Lean in Service - a case study- Chapter 4

In my previous blogs I have covered the following:

1. Background and nature of service industry / sector highlight the uniqueness of this sector. https://wordpress.com/block-editor/post/excellenceaninnerinsight.home.blog/64
2. Contrasting Manufacturing Vs Service Sector. https://wordpress.com/block-editor/post/excellenceaninnerinsight.home.blog/115
3. LEAN applicability in Manufacturing and Service Sector.

In this blog I want to cover Lean Transformation in Service Sector with a case study!

To achieve success in any process improvement deployment we need to know the customer and his/her pain points. Broadly it is suggested to follow the steps listed below with an example of a credit card process. The following are the broader level steps:

1. Understand the current condition: this can be done using the following
2. Identify the current process flow of activities
3. Under the physical flow of information
4. Create the future state
5. Validate the results
6. Roll out

Let me explain the above steps:Step 1: Understand the current condition: Here am dealing with Credit Card application processing  

Value chain mapping:A pictorial representation of a process, detailing actual steps taken and highlighting the relevant interfaces and information sources.Shows big picture of the organization.

1. • • Explains the Process as it works today.
     • Identifies the key performance indicators of processes within the function and in between the functions. This will give inputs to create the dashboard. 
     • Identifies pain areas in the value chain specifically within and between the departments
     • Describe the process as it currently works
       • Outcome of Value Chain Mapping:
         • Understand the current state
         • Key processes and challenges
         • Identify improvement opportunities

Note: Process efficiency of the above depicted value chain was less than 5%
Step 2: Identify the current process flow: Based on the value chain mapping next steps is to understand the flow of the process and the bottlenecks.
 Following process flow shows a view of how the process is designed and the bottlenecks when it creates the customer value.

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Note: Following are the critical observation from the above complex process.

• Learning from Process flow mapping
  • Red boxes are the non-value activities (NVAs)
  • Green one’s value add activities.
  • Approx. 50% of the activities are NVAs.
    • Outcome of Value Flow map:
      • Process challenges
      •  Functional interface challenges
      • Bottlenecks during the value creation

Step 3: Flow of the process is very complex web of information exchange and lot of movements which are primarily non-value.
Note: Look at the complex way the flow of information both physical and soft transfer of information. In this credit card case, the physical form of information travels around 103 mtrs and many of the due to the reason the way flow is created.

Step 4: Create a future state process flow:

Note: you can clearly observe the Value chain in step 1 above and the future state flow above depicted and enormous simplification possibilities in creating customer value.

• Important learning:
  • Find what are the improvement areas to bring in to create the future state
  • Appoint a task force team to roll out and validate the results
  • Process efficiency of the above value chain is jumped to 31% from less than 5% when we started the improvement journey

Step 5: Demonstrator Line Creation: To validate the solutions:

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Note: you can clearly observe the above flow how simplified the physical movement and reduced considerably from the initial state.  

• Number of non-value activities from 32 activities to 5 activities
• Physical travel has been reduced from 103 mtrs to just less than 20 mtrs
• Lead time from customer credit card application collection to process of application from 3 days to 3 hours

Next deployed to roll out across various branches since validation of results were met the objective

DO YOU HAVE SIMILAR CASE?

PLEASE SHARE YOUR EXPERIENCE. LOOK FORWARD TO SEE THEM IN THE COMMENTS SECTION