Lean Systems is described as a managerial philosophy which enhances the value perceived by the customers, by adding product and/or service features and by continuously removing non value added activities (i.e. wastes), which are concealed in any kind of process. To reduce waste, the lean manufacturing is capitalizing on various tools at its disposal including regular process review. In particular the five Lean principles proposed , these 5 principles are Define Value, Value stream, Flow, Pull and perfection.

1. i
Master of International Business Administration
(MIBA)
Lean System Adaption in Services Industry
Project Supervisor: Dr. Abd El Monem El Saied
Submitted by: Ahmed Mohamed Adel
Academic Year: 2012

2. 2
Abstract
Nowadays, in highly competitive marketplace, satisfying the customer is
becoming more challenging and the service industry is struggling for better
quality and costs reduction. Gaining or losing a customers can be due to
administrative processes that go along with services transactions and it is
becoming a must to maintain costs (or reduced) with maintaining the same level
of service (Tapping, 2005). Remarkably, in spite of processes automation,
intervention of information technology and training, the level of service quality
is actually declining, with year-on-year service declining by significant amounts
(Acland, 2005) (D. Dickson, 2005). Multi-national enterprises has tried to
enhance its processes in order to maintain the quality measures originally
defined by customers as well as decreasing its cost to maintain its profit growth,
accordingly many of these MNEs has adapted Lean Systems.
Lean Systems has been broadly used in MNEs manufacturing processes and has
shown great success especially in the last 4 four decades, now there are efforts
for it to be implemented in services industry to assist in increasing the value add
during product delivery processes. There is no doubt that of lean system
philosophy application in services industry will increase productivity, quality,
capacity and decrease cost leading to positive impact on customer retention and
enterprise profitability.

3. 3
Table of contents
ABSTRACT 2
TABLE OF CONTENTS 3
TABLE OF FIGURES 4
INTRODUCTION 5
LEAN SYSTEM EVOLUTION 7
LITERATURE REVIEW 8
LEAN SYSTEM PRINCIPLES 8
Step 1: Define Value 8
Step 1-i: Value Add and non-Value add: 9
Step 1-ii: Waste 9
Step 2: Value Stream 10
Value Stream Mapping 10
Current state value stream map 11
Future/Desired state value stream map 11
Service Value Stream Management 12
1- Commit to lean 12
2- Learn about lean 12
3- Choose Value stream 13
4- Mapping the current state 13
5- Set Improvement Targets 13
6- Map Future state 14
Step 3: Creating Value stream flow 14
Step 4: Implementing the pull system 14
Push system 14
Step 5: Perfection 14
Empowerment 15
LEAN SYSTEM IMPLEMENTATION 15
BENEFITS OF LEAN SYSTEMS: 16
Disadvantage of Lean System 16
LEAN SYSTEM APPLICATION IN SERVICES INDUSTRY 17
Critical Benefits of Lean in Services Industry: 17
Service View for Lean Principles Application: 18
Value identification from Services view 18
Identify the Service Value Stream 18

4. 4
Making the Value flow from Service view 18
Supply at the Pull of the Customer Service View 18
Pursuit Perfection Service View 19
Application Examples in Services Environment: 19
CONCLUSION 21
WORKS CITED 23
Table of Figures
FIGURE 1 LEAN PRINCIPLES 8
FIGURE 2 VALUE STREAM MAP (CURRENT STATE) 11
FIGURE 3 VALUE STREAM MAP (FUTURE STATE) 11

