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What about Lean in a Services Environment?

September 9th, 2010

Everyone knows that Lean came from the manufacturing world, and many aren’t quite sure how, or even IF, it applies to more service oriented environments. Well, rest assured, it does.  I see countless examples of Lean success stories in a broad range of services/transactional domains. Financial close, claims processing, call centers, software development, enterprise software implementations, patient waiting times, logistics and supply chain, order fulfillment  …. The list goes on and on.

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Granted, adoption of Lean in services environments has been a little slow, but adoption is happening now at a rapid pace.  Why?  It could just be the natural progression of things, but I think it’s also a function of the business environment since the recession.  Internal efficiency and productivity, doing more with less, and cutting costs are now just the way business is done, the new norm …. And that, my friends, is what Lean is all about.

Lean can deliver big ROI in services processesLean first and foremost is about the elimination of waste, and it defines 7 ( or 8 ) elements of waste. Any activity that doesn’t add value, from the customer’s perspective (internal or external), is by definition non-value-add and should be minimized (or eliminated).   Now, think about this … some very reputable research suggests that, in a typical services process, 80% of the activities are non-value add. 

Yet, all those NVA activities add time and cost, and opportunities for errors to the process. In the case of most back-office processes (e.g. Finance, Customer Service, HR, IT, supply chain, etc), any saving in cycle time / cost filter straight to the bottom line.

80% NVA activities, savings straight to the bottom line … That tells me that there is ample room and opportunity for Lean in Service-oriented processes.      Think about it and contact me if you’d like to discuss in more detail.

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