| Why Services are Special | | | | the like. Reactive methods are good at detecting |
| The Ubiquity of Services: | | | | service weaknesses as customers will most likely |
| We encounter services everywhere, from health | | | | contact you when they have problems. |
| care, hospitality, and transport to government, | | | | Proactive methods are those where you take the |
| retail and financial services. Even within | | | | initiative to gather customer information and |
| manufacturing organisations, a significant portion | | | | include surveys, questionnaires, focus groups etc. |
| of the activities are service related. | | | | This information ensures that improvement |
| The Visibility Challenge: | | | | targets you set are based on customer needs. |
| While services are everywhere, the steps | | | | Make the Relevant Processes Visible: |
| involved in the processes are difficult to visualise. | | | | The relevant processes target for improvement |
| For instance where on a production line, you can | | | | should be observed and mapped. This is not very |
| directly see the amount of work in process, or | | | | easy to do, considering the nature of services. |
| measure lead time by following a work piece | | | | However with the cooperation and involvement of |
| from one end of the process to the other, the | | | | stakeholders and process operators, a lot can be |
| same is not always possible with services. An | | | | achieved. |
| observer would be hard pressed to say how | | | | For each activity in the process, information |
| much work in process a data analyst working | | | | required in creating the value stream map include |
| mainly with his computer has. | | | | estimated cost per activity, process time, queue |
| The Prevalence of Waste: | | | | time, change over time, demand rate, complexity |
| Services are generally prone to waste. A major | | | | (number of different services processed at the |
| reason is that there is usually too much work in | | | | activity), uptime and defects/rework. This data |
| process. These may be sales orders, reports on a | | | | should be collected based on at least one week of |
| desk awaiting review or approval, emails to be | | | | observation. The resulting map is known as a |
| responded to, or customers waiting to be served. | | | | complexity value stream map. |
| Up to 90% of the time work spends in process it | | | | Determine the Time Traps (to prioritise projects): |
| is just waiting. | | | | Using a complexity value stream mapping |
| Substantial work in process makes services slow, | | | | software, the activities which contribute most to |
| which drives up costs and makes them prone to | | | | non-value added time will be visible. These are the |
| poor quality. | | | | time traps. Following from the Pareto law, usually |
| Other common wastes include people moving | | | | 80% of the non-value added time can be |
| around chasing information, documents looping | | | | accounted for by 20% of the activities. |
| back and forth where items are being clarified, | | | | Analyse the Time Traps to Determine their |
| interruptions etc. | | | | Causes |
| The High Variation in Demand: | | | | A further output from the complexity value |
| Services, particularly those dealing directly with | | | | stream mapping software is the cost driver |
| customers generally face highly variable demand. | | | | analysis. This specifies whether the source of the |
| Consider the case of hotel clerks checking in | | | | major time traps are primarily quality related, |
| guests. There will be periods of low activity and at | | | | making them amenable to Six Sigma tools, |
| other times many guests will be in queue, waiting | | | | operations related, which can be taken care of by |
| to be checked in. The situation is similar in a | | | | Lean tools or complexity related which requires a |
| restaurant or shopping mall. The impact of such | | | | streamlining or optimisation of the variety of |
| variation on WIP is significant. | | | | service offerings. |
| The Relative Absence of Hard Data: | | | | Apply Appropriate Tools to Improve the Process: |
| Service personnel are not accustomed to the | | | | The foregoing analysis having already pointed out |
| same level of rigor in collecting and analysing data | | | | the direction of improvement efforts, it is now |
| as their manufacturing counterparts. | | | | left to apply lean methods to reduce setup time, |
| Applying Lean Six Sigma to Improve Services | | | | reduce work in process or increase completion |
| Define Improvement Targets on the Basis of | | | | rates and six sigma methods to reduce the |
| VOC: | | | | defects. |
| Use reactive and proactive means to listen to the | | | | Huge opportunities translating to significant cost |
| voice of the customer. | | | | and time savings, along with quality |
| Reactive methods are those where the customer | | | | improvements, exist in many service operations |
| takes the initiative through complaints, | | | | where typical process efficiencies are below 10% |
| compliments, enquiries, web page hits, emails and | | | | as against world class levels of 25-50%. |