Tag Archives: lean HR

How much waste is there in the Service Industry?

Over the weekend a question was posed to me via Twitter (@theleanmanager if you’d like to follow) about the amount of waste (wasted time) in the back office of banks/service/insurance operations. Now I took this to mean the call centres, data processing centres, mail rooms, customer response teams etc.

The guys asking the questions @wisemonkeyash and @channingwalton  wanted to know could it be as high as 90%? (Update: we do know that in some legal firms the time to process matters is being improved by 50%, by using lean thinking, indicating that wasted time could considerable in the professional services sector.)

I decided I should expand upon my 140 character replies, which were based on my experience.

Variation of demand is the first factor to consider i.e. what does the busiest day (for demand, not completed work) look like and what does a quiet day look like and what are the patterns the peaks and troughs for the demand.

What causes this demand, the peaks and troughs? Our experience? it’s normally another part of the business which generates and stokes the demand and therefore changes here can reduce the peaks.

This could be letters with incorrect details, mass direct marketing mailing, customers chasing progress etc

This variation often causes capacity (people) to be 50% more than required to achieve the current results.

The implications here are that you can deliver improvement by changing something outside of the back offices, without changing what many individuals do – making continuous improvement more readily accepted.

Remember that so far we haven’t looked at the waste in the activities undertaken in these departments. Now as a lean person we look for the 7 hidden wastes, yes I know others have 8 or even 9 but we stick to the 7.

To give you just one example, have you rung a call centre, in the last 6 months,  to be told ” I’m sorry the system is a bit slow today”?

Sometimes that is genuine, the system is slow, it may be that the networking is slow or the server needs upgrading or the PC workstation is old. So say you have 50 agents handling 20 calls an hour? how much time are you wasting because the technology isn’t up to speed?

The more common reason for ” I’m sorry the system is a bit slow today”, that we see is that staff have two screens in front of them and they maybe running 4 different programmes at once. As the programmes can’t transfer information directly to one another, the staff take info from one system, send to their own e-mail, cut and paste it into another programme and then have to delete the e-mail.

This is just one example and adding up the rest we often find that 50% of the activity time is wasted.

What does this mean  overall?

If we start with 100% and 50% is waste due to Variation demand, this leaves 50%.

Of the remaining 50%, we reckon 50% is wasted time, so we get to the figure of 25% (50% *50%), or 75% of the work can be classified as waste.

Remember this is based on what we have seen, so not as high as the 90% the guys originally asked.

Within an hour I spotted this article all Aviva shakes up it’s Customer Service  from the FT, which shows the global serving UK based insurance firm Aviva put the waste figure in call centres as 60%.

It’s also worth noting that Aviva thought it was completing work in 5 days, in reality it was taking 39.

How can this happen? well sometime companies split activities into discrete chunks and add up the time each chunk takes, assuming this equals the processing time. They forget the handoffs and delays that each happen between each activity. We’ve definitely seen office work with activities of an hour take over 10 days to complete in reality.

Okay there is a variation in the figures but should we split hairs on whether waste in offices is 50% as in the professional services firms or 60% – 75% for the back offices and call centres, the reality is that the waste appears to be relatively large, though maybe not as large as the 90% that started the question.

Do you have any views on what the waste could be?

About the Author;

Mark Greenhouse has been working on the application of Lean management in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Production Engineering. He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.

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LEAN – It won’t work here!

Alternative Title “Who else uses LEAN?”

So Lean isn’t for you or your company then, it won’t work in your industry, it’s for car makers or those people on a production line isn’t it?

It occurred to us that a great number of organisations have lean specialists, lean trainers, change managers etc who are trained in and utilise lean and six sigma techniques everyday, to drive change yet where can you find which organisations they are.

Try and find the “Lean” department in structure charts, organisational diagrams and the like and you’ll struggle; you see lean doesn’t lend itself to a single department, it needs to permeate everywhere. Lean practitioners will have other names “progamme managers”, “process engineering”, “Improvement specialist” and so on.

So it not obvious, from the outside, which organisations are using lean & six sigma principles and tools to drive their business forward. Some will just be using lean in operations, production, & distribution, others in offices & call centres, the more progressive in lean accounting and one or two real trialblazers in lean marketing.

Hence, this list; it is built from our collection of articles we have read and from profiles of individuals who claim they use lean thinking and six sigma in their roles.

So next time you hear “Lean, it won’t work here!” you might just want to point people to this blog, to show them where it is working.

The aim of this blog is simple; to record the names of all the businesses, with UK bases*, who use lean and six sigma as methodologies and improvement techniques or employ people who claim to use lean as one of their primary improvement technique.

*- the UK is big enough for us right now.

Please feel free to send us details of companies you know who use it, all we ask is you provide some evidence (an article, a profile etc) & the business sector they are in and we’ll add them to the list.

 First published 13/10/09.

