Introduction:
In order to make a business successful, the owners have to strive day and night! But only hard work is unlikely to help them achieve their goal. Together with it, they need to employ skillful employees, implement strategic business methods and explore new markets. For achieving maximum revenue there are only two main ways; either to maximize sales or minimize costs. The former can be hard to achieve initially, but the latter is controllable at every stage. The best business strategy proposed to decrease costs is Lean Service Management; which focuses on reducing and eliminating unnecessary costs.
What is Lean Service Management?
Lean services refer to a systematic process of recognizing and eliminating activities and costs which do not add value to the product. These thus, are an additional financial burden, which the service providing/manufacturing company has to bear. Invented by the Japanese manufacturers, this system bases on an approach to continuously improve services/products, by extracting unnecessary activities from it. The main focus of this strategy is on the inventory, movement of products and service providers. Over time, as firms expanded, they required the support of professional organizations who specialize in cost-reducing methods. These organizations provide Lean Service Management to firms and devise for them appropriate plans, which can be implemented in order to reduce waste and costs.
How beneficial is it to integrate Lean into Business activity?
The process has been endorsed by many industrial giants, as it is known to provide a firm; several advantages. Lean service helps to boost productivity; which is one of the most important things. As productivity rises, a firm can produce more output compared to their input, thus they reduce their per-unit cost. The process also allows operations to be conducted smoothly and makes room for better responsiveness and flexibility. Through this process, efficiency also raises, thus efficient products and services are provided. Thus, fewer defects are reported, and service does not have to be reworked; hence, saving both time and money. The lead time (Time between the commencement and completion of a product) is also reduced, thus customers get their desired product/service in lesser time. Lean Service Management also boosts the motivation of employees; who then produce better and quicker. This, in turn, leads to more satisfied customers.
Critics VS Lean Services:
Even though the process, has been adopted by several organizations and has provided them benefits; it has strongly been criticized by many professionals too. The critics claim that the process creates a situation of supply scarcity. Since the inventory is minimized to decrease storage costs, many firms face issues in the cases of unexpected large orders. They at those times, do not have sufficient products and cannot cater to their customers. The process is also very expensive, as it may require hiring a professional lean service management company. This may also not be accepted by the company’s employees, as it would require for them to change their existing production methods. This may thus, reduce their motivation and may even lead to several resignations. These critics, also claim that customers are also dissatisfied with firms practicing Lean since they fail to provide goods on time or of premium quality.