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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, 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.
Definition of "service"
"Service" in this context is not limited to the office or administration, 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. "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.
Lean Six Sigma
In recent years, some practitioners have combined Lean and Six Sigma principles to yield a methodology commonly known as Lean Six Sigma. One of the earliest adopters of this is Honeywell, which calls its program Six Sigma Plus. Like some other 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".
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 the 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.
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.
- 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.
- Seldon, John; O'Donovan, Brendan (July 2009). "Rethinking Lean Service".
- Balzer, William K. (2010) "Lean Higher Education, Increasing the Value and Performance of University Processes", Productivity Press.
- Hanna, Julia - HBS - Bringing "Lean" Principles to service industry, published 22 October 2007.
- Seddon, John (2003) Freedom from Command and Control: A Better Way to Make the Work Work, Vanguard Press.
- Stüer, Philipp (2015), Gestaltung industrieller Dienstleistungen nach Lean-Prinzipien (Design of Industrial Services according to Lean Principles), Apprimus Verlag. ISBN 978-3-86359-298-1.
- Swank, C.K. (2003). The Lean Service Machine. Harvard Business Review 81 (10), 123-129 (case study of Lean in transaction-intensive services)
- Womack, J.P., Jones, D.T., (2005) Lean Consumption. Harvard Business Review 83 (3), 58-6, "