The Difference of Demand in Service
- May 10th, 2010
- Posted in Systems Thinking Concepts . Systems Thinking and Contact Centers . Systems Thinking and Government . Systems Thinking and Healthcare . Systems Thinking and Technology
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I have posted many times before about the importance of demand for service. It is something that practitioners of manufacturing-based improvement methodologies like lean six sigma seem to miss. As manufacturing facilities have closed in the US, the movement of people from manufacturing to service has brought this thinking with them.
What have they brought?
Standardization as the place to begin improvement activities. Something that I have learned is not a good place to start. Yet, most service books I read that have applied these manufacturing techniques to service industries like hospitals, contact centers, break-fix organizations and many more.
Service may improve as order is made out of chaos with this thinking, but I often find that demand has a way of changing over time and that the service variety is much greater than manufacturing. I would also include that most of these manufacturing techniques were deployed on the front-line and the important changes to management thinking never took hold or place in manufacturing. This hits at the heart of sustainability as in order to improve management thinking has to change too.
With service having greater variety, standardization doesn’t make much sense until we understand demand. In fact, standardization inhibits absorption of the variety found in service without the insightful study of demand. It is (in essence) putting the cart before the horse when we start with standardization in service.
A study of demand allows us to discern customer wants and needs to truly design the system to give exceptional service. The absorption of variety allows costs to be reduced. When variety isn’t abosrbed like say in an IVR (Interactive Voice Response), customers have to call back with great frustration or they don’t call back which results in loss of business.
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Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.
Hi Tripp
You’re right on the IVR example which is trying to impose standards on customers. That often creates waste because customer demand has more diversity than IVR-menus. This kind of standard results in bad service.
However, in service you often have process steps that benefit from standardization. In service that often comes in the form of checklists. They are very useful to prevent mistakes. Think about pilots who are doing service. There’s huge variability in the weather, air traffic controller demands, destinations, unexpected events, etc. And it still makes a lot of sense to have a standard departure and landing check. The same goes for healthcare and other service industries, even call centres. I have observed that many mistakes and the resulting failure demand in call centres could be prevented if agents repeated the key elements of an order at the end of the call together with the customer. That can be seen as standard work. Another example is not listening properly to customers at the beginning of a call, therefore not understanding his real needs. That often creates repeat calls at service hotlines, because inappropriate measures were taken before. Again “Understand the trigger of a call from the customer’s perspective” is an important element of a checklist.
So good standards prevent mistakes and can support quality and safety. The key is that standards must be customer oriented and not be designed from an internal perspective. I believe checklists are most useful if they’re not imposed top-down but rather created and continuously improved by workers themselves, be they pilots, doctors, agents, etc.
There’s a book, “The checklist manifesto”, I haven’t read it, but heard there are some interesting thougths on the subject.
Regards, Frank
Frank-
Thanks for the comment. I have rarely found checklists to be a pancea for an ailing system. Like most tools, it has a purpose . . . that said I have seen checklists fail and then blame is sought when the system is still the culprit. Too many times I see checklists used AFTER the work is done as it becomes routine.
I have heard about checklists just as I have 5S and other tools. I am still left with the same questions Who invented the tool? What problem were they trying to solve? and Do I have that problem. More often I find that the checklist may make sense but doesn’t answer why the system behaves the way that it does.
A standard of any type has the same problem. I rarely find them useful until I have a good understanding of demand, system conditions and management thinking.
Regards, Tripp