5. 5
Introduction
Lean manufacturing genuinely is management philosophy that focuses on
reducing the wastes throughout a specific tools and concepts in order to magnify
the overall customer value. This is done by quality enhancement; reduction of
production time hence, costs decreased (Jordan, 2001). It is also described as
philosophy that when implemented reduces the duration from customer order to
delivery by eliminating sources of waste in production flow (Liker, 1996). To
reduce waste, the lean manufacturing is based on a set of tools including regular
process review & analysis, value identification, customer’s involvement and
pull production. More information can be seen further afterwards.
Taking into consideration Lean System success in manufacturing process and its
participation in enhancing some production metrics cost, productivity, quality
and profitability , adapting same philosophy in services industry is seen to be
very important knowing that the participation of services industry in World
economy and Global GDP is 63.4% (CIA, 2012), more details is shown in table
1 below.
Country 1960 1970 1980 1985 1990 2011
(estimate)
Canada 46.2% 52.4% 53.8% 55.7% 69.7%
Germany 45.8% 45.6% 49.4% 50.6% 53.7% 70.6%
France 49% 50.3% 52.4% 54.2% 56.8% 79.5%
UK 54.9% 57% 59.9% 63.1% 77.8%
Italy 59.4% 57.5% 58% 58.8% 73.4%
Japan 57.8% 59.7% 58.5% 59.4% 71.6%
U.S. 57.2% 58% 61.4% 62.2% 63.2% 79.6%
Table 1: Services Output as a Share in GDP (Source: OECD, 1994 International Sectoral Database), 2011
estimate results by CIA world Fact book)
Although there is a debate introduced that there is major difference between
manufacturing and services industry and whether they shall be treated in the
same manner, this debate has been briefed in four major difference points
1)Services are more or less intangible, 2)Services are activities or a series of
activities rather than materialized products, 3)Services products to some extent

6. 6
produced and consumed at the same time, 4) The customer is involved in the
production process itself to some extent (Grönroos, 1990). Nevertheless either
dealing with a good or a service it is considered to be a demand by the client
that should fulfill his needs, meets his required values and ensure his
satisfaction via an organized set of processes.
Lean system uses Value Stream Management (VSM) as a key towards
successful implementation in several industrial cases and recently it has also
been used to understand the flow of information and materials in office
activities (Holmes, 2007). However, its direct application to the service field is
somehow doubtful. Definitely, due to the lack of process clarity and ownership
that might exist, the concepts of both value stream and waste removal are less
tangible for a service than for a manufacturing process (Juroff, 2003).
The detailed literature review is focused on understanding the core principles of
Lean systems and its tools based on Value Stream Management (VSM), and its
mutation to Service Value Stream Management (SVSM) which leads to
possibility of increasing service performance by highlighting and tackling
critical points. The need of this study is initiated by the increasing need to
extend the lean concept beyond manufacturing business environment to the
service business environment triggered by its dominant share in the world
economy.

7. 7
Lean System Evolution
Japan production technology principle that contributed most to the world in the
latter 50 years of 1990s century was the Japanese-style production system
named the “Toyota Production System, TPS”. (Ohno, 1988) TPS is considered
the base stone of Lean Systems, the most important objective of TPS has been
to increase production efficiency by eliminating waste. This concept and the
equally importance of humanity that has been introduced by the venerable
Toyoda Sakichi (1867-1930) founder of Toyota Inc. and master of inventions,
to his son Toyoda Kiichiro (1894-1952), Toyota Motors company first president
and father of the Japanese passenger cars. (OHNO, 1988) TPS is described as an
integrated socio-technical structure that systematizes industrial and logistics for
the automobile manufacturing companies, including interfacing with suppliers
and consumers. TPS states that to have an effective production system you need
to produce a production line that runs efficiently in order to deliver to the
customer in the quickest amount of time. The TPS includes nonstop
improvements, people respect, and work practices standardization (Heizer &
Render, 2008). TPS stresses on the significance of entirely eliminating waste
from the production line to increase its efficiency.
Based on that and according to (Hines, Holweg, & Rich, Learning to Evolve:A
Review of Contemporary Lean Thinking, 2004), lean thinking can be defined as
a managerial philosophy which develops the value received by the customers,
by adding product and/or service that resembles a value for them and by
continuously removing non value added activities (i.e. wastes), which are
hidden in any kind of process.
Lean system is also described also a set of tools of methods for practical use at
the operational level that have been developed to support lean thinking
approach. These tools include, value stream mapping which is used to analyze
the flow of resources, indicate activity areas that consume resources but do not
add value from the customer’s perspective.’ (Radnor, Walley, Stephens, &
Bucci, 2006). The application of lean system to the service industry could be a
possible solution to tackle quality and cost concerns (Maleyeff, 2006) (Abdi &
Shavarini, 2006).

