Introduction
The lean philosophy has continued to be an integral approach that global companies utilize to ensure maximum value is obtained from their products and services. When it was first developed in the 1900s by the Japanese, the lean philosophy was primarily applied in the production and manufacturing environments. Through the Toyota Motor Company, the popularity of lean thinking and lean manufacturing spread exorbitantly and became a pillar in the company’s’ generation of the highest profits and acquisition of new markets (Sinha et al. 304). Following the success in mass production of high-quality and reasonably-priced automobiles, the lean philosophy quickly shifted to the service environment. In this paper, an evaluation of how the lean philosophy can be used to operational advantage in a service environment is made by explaining its evolution and present application.
Evolution of the Traditional Concept of Lean
The roots of the lean concept can be traced to around 1918 when Sakichi Toyoda of the Toyota Motor Company (TMC) created a patent for an automatic loom that revolutionized the production systems that were linked to his business in the weaving industry (Kalogeropoulos et al. 363). After Toyoda sold the patents in 1929, he led in the reinvention of TMC in Japan’s automotive industry in an effort to attain a competitive edge against other local subsidiaries of Ford and General Motors (GM). Although the production of trucks and cars at TMC commenced in 1935, the company was formally incorporated in 1937. By the 1950s, the Japanese auto industry would produce an annual output that was comparable to three days of car production in the US. This influenced TMC to send some of its employees to the US to study manufacturing methods. From such a visit, two major flaws were established to be associated with America’s production systems: large inventories from the production of components in large batches and preference of large production over customer needs. Through much iteration, TMC’s production system continued to evolve and effectively function in an environment with diverse cultural values when compared with the Western hemisphere. Considerably, the system was an essential tool since it utilized common knowledge and innovation. However, until 1973 when the global automotive industry was affected by the oil crisis, it was largely unnoticed (Benkarim et al. 3). The company’s production system would later begin to be documented after being rolled out to TMC’s suppliers.
In 1990, The machine that changed the world by James Womack and Daniel Jones highlighted the performance gaps between Toyota and other car-makers and first coined the term ‘lean production.’ Toyota’s production system was a considerable process of continuous waste elimination since Japanese industries were challenged by low productivity and huge lack of resources after World War II (Groten et al. n.p). As different authors and experts explored the Toyota model, the concept of lean production was sustained in the sense that manufacturing problems and technologies were embraced as universal problems faced by organizations’ managements. In this case, non-Japanese enterprises saw the need to emulate these concepts. In the next few years, reports of American companies incorporating lean principles accelerated the prominence of the lean philosophy in diverse sectors through the identification of customer value and management of value stream. Considerably, these principles were equally oriented to the services area. Since production at this time only focused on mass production, the studies conducted to influence the transfer of techniques used in manufacturing to the service sector also encouraged the same pattern. Since the beginning of the 21st century, new lines of studies about lean services continued to present scenarios that demonstrated how possible it is to transfer the lean principles used in manufacturing techniques to service environments. Initially, the traditional concept of lean in mass production was challenged by workers and unions that constantly sought to have work hours reduced (Butt 8). However, lean in the service environment has generated great financial and economic results by improving workers’ behavior. Lean tools have continued to increase and promise a future for service companies amidst the need for new strategies and technologies. This has helped to ensure that the service sector greatly accounts for the gross domestic product (GDP) and employment opportunities in developed and developing economies.
Application of Lean in a Service Environment
Services in the mining, agricultural, or manufacturing environments can be considered as some of the greatest economic pillars. This is because such sectors create jobs and wealth that grows at higher rates when compared to other sectors of the economy. A service environment also encompasses businesses, infrastructure, and public administration (Reis et al. 249). In such cases, financial consultations can be made in banks while other retail, maintenance, and repair services can be acquired in various commercial businesses. Communication and transportation services are mainly entailed in the infrastructure environment. Other service environments such as restaurants, supermarkets, and hospitals also provide social and personal amenities. In addition to the education and governance derived from public administration, it is evident that a service environment is essential in generating jobs and facilities that are also responsible for supporting the major types of industrial, commercial and agricultural activities (Sima et al. 13). As mentioned before, the service sector stands out for being the largest contributor to the world’s GDP. Certain factors such as urbanization and demographic, technological, and socioeconomic changes greatly ensure that the level of value derived from services meets the front-line needs of the modern society.
