Lean Implementation Is the Streamlining of an Organization's Operations

Lean In Service

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Executive Summary:

Lean Implementation is the streamlining of an organization's operations designed to systematically and consistently improve any industry workflow. Implementing lean practice saves time and cost, while aiming to eliminate, or reduce waste occurring within the value chains of firms providing products through manufacturing or services to customers. The process involves the removal of unproductive wasteful movements of employees and attempts to minimize idleness of workers on assembly lines or in service capacities. The time saved performing tasks in assembly can be used to further reduce the need for more employees or improve service businesses by improving the customer experience. Lean, is a strategy that organizations in all industries have utilized to implement improvements and best practices to streamline workflows for efficiency.  

Lean in service takes the same manufacturing philosophy at Toyota and refits any company’s traditional processes to employ lean philosophy by reducing redundancies and extra steps. The workflow is examined from the beginning to end and the examination is sometimes difficult, as services appear to be invisible. Services are an important part of the economy and includes business, commercial, infrastructure, restaurants, and public administration.

In services, there are large barriers of entry as companies with a huge competitive advantage of big data, dedicated to satisfying customer demands for quality, delivery and cost through principles of lean already exists. Acquiring new customers is expensive as companies such as Amazon have brand loyalty worth considerable customer lifetime value. The competition and exposure to excellent customer service has made all service firms review their processes involving customer touchpoints. Lean in service removes extraneous touchpoints with customers and improves the delivery processing to save customer time, enhance customer satisfaction and improve the overall customer journey.  

What is Lean (underlying philosophy)

In postwar Japan resources were scarce and the founding principal of the Toyota Production System (TPS) was to do more with less.  In efforts to reduce muda (waste), originator Sakichi Toyoda, his son Kiichiro and Toyota’s chief engineer, Taiichi Ohno, worked together with all levels of staff to evaluate and improve the processes of the auto manufacturer. Originally developed as a cost savings approach to resources during the manufacture of automobiles and later identified as “lean” during the 1990s, the growth of this small auto manufacturer into the world’s second largest auto-manufacturer has encouraged business leaders everywhere to study the TPS as it can be applied to any type of business. Toyota recognized the following seven wastes to remove from work processes: transportation, inventory, motion, waiting, overproduction, over-processing, and defects which are often referred to with the acronym TIMWOOD. Currently this has been updated to TIMWOODS by westerners to include “S”: skills or non-utilized talent of employees (Akhmot, 2017)

The goal is to ensure full-time engagement of workers and machines to gain efficiency and economies of scale for production and improvements in the customer experience. Sustained innovation can become the competitive advantage a company enjoys. Bringing a lean approach to work requires an in-depth understanding of the environment and is a huge undertaking for implementers.  When done well with continuous process improvement, lean can produce huge improvements in turnaround time (cycle), output amounts, leading to lower costs and improved competitiveness (economies of scale). Additionally, those improvements derived from lean implementation in service industries can build the competitive advantage as it will improve customer service interactions, crisis management, and many aspects of a business.  

How to Apply Lean to Service

In using the six factors of lean implementation suggested for service providers, the difficulty is in change management to create a lean crew. Although asking professionals to create a standardization format for their own processes will be difficult because it will be viewed as reducing their importance, it is important to involve all levels of the organization in looking or suggestions.  An example is paperwork that moves online is work flowed sequentially to each department just as the paper physically moved in the past because it was not thought out; the online form can move in parallel to two authorities at the same time.

According to the STR Team from the website “The Business Standard”, the following six factors that will increase success of lean implementation:

1. Identify and map end-to-end processes: usually processes pass through more than one department until completion and it is possible for end-to-end workflow to be unknown. Ensure performing actions in parallel instead of sequentially to reducing inefficiencies.  
2. Reduce Complexity: eliminate disruptions by moving exceptions to management.
3. Standardize discrete work modules: each process should be broken down into little repeatable steps that must be meaningful tasks, to speed the process.  
4. Track performance metrics: measure discrete pieces and set performance benchmarks for manager to track time spent on tasks. Productivity and utilization is measured by time spent on tasks.
5. Use big data; use analytics that can lower costs, improve performance and minimize waste, implement neural networks (machine learning.)   An example is a steel manufacturer has statisticians analyze historical data and find that under certain conditions there are multiple bottlenecks unidentified (Dhawah, 2014.)
6. Cross-train staff; allow staff to assist each other to avoid downtime increases efficiency. i.e. McDonald's and other fast food restaurants cross train their staff to cover for each other because of scheduling limitations (Magalhaes, 2017.)

Examples of lean in service industries

After the success of lean manufacturing the concept has been adapted for industries as diverse as healthcare, insurance, and financial services.  Not all lean manufacturing concepts are translatable from manufacturing to offices and retailers for instance.  For example, Wipro Technologies chose four principles from the TPS to create a framework to guide them.  First, all work shall be highly specified as to content, sequence, timing, and outcome.  Second, every customer-supplier connection must be direct, and there must be ambiguities in requests and responses. Third, the pathway for every product and service must be simple and direct. And last, any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization (Hanna, 2007).

Wipro Technologies, as India’s third largest software exporter, was dealing with wage inflation and implemented lean strategies to improve the bottom line. Wipro took a staged approach and moved customers over to lean in a controlled fashion. Wipro showed great improvement using lean guiding principles according to their own metric ratings and results reduced defect rates per thousand lines of code.  Using lean had made is easier to transition new customers from rival vendors to its own team in one hundred days. Kaizen method for continuous improvement was implemented to software development creating gains for both company and customer. During this implementation the mistakes were shared across the process creating benefit for all (Mishra, 2010).

        Bank One was one of the largest wholesale lockbox provider nationwide. During 2002 the service exploded with customer exceptions which resulted in an excessively complex process. Bank One saw this as an opportunity for revenue but would not charge for services until able to standardize and be proficient. The project launched using the Kaizen method to improve the process and ended with a complete redesign of the workspace. They were sent back to redesign the process without infrastructure redesign.  Their final ideas allowed for a 35% improvement in cycle time, matched with a promised service level turnaround of 4-hours (George, Lean Six Sigma for Service, 2003).

Continuous improvement- philosophy and Kaizen in manufacturing

        Kaizen is a tool used by the Japanese after WWII to improve their manufacturing technique. Kaizen is an inexpensive, low-risk effort to achieve dramatic results through the collective talents within a company. The philosophy is that in our work life, our social life and our home life, deserves to be constantly improved and by taking small steps instead of dramatic steps, the result will be dramatic after time passes.  Kaizen improves the productivity and workday culture at every level of the organization from the CEO to the assembly line worker.

        As a long-term strategy Kaizen’s goal is to develop the confidence of all workers in the organization. Every employee is encouraged to look for areas to improve and provide suggestions based on their observations. Management’s role is to demonstrate a commitment to process improvement and educate and train the staff in Kaizen (Do, 2017).  

The continuous cycle of improvement of Kaizen activity has six phases (Do, 2017): the phases are to identify a problem or opportunity, analyze the process, develop an optimal solution, implement the solution, study the results and adjust, and standardize the solution.