Many companies in the manufacturing sector are familiar with and have applied Lean Six Sigma methods to improve quality and efficiency in production. These companies have realized significant gains by reducing variation and eliminating waste in production activities. But did you know these same concepts can be applied to the service and transactional functions of a business as well?

Healthcare and banking are leading the way in applying Lean Six Sigma to their transaction- and service-oriented processes. Many other sectors and service functions within manufacturing businesses will soon begin to explore the opportunities Lean Six Sigma presents to their business.

Service processes are ripe with waste and non-value added work that breeds inefficiency. They present a slam-dunk opportunity to analyze and improve results. Most service functions have far too much WIP (work-in-process) like orders waiting to be processed, reports waiting to be run, e-mails waiting to be looked at, etc. This time spent “waiting” is considered waste for two reasons: the service can’t be delivered while it’s waiting and most of the time the wait is for non-value added activities like review and waiting for approval.

The goal is to re-work the process to eliminate as much waste as possible by reducing variation, complexity, duplicate steps, non-value added work and waiting time. The elimination of work “loops” is one of the goals. The 80-20 rule applies here. Normally, 20 percent of the process steps can impact up to 80 percent of the cycle time. Focus on that 20 percent and watch the cycle time of your service process drop!

This article was originally published in Illuminations: Facts & Figures from people with a brighter way, a Rea & Associates enewsletter, 1/31/2007.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

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