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Archive for October, 2010

Who ya' gonna call? LSS for Services Tip #2 – Lean Busts Halloween Ghosts

October 19th, 2010 Comments off

Lean Tools Bust Waste in ServicesAs we all know, the birth of Lean (usually with the word “Manufacturing”)  is often considered to be the Toyota Production System. Lean for Service Operations is so new it is defined on Wikipedia as the application of lean manufacturing principles to service operations. Yet when you search using Google the term Lean Manufacturing yields just over 1.5 million results while Lean Services yields a surprising 16.3 million results! The derivative outpaces the original because of its natural application. It’s as if it were always meant to be.
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This natural fit lies in the very nature of manufacturing, service operations and the strengths of lean. Lean was first easily discovered in manufacturing because waste and WIP are easily found. Like in the California gold rush, you could bend down and pick up the nuggets. Manufacturing’s physical nature provides an easy route by which to follow the flow of work. As you move along, you can see raw materials, intermediate stages of inventory and final finished goods. And also along the way, you can see bins of rework and scrap as well as WIP between stations. You physically see the work, the WIP and the waste. Certainly it took brilliance to design what to do with it but the problem was evident.

Lean Six Sigma for Services

our whitepaper that discusses how Lean and/or Six Sigma in a services environment differs from a traditional manufacturing environment

Service operations, however, by their very nature aren’t so easily observed. Work flows are unseen. Information representing WIP are sent over networks. Customers waiting on phones can’t be seen. Time lost is erased with the stroke of a delete key. Service operations, like spirits on a Halloween night, can pass before our eyes without a trace. Enter Lean. Lean with its highly visual tools like value stream maps performs the supernatural. It gives earthly form to the phantom.

As the invisible becomes visible, we make a great discovery – so many service operations occur between functional areas such that they aren’t owned by anyone. We learn that not only is there waste, but there isn’t anyone even worried about it. Thus Lean, with its visual tools, not only provides visibility to work flow, waste and WIP but raises the question of process ownership.

With processes made visible and ownership addressed, the race for improvement forces the question of where to attack first. Very simply put, once non-value added activities are made obvious by the accumulation of waste & WIP, you look for the actions and processes that drive up said waste & WIP. Therefore, when looking for projects, look within or between the processes to which waste and WIP demonstrate the greatest sensitivity. Then heavily rank that projects that improve those processes. They will have the greatest impact on eliminating non-value added activities.

People talk about the amount of low hanging fruit in service operations. It’s important to understand why it is there. People in service operations aren’t fools willing to let waste and WIP drag them down. But they haven’t been able to see the problem and where it resides. With the visibility lean brings, that has changed. And consider us your Ghostbusters! If you would like to discuss the visual tools embodied in lean and how they can help your service operations, please feel free to contact me.

Lean Six Sigma In a Services Environment – Tip #1 What Versus How to Measure.

October 6th, 2010 Comments off

When attempting performance improvement in a services organization, it is very important to distinguish between measuring the “correct thing” vs. “measuring the thing correctly”. Since people drive the decisions in service organizations more than in manufacturing organizations where machines and software limit human variance, processes are less defined in service organizations.

With less defined processes, the service world’s KEY measurement issue is finding the correct things to measure that gives true feedback on past or future performance. This “what to measure” issue is quite different than the predominant issue in manufacturing, which is “how to measure more accurately.” In manufacturing, for example, gage studies are critical; the data usage is straightforward. In service processes, however, the greater issue by far is determining a useful measure.

Lean Six Sigma for Services

our latest whitepaper that discusses key differences for Lean Six Sigma in a Services environment

A general lack of consistent, cookie-cutter measurements for service businesses demands greater time and attention is focused on developing and understanding appropriate measurement systems in specific environments. Managing a process becomes a matter of reading and interpreting a series of interrelated measurements rather than relying on a mystical “key measurement”. No one measure will identify and eliminate all problems forever. For the most part, businesses measure variables such as close rates, cycle time and on-time compliance, with little understanding of “value added” contributions to the final “product.”
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Each service-related

environment has its own unique set of problems, and each requires a carefully crafted, custom analysis that fit its top level customer and business data, its core and sub processes and its definition of critical to customer. As such, the skills needed to do this well, such as process mapping and process design techniques rise in importance.

So often when we talk to clients and prospective clients in service industries, they describe their requirements along the lines of “our folks don’t handle statistics well”, “we’d like more service examples” or “we need someone who understands our culture”. To them, that is what Lean Six Sigma in Service environments mean. All these things are true. But just as importantly, you need to understand your unique nature and adopt a different set of tools and techniques. This discussion of the importance of process is just one. In coming posts, we’ll discuss others. If you want to talk about these Service Industry points, please feel free to contact me.