Here’s a few for starters

Lean Banking

  • LloydsTSB
  • Barclays
  • CO-OP
  • GE Cards
  • RBS

Lean Retailers

  • Zara
  • Littlewoods Shop Direct
  • Orange
  • Dixon Stores Group
  • Starbucks
  • Tesco

Lean Utilities

  • Severn Trent Water
  • Thames Water

Lean Insurance

  • Aviva
  • Willis
  • Axa
  • Zurich

Lean Food

  • HJ Heinz
  • Mars
  • Tulip
  • United Biscuits
  • Kerry Group

Lean IT

  • Hewlett Packard
  • Siemens
  • Fujitsu
  • Unisys

Lean Councils

  • Leicester City Council
  • Bristol City Council
  • Suffolk County Council

Lean NHS

  • Birmingham Children’s Hospital
  • Guy’s & St Thomas’s Hospital NHS Trust
  • Gwent Healthcare NHS Trust

Lean Engineering

  • BAE Systems
  • Toyota
  • Harley Davidson
  • ABB

 

Lean Pharmaceuticals

  • Eli Lilley
  • 3M
  • Bausch & Lomb
  • GlaxoSmithKline
  • Smith & Nephew

Please let us know if these details aren’t correct and we’ll amend them straight away.

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What are the traits of a Lean Manager?

We’ve moved What are the traits of a Lean Manager to our new Lean Management website.

About the Author;

Mark Greenhouse has been working on the application of Lean management in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Production Engineering. He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.

 

Is President Obama poised to go lean?

I was intrigued as to what President Obama would make his priorities in his first address to the US population so watched his first weekly video address on the BBC website.

Towards the end, just on 4 mins, he mentions that he is looking to root out waste & inefficiency in government.

So thinking that maybe Obama has come across lean I googled “Obama Lean” and found two key stories;

  • He has appointed a Chief Performance Officer to the White House staff, Nancy Killefer an appointee from McKinsey and the story is covered here and covers what her role entails.
  • Given his appointment to the post of the President on Tuesday he found time in the week before to visit a company, Cardinal Fasteners who have used lean techniques since 1998 and used it to turn to new technologies in the last two years.

Visit the Cardinal Fasteners website to see how they promote lean thinking.   

So what is the evidence as to whether Obama might be a fan of Lean?

  • He’s appointed a Chief Performance Officer,
  • He talks of reducing waste and inefficency, not just inefficiency or becoming more productive,
  • He visited and championed a company who have used lean techniques, in the week he took on the most powerful office.

Okay it might not seem much and he hasn’t actually used the word lean or lean thinking but we’ll keep an eye and ear open for any other stories we see about this, it may help promote lean over here too.

Visit www.resqmr.co.uk for details of how lean can be applied across many functions in organisations including; FREE papers and guides on LEAN in marketing, sales, accounting, HR etc.

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Lean can improve innovation skills

The fifth principle of lean is to “pursue perfection through continuous improvement” and this is often achieved by holding Kaizen (continuous improvement) events.

Earlier in 2008 researchers in the States discovered that when we consciously develop new habits, which Kaizen events encourage us to do, we create parallel synaptic paths, and even entirely new brain cells, that can jump our trains of thought onto new, innovative tracks. Indeed the more new things we try the more innovative we become both inside and outside work.

The article, Can You Become a Creature of New Habits, from the NY Times sets out how small changes can make us more innovative and actually suggests Kaizen as a process to follow.

Proof, perhaps, that Lean isn’t just great for business, it’s great for the mind!

(This article was published earlier in 2008 but it has only just been highlighted to us, we thought it was very useful and that it would be a shame not to share it!)

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Lean improves Cash Flow by 38%

In these economic times where “Cash is King”, lean thinking provides a set of principles which can be used to dramatically improve cash flow.

The example we’ve come across here shows how lean thinking can be used to

  • improve cash flow
  • improve customer service
  • improve organisations in the service or knowledge sectors

and proves you don’t even need to resort to slashing stock levels, especially if you don’t have any!

The business in question is Stiles Associates LLC, an executive recruitment agency and the story was mentioned in Lean Directions, using lean thinking Stiles Associates achieved the following results;

  1. 29% reduction in time taken to fill a vacancy! filling in under 90 days
  2. 38% reduction in debtor days, which had a massive impact on cash flow.

They achieved this by conducting

  1. value stream mapping (including their customers)
  2. kaizen events 
  3. daily meetings to highlight completed, outstanding and on-going tasks
  4. visual management systems.

Goes to show that the promises of improved business processes, better cash flow can be achieved through lean and in sectors other than operations or manufacturing.

If you want to read how lean can be applied in marketing, sales or accounting then please visit our website www.resqmr.co.uk to see how we approach these areas as well as the traditional manufacturing/operations areas.

Or contact us at info@resqmr.co.uk , Mark.

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