What is Lean in a Service Context?

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Lean manufacturing has been around for quite sometime. Even before we got to know what Toyota was doing, manufacturing companies have been practicing many of the tools and techniques of Lean.

However, thanks to the work of stalwarts such as James Womack, Danies Jones, John Shook and Jeffrey Liker, today we have a better appreciation about Lean and how it has been approached by Toyota.

Lean as a concept is new to the service sector. It’s initiation to services happened only in the early 2000s–the pioneers, including the author, sensed the tacit power of Lean and started leveraging it for business enhancement.

Lean in a Manufacturing Context

In manufacturing, Lean is defined as a systematic approach to identifying and eliminating waste (non-value added activities) through continuous improvement by flowing the product only when the customer needs it (called "pull") in pursuit of perfection.

Lean in a Service Context

While the basic philosophy remains the same, Lean in a service context needs to be defined differently. This is more to make it contextual and relevant for professionals working in the service business. So what is Lean in a service context?

As I look at it, there are two definitions for Lean in the service context–one from a strategic lens and the other from a tactical window. I have been observing Lean practitioners who seem to be somehow forgetting the strategic angle of a Lean intervention.

Strategic Definition of Lean in a Service Context

Lean is an improvement philosophy that targets to improve the performance of a business system by focusing on elements that do not add value. It is about creating an agile engine, which helps an organization weather the storm of competition.

Tactical Definition of Lean in a Service Context

Lean is a process optimization methodology that focuses on improving the effectiveness and efficiency of a process by eliminating activities that do not add value to the customers and the product. It manifests itself in the following:

  • Reduction in cycle time*
  • Reduction in touch times*
  • Reduction in lead times*

(*In my subsequent articles I shall demystify the meaning of all these terms.)

Where Can Lean be Used in a Service Business?

For many practitioners, Lean is just for back-office processes. This is a highly parochial view that has emerged from ignorance. In a service organization, Lean can be used across functions such as sales, marketing, credit, collections, customer services, back-office, front-office, operations and product development.

Just remember that wherever there is a business system one can apply Lean. Typical components of a business system include people (employees, share-holders), process, resources (includes money), strategy, customer, product and so on. A few examples are business system include organization, value-streams, process management system and workplace management system. However, two critical components for a system to be amenable for Lean are people and processes. I am not sure if we can Lean a business-system bereft of these two components, or if Lean will be relevant when processes and people do not exist.