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,^[1] 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.^[2] 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.^[3]

‘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:

• 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.
• 8. Service quality errors, lack of quality in service processes.

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.

Debashis Sarkar’s Contribution to Lean for Service ^{[4] [5] [6]}

In 2007, Lean Practitioner & Phil Crosby Medalist Debashis Sarkar ^[7] came up with world’s first holistic approach for building a lean enterprise in service sector. This took into account unique challenges faced by service companies and provided a much needed playbook for change leaders. His contribution to “Lean Service” comprises the following:

• DEB-LOREX-MODEL™ ^[8] Based on principles of Lean and Systems Thinking, this management system specifies the building blocks that need to be kept in mind while embedding lean to a service organization. The components that make up the DEB-LOREX™ Management System comprises:(1) Leadership (2) Functions, (3) Value Streams, (4) Anchors, (5) Lean Thinking, (6) Results. The Anchors include the 5Ps which are People, Processes, Partners, Promotions and Problem Solving. 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 properly implemented. Inadequacies in any of them will impair the overall expected performance of organization.

• Blueprint for Service Lean Enterprise^[9] Debashis Sarkar proposed a step-wise approach for holistic deployment of lean in a service enterprise. This included four phases such as Plan -> Build -> Assimilate -> Sustain. Each of the four steps have detailed sub-steps that add to building a lean business system.

• The DEB-LOREX Index^[10] This is a holistic measure to ascertain how far an organization is on a journey of lean transformation. The DEB-LOREX Index is established by evaluating an organization on a set of parameters based on elements such as leadership, value streams, anchors, customers and 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' ^[11]

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 Service & 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.

In early 2000s Lean Practitioner Debashis Sarkar pioneered world’s first enterprise-wide deployment of 5S in a large universal bank across its offices all over the world. He reported major benefits that helped to improved organisational effectiveness by making workplaces more efficient and effective. The approach was based on experiences for manufacturing but intelligently customized to a service enterprise. He found 5S to provide an excellent foundation for a multi-year lean transformation.^[12]

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

• Lean manufacturing
• Lean construction
• Lean IT
• Lean accounting
• Lean Government
• Lean Higher Education
• Lean Consumption

Notes

1. ↑ Ker, J. I., Wang, Y., Hajli, M. N., Song, J., & Ker, C. W. (2014). Deploying lean in healthcare: Evaluating information technology effectiveness in US hospital pharmacies. International Journal of Information Management, 34(4), 556-560.

2. ↑ http://www.oeeuk.com/community/lean-service-forum/ Further information on The Lean Service Forum

3. ↑ http://www.oeeuk.com/five-min-briefing/lean-continuum/ The Lean Continuum

4. ↑ http://www.thesystemsthinkingreview.co.uk/images/ARTICLE/john_rethinking_lean_service.pdf ^{[dead link]}

5.↑ Sarkar, Debashis (2006), 5S for Service Organizations and Offices — A Lean Look at Improvement, ASQ Press, Milwaukee

6.↑ Sarkar, Debashis (2007), Lean for Service Organizations and Offices — A Holistic Approach for Operational Excellence, ASQ Press

7.↑ List of ASQ’S (American Society for Quality) Crosby Medalist:

8.↑ Details of DEB-LOREX-MODEL™

9.↑ Sarkar, Debashis (2007), Lean for Service Organizations and Offices — A Holistic Approach for Operational Excellence, ASQ Press, Milwaukee, 51-194

10.↑ Sarkar, Debashis (2007), Lean for Service Organizations and Offices — A Holistic Approach for Operational Excellence, ASQ Press, Milwaukee, 205-219

11.↑ Sarkar, Debashis (2012), Lessons in Lean Management – 52 Ideas for Service, Westland

12.↑ Sarkar, Debashis, "Lean for Service Columns": http://www.processexcellencenetwork.com/default/columnists/lean-for-services/Lean ]

References

• 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 (2006), 5S for Service Organizations and Offices — A Lean Look at Improvement, ASQ Press
• Hanna, Julia — HBS — Bringing "Lean" Principles to service industry, published 22 October 2007, Author Julia Hanna
• Sarkar, Debashis (2007), Lean for Service Organizations and Offices — A Holistic Approach for Operational Excellence, ASQ Press
• William K. Balzer (2010) "Lean Higher Education, Increasing the Value and Performance of University Processes", Productivity Press

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

• http://webapps6.hpcl.co.in/knowledge/kma/sm/sfm/sfm260208.htm
• Sarkar, Debashis (2012), Lessons in Lean Management – 52 Ideas for Service, Westland
• Sarkar, Debashis (2013), How Can I Help You – 5 Mistakes to Avoid in Customer Service, Random House Business
• Stüer, Philipp (2015), Gestaltung industrieller Dienstleistungen nach Lean-Prinzipien (Design of Industrial Services according to Lean Principles), Apprimus Verlag

External links

• [Lean for Service Columns: http://www.processexcellencenetwork.com/default/columnists/lean-for-services/Lean ]
• [Lean Thinking for Service Podcast: http://business901.podbean.com/]
• [Great Debate - Lean for Service: http://www.processexcellencenetwork.com/six-sigma-quality/podcasts/the-great-debate-lean-for-services/]
• [How to drive culture change: http://www.processexcellencenetwork.com/change-management-for-continuous-improvement/podcasts/beginning-your-lean-transformation-how-to-initiate/]
• [Applying Lean for Service: http://www.oeeuk.com/five-min-briefing/applying-lean-for-services/]