8. 8
Literature review
Lean system principles
In particular Lean System has five basic principles proposed (James P.
Womack, 2003), these 5 principles are Value definition, Value stream, Flow,
Pull and perfection. It is very important to understand these principles as they
are considered the key milestones in the way to implement Lean Thinking, thus
providing a simple structure for building a detailed route map for anyone
wanting to apply Lean to a business process (James-Moore & Haque, 2004).
Figure 1 Lean Principles
Source: This figure was adapted from the lean thinking model created by: James Womack and Daniel Jones in
their 2003 book Lean Thinking, Free Press Publishing.
Step 1: Define Value
During this step it's critical to understand who's doing the definition and what
they are valuing. The customers are the ones who define what they value in
specific products and/or services as stated by (KennedyCPA & BrewerCPA,
2005), they added as well, in order to be a lean thinker; you must insistently
seek to view your organization through the eyes of your customers.
Value is about providing the full value that customer’s desire from their goods
and services, with the greatest efficiency and least waste (Jones & Womack,
2005). Value identification and specification must be carried out and updated on
a continuous basis as customers change their mind with time. Once the value
has been defined it is essential that the organization confirms they have the right

9. 9
process in place to deliver the product or service to meet the exact customer
requirements.” (Systems, 2012).
Step 1-i: Value Add and non-Value add:
Value add can simply be distinguished as the activities that changes the form or
function of a product or service and this is what the customer is willing to pay
for, while the and non-value add are the activities are those which don’t add
value to the process and will not impact the specifications required by the
customer, activities he will not have the desire to pay for.
James Cowan, president and CEO of American Railcar Industries Inc. initiated
amongst his management during his efforts to decrease cost, the question about
if the activities they are doing adds value to the customer or not, and that they
have to make sure it is, highlighting that the company is getting paid for what
the values they deliver to the customer through their products. Mr. James
Cowan has clearly stated that if the activities made in the internal process don’t
add value to the customer, it is considered a non-value add (waste) and shall be
eliminated (SCOTT, 2011). Identifying those activities that add value and those
do not is important to decision makers knowing that currently business
environment is getting more competitive and doesn’t allow cost increase
because of unnecessary activities. (Collins & Shafer, 1992).
Nevertheless, there are some essential non-value add activities that is designed
to insure that the value add activities are implemented correctly and completed
to reduce waste. For example, inspection does not contribute to the product
delivered to the customer, but it is necessary to minimize waste and rework
unless the process itself can be enhanced up to an optimum point where
inspection can be eliminated.
Step 1-ii: Waste
Waste is described as unintentional use or consumption of resources during the
process, leading to lose (time, money, materials, machine, manpower, etc…),
cost increase will be a significant outcome of this loses. There are "seven types
of wastes" that everyone in a manufacturing operation should attempt to

10. 10
eliminate; these are 1) overproduction, 2) unnecessary transportation, 3)
inventory, 4) worker motion, 5) defects 6) over processing and 7) waiting
(OHNO, 1988).
Waste is anything but the value add and essential non-value add activities
during the process of product deliver. For instance, waiting is a waste, defects,
waste is something shouldn’t exist in the manufacturing processes, it should be
eliminated, it’s profit enemy (Giannantonio & Hurly-Hanson, 2011). One
reclassification and identification of these wastes for service operations
according to (Bicheno and Holweg, 2009), 1) Delay on the part of customers
waiting for service, 2) Duplication, Having to re-enter data, repeat details on
forms, etc., 3) Unnecessary Movement, queuing several times and lack of one-
stop, 4) Unclear communication, 5) Incorrect inventory, 6) Lost opportunity to
retain or win customers, 7) Errors in transaction of service and defects in the
service bundles delivered.
Step 2: Value Stream
The Value Stream is a sequence of activities necessary to design,
produce or manufacture and provide a specific good or service and
describes as well which information, materials and worth flows. Value
stream management appears as an important tool to ease the lean
transformation. It maps the information and materials flow, identifies
various types of wastes, and redesigns the value stream toward the
future state. (Womack & Jones, 1996b).
Value Stream Mapping
The core of Value Stream Mapping (VSM) basically is graphical representation
of materials and information flow within the facility and consists of two maps
(Hines, et al., 1998) (Braglia, Frosolini, & Zammori, "Uncertainty in Value
Stream Mapping Analysis,” International Journal of Logistic: Research and
Application,, 2009). It is also known as "material and information flow
mapping" in Toyota where the Lean system and its techniques has started
(Rother & Shook, 2003). The first map represents the current state, whereas the
second map is the future state map, which represents the optimum achievement
the system should produce. The aim of is illustrative maps is that 1) it represents

