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

October 6th, 2010

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.”

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.

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