Operation Improvement Programs: The Grinch of the Service Industry

Various programs exist, such as Six Sigma, Lean Thinking, and the Theory of Constraints, that all help businesses improve performance by decreasing inefficiencies. Typically, these types of programs were created for heavy manufacturing operations such as Toyota’s vehicle assembly line.

After showing success in manufacturing, the same programs have been tried in service industries as well. Starbucks has had an increased number of daily transactions at stores implementing an improvement program, and therefore, is making more money [1]. Seattle Children’s Hospital has decided not to spend millions of dollars on an expansion project to care for more patients after implementing an improvement program that increased the hospital’s capacity by reorganizing their resources.

Improving operations on a manufacturing line is one thing, but many argue forcing coffee baristas and hospital nurses to cater services in the most efficient way possibly greatly detracts from customer and patient care. One study done by McKinsey published in “The Lean Management Enterprise” shows that employees of larger organizations become more stressed when there is more management as seen in figure 1 [3]. Managers implementing and enforcing improvement programs can be a major source of stress for employees as mundane tasks such as creating a Frappuccino, or starting an IV are timed by the second.

Figure 1.

It is important to consider whether an employee in the service industry can provide the same level of customer care when so much pressure weighs on them to run the most efficient operation possible. One nurse argued that “procedure times can’t always be standardized. For example, some children need to be calmed before IV’s are inserted into their arms” [4] Therefore, supporters of improvement programs need to consider the tradeoffs that exist when employees are urged to operate more like robots and less like compassionate individuals.

[1] http://online.wsj.com/articles/SB124933474023402611

[2 & 4] http://www.nytimes.com/2010/07/11/business/11seattle.html?pagewanted=all&_r=0

[3] http://www.mckinsey.com/client_service/operations/latest_thinking/lean_management