11. 11
Visual Management to communicate the goals of the organizational and 2) it
shows relationship documentation between the front-line processes and the
control policies (Emiliani & Stec, 2004).
Current state value stream map
A “current state” map is created to illustrate and define the flow of the current
process and its performance levels.
Figure 2 Value Stream Map (Current State)
Source: MWP advanced manufacturing magazine, Chris McKellen, Mapping techniques
Future/Desired state value stream map
The “future or desired state” map is designed to show the desired flow of the
process and its targeted performance levels.
Figure 3 Value Stream Map (Future State)
Source: MWP advanced manufacturing magazine, Chris McKellen, Mapping techniques

12. 12
Service Value Stream Management
Considering the debate highlighted earlier, this paper highlights an enhanced
lean approach called Service Value Stream Management (SVSM), which makes
it possible to identify the criticalities of a service and enhance its performance.
SVSM steps beyond the standard VSM in that it has been specially modified to
accommodate the needs of services industry. Specifically, the following main
modification was made: 1) introducing new set of icons for a detailed service
value stream map; and 2) the definitions for some items such as Takt-Time were
reformed in a more suitable way. SVSM follows six steps procedure: 1)
committing to the lean concepts; 2) learning about lean; 3) choosing which
value stream to be improved; 4) mapping of the current state; 5) identifying the
metrics, discussing the impact of waste and set the desired state and targets for
the improvement; 6) mapping the future state. (Bonaccorsi, Carmignani, &
Zammori, 2011)
1- Commit to lean
Developing a lean process requires a strong commitment and especially the top
management while the front line workers must be engaged in the project. Unless
the necessity of a change is backed (financially and in time and spirit) by the top
management and transferred accordingly to all the employees, implementing
lean concepts is doomed to be a failure (Holmes, 2007)
2- Learn about lean
In the second step learning/ training sessions on lean concepts shall take place to
the organization. Its objective is to increase commitment and develop the
abilities to identify/resolve any operational weaknesses negatively affecting
organizational effectiveness and efficiency (Canel, Rosen, & Ancerson, 2000),
(Monden, 1993). The people involved in the lean implementation project should
participate in the training sessions, but the involvement levels should be
redesigned on their specific needs. However, everybody should have the basic
concepts of lean and should be familiar and have full understanding with the
wastes of the service industry (Kollberg, Dahlgaard, & Brehmer, 2007).

13. 13
3- Choose Value stream
The value stream can be easily selected making a Service- Quantity (SQ)
analysis and organizing data. More frequently asked services or those which are
generating the biggest share of the total revenue should be chosen for the
analysis. If the services delivered cannot be easily classified into critical few
and trivial many, the services shall be grouped into consistent families
(Bonaccorsi, Carmignani, & Zammori, 2011). By defining product families and
clarifying the flow of each, common steps can be merged together for similar
families at a time. The more value added during the steps, the higher profit will
flow (Bhasin & G, 2006).
In that manner the team involved in implementation should specify defects
categories such as: delays, data errors, loss of documents, etc…and define these
defects. The team shall gather as much information as possible from internal
and external customers, using different data and information means. The
collected data should be enough to 1) clarify the customers’ needs; 2) determine
the defect in categories; 3) give an importance weight to each defect and 4)
categorize each service in terms of criticality and rank it (Bonaccorsi,
Carmignani, & Zammori, 2011).
4- Mapping the current state
At this point the current value stream map shall be constructed shall take place.
This is a basic step of the lean project, as it defines the project’s baseline and
makes the team to get familiar with the process and to investigate how the
current processes is running (Bonaccorsi, Carmignani, & Zammori, 2011).
5- Set Improvement Targets
Here is where activities is ordered as: 1) value added; 2)non-value added but
necessary and 3) waste. This has to be handled with attention because some
activities can be bulky (Bonaccorsi, Carmignani, & Zammori, 2011). For this
reason it is important to organize the activities from two points of view: a
process and a customer oriented perspective, respectively. In case of
discrepancy, the customer perspective should be favored.