In the above mentioned service environments, lean is constituted of several principles that act in control, agility, automation, and improvement to ensure all processes have continuity and stability. One of these principles encompasses the application of value stream mapping (VSM). Just like production, VSM concepts provide a direct relation between the service sector and development, preparation and delivery of service to customers (Järvenpää et al. 4). In the case of TMC, heijunka, production balancing has been a great pillar of its production system since it leads to efficient use of resources through the reduction/elimination of unnecessary inventory and costs. Considerably, this ends up creating flexibility. In the service environment, the lean concept is reflected in VSM through the balanced operations that get introduced to a company hence enabling it to develop new and better ways of relating with the suppliers, using equipment, team planning, and meeting customers’ preferences. The aspect of balance introduced in the service sector through VSM further influences the achievement of the just-in-time (JIT) system in all processes. As a paced technique, JIT aims at improving global productivity while at the same time ensuring maximum elimination of waste (Naciri et al. 397). In its entirety, JIT is necessitated by a balanced production. Since organizations always intend to provide the right amount of services at the most appropriate time and place, the application of lean via JIT helps in the delivery of services that are more efficiently and with reduced cost. Considerably, the customers’ needs end up being met on time via the organizations’ use of the minimum capacity from their facilities, equipment, materials, and people. Practical applications of production balancing via VSM in services can be witnessed in environments such as the hospitals where the correct patients flow is always set through inpatient and outpatient services, the financial sector where the distribution of credit approval processes have to be balanced and in restaurants to prevent cases of disruptions and delays in meal serving.
In service operations manpower is considered to be one of the most critical factors. This is different from the emphasis laid on the high costs of raw materials and equipment in manufacturing operations. It has been argued that in the services sector, the human element is a highly relevant variable (Tajeddini et al. 25). Therefore, the application of lean in the service sector has a great involvement of people. Manpower may be involved in front office customer service or in the preparation of service products that should be delivered at the point of sale to a distributor or directly to the customer. This is why the workforce is always greater in the service sectors of any given country when compared to its manufacturing environment. Through lean service principles, easy process standardization is always prioritized to maintain an improvement in co-production and information technology accepted by the customer. Greater focus is also accorded to employees in the service sector where lean principles get applied through various forms of empowerment such as training to increase their autonomy. Essentially, the lean concept reinforces the significance of the human factor in the process of delivering services.
As mentioned before, lean services not only focus on people that make part of the transformation process, but also on the customer. The customers are always the first contact made in the sale of services (Lee et al. 3). This means that a service company has to directly deal with the customer on the front line. In the service sector, lean principles can be reflected in the professional services such as corporate banks where a high focus is laid on people, contact time, and process. Service shops such as hotels and other rental services may also have a medium focus on customization, front office, and back office. Mass services such as those in the transportation sectors also have low attention to equipment and customization. Nevertheless, the concept of lean consumption emerges from these scenarios where efforts are always made to ensure that the customer acquires services with less difficulty and disruption. Lean consumption influences companies to ensure that they adopt practices that streamline the production processes by incorporating initiatives that aim at delivering the best consumption experience in a more efficient manner and with less sacrifice (Mehta et al. 429). Essentially, the lean service operations ensure that what is needed by the customer is offered wherever it is wanted. This is why TMC has different enterprises around the world to ensure that the diverse customer needs of its automobile products are promptly met. The same approach is applied in supermarkets that build branch stores where customers are largely connected to ensure they remain connected to the strategically located distribution centers. The speed and agility of service distribution tends to increase as retailers utilize downtown megastores, small and regular markets within their neighbourhoods, and online markets for internet sales. For all this to succeed, lean logistics are required to be up-to-date with innovative techniques that increase delivery time performance and customer satisfaction. This necessitates suppliers to apply lean methodologies to their processes after understanding their customers’ needs. Nevertheless, customers are also obligated to strategically and operationally align themselves with other service suppliers to ensure that positive reflections are not limited to financial results but also in the quality perceived by clients.
Conclusion
From the preceding discussion, it can be concluded that lean in production and lean in service have parity. The service sector greatly benefits from the techniques applied to production lines for manufacturing systems. For instance, some of the principles of lean manufacturing encompassing pull production system, value specification, VSM, flow optimization, and continuous improvement are also embedded in lean services. Integration of these principles in lean services ensures that customers’ problems are completely solved as all services operate together to deliver all customers’ needs and to avoid wastage of their time. Just like lean in production, lean in service first compares the expectations held by customers to the perceptions they have in regards to service delivery. In his case, customers end up being happy if the perceived service is better than the expectations. Lean in service can also influence an entire service consumption experience. Although the service sector almost lost its economic importance after the first industrial revolution, the 21st century has been instrumental in maintaining its steady growth and importance in the developed and emerging countries. Since it is a mix of tools and practices that must be applied in conformity to a specific situation that is in need of being improved, lean in service inherited various standards and methodologies from manufacturing where when applied, large economic and financial results are generated. Despite the resistance suffered in the application of lean in services, the new strategies and technologies that are continually being introduced into the market ensure that the system continues to improve workers’ behaviour, the GDP, and create employment in all modern economies.
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