Lean Six Sigma (2/3): Service vs. industry


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Peter Matthijssen
Posted by Peter Matthijssen on Sep 12, 2011

Lean Management

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As mentioned, the service sector runs about 20 years behind on the industrial sector when it comes to process optimization. To illustrate this, there are a few explanatory symptoms that we see a lot in companies. Some might be recognizable.

We lose the customer

Everybody is busy, but where is the customer? We say the customer is king, but we put them on hold for 10 minutes. What value do our activities add for the customer? Do we even know what our customer wants? It is hard to deliver quality if we have no clear sense of our customer.

We lose focus

Endless projects. Continuous re-organization. New applications that become goals in themselves. Organization politics. All this takes a lot of energy. But what is the concrete added value to the company goals? And how does our customer benefit? People tend to spend a lot of time doing things that do not contribute to the company goals.

We reward incorrect behavior

A lot of companies work with Performance Indicators (PIs) and performance rewards. But are we rewarding the right things? We often see that based on PIs the wrong behavior is rewarded. Employees are stimulated to score high on PIs, but end up deteriorating the quality/turnaround for the customer. Poorly designed systems for performance rewards can turn out to be counterproductive.

We complicate things

Company environments are getting more and more complicated. There are continuous rapid developments in new technology, (online) competition, globalization and legislation. We have limited influence on these external developments, but often organizations are also very complex on the ‘inside’. We find complex systems, complex organizational structures, complex products/services and complex processes. It takes a lot of energy to keep control over this complexity.

How does this work in Lean organizations?

Lean helps organizations to reduce waste and streamline processes. Excess inventory, extended processing time and repetitions are unwanted and taken care of. Also the layout and structure of processes, workplace and software is optimized. This way unnecessary movements and transport can be avoided. And when something does go wrong, a thorough analysis takes place: how do we make sure we don’t make the same mistake twice? Lean teaches us to only do what our customer is asking for and is willing to pay for. Everything that costs time, energy and money is tested on added value for the customer. This is what it is really all about! Projects, management and ICT also have to be focused on delivering added value.

As discussed, external developments cause organizations to become increasingly complex. This means that we want less complexity in our process and organization. Lean organizations are typically calm, standardized, predictable and have a continuous interest in improvement. In these organizations, from top to bottom, people are involved in the execution of processes and delivering quality for the customer. There is a transparent culture in which for example the effects of an adjustment at management level will always first be tested in processes in the workplace. This is exactly where things go wrong in many service organizations.

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