14. 14
The classification objective is mainly to remove wastes and to improve the
efficiency and effectiveness of all the other activities. A set of metrics shall be
defined that will be used to measure the status, to establish targets for the
improvement and to assess obtained results. The efficiency of the service is the
main lean metric. (Bonaccorsi, Carmignani, & Zammori, 2011).
6- Map Future state
This is a visual tool that shows the desired value stream status after
improvement implementation. A future-state value stream map is an ideal view
of a value stream and represents the goal of a lean initiative.
Step 3: Creating Value stream flow
Under the lean concept work should flawlessly flow from one value added
process to another forming a streamlined batches moving along from one step
through the another one, all the efforts should be concentrated in eliminating
and preventing any bottlenecks that may rise during the flow (Womack & Jones,
1996b). The various activities are sequenced in a manner that reflects the steps
of the manufacturing process, thereby enabling a continuous one-piece flow of
production. Employees are cross-trained to perform all the steps within the cell
(KennedyCPA & BrewerCPA, 2005).
Step 4: Implementing the pull system
For Pull concept, the products should be driven by the customer demand
which pulls the work through the system and not pushing the products to the
customer that not needed (Womack & Jones, 1996b). Implement a Pull System
where customer demand dictates the production level.
Push system
A production method based on keeping up with preset inventory levels or with
due dates for customer orders rather than customer demand.
Step 5: Perfection
The flawless flow is 100% quality compliant at the pull of the customer,
creating flow and pull starts by reorganizing process steps together, the more
flawlessly combined, seeking perfection is a must, as this happens more and
more layers of waste become visible and the process improves targeted the end

15. 15
point of perfection, where every action shall add value for the customer
(Sheehan, 2002).
Strive for Perfection, leverages the process knowledge of frontline workers.
Rather than relying exclusively on management-level employees to generate
ideas for improvement, management views all employees as intellectual assets
capable of improving the flow of value to customers (KennedyCPA &
BrewerCPA, 2005).
Empowerment
The resources, systems and polices in place that is helping each employee to
take the relevant necessary data & information in order for him to take the
right decision (Sundbo, 1999). This plays a major part of employee
engagement in the business and on the other hands promotes the ownership of
each employee to what he is doing and fosters employee citizenship to the
given enterprise.
Lean System implementation
Any lean system need to take 5 years in order to maximize the success
chances, the methodology defined divided in to four main phases (Womack &
Jones, 1996b).
The four phases are as follows, get started, create a new organization, install
business system and complete the implementation. A detailed illustration for
each phase is shown in the below table (1).
Phase Steps Involved Time frame
Get Started Find a change agent
Get lean Knowledge
Map value Streams
Expand company scope
Six months
Create a new organization Reorganize by product family
Create a lean function
Devise a growth strategy
Instill a perfection mindset
Six months to two
years

16. 16
Install Business Systems Introduce lean accounting
Relate pay to firm performance
Initiate policy development
Introduce lean learning
Fight right size tools
Year three and four
Complete the implementation Apply previous steps to
suppliers/customers
Develop global strategy
Transition from top down to
bottom up improvement
By end of the fifth
year
Table 2 Lean system implementation phases (Womack, 2003)
Benefits of Lean systems:
As formerly mentioned and as well perceived about the lean system, that it
greatly improve customer service, feedback, quality and profitability (Standard
et al, 1999). The approach that lean will directly affect productivity
improvements is very well supported. “converting a classic batch and queue
production system to continue flow with effective pull by the customer will
double labor productivity all through the time”. (Womack & Jones, 1996b)
Hence, profitability as well improved along as a consequence from
productivity and production related parameters improvement. Moreover, and
as speaking about productivity improvement “another important advantage
that companies realize as they become lean is a marked increase in
productivity”. (Liker, 2003)
Lean manufacturing tools being used in the UK’s public sector services. It is
proclaimed as successful the adoption of ‘lean tools’ in the Scottish public
sector (Radnor, Walley, Stephens, & Bucci, 2006).
Disadvantage of Lean System
Naturally, any system subjected to criticism regardless the stability, efficiency
and effectiveness of the system, the same applies on lean system as well. The
main criticism under focus is the human dimension of the system. (William et
al, 1992)

