Lean Management in the Service Industry Lean Management in the Service Industry Lean management is a philosophy focusing on identification and elimination of waste throughout the product’s value stream. Toyota originated lean management in the manufacture of its vehicles and the philosophy traveled from Japan and is now a widely known and applied phenomenon globally in the manufacturing sector. The service sector has been less willing to accept and implement lean management in its operations owing to its manufacturing origins and the absence of a standardized framework for the application of lean management in the service industry (Salvendy, 2001: 559).
This paper aims at analyzing how lean management can be used in a service operation using an example to expound on the strategies effectively. Application of lean to an example Lean management can be applied to a financial institution through assessing the issues, constraints, and opportunities involved in the financial performance of the institution in terms of clients, suppliers, and expenditure. The second stage involves designing a clear and shared vision and using the results from the assessment phase, focuses value streams and time to performance of key functions (Charron, 2014: 247).
The vision entails what the financial institution aim at achieving, the value needs for the customer, and time required for different functions like loans and checks processing. This allows for the development of standardized documentation and new structures. Documenting involves writing the procedure and time guidelines for different functions like loan application and processing. Next involves construction of new processes, performance indicators, standardization, and supporting structures in the organization. The lean implementation team ensures the roles and responsibilities of financial managers and other employees are aligned to new processes like financial management and credit facilitation processes. The next step involves the implementation of the system where the new standards and processes are communicated to the employees, training of lean managers and employees, and following the RACI guideline (Skaf, 2007: 64).
RACI involves developing responsible, accountable, consulted, and informed employees at the financial institution. Communication and consultation on the system and training shall be done on loan managers, credit officers, tellers, and other employees of the financial institution. This will facilitate smooth rollout of the lean management structure at the financial institution.
The last step involves operation and reviews to ensure improvements are made to the system as is required by the lean management guideline for continuous improvement (Salvendy, 2001: 559). Controls implemented at this stage include key metrics, visual management, and customer feedback loops. Use and adaption of lean models and tools Lean models Five P’s lean management model can be used in lean implementation in an organization through analyzing the five P’s. The purpose of the project, process of reaching customer and product production, people involved in production, platform entails production resources and technology, and performance, assessing the outcome of the process.
This model can be adapted through ensuring an analysis of the 5P’s is done throughout project implementation for successful lean management. Lean transformation model is used and adapted through engaging all stakeholders, followed by deployment of active policy assessment of value streams in the organization. Mobilization of lean projects and leadership allows for the acceptance of the lean system. Standardizing the processes and documentation follows in the model and culture development to keep the change permanent.
The last step in the model is enhancing internal capability to ensure the lean system is improved with time. Lean Tools One piece flow can be applied and adapted in the banking sector through avoiding batching of processes that may result in waiting for example processing of checks singly instead of in batches. Constant effort can be used to set standards of processing for work to be done at constant level allowing for the avoidance of waste. Automation and visual reporting tool can be used to flag and stop errors in the service industry.
This can be adapted using automated controls for the flagging and stopping of these operational issues. Lean task analysis is used in waste elimination and improving value and non-value added but necessary activities. Lean task analysis can be adapted through running tasks in parallel as appropriate for effectiveness, assessing time, effort, and contribution to customer value of a certain process Standard task tool is used to ensure all tasks go through similar processes and are carried out in a similar version. Adapting of standard task lean tool involves implementing workflow processing and documenting tasks with no variation. Mistake prevention lean tool is used to ensure mistakes are minimized or eliminated in processing.
Mistake prevention can be adapted through instituting error-proof controls, automating control and implementing entry validation controls. Potential issues with implementation in services Lean management faces some issues when applied in the services sector of the economy including the lack of a principle that changes the attitude of the management to change for top-down command-control making hierarchical leadership a hindrance to lean management. The use of takt time in the manufacturing sector that has allowed for success of lean management is not applicable in service.
Seven wastes are also only applicable to manufacturing since service requires an analysis of all the wastes in a process. Manufacturing and service face different problems with service facing high demands, lack of inventory, and that service is done during interaction between frontline employees and customer depicting another issue in lean management in service. Extreme lean systems my result in increased vulnerability of the business to external shocks including strikes, bad weather, jams, and earthquakes. References CHARRON, R., HARRINGTON, J., VOEHL, F., & WIGGIN, H.
(2014). The Lean Management Systems Handbook. Boca Raton, Florida: CRC Press. SALVENDY, G. (2001). Handbook of industrial engineering: technology and operations management. New York, Wiley. SKAF, K. M. (2007). Application of lean techniques for the service industry: a case study. Thesis (M. S.)--Southern Illinois University Carbondale, 2007.