Waste in Service Organizations

By Al Norval

Have you ever had people say this to you? I’ve had numerous people say to it me.

“I can see how Lean applies in a manufacturing organization but does it really apply outside of manufacturing? I’m in service, we don’t make things, we’re different”

Providing a service is somewhat different than making a product but from a Lean perspective, all the principles still hold true. It all starts with the Customer and how we provide value to our customers. The key is understanding what Customers truly value and what drives the Value Proposition.

Take a simple shopping experience to a large department store. We could define value narrowly as simply as the consumer purchasing a product (so they must have found value) but what if we expand the definition to encompass the entire service experience the consumer had while in the store. How many of us would pay for the experience of standing in line waiting at a check-out line, or the experience of searching through stacks of articles for the correct one, or the experience of looking for a store clerk to answer questions we have only to have none around or to be told “his isn’t my area”?

Let’s take it one step further. How many of us would pay for the experience of waiting in line to return a purchase, or the ultimate – how many of us would pay for the experience of being placed on hold to wait for a Customer Service agent or endless telephone tree options just to talk to a live person who can answer our inquiry.

When we map the entire customer experience through the customers eyes, we can see the rich opportunity we have as waste is buried everywhere.

In these simple examples, we see waiting, over-processing, correction, inventory (queues), motion, and knowledge wastes.

Why do organizations do this? Typically, because they are looking at short term profits not at providing superior value to customers which will ultimately provide long term profits. Ironic isn’t it? By adding short term costs, we can ensure long term profits if we can provide superior value to our Customers.

Try this. Look at the service you provide and map the process, not from the suppliers point of view but from the customers point of view. I’m sure you’ll find many opportunities for improvement.