it is imperative that each of the elements of DEB-LOREX™ management system is looked at closely and taken up for improvement. Inadequacies in any of them will impair the overall expected performance of organization. The components comprising Leadership, Functions, Value Streams, Lean thinking and Anchors are the enablers in DEB-LOREX™ Lean Management System. The adequacy of each of the enablers will have direct impact on the performance (Results) of the organization. For example, an organization may have great processes but without leadership commitment cannot expect the management system to deliver value. As the implementation of Lean matures in the company, leaders will be in a position to clearly say which of the enablers (or causes) need to be acted upon to get the desired results.

Lean Six 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

More recently it is being argued that the application of lean manufacturing tools and techniques have seriously damaged the service organizations that Lean has been applied to. John Seddon (visiting professor Sheffield University) has been especially vocal and critical of lean in his paper 'Rethinking Lean Service' [4]

The application of Lean Tools and techniques has led to serious problems in many service organisations, including Her Majesty's Revenue and Customs (HMRC) and even Starbucks.

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. Service Lean leader Debashis Sarkar has done pioneering work in the space of application of 5S to improve performance of a large financial conglomerate which can be read in his book referenced later.

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 extensive amount of time to convince external parties (typically lobbying) or ability to successfully negotiate are needed; and that the 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 Lean implementations that have failed to properly understand Lean as a holistic, action based management and implementation system to provide enhanced customer value, a "Tools" mentality instead of an outcomes orientation and an inadequate knowledge of how to utilize and adapt Lean Manufacturing methods to the service environment.

See also

Notes

  1. ↑ http://www.oeeuk.com/community/lean-service-forum/ Further information on The Lean Service Forum
  2. ↑ http://www.oeeuk.com/five-min-briefing/lean-continuum/ The Lean Continuum
  3. ↑ Harvard Business Review Sept 1999
  4. ↑ http://www.thesystemsthinkingreview.co.uk/images/ARTICLE/john_rethinking_lean_service.pdf

References

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