Monday, February 13, 2012

TPS for Service operations: Stretching it too far?

This week’s readings are interesting in the sense that they introduce us to the Toyota Production system principles and clears the misconception between the goal of TPS and the tools to achieve the same. It is a well-known thing that most of the corporations across verticals are adopting TPS these days. And, as articles point out many organizations does get it wrong when they fail to understand the philosophy behind TPS and blindly adopt the tools and techniques without a purpose.

The article on ‘Lean operations’ efforts in Starbucks and a healthcare facility intrigued me more than the TPS implementations in production/warehouse operations. The reasons being TPS is designed and perfected over years for production/warehousing operations and yes it can be derived and reasonably ‘imitated’ in any organization in the same sector. But efforts to get it going in a service operation is interesting. Before, I explore this any further, we need to clearly identify our focus - it is service operations and not the whole service sector. To better get the difference, a service operation could be a customer care, airline, hospitality etc whereas service sector could be software services, healthcare unit, a hotel etc. Note that a service sector has many service operations and also non-service backend operations such as store management, sourcing, vendor management etc.

As seen in the article on Starbucks efforts to get TPS rolling, there has been considerable resistance and also doubts on the applicability of the techniques within the ecosystem. No doubt, the re-arrangement of ingredients on the ‘partner’s’ desk will boost the productivity and cut down the service time. But, how far can the principle of conserving ‘wastage’ be stretched without affecting the service quality?
Let’s consider the couple of examples here and look deeper. Continuing on the Starbucks service operations, it was identified that the partner wastes considerable time in bending down to roast the coffee powder and while walking around to gather the ingredients. Agreed. But, what is the essence of Starbucks? Is it quick coffee or Is it a soulful coffee? Numerous literature on success of Starbucks reveal the fact that customers feel comforted when they grab a coffee in Starbucks, largely due to the fact that Starbucks' partners strike a conversation and maintain a relationship with the customers. If lean service philosophy eliminates all ‘slacks’ in operating time, then where would be the scope for conversation? At least in my personal experience, most of the talks happen while the drink is being made. The counter argument might be that by making beverage preparation efficient you are freeing up partner’s time to maintain better conversations. Wouldn’t that look phony?
Second instance I can think of is the hospitality industry. How would one feel as a customer, if the hotel staff start performing as per well-defined rules without a personal touch?

The TPS system relies heavily on the couple of key workings,
1. Scientific and well-defined processes in small steps. And, they should be measurable and evaluated in a continuous cycle
2. Clearly defined communications between parties with no room for ambiguity
3. All actions must directly contribute to creating value to the customer

If one analyzes these principles from the service operations’ perspective, apparent differences are evident,

1. Human interactions and relationship building as described by many psychologists are hardly classifiable as scientific. It would be next to impossible to specify the content, sequence, timing and outcomes as needed by TPS.
2. Ambiguity and adaptations are inherent in human interactions and eliminating them is as good as devoid-ing the communication
3. A Starbucks' partner spending time and brewing coffee in a laid-back manner could be argued for both sides - it is indeed contributing to the value offered to the customer or it is non productive and better efficiency can be driven in.

Thus, it is at the best interest of the organization to first decide which operations fits the bill to adapt to ‘lean’ model and which are the operations that are best left for personnel judgement while servicing. But in my opinion there is always scope for TPS based improvements in any organization if the right operation, right outcome and right degree of lean implementation is incorporated.

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