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Blog post 10 Dec 2020

Lean Process III: How Services Can Benefit from Lean Methodology

Lean Process III: How Services Can Benefit from Lean Methodology

While project management tends to be associated, first and foremost, with software development methods and practices, it would do a great disservice to limit the various available project methodologies to this particular field, especially when other domains can greatly benefit from them. Lean processes are a great example here. The techniques and principles of Lean methodology have, however, taken a quite long time to enter such industries as human resources, customer service, or even health care, and this is mainly because in the service industries, some of the main concepts, such as waste and inefficiency, may not be easy to detect.

How to apply Lean methods to service-oriented industries

Lean methods and principles were first designed for manufacturing, and there are undoubtedly great differences in the management of a manufacturing enterprise and a company offering services. American-German economist Theodore Levitt summed up these differences: While manufacturing looks for solutions inside the very tasks to be done, service looks for solutions in the performer of the task.

The role of the performer is the key distinction between service and manufacturing. Also, when focusing on cutting costs, no physical inventory is present to consider. In this case, the Lean methods have to be adjusted. Instead of the physical inventory, there is labour and customer satisfaction to tackle.

It has already been stated that waste may not be easy to detect when it comes to services. In their study named Lean Toolbox, Bicheno & Holweg came up with an adapted version of waste categories that service industries can relate to. These include delays on the part of customers waiting for service, lack of quality in service processes, unclear communication leading to clarification, duplication and re-entering data, and a failure to establish rapport with the customers.

Besides the question of waste and its elimination, the service-oriented industries may also struggle with the standardisation of their white-collar workers' work. And as for the standardization of the work process, its performance can increase overall responsiveness, lower error rates, and eventually lead to higher customer satisfaction.

Since applying principles made primarily for the environment of manufacturing may be a challenge when it comes to managing work productivity and analysis of the work process efficiency, here are the six factors that can serve as a guide for reaching the goal:

  1. Identification and mapping of end-to-end processes

    Inefficiency can stem from the failure of seeing the complete picture with all its interface and interdependencies. A detailed process analysis can be a remedy here. It will reveal the intricacies of the process while unmasking its complexity. This step leads to improving performance by simplifying the process, automating some parts, and decreasing the costs.

  2. Complexity reduction

    Reducing complexity goes hand in hand with the first step – analysis of the whole process. Complexity tends to obstruct efficiency and lead to disruptions and rework. Redesigning the process may be the key to the elimination of redundant elements and the removal of exceptions. This may be a complex operation in itself, especially in the case of larger companies. The result, however, is worth the effort.

  3. Definition and standardization of the work modules

    While it is necessary to see the “big picture” of the process, it is likewise essential to break down the process into small modules. Therefore, while de-complexing the process, the individual, repetitive modules have to be identified. Once these modules are well defined, they need to be standardized to reduce errors while increasing speed and efficiency. Standardizing work modules can help in such environments as sales or banks where many customers are served daily.

  4. Harnessing the power of Big data

    Whether during the initial analysis geared toward unmasking the redundant processes or standardization of the smallest modules, there is support available through the data collected and systems developed. Information, know-how, and practical advice can be reached quite easily to assist even a small and starting company to set their own work process from the very beginning.

  5. Setting and tracking performance

    No process can be evaluated without being adequately measured first. After the problem identification and elimination phase are finished, the company performance improvement needs to be assessed. This includes tracking the amount of time spent on performing different tasks. It has been proven that bigger workloads lead to higher productivity, yet only up to a certain point of overload. Tracking the time during which the workers work and finish the task will reveal how productive they are.

  6. Cross-training for productivity increase

    The last factor to pay attention to is cross-training. Training the workers to perform more than one service task can lead to their ability to substitute for a missing worker or when the workload increases. As service industries may experience seasonality, there may be a greater need for certain work performance in specific months or seasons of the year, for example. The benefit of cross-training the staff has double-fold: the company has plenty of workers for the individual jobs throughout the year, and the workers don’t have to put laid off when the particular jobs they initially trained for are not needed at the moment.