You may already be aware of the 7 forms of waste in the manufacturing industry, first defined by Toyota; but what about other industries where specific types of manufacturing waste isn't relevant? In this article, I explore the 7 wastes of service and how you can identify them to improve business efficiency.
Dr. Michael Cousins, Managing Director at Triaster recently provided an in-depth analysis of the 7 wastes of lean manufacturing which is also a great read. However, some of our readers in the service industry have asked for an article specifically explaining how to identify the 7 service wastes - and, as always, you ask the question and we answer it.
Defining 'Waste' in the Service Industry
In any industry, identifying waste can prove a challenging endeavour as you cannot always spot inefficiencies with the naked eye. Toyota's Seven Wastes of manufacturing was a game changer in terms of maximising efficiency throughout the production process. You can find a full definiton of the seven forms of manufacturing waste by visiting the article.
The good news is that the Seven Wastes methodology does not only apply to manufacturing - it can also be applied to the service industry. However, as always, there are two sides to every coin: identifying the seven service wastes killing your business efficiency can be a rather challenging endeavour.
The 7 Types of Wastes in the Service Industry
According to a study conducted by the Harvard Business School, the service industries are not yet catching up with manufacturing regarding process improvement and the reduction of waste. In fact, a surprisingly high proportion of processes are wasteful without anyone noticing. With a bit of help and practice it is possible to learn value-stream process mapping and achieve the lean principles of standardisation, process improvement, cost reduction, and efficiency for your business as well.
Before you can identify the wastes of your organisation, we first have to capture and analyse the seven individual wastes that are typical in the service industry (which are occasionally also broken down into eight types of waste of, which then includes the 'waste of human potential').
The 7 wastes of service are:
- Delays - delays in providing the customers with information, a product, or a service:
- such delays can take many different forms (e.g. waiting in queues, waiting on hold on a phone, etc.)
- identifying your own organisation's delays is crucial, as these delays can cause your customers to choose your competitors' services
- Duplication - filling in multiple forms with repeated data:
- this waste can be highly interruptive to the efficiency of your customer service model
- it is essential to cut down on duplication as much as possible - your business' customers will perceive it as annoying, time-consuming and unnecessary
- Unnecessary Movement - unnecessary segmented points of communication:
- making the customer journey as comfortable as possible is the recipe for success
- if your customers' experience is too segmented (e.g. having to contact different internal departments in order to access a service), they may lose interest along the way
- Unclear Communication - unclear industry jargon and unclear communication:
- creating a confusing customer experience through unclear instructions and industry jargon will frustrate your customers
- keeping the communication clear and straight forward will prevent confusion and mistakes, and keep your customers happy
- Incorrect Inventory - Products being out-of-stock or expired:
- offering expired or out-of-stock products does not only frustrate your customers but will also come across as disorganised and highly unprofessional
- Errors - customer receives the wrong product:
- receiving the wrong item or possibly nothing at all is a waste of both yours and your customers' resources
- in order to maintain a positive relationship with your customers, it is essential to ensure that items function properly and services or deliveries reach their destination
- Opportunity Lost - not recognising opportunities to 'go the extra mile':
- maintaining good customer relations is crucial - treating customers in a rude or annoyed manner will ruin your reputation and result in the loss of many opportunities
- make sure to 'go the extra mile' when in order to create customer evangelists and further opportunities for referrals
The Key: Value-Stream Mapping
Identifying these Seven Wastes in your organisation is essential for addressing inefficiencies and process breakdowns. However, knowing about wasteful processes is just the beginning. In order to move from the theoretical to the practical sphere and see real practical change in your process management, you're going to need to read a different article. Dr. Michael Cousins has also written an article explaining how to display waste within a process using Data-driven Visualisation.
It is also important to understand how to model time, effort and cost data in order to identify and then reduce the problematic wastes.
Value-stream process mapping is the key ingredient in identifying where your organisation is failing the efficiency test and, subsequently, removing these 7 wastes of Lean services. This way, you will be able to radically cut down on time and cost. In a nutshell, it is important to understand that time is indeed money - and that your customers' time is precious.