Pull issues in service

For my first direct posting to LeanBlog.org, I thought I would jump right in. I get a lot of responses to my column, Leading Lean, which is in Assembly Magazine each month. I welcome those emails and thought I would respond to some of the questions here. My April column was about pull, and here was one of the responses I received:

How does pull work in a service business? Is a service business on the other end of this? In other words, a service business must meet the demand as it occurs. In a bank, for example, there must be enough tellers to meet the demand at different points during the day. Are there lean tools and concepts that help us to understand better how to provide excellent service without over-staffing?

There are two distinct concepts at work here. The first is pull in service and the other is leveling, or heijunka. Let’s deal with pull first. To enable pull in any process, I first need to achieve some level of flow. Without any flow, with forks and loops in my process and waits and delays, it is difficult to have successful pull. So first thing about flow. Pull in the simplest sense is responding to consumption, whether it is a machine or a customer. Since I haven’t actually been inside of a bank for years, I’ll use another example. If a McDonald’s is operating well (which is a big assumption), the process for making hamburgers should have some flow from patties to toppings to wrapping to the customer. Now, consider how McDonald’s tries to work. They work towards having pull at the end-unit level. They can’t make it just when you arrive, because you are only willing to wait about 2.5 seconds for your food before starting to grunt and groan with impatience. So they have end units, hamburgers, finished. Ideally, if they had a stock of 5 hamburgers, as one would be consumed, or put into a bag, that would indicate to the hamburger maker to make one more. It doesn’t always work this way, but that is the goal. The reason is doesn’t work is that there isn’t a clear, unambiguous signal to replenish. That’s all pull is – a clear, unambiguous signal. In service, consider what is consumed, whether it is time, materials, information, and how it is replenished or supplied. Then, is the need and the supply clearly connected?

The second concept this gets into is leveling the work. When you can achieve level work, a whole lot more waste can be eliminated, pull and flow work in a stable environment and capacity can be planned and minimized. However, our customers won’t always accept that leveling. In Toyota, this is the case, and Toyota is willing to either have excess finished good inventories or leave orders unfilled on the table in order to achieve level flow on the back end. In service, such as a bank, our capacity is directly linked to the customer order. When you have spot demand, you can not produce to a day’s average customer demand rate. Imagine if an emergency room said “we are designed for an average of one patient every 5 minutes, so you 40 people that just came in will have to wait.” Think about the other work that goes on. You might have to rebalance the work, cross-train and do some other things so that you can flex some resources. For example, one hotel used their deep cleans to fill the buffers on their slow daily-clean days, resulting in an level amount of work every single day.

Remember than in service processes, the lean concepts are not less applicable. They may be harder, but that is only because it is harder to see the process.

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Jamie Flinchbaugh is a lean advisor, speaker, and author. In addition to co-founding the Lean Learning Center, he has helped build nearly 20 companies as either a co-founder, board member, advisor, or angel investor. These companies range from high-performance motorcycles to SaaS tools for continuous improvement. He has advised over 300 companies around the world in lean transformation, including Intel, Harley-Davidson, Crayola, BMW, and Amazon. Jamie co-authored the popular book The Hitchhiker’s Guide to Lean, and continues to share his experiences as a Contributing Editor forIndustryWeek and as a blogger at JamieFlinchbaugh.com. He holds degrees from Lehigh University, University of Michigan, and MIT, and continues to teach and mentor on campus. Jamie is best known for helping to transform how we think about lean from a tools-centric model to one based on principles and behaviors. His passion for lean transformation comes from seeking to unlock the great potential that people possess to build inspiring organizations.

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4 Comments on "Pull issues in service"

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  1. Mark Graban says:

    Imagine if an emergency room said “we are designed for an average of one patient every 5 minutes, so you 40 people that just came in will have to wait.”

    Um, I think that IS how emergency departments are designed ;-) If they’re busy, you wait… unless you’re having a stroke or you’re bleeding to death.

    Hospitals have found it uneconomical to build capacity, space, or to staff for peak levels. They especially aren’t staffed for catastrophic peaks (like an avian flu pandemic).

    But, improving flow at a hospital (throughout the process) has ripple effects back to the ED, allowing them to treat more people or to get them admitted faster.

  2. jp says:

    Yeah, too bad ERs can’t introduce an early bird special or something similar to levelize demand.

    Perhaps they could create alternate contact channels for customers via phone or live internet. If an employee cuts off part of his finger (true story), would I rather send him with a bloody rag to the ER to sit in a chair for 8 hours, or would I rather keep him comfortable and treated in the plant infirmary until the ER is available? Not sure, but somewhere in there an opportunity may exist.

  3. Mark Graban says:

    ER demand/load is pretty predictable, even if not level. I’ve read reports and seen data that show that hospitals do a much worse job leveling elective surgeries and things they actually have control over (too many surgeries done the same day, or same times). They could actually make a huge impact working on that and managing ER’s the best they can.

    ER’s are “build to order” and strictly reactive while many surgeries are somewhat planned and can be leveled easier.

  4. Jamie Flinchbaugh says:

    That’s a good point. We design systems that introduce additional variables which increases the instability in the system. This is one of the lessons of The Beer Game, which we love to teach. Left alone, the system is relatively stable. The more you interfere (without actually changing the system) the worse things get.

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