Lean Six Sigma Applied to the Service Sector

The service sector is of great and increasing relevance in the modern economy. For this reason, wasteful service delivery, which can result in losses of 30 to 80 percent by driving up costs, needs to be mitigated.

On the other hand, because of peculiarities in this sector, the application of Lean Six Sigma—long used in manufacturing—has not been easy.

Lean Six Sigma is a methodology developed from the integration of two different but complementary methods: Lean Manufacturing and Six Sigma.

Lean Manufacturing is a management philosophy that aims to reduce waste and as a consequence increase productivity and quality.

Six Sigma is also a management philosophy that aims to solve problems and reduce process variation, significantly reducing costs for the company, thus increasing its profitability.

Lean Six Sigma, then, combines Six Sigma with the tools and concept of Lean Manufacturing to improve business results by reducing process variation and costs by eliminating waste and non-value-added activities. In the service industry Lean Six Sigma is nothing more than a methodology for improving business management to deliver customer satisfaction, reduced costs, improved quality of service, and maximized shareholder value.

The integration of the two methodologies is important, since Lean adopted in isolation does not have the capacity to place a process under statistical control, while Six Sigma alone does not have the power to significantly improve the speed of a process, let alone reduce the capital invested.

Waste in services stems from the fact that processes are usually slow, often complex, thus expensive; further, many delays are due to problems located in a limited number of activities.

Lean Six Sigma applied to service activities enables companies in the industry to analyze their

process flows and, from there:

  • reduce operation costs
  • eliminate activities that do not add value to customers
  • minimize delays
  • simplify operations
  • reduce delivery time and therefore waiting time
  • make decisions based on data
  • and more.

In addition to solving process-related issues that hinder business development, Lean Six Sigma enables the service company to:

  • reduce waste
  • improve delivery quality
  • reduce the time required to develop customer solutions
  • and increase customer satisfaction.

In due course we will return to the subject to address the deployment of Lean Six Sigma in the service industry.

See you later!

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