The service wastes
The original seven wastes (Muda (Japanese term)) 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.
Bowen amp; 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 : http://www.victoryag.org/mentoring.htm
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 way to send requests and receive 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.