It Only Works For Manufacturing
Lean Principles: They only work in manufacturing. It’s a statement you hear more often than not. Even though many organizations across the service industry are adopting Lean principles and practices, the concept just hasn’t been sold. So many understand the value of Lean principles, but just cannot get their head wrapped around how it would apply to them in the services sector. They don’t manufacture a ‘widget’ and they don’t see a production line, with idle workers or backlogged production. Without those situations challenging them daily, they just don’t understand the connection.
Lean Principles in the Service Industry
A typical observation within the service processes is a variation of the “80-20” rule: a small percentage of work typically eats up a disproportionate amount of time. In one internal support function, 75% of transactions took less than five minutes to process. The remaining 25 %, more complex transactions, account for 60% of the total time expended daily. These examples can be a huge drain on productivity and are typical for many service processes. In manufacturing, the ‘widget’ is the product. In the service industry, the customer is the product and their satisfaction is the focus of the process. When satisfaction is missing, the ‘widget’ is broken and product is not going out the door. The customers then abandon the organization in favor of a competitor that does offer the right ‘widget’.
Service Quality and Focus
Implementing Lean practices and principles is really about a mindset and change management. Without a tangible ‘widget’, employees are your best insight into practices and customer behavior. Involve them from the beginning of any process and you will get their buy-in and support. Making continuous improvement will then make a permanent change in the culture and produce the change you are seeking. The elusive ‘widget’ will then become tangible and visible to those in the services that you are providing. Add to that unwavering support from the top and encouraging teamwork at all levels, and you will have found the right way to apply Lean practices to your service organization.