17. 17
It was mentioned that the system is dehumanizing and un-equal. Year to year,
the system was associated with being a big mean and with exploiting the work
place (Bicheno, 2008). It was argued as well that the introduction of lean
system was not helping the job development any more, it’s more leaning
towards some activities and technical processes that affects dramatically
worker disempowerment, for example this approach was clearly illustrated in
Kaizen tool which was claimed as a method stealing the workers ideas and
utilizing it for the facility’s benefit. (Garrahan and Stewart, 1992)
Lean System Application in Services Industry
Critical Benefits of Lean in Services Industry:
There is a belief that there are a number of key areas in which customers will
benefit from implementing Lean Service Solutions, these potential benefits
include:
1. Employee Benefits:
Employee Lean capabilities expand from the core Lean team to embrace full
employee engagement, with staffers contributing to continuous small changes,
being incented to drive new development ideas and seeing improved
responsibility and job satisfaction.
2. Operational Benefits:
Operational benefits include improvements in throughput, cycle time, and
quality. According to (TBR, 2012) it has helped a leading insurance company
improve its bug-fix efficiency by 11% to 29%, while an airline client benefited
from a 30% improvement in cut phase productivity. A global telecom
company was able to achieve substantial benefits with a reduction in fault slip-
through from 16% to 4% with no significant impact on other key performance
indicators.
3. Customer Benefits:
Customer benefits include faster response times, increased flexibility and
higher customer satisfaction.
4. Financial Benefits:
Financial benefits include increased resource return on investment, improved
leverage of organizational assets and reduced rework costs.

18. 18
5. Lean Capabilities:
Internal Lean capabilities also improve with time, including the development
of an in-house training capability, training materials and building year-to-year
gains across strategic, customer and operational benefits.
Service View for Lean Principles Application:
Value identification from Services view
In service management, especially in service marketing issues, this is a core
aspect. Customers have got several expectations and service organizations
need to act and customize according to their needs and expectations. So, this
principle can be used as well in a service organization. Using lean thinking
experience in combination of service marketing creates a powerful toolbox for
services manager (Abdi & Shavarini, 2006).
Identify the Service Value Stream
This is a valid principle in service organizations. Any service organizations
have got one or many process. In service literature, tools like blue printing and
process mapping have been used (Lovelock & L. Wright, 2001). But using
lean approach help to refine and design or improve the entire value chain. It
means that all parts of the organization get involved in service providing, and
it is not a disconnected isolated effort. On the other hand, some changes must
be adopted such as differentiating between front office and back office and
attending customers in service process (Abdi & Shavarini, 2006).
Making the Value flow from Service view
Flow in a service context means to behave in a manner that minimizes delays
or stoppages in the work performed by others. Common practices that cause
delays include contradictory or confusing words or actions delivered by
service managers or colleagues. Any form of inconsistent behavior will create
queues that threaten responsiveness to rapidly changing conditions (Abdi,
Shavarini, & Hoseini, 2006).
Supply at the Pull of the Customer Service View
Pull applied in a service organizations as a behavioral context means to
recognize that people operate under many different mental models (Senge,
1990), which requires adjustments. We can think of the people that we interact
with as customers, where each one has a different set of demands. Practicing

