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Part Three
Planning and control
Coordinating aircraft with sufficient tolerance to arrange take-offs and landings every two
minutes would be out of the question. Aircraft would be jeopardized, or alternatively, if aircraft
were spaced further apart to maintain safety, throughput would be drastically reduced.
Yet this is how most supply chains have traditionally operated. They use a daily ‘snapshot’
from their ERP systems (see Chapter 14 for an explanation of ERP). This limited visibility
means operations must either space their work out to avoid ‘collisions’ (i.e. missed customer
orders) thereby reducing output, or they must ‘fly blind’ thereby jeopardizing reliability.
Lean service
Any attempt to consider how lean ideas apply throughout a whole supply chain must also
confront the fact that these chains include service operations, often dealing in intangibles.
So how can lean principles be applied in these parts of the chain? The idea of lean factory
operations is relatively easy to understand. Waste is evident in over-stocked inventories, excess
scrap, badly sited machines and so on. In services it is less obvious, inefficiencies are more
difficult to see. Yet most of the principles and techniques of lean synchronization, although
often described in the context of manufacturing operations, are also applicable to service
settings. In fact, some of the philosophical underpinning to lean synchronization can also be
seen as having its equivalent in the service sector. Take, for example, the role of inventory.
The comparison between manufacturing systems that hold large stocks of inventory between
stages and those that did not centred on the effect which inventory had on improvement
and problem-solving. Exactly the same argument can be applied when, instead of queues of
material (inventory), an operation has to deal with queues of information, or even customers.
With its customer focus, standardization, continuous quality improvement, smooth flow
and efficiency, lean thinking have direct application in all operations, manufacturing or
service. Bradley Staats and David Upton of Harvard Business School 9 have studied how lean
ideas can be applied in service operations. They make three main points:
1 In terms of operations and improvements, the service industries in general are a long way
behind manufacturing.
2 Not all lean manufacturing ideas translate from factory floor to office cubicle. For example,
tools such as empowering manufacturing workers to ‘stop the line’ when they encounter
a problem is not directly replicable when there is no line to stop.
3 Adopting lean operations principles alters the way a company learns through changes in
problem solving, coordination through connections, and pathways and standardization.
Examples of lean service (a summary)
Many of the examples of lean philosophy and lean techniques in service industries are
directly analogous to those found in manufacturing industries because physical items are
being moved or processed in some way. Consider the following examples.
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Supermarkets usually replenish their shelves only when customers have taken sufficient
products off the shelf. The movement of goods from the ‘back-office’ store to the shelf is
triggered only by the ‘empty-shelf ’ demand signal. Principle: pull control.
An Australian tax office used to receive applications by mail, open the mail and send it
through to the relevant department which, after processing it, sent it to the next department.
Now they only open mail when the stages in front can process it. Each department
requests more work only when they have processed previous work. Principle: don’t let
inventories build up, use pull control.
One construction company makes a rule of only calling for material deliveries to its
sites the day before materials are needed. This reduces clutter and the chances of theft.
Principle: pull control reduces confusion.
Many fast-food restaurants cook and assemble food and place it in the warm area only
when the customer-facing server has sold an item. Principle: pull control reduces throughput
time.