LSD Service

Traditional thinking normally defines services along these types of categories:

  1. Deeds, processes, and performances.
  2. Intangible activities that take place in interactions with customers
  3. Output is not a physical product
  4. Consumed at the time it is produced and provides added value
  5. Ownership not normally taken
  6. Time perishable

Lean has reacted and supported the improvement of services through the foundation based on Deming’s 14 Points Applied to Services (Quality and Reliability). In Deming’s view, management was responsible for 85 percent of all quality problems and, therefore, had to provide the leadership in changing the systems and processes that created them. Management needed to refocus attention on meeting customer needs and on continuous improvement to stay ahead of the competition. His philosophy is captured in his 14-point program:

  1. Create constancy of purpose for improvements of product and service. Management must stop its preoccupation solely with the next quarter and build for the future. Innovation in all areas of business should be expected.
  2. Adopt the new philosophy. Refuse to allow commonly accepted poor levels of work, delays, and lax service.
  3. Cease dependence on mass inspection. Inspection comes too late and is costly. Instead, focus on improving the process itself.
  4. End the practice of awarding business on price tag alone. The purchasing department should buy on the basis of statistical evidence of quality, not on the basis of price. Reduce the number of vendors, and reward high-quality suppliers with long-term contracts.
  5. Constantly and forever improve the system of production and service. Search continually for problems in the system, and seek ways of improvement. Waste must be reduced and quality improved in every business activity, both front office and back office.
  6. Institute modern methods of training on the job. Restructure training to define acceptable levels of work. Use statistical methods to evaluate training.
  7. Institute modern methods of supervising. Focus supervision on helping workers to do a better job. Provide the tools and techniques to promote pride in one’s work.
  8. Drive out fear. Eliminate fear by encouraging the communication of problems and expression of ideas.
  9. Break down barriers between departments. Encourage problem solving through teamwork and use of quality-control circles.
  10. Eliminate numerical goals for the workforce. Goals, slogans, and posters cajoling workers to increase productivity should be eliminated. Such exhortations cause worker resentment, because most of the necessary changes are outside their control.
  11. Eliminate work standards and numerical quotas. Production quotas focus on quantity, and they guarantee poor quality in their attainment. Quality goals such as an acceptable percentage of defective items do not motivate workers toward improvement. Use statistical methods for continuing improvement of quality and productivity.
  12. Remove barriers that hinder hourly workers. Workers need feedback on the quality of their work. All barriers to pride in one’s work must be removed.
  13. Institute a vigorous program of education and training. Because of changes in technology and turnover of personnel, all employees need continual training and retraining. All training must include basic statistical techniques.
  14. Create a structure in top management that will push every day on the above 13 points. Clearly define management’s permanent commitment to continuous improvement in both quality and productivity.

I am a firm believer and follower of Deming. These 14 points apply as much today as they did when they were first written. However, I believe that many Lean Practitioners have taken these points and internalized them. We need to re-think these points placing the customer and user experience as the center.

Adapted from Service Management:

One of the unique characteristics of services is the active participation of the customer in the service production process. Every moment of truth involves an interaction between a customer and a service provider; each has a role to play in an environment staged by the service organization. The service encounter triad shown captures the relationships between the three parties in the service encounter and suggests possible sources of conflict.

The managers of for-profit service organizations have an interest in delivering service as efficiently as possible to protect their margins and remain competitive. Nonprofit service organizations might substitute effectiveness for efficiency, but they still must operate under the limits imposed by a budget. To control service delivery, managers tend to impose rules and procedures on the contact personnel to limit their autonomy and discretion when serving the customer. These same rules and procedures also are intended to limit the extent of service provided for the customer and the resulting lack of customization that might result in a dissatisfied customer. Finally, the interaction between contact personnel and the customer has the element of perceived control by both parties. The contact people want to control the behavior of the customer to make their own work more manageable and less stressful; at the same time, the customer is attempting to gain control of the service encounter to derive the most benefit from it.

Ideally, the three parties gain much by working together to create a beneficial service encounter. The moment of truth can be dysfunctional; however, when one party dominates the interaction by focusing solely on his or her own control of the encounter.

Think about each touchpoint you created in the previous Trilogy Journey Map. Can you distinguish who has the perceived control of the encounter? Are you willing to give up control to achieve a better outcome? Should you?

In The Service-Dominant Logic of Marketing edited by Robert Lusch and Stephen Vargo, they present the case to use SD-Logic as a foundation versus a total integrative marketing method. I believe that Lean viewed through the lens of PDCA as a knowledge creation platform can serve as the vehicle for implementation of this Logic. The principles of SD-Logic cannot be implemented in various silos of an organization, just as the basic principles of Lean cannot. It requires a cultural and fundamental shift within the organization placing the customer and user experience as the center.

This Service Module is filled with examples of creating a PDCA culture of continuous improvement in the service fields. To prepare yourself stop thinking of creating services. Think about improving them. We are working with services that already exist.

This leads us to Service Quality. It is a challenge because customer satisfaction is determined by many intangible factors. We will discuss these gaps in greater details later in this module but for now, watch this short overview on Improving Quality.

Go to the next page; Service/Train.