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Lean for Service Operations – It Really is Different …

March 30th, 2012

Lean Services vs. Lean ManufacturingWe have many conversations with companies that want to talk about applying lean in areas other than manufacturing.  Some of these companies are manufacturers that have been doing Lean for years, and doing it well in their productions operations, but not at all in non-manufacturing parts of the business.  Others are pure services companies like telcos, banks, and insurance companies that are just now starting to explore Lean.  In many cases, they’re looking at Lean because they’re being asked to do more with the static or declining headcounts.

One of the challenges that I keep seeing is that companies try to do Lean Manufacturing in a services environment.   Let me be blunt … if you think you can blindly copy the tools of Lean manufacturing in a services environment, you’re setting yourself up for failure.  We see this happen when manufacturing companies that have had great success with Lean in the production operation try to take their Lean manufacturing experts and approaches and leverage them to roll out Lean in services operations.  These people may indeed be Lean manufacturing specialists with great knowledge, but this doesn’t mean they can effectively roll out Lean in non-manufacturing aspects of the business.  In most cases, it doesn’t work.  The same thing happens when services companies hire a Lean manufacturing expert to help them.  It just doesn’t work.  Why?   Because Lean in a services operation is just different, that’s why.

Download Lean Services

this powerpoint overview of Lean in a Services environment …

Now, we could dive right in and start looking at a lot of individual tools and see which ones fit well in a services environment and which ones don’t.  But, I think the better approach is to take a step back and look at the differences from a business perspective first, then come back and start talking about tools and approaches.  So, here are some of my thoughts on how a services environment is different, and these difference most certainly impact the way Lean should be rolled out.  I encourage our readers to chime in with their own ideas.

  • There is typically greater involvement of customers in the production process. In many cases, the customer is a supplier to the process.  Sometimes the involvement is so ingrained in the process that you really end up with co-production with the customer.
  • Since services processes are often very people-centric (vs. machine-centric), it is very difficult to get to real standardization.
  • Quality is an experience, not just a measurement against specifications.  The inability to standardize the process makes it very difficult to standardize quality.  The customer’s definition of quality is a perception, subjective vs. objective
  • There is much less visibility to what is happening.  Information is flowing, not product, and that information can be digital, paper, or even verbal.  And, HOW it flows often has little or no standardization
  • IT systems play a much bigger role.  They enable the process, but can also be a rigid constraint on the process.   There may be multiple and often un-integrated systems.  Workarounds persist in the form of excel spreadsheets, word docs, etc
  • WIP and inventory are often hidden and ignored, but they are there and can have the same negative impacts as in a manufacturing environment (e.g. wasted resources, longer lead times, more variation

These are just a few of the key distinctions, and there are many more.  But they do point out some fundamental differences in manufacturing and non-manufacturing operations.  The differences are so stark that common sense should tell you that you cannot roll out Lean in a services operation the same way you do it in a manufacturing operation, not if you want to see results, and our experience here at Qualtec backs that up.

This is but the first in a series of articles we’ll publish on this.  I invite your thoughts, comments and feedback.  Feel free to contact me if you’d like to discuss.

  1. March 30th, 2012 at 20:27 | #1

    a fine analysis of difference between man-mamnagement aand machine management.It is the mindset which controls all activities in life.

  2. July 28th, 2013 at 11:06 | #2

    Yeah it’s totally different, production process and services process definitely different thing.

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