Why have companies been so slow to apply lean principles and techniques to service processes such as finance, human resources, accounting, health care, and customer service? One reason is that the waste and inefficiency that can interfere with services are rarely obvious.
For decades, manufacturers have used lean tools and techniques to improve productivity, reduce waste, and get more from their assets. But the same principles of lean innovation can be applied to service functions.
In manufacturing, the customer doesn’t see or care about the production process itself, as long as workers aren’t abused and the product is acceptable. But in health care, banking, travel, and other service industries, the customer is the product moving through the process, and experiencing firsthand the frustrations of inefficiency. Satisfaction is critical, whether the customer is internal or external. And a lack of satisfaction is costly when it prompts customers to take their business elsewhere.
Key reasons for inefficient service processes are a lack of standardization and consistency, exceptions and rework that slow throughput, and an inability to analyze and manage the drivers of work force productivity and customer satisfaction.
BCG reveals six factors that increase the odds of success of services:
1. Identify and map end to end processes: A detailed analysis of processes and subprocesses often reveals inefficiencies, “work-arounds” and complexities as well as opportunities to improve performance.
2. Reduce complexity wherever possible: Complexity is a major obstacle to process efficiency. Flag and eliminate any variations, disruptions, rework or exceptions that slow the workflow. Rethink and redesign the process to eliminate elements that sap efficiency.
3. Define and standardize discrete work modules: Break each process into discrete, repeatable pieces with distinct inputs and outputs. Then standardize these repeatable process steps.
Besides increasing speed and efficiency, standardization can reduce errors.
4. Harness the power of “big data”: The advances in computing power and processing speed now allow companies to gather vast amounts of data and perform complex analytics. The resulting insights can minimize waste, lower costs, and sharply improve process performance.
5. Set and track performance metrics: Once process work has been broken down into discrete pieces, those pieces can be measured and target benchmarks can be established. The metrics provides value in three areas: 1) To improve performance of people 2) To coach and improve workers, and 3) To set performance benchmarks and improve overall process excellence.
6. Cross-train to increase productivity: In some service functions, employees have uneven workloads at different times of the day, leading to periods of frenetic activity mixed with periods of downtime. In some industries, workers often share the workload by wearing different hats, for example taking customer orders, serving food, and so on, and other company cashiers can shelve products and department specialists can provide customer service when it is needed.
Implementing lean services is really an exercise in change management and one that is most effective when people at the front lines are engaged and involved in problem solving.
The companies should aim to develop lean champions and trainers who can teach lean methodologies and tools to others within the organization, ensuring that results are sustained going forward.
images credit: www2.hull.ac.uk
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Geovanny Romero, is certified NPDP Plant Manager at Renovallanta-ContiLifeCycle, and Managing Director at NPD Strategy in Andean Region. A Member of PDMA International, his main interests are focused in Productivity, New Product Development and Lean In