Lean management is a method that is mainly used to run organizations that support the idea of nonstop improvement. Basically, it is a long-term method to work that analytically pursues to attain small, incremental variations in procedures with a view of improving effectiveness and quality. As a method, lean management strives to eradicate wastage of time, energy or money by recognizing every step in a business procedure and then reviewing the steps that do not produce value. Lean management as a philosophy has its origin in the manufacturing industry.
Lean management is guided by the following principles:
- Defining value from the view of the final client.
- Classifying every step in a business procedure and eradicating those steps that do not generate any value.
- Ensuring the value-producing steps follow in tight sequence.
- Repeating the initial three steps on a constant basis till all excess has been eradicated.
In their articles, ‘The industrialization of service’ and ‘Manufacture line approach to service’ correspondingly, Levitt and Levitt advocated for the use of lean management in the service industry. Since then, there have been numerous attempts at applying lean management in the service industry. However, the use of lean management in the service industry only begun to gain force back in the late 80s.
Piercy and Rich explained lean management as an idea that entails a set of ideologies, practices, tools and methods which, when applied by following a methodical technique, would improve resource use, quality and distribution in relation to products and services. A crucial factor to note again is that, in the 1990s, lean management was effectively applied in the service industries for instance, the banking sector and the public sector. Hospitals and airlines were also not left out as they also embraced this approach to improve effectiveness in their organizations.
Some features of lean management are not known to apply to all service industries. However, research conducted by scholars outline the essential lean principles which can be used by any industry, as well as service industries as: value client focus; classifying the value stream; forming flow or constant flow; executing a pull system; and struggling for perfection. Basically, an organizations can transfer these values to suit their setting and guarantee agreement to other service standards.
Additionally, some of the Lean manufacturing or management tools are suggested for service environments with the crucial appreciation that service industries differ in their obligation and that organizations have to utilize tools that are appropriate for their organizations, as they deem appropriate. Some of the lean standard tools which can be used in service industries are the: 5s methodology, 7 wastes of lean and the value stream.
According to Psychogios et al, McDonald’s and Taco Bell’s application of the lean production flow model in order to ensure their client’s anticipations are met are actually good success stories of the use of lean management in the service industry. In fact, this two organizations have been recommended as good examples of a lean production line in the service industry. A critical look at McDonalds as an example, McDonalds which is positioned in the service industry can apply lean management effectively in its operations. Although McDonalds is positioned in an industry that applies its own standards, lean policies can still apply. By implementing the production line model in their food service industry, McDonalds will be have the chance or opportunity to improve client fulfillment and efficiency.
Though the use of lean management in the service industry has its numerous advantages, lean management has its potential issues as regards its application in the service industry. Some of the potential issues are:
- Processes Are Not Visible- In the service industry, procedures that are not visible end up in wastes that are also not visible. Therefore, it necessitates a high degree of expertise, where one requires to look for things for example, work-arounds and voice-of-customer.
- Processes Are Large and Complex- Considering the size and involvedness of procedures, this is habitually not easy in a service industry. For instance, there could be procedures in service organizations that not only cut across serviceable storages but also other regions.
- Processes Are People Intensive- Service procedures are habitually people concentrated. Therefore, this necessitates the assignment of positioning all persons directly or indirectly related with the procedure on the improvement objectives. Getting reliability on this particular aspect adds pressure past acquiring buy-in from all shareholders affected by the improvements.
 Levitt, T., ‘The industrialization of service’ Harvard Business Review, 1976
(September – October): p. 63-74.
 Levitt, T., ‘Production-line approach to service’. Harvard Business Review, 1972
(September – October): p. 41-52.
 Piercy, N. and N. Rich, Lean transformation in the pure service environment: the case of the call service center. International Journal of Operations & Production
Management, 2009. 29(1): p. 54-76.
 Bowen, D.E. and W.E. Youngdahl, “Lean” service: in defense of a production-line approach. International Journal of Service Industry Management, 1998. 9(3): p. 207-225.
 Psychogios, A.G., J. Atanasovski, and L.K. Tsironis, Lean Six Sigma in a service context a multi-factor application approach in the telecommunications industry. International Journal of Quality and Reliability Management 2012. 29(1): p. 122-139.