Lean in Service - Chapter 3

This blog is in sequence to my previous blogs Lean in Service about Uniqueness Service Industry"

“Contrasting Manufacturing Vs Service Sector”

Sr. No.	Manufacturing Sector	Service Sector
1	Major invested capital is cost of machinery and infrastructure	Major invested capital is cost of people
2	WASTE (as per LEAN) is visible to naked eye for example Inventory (Raw material or Finished goods)	WASTE (MUDA) is not visible and largely hidden
3	Bottleneck or flow detractors in the value creation is easy to identify during the conversion process (from Customer Order to Dispatch)	Value chain perspective in service industry is yet to become a reality
4	FLOW means Raw Material Flow (raw material)	Primarily FLOW means Information flow
5	Customer is not part of the value chain conversion	Customer is part of the value chain
6	Customer comes to know the product defect after delivery and the dissatisfaction starts later...	a. Possibility of customer dissatisfaction throughout the value chain ( customer journey) b. Customer expects instant gratification
7	Machines being a bottleneck in the conversion process primarily	Hand off between processes ( process hand off means data or output transfer from one stage to another stage ) and IT system being a bottleneck in the information flow wrt to islands of IT systems (different modules not connected to each other)
8	Its relatively simple to identify and bring in Poke Yoke principle (Mistake proofing – to prevent mistakes from occurring)	Challenge in designing Poke Yoke principle in service processes largely due to people dependent decisions and intervention
9	Variation in the customer demand and imbalance between processes are always the focus of manufacturing	Since majority of the functions works like a silo variation and imbalance are not part of the study
10	Product quality definition is relatively simple to define	Its difficult and needed in depth understanding to define quality
11	Process performance measures are easy to identify	Complexity of defining Performance measures is high

ONE MAJOR DIFFERENCE IS “LEAN HAS PENETRATED INTO MANUFACTURING BUT NOT IN SERVICE SECTOR”. Even Japanese Service Industry is not practicing LEAN or Service Excellence as much as Manufacturing.

LEAN is unarguably applicable in-service industry as much as in Manufacturing. But the approach to deploy LEAN is the key for success.


I will write further to share the Lean in Service Deployment Approach in my next blog.