19. 19
lean behaviors reduces ambiguity and re-works in interpersonal relationships.
Service organization always encounter inconsistency: related with flexibility
versus efficiency. Lean systems is considered a solution for this inconsistency,
especially applying value stream mapping and pull techniques (Abdi &
Shavarini, 2006).
Pursuit Perfection Service View
Similarly, perfection in a service context is more about people and their
behaviors. It means to take advantage of the transparency brought about by the
lean system steps in order to more easily identify and eliminate behaviors that
do not create value. (Abdi, Shavarini, & Hoseini, 2006).
Application Examples in Services Environment:
Example: Southwest Airlines
Southwest Airlines (SWA) is frequently cited as a service role model
(HESKETT, Jr., & Hart, 1990). They granted this description after being able
to have fewest late flights, fewest mishandled bags, and fewest passenger
complaints (this is according to Department of Transportation records) for
three consecutive years as well as being the only major US airline to make
profit throughout the 1990s (Hallowel, 1997). By viewing SWA’s strategy and
operations it is noticeable that they resemble an example of the “lean”
production-line approach to service.
SWA has resolved the performance tradeoff between efficiency and other
customer benefits such as flexibility, quality, and variety. SWA’s operations
are driven by a value chain orientation and are supported by flow production
and JIT pull. Their approach has removed the waste and cost of services such
as in-flight meals that are considered to be relatively unimportant to
passengers. The new approach allowed SWA to turn around a flight in only 17
minutes whereas the average airline takes approximately 45 minutes
(Hallowel, 1997). SWA displays the commitment to increased customer
focus, involvement, and training true of the lean approach. Employees and line
managers are reminded of these goals through corporate and personal
communication with top management (Hallowell, 1996). The empowerment

20. 20
of SWA employees represents a radical departure from the mass production-
line approach – which still seems to characterize the majority of the airline
industry.
In sum, SWA exemplify how the “lean” production-line approach can deliver
value (low cost, high quality) to customers. The example also demonstrate that
the “lean” approach can overcome the barriers to transferring manufacturing
principles alleged to exist due to the differences between manufacturing and
service. However, in the “lean” approach, the elimination of relatively non-
value adding activities frees up employees to meet the fluctuating and diverse
customer demand.
Example: Large U.S. Retail Consumer Company
Before the company implemented Lean principles it had multiple sources of
data for Service Level Agreement (SLA) measurement, which led to
discrepancies in SLA reports. In addition, management was forced to be
reactive due to the lack of a system to provide real-time status.
By applying Lean system basics (Single Piece Flow, Automation and Visual
Control) the following were observed:
 Response and resolution compliance for support calls increased to
97%+ from 70%.
 Adherence to schedule for enhancement requests increased to 95%+
 4,728 working hours are saved per month on reporting due to improved
flow of information.
 45 backlog enhancement requests only after 6 months of lean
implementation, from 1,440 before Lean

21. 21
Conclusion
It is not doubtable that lean system is a distinctive step forward in to deliver
better quality products through well designed management processes that
focus on the customer requirements and expedite the product delivery.
Clearly, because of the differences between the manufacturing and the service
industry, lean systems shall not applied typically “As Is” used in
manufacturing processes to services product processes. Applying lean to
services is challenging and it shall be redesigned and/or redefined in a way
that serves the services industry properly. In order to tackle this challenge a
new approach is introduced named Service Value Stream Management
(SVSM).
This approach is flexible that can be adapted to different types of services
from virtual manufacturing (such as software) to pure service processes (such
as call centers). SVSM is built on a set of evolving steps that is structured to
serve as the road map to a true lean service.
Accordingly, and considering the system adaptation cycle, keeping an eye on
the advantages and disadvantages raised, we can notice the following:
 Lean system is broadly adapted in the last thirty years in almost all
kind of industries involving service, manufacturing and agriculture
fields.
 Lean system has to change/adapt some of its basic steps to serve
services industry, as services industry’s business nature and processes
is different from manufacturing industry.
 Lean is a philosophy or a set of tools, specifically designed to serve its
purpose by each type of product emphasizing the customer
requirements and maintaining his needs as the main driver.
 The disadvantages of lean were mostly concerned on the dehumanized
and missing empowerment; not taking into consideration
communicating and adaption on all corporate levels specially the first
line.

