The First LEAN SERVICE SUMMIT - June 2004

Conclusions

The first conclusion from the Summit is that lean works in all kinds of office and service processes. It may need translating into the language of your industry, and you may need to create an example in your industry to convince the sceptics. But wherever it has been tried the results are consistent - better customer satisfaction through higher customer fulfillment (right first time on time), lower failure demand and compressed and streamlined processes free up resources and cost as waste is eliminated and as capacity is aligned to demand. In other words you can create more value for customers at much lower cost with more motivated employees.

The second conclusion is that in service processes you need to spend more time up front analysing and really understanding the nature of your customer demand, learning to dig down to discover the customer's underlying purpose and to distinguish between value and failure demand. You can then work on how you can better deliver and enhance value demand, maybe by separating it into separate value streams. You can also tackle the root causes of failure demand so you can eliminate it. Once you have done this then you are ready to redesign each value stream.

The third conclusion is that office processes are different in several respects, which need to be taken into account when redesigning the value stream: - customer demand is often not clear, process steps are not visible, no one sees the whole process, the work rarely goes as planned, right first time is very low, total elapsed time is very long, there are many hand offs, it is hard to see waste and it is hard to see progress and problems in current working.

There are also fears and a lot of misunderstandings about standardising work and stifling creativity. Standardising the common process steps and the hand offs between them enables the routine process to run smoothly, freeing up more time for creativity in responding to individual customer needs or designing new ways to create value. This in turn leads to better employee satisfaction - obvious but counter-intuitive.

The fourth conclusion is that value stream mapping is the most powerful tool for redesigning office processes. Indeed the potential gains are even bigger in the office than on well studied processes on the shop floor. John Shook summarised the value of VSM as follows, emphasising that leadership is key and the objective is learning to deepen knowledge of the process:-

• It helps you visualise more than one process level
• It links the work flow with the "controlling information" flow
• It enables "System Kaizen", a focus on lead time and total system optimisation
• It provides a new common visual language
• It provides a blueprint for change
• It ties together lean concepts and tools

The final conclusion is that while lean certainly needs to be built bottom-up by those involved in the process, it also has to be led from the top to really make a difference to the performance of the organisation. It was impressive to hear how in different ways General Motors, General Electric, Deutsche Telecom and Deutsche Bahn are rolling lean out across the whole enterprise.

Photos by Leikep