How different are Service Processes from Manufacturing Ones

Quite often, not a lot of thought is put into translating Six Sigma and Lean Methods from Manufacturing to Service Processes.

Are they similar or different? Yes in some ways they are similar, and in other ways, they are not. Not knowing the differences can be quite costly!

I have talked to many senior process and operational excellence management in large corporations. Many of these companies have had "Six Sigma" efforts for a while, but many seem to be losing steam. They are being rolled into generic "Operational Excellence" efforts and some do not want any mention of Six Sigma alone explicitly. Some of them have realized that they need to use other techniques like Lean Methods and such. Some of them want to consider end-to-end performance of processes rather than just the part that is outsourced or offshored!

Which makes me think that sometimes we blindly translate something that worked in one area of the company to another; something that worked in one company to another. Which may not always work. A collections process of one company may not be the same as a collections process in another, even though their businesses may be very similar. Their loan profiles may be different and collections strategies and tactics may have to be very different depending upon their own individual approaches to their business.

There is an excellent article in the Fall 2006 Issue of The Journal of Supply Chain Management - Manufacturing and service supply chain performance: a comparative analysis. This is an article that describes the clear differences between Manufacturing Supply Chains and Service Supply Chains and how one set of techniques that work in manufacturing may not work in services.

Primarily, the point that is made is that Services contain a higher percentage of the human factor depending upon the service process in question. Process improvement approaches that work in Manufacturing may have to be tailored for proper use in services. A higher level of consideration to the human equation and consequently the expectation that variation is to be expected and managed appropriately needs to be there.

Which may explain the first set of discontent with applying Six Sigma approaches straight out of the manufacturing bottle!

Something to think about!

The problem with people is that they're only human - Bill Watterson