22. 22
 Lean system needs management believe in, understanding and
guarantee to adapt before proceeding with implementation.
 There was indication that Lean system has negatively affected product
quality or profitability which are considered corporates main concern,
on contrary, all the reviews emphasized remarkable positive change in
profitability by the organization.
 Lean system shall be applied on phases, starting by a pilot run before
applying across the whole organization; it shall consider while
implementation the employee resistance that has been has been
described earlier as one of the disadvantages of the whole system.
In order to apply lean system in the organization, it has to consider that it will
change the culture the resistance shall be handled in a proper manner;
management persistence as well as believing in the philosophy will help to
communicate the positive aspects of system adaption across the organization.
Once the Lean system culture is created, the effect will influence and improve
all business aspects, productivity, effectiveness and quality will significantly
share with the main part; this will end up with cost reduction and profitability
improvement which will take the organization to better competitive levels.

23. 23
Works Cited
Abdi, F., Shavarini, S. K., & Hoseini, S. M. (2006, July). GLEAN LEAN: HOW TO USE LEAN
APPROACH IN SERVICE INDUSTRIES? Journal of Services Research, Volume 6, Special
Issue, pp. 199-206.
Abdi, S. H., & Shavarini, S. (2006). Glean Lean: How to Use Lean Approach in Services
Industries? Journal of Services Research, 6(Special Issue).
Acland, H. (2005). Disaffected Nation . Marketing, Vol. 8( Vol. 8, 2005, pp. 32-35.).
Bhasin, S., & G, B. P. (2006). Lean viewed as a philosophy. Journal of manufacturing
technology management, 17(1).
Bonaccorsi, A., Carmignani, G., & Zammori, F. (2011). Service Value Stream Management
(SVSM): Developing Lean Thinking in the Service Industry. Journal of Service Science
and Management, 4(4).
Braglia, M., Carmignani, G., & Zammori, F. (2006). A New Value Stream Mapping Approach
for Complex Production Systems . International Journal of Production Research,
44(18-19).
Braglia, M., Frosolini, M., & Zammori, F. (2009). "Uncertainty in Value Stream Mapping
Analysis,” International Journal of Logistic: Research and Application,. pp. 435-453.
Canel, C., Rosen, D., & Ancerson, E. A. (2000). Just in time is not just for Manufacturing: A
Service Perspective. Industrial management and Sata systems, 100(2).
CIA. (2012, December 12). CIA world Fact book. Retrieved 12 12, 2012, from www.CIA.gov:
https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html
Collins, F., & Shafer, S. M. (1992). Which Activities Add Value and Which Don't? Journal of
Corporate Accounting and Finance, Winter 1991/92.
D. Dickson, R. F. (2005). Top Ten Excuses for Bad Service . Organisational Dynamics, Vol. 34,
No. 2.
Emiliani, M. L., & Stec, D. J. (2004). Using Value-Stream Maps to Improve Leadership. The
leadership & organization Development Journal, Vol.25, No.8(622-645).
Giannantonio, A., & Hurly-Hanson. (2011). Journal of Business and Management. Journal of
Business and Management, 17(1).
Grönroos, C. (1990). Service Management and Marketing. Lexington MA: Lexington Books.
Hallowel, R. (1997). Dual Competitive advantage inin Labor Dependent service: Evidence,
analysis and Implication. In D. Nowen, T. Swartz, & S. Brown, Advances in Services
Marketing and and management. Greenwich: JAI Press.
Heizer, B., & Render, J. &. (2008). Principles of Operations Management' 7th ed. Pearson
International Edition: Prentice Hall. United States of America. P 639-665.

24. 24
HESKETT, J. L., Jr., W. E., & Hart, C. W. (1990). Service Breakthroughs: Changingthe Rules of
the Game. New York: The Free Press.
Hines, P., Holweg, M., & Rich, N. (2004). Learning to Evolve:A Review of Contemporary Lean
Thinking. International Journal of Operations & Production Management, 24.
Hines, P., Rich, N., Bicheno, J., Brunt, D., Taylor, D., Butterworth, C., et al. (1998). Value
Stream management. The International Journal of Logistic Management, Vol. 9, pp.
25-42.
Holmes, F. (2007). Is Your Office as Lean as Your Production Line? Manufacturing
Engineering, Vol. 139.
James P. Womack, D. T. (2003). Lean Thinking: Banish Waste and Create Wealth in Your
Corporation. New York: Free Press.
James-Moore, M., & Haque, B. (2004). Applying Lean Thinking to new product introduction,
Journal of Engineering Design. 15(1).
Jones, D. T., & