Lean manufacturing started on the automobile assembly line.
When it was introduced to other types of manufacturing, the first reaction was, “It won’t work here. We are different. We don’t make cars.”
Some brave and advanced-thinking companies tried it anyway. Several years ago when lean was introduced to the construction industry, it was common to hear: “We aren’t manufacturing; we’re different and lean won’t work for us.”
Today there are many case studies proving that lean does work in construction. The next frontier is service work and especially residential service. But approach service managers with the possibility of applying lean techniques, and the first words out of their mouths might be: “We’re different from construction and it won’t work here.”
Service work is different from construction, just as construction is not manufacturing. Residential service work is unique from commercial service. Every HVAC service contractor is different, as is each individual. Even with the differences, lean works for service too. Lean works in all industries, services and even government. Not every tool is applied the same way, but the concepts and tools do work. As you read this article, consider the possibilities of how it can work for you, not why it won’t work. Good leaders will see the opportunities and allow lean to make them more competitive and successful.
To successfully implement lean in a service department, managers need to understand the foundation of lean thinking. They need to know about value and waste.
Value is in the eyes of the customer, and waste takes many forms, often invisible to those managing service operations.
Value is what transforms the product or service into what the customer is paying for. The economist defines value as the ratio of usefulness to cost. Basically, what you got to what you spent. Costs include more than dollars; it includes the time and pain one must endure to get what is needed. Customers call for service because they have a problem. In the consumer world, which includes residential customer services, value means:
Solving a problem completely. No run-arounds and no multiple phone calls to make.
Don’t waste their time. Most companies that provide services to consumers typically assume the customer’s time is free. How often do you go to a doctor’s appointment and wait hours to see the doctor? They feel your time is free. It’s not. You schedule a service call and if you are late, it is only the customer’s “free” time you are using. Contractors often hedge on possibly being late by giving a window of when the technician will arrive. Would you make an appointment with your accountant if he or she said, “Come at 8 a.m. and I will work you in before noon?” Your time is not free; nor is your customers’.
Providing exactly what is needed. Many service technicians are encouraged — or required — to up-sell the customer more than is really needed. No one likes to pay for more than is necessary.
Providing it when it’s needed. Customers see value in how fast we respond to their service call. The sooner the response, the greater the value.
Providing value where it is needed. Customers don’t bring their HVAC units to a business; you must go to them.
Solving the problem right the first time. Customers hate having to call again because the unit was not fixed on the first visit.
Reducing the number of problems to be solved. Customers value making only one call.
Deliver the service at a fair price. Most customers don’t want something free; they want their money’s worth. They will see you as providing greater value when you solve their problem quickly at a fair price.
Delivering greater value and quicker service at lower costs seems impossible to many service department managers. But it is possible when managers and technicians change how they view “waste.” In general, waste is anything that consumes resources and time, but does not add value. There are seven basic types of waste identified through lean thinking:
1. Defects in products or services. If you didn’t fix it right the first time, it is rework. Call backs are waste and especially disliked by customers. Punch lists are also rework.
2. Overproduction seems to fit in manufacturing and construction, but not in service. Yet it does. Just-in-case thinking and ordering too much material causes waste. When a technician orders extra parts just in case they might be needed, it is overproduction.
This is a sticky point with residential service. You don’t want to carry too many parts, but we don’t want to not have the part when needed. There is not one right answer, and often trade-offs must be made. Service work should be managed by using these three priorities at all times and in all decisions:
• Protect the customer. Always do what is needed to deliver value to customers — value as they see it.
• Reduce inventory. Don’t carry excess inventory (but never at the expense of priority No. 1).
• Reduce other costs.
Ordering the right amount of material is not a simple equation or calculation. Exercise judgment to avoid excess.
Inventory, such as materials stored in the service warehouse and in the vans, is waste. Some inventory is needed to avoid greater waste, such as a technician waiting to fix the problem, but much inventory is excess and waste. One large service contractor used the “Five S” to get rid of unneeded parts and tools. This came out to over 7,000 pounds of material, parts, and tools — about 100 pounds per van. Another contractor did the same approach and found that most vans were carrying about 150 pounds of excess and outdated materials. How much extra fuel is used carrying around an extra 150 pounds of excess material?
Unnecessary processing, such as redundant or unneeded steps to restock the service van/truck, is waste. Multiple signatures on an equipment order add no value. Filling out more paperwork details than is needed is waste.
Unnecessary movement of people is called “treasure hunting” and it adds no value. Treasure hunts are common on construction sites. They are maybe even more noticeable when a service technician is constantly going back to his or her service van for parts or tools.
Moving material, tools or parts, or leaving the job to buy a part, is waste.
Waiting is waste. When the technician is waiting for equipment, plans, approvals or material, it adds no value. Causing the customer to wait is also waste.
It starts with applying the Five Ss: sorting, simplifying, sweeping, standardizing and self-discipline.
• Go through each truck to sort out and remove anything that is not necessary. For items deemed necessary to stay in the van, organize where it should be stored and visually mark it to make it easy for everyone to find and use.
• Develop and maintain cleanliness standards and routines so clutter is removed and all tools are made ready for their next use.
• Standardize how all vans are organized and visually marked so a technician or assistant can find what is needed on any van in use.
• Use regular checkups and self-audits to maintain the gains. This requires self-discipline.
Also change how you prepare for calls. Gather as much information about the problem as you can. This usually means changing the questions the dispatcher asks. The more information obtained, the greater the possibility of technicians showing up ready to solve the problem with the right parts and tools. Sure, some residential customers may not be able to answer technical questions about their equipment, but others will. Seek to gather and store information about repeat customers to be better prepared for service calls.
Work to gather other data to help pre-diagnose the problem before sending technicians to a home. Use statistics on job history and typical failures of the customer’s equipment. Technicians should arrive with the parts most likely needed so they can fix it the first time, on time.
Change how you support technicians. The technicians are the value-adding workers, but company processes and policies often slow them down. Stock the service vans with the right tools and parts. Implement a system to keep the service vehicles stocked, but not overstocked. Use data to tell what the right tools and parts are, and stocking levels for each season of the year. Make it easy for technicians to see work order history for customers and equipment, not just the most recent calls. Use a runner to get parts so the technician can keep working at the facility. Reduce paperwork to only what is actually needed and avoid duplication of information. Change how you manage service work
Finally, consider organizing and assigning work based on the time and skills needed. For example, a service call might be separated into one of three categories:
• High-volume and fast. This is the type of work performed frequently and quickly
• Complex jobs that can be accurately pre-diagnosed. We know what is involved to perform this work, but it takes time and skills to complete.
• Jobs where the problem is unknown prior to on-site investigation.
By categorizing work this way, you can assign the right skills and do a better job of fixing customers’ problems.
Applying lean to service work is not complicated but it does require a change in thinking — a change to lean thinking. Lean does work in service but only if you try it.
Dennis Sowards is an industry consultant and guest writer for Snips. He is the author of the Lean Construction Pocket Guide: Ideas and Tools for Applying Lean in Construction. His company is Quality Support Services, Inc. Reach him at dennis@YourQSS.com or at (480) 835-1185.
For reprints of this article, contact Renee Schuett at (248) 786-1661 or email email@example.com.