I interviewed Nitin Sinha who discussed Lean Supply Chains For The Service Industry.
It’s good to speak with you today, Nitin, and I’m looking forward to hearing your views today on lean supply chains for the service industry. Can you start by providing a brief background of yourself?
I’m currently a director with a company called Sigma Way, which is into process consulting, analytics, marketing intelligence, IT, and training. Prior to that I was with a company called Genpact, which is an offshoot of General Electric. That’s the high focus in Six Sigma and lean, because General Electric was so much into it. I am engineer, as well as an M.B.A. from Delhi University in India. In addition to that, I hold different certifications in financial risk management, as well as black belt and master black belt in lean and Six Sigma.
Great. My first question is regarding using lean techniques in the service industry. Can you talk about how it’s done and the transformational skills involved? How we transition into the service industry.
Technically, when I compare manufacturing to a manufacturing scenario, for example, the basic concept of lean being a full function and we only manufacturer when the customer demands it. We keep the inventory low, as low as possible. That is a JIT manufacturing paradigm, as well as the the Single-Minute Exchange of Dies, which is called the SMED technique in manufacturing, where multiple products and manufacturers on the same assembly line, how quickly can we change the contribution situation of the assembly line so that not a lot of time is wasted and optimized production can take place? To transfer these techniques, they’re actually quite relevant in the service industry as well.
What are the challenges involved?
The main challenges in the service industry are, from my perspective, the unit which is on the assembly line is actually your customer, to expedite to them by doing the change. Rather than a good or artifact, it is the customer who’s on the assembly line as it’s expediting the change, as it passes through your service experience. That is the key challenge, because a customer is also dictated by his own moods and the circumstances, so you might offer him consistent service on two different occasions, but he might be in a different mood and might be expecting something else on the second occasion compared to the first one and might not be happy with your service. That, I think, is the key term.
Usually, we talk about processing a single at one point of time. In the service industry, this is an industry where reports are very prevalent, and if you look at it, a lot of times, the reports are in batches. The reports consist of a list of transactions. That in itself kind of goes against the lean paradigm. That’s one of the challenges.
Similarly, when I talked about using Just In Time in the service industry, in today’s scenario direct companies are trying to get into big data and analytics, and they are buying expensive software. For me, there is no point in doing analytics unless you can take action from the insight you get. Different companies have got different capacity to take action. Some companies are nimble enough to take action in real-time; a lot of them use real-time and the systems that contribute that way. And some companies take a week or two to respond to a report which came out last week.
In my mind, you should only be producing insight almost at the rate at which you can take action. Anything else, actually, is a waste of resources or almost like an inventory when I compare it to the manufacturing industry, because you’re not going to be using it. You want it to be used in the proper time, and it might get old, the information might get old.
Similarly, when I talk about the SMED, or Single-Minute Exchange of Die technique, I compare it to the contact centers and the call centers today, which are highly prevalent. When we look at the people working in the service industry today, they’re not usually playing on one thing. They’re to handle multiple kinds of calls, they’re to handle multiple kinds of channels. You have the same person in a lot of cases talking on social media, like Facebook, Twitter, also on e-mails, and then talking on the phone as well. How do you manage all of this, because usually, the software for all of this is different? For this, it’s a combination of training, as well as software.
In my mind, when I look at SMED, I look at a lot of middle-ware software. These are common with one interface to talk to these multiple channels, as well as optimal cross-training of each of the employees who have such interactions so that they can function in multiple ways or multitask. To me, that’s also an application of Single-Minute Exchange Die; otherwise, you’re looking at different people and different rules, handling different kinds of interactions. And some companies still do that, but I think the contact centers which do really well are people who are using the same people or employees to interact with these multiple platforms.
Can you talk about how you implement in the service industry?
The typical lean implementation, let me compare it to a manufacturing scenario. One of the companies which is where it all started, is Toyota. The culture is really ingrained there; Lean is a tool and technique, as well as a culture there. I think in the service industry, the culture for companies’ improvement doing a lean improvement is important. The first thing we need to do while implementing in the service industry is to give the gauge the situation and understand if there is any kind of change needed there, and there are change leadership tools and techniques we deploy to make sure that we get support for the lean deployment from the leadership.
In addition to that, I think we do a lot of process mapping—not big ones, but one of the key tools by implementing the Lean tools and techniques is value stream mapping, where you look at a profit in a value stream and then try to identify ways of alternately using nonvalue-added activities and reduce things. Now, in the service industry, in my recent experience, what I found is it’s very tough to get people out into a room away from their desk for three days or five days to create a huge value stream and then start looking at improvement opportunities.
So, what we’ve started doing is a lot of pre-work where we are going to the people at their desk, looking at their processes, and trying to create a draft value stream map ourselves and then bringing the people into our room for a day and a half and then asking them to quickly validate it, make the changes, and start implementing process where we try to identify non value-added activities. Another thing which really helps which is different about the service industry, a lot of times one of the requirements are the processes which people are using. You might not need to change any software. It’s just the process the people are doing; it’s not the machinery as such. That is relatively easy on paper, but actually, we’re talking about changing behavior and, in some cases, behavior of people which they have been doing for years and years.
For that, I think it’s very imperative that we do something called..... which is a planning exercise where, once you’ve brainstormed on implementing ideas, we actually try to implement it ASAP. We actually try to implement the easy ones during the course of the lean event or the value stream mapping event, what we call a Kaisen event. We try to implement it during that time so that people are in that mood. When they’re in that room, they’re talking to other cross-functional employees. You want to improve your processes, when we get back to the desk, they might forget about it if it’s not reinforced. Thus, applying some activities where we tell them, “Okay, you’ve come up with ten ideas. Let’s try four of them right now. Let’s just go back to your desk; let’s try them right now and see what the results are. If they don’t work, we’ll drop those ideas and look at something else.” I think that really works within the service industry, especially when it comes to changing behaviors.
Thanks again for sharing these great insights on lean and the service industry.
About Nitin Sinha
Director at SigmaWay LLC