Thursday, 23 December 2010

Carkean Solutions: Lean Services

Lean services are centred on two concepts: value demand and failure demand. Between these we can ascertain what the customers are expecting from the service, and, in turn, what they’re not expecting and what they could consider wasteful.

As the name would suggest; the ideal situation is to maximise what they would expect/pay for while minimising the waste.
Value demand is the demand of the service from the customers, which could roughly be translated to “what you can do right by your customers”.
Making this the hardest of the two types of demand to improve, as it’s not always easy to see where you can add value or extra layers of service. Equally sometimes it can be adverse to increase value, as you could end up making the service too complicated or extensive.
Mostly, however, this is the heart of Lean Services in many ways.
As while you may have failure demand as a second component- increasing value is your main priority.

Failure demand, in comparison, is the demand created when the initial value is lower than expected. As an example: in a call centre, value demand would be created by prompt replies and an acceptable phone manner. Failure demand would be not following up calls, not dealing with them promptly or even answering the phone in the first place.
In this way, while the two are linked quite tightly (as one is the direct result of the other) you cannot statistically compare them.
By treating failure and value demand alike in statistical analysis, failure demand can help give a quite false impression of greater productivity.

We’re all customers to some degree and we all want things from various services. Often, we want a more efficient and cost-effective service or more value for money.
However, some services are cost-intensive and cost whether we like them to or not.

This is why it helps to look from the customer’s point of view and see just what, if you were the customer, you would want from a service.
  • What things would be worth your time/money?
  • Why would you choose this service over another?
  • What does “more value for money” really mean?
Identifying these things (and more) can give you a better idea of what you are delivering, and why, as sometimes while something may work better- it’s more work. More work that may be hard to justify to those doing it, which is something you should always consider.

As the quality of the service is directly related to those delivering it. And if they are faced with the prospect of more work, for the same service, without any foreseeable gain (on their part) quality could drop there.
In order to create value you have to reduce waste, this is pretty much what Lean Services does- reduce waste.

However, that’s a rather broad interpretation so we’re going to single out seven common causes of waste. Not all of them may apply to you or your organisation, but some will do and some will apply slightly:
  1. Delay in the delivery of the service to the customer, while their time may seem “free”- you’re vying for that as much as their custom.
  2. Having to re-enter data or redo work that has been left undone, not followed up or completed to standard.
  3. Moving products, resources, services and labour unnecessarily with no given reason or purpose- time wasting, effectively.
  4. Wasted communication (or lack of) where services, labour and resources are not delivered or delivered in error.
  5. Lack of products or labour to deliver services, products and resources on time and to the standard required.
  6. Losing or failing to retain customers through either bad manners, or being unable to meet their requirements fully.
  7. Errors in the end product or service which leads to dissatisfaction and going somewhere else for the customer/party involved.
Borrowing slightly from Lean Manufacturing we can begin to see an eighth kind of waste. This waste is, quite simply, not making sure the needs of the consumer has met before delivering the service to them.
If the service doesn’t meet their requirements they won’t take it.
For example: if you were to look at smartphones and say “What do people want from them?” the answer would, most likely, vary from person to person. Although, there would be a few core features certain types of users would want.

Those would be considered your primary requirements and/or your specification. Following that would make sure you deliver the service that is required, while adding all of your usual extra functionality later.

Lean Services is not a wonder cure but an exercise in efficiency and value-enriched service. It won’t solve all of your problems- but will make your service better, overall, for your customers.
It is useful for many organisations and well worth looking into if you deliver a service regularly.
All information presented here is © copyright Carkean Solutions Ltd., 2010 - Not to be used without our permission - The views expressed here are the views of an individual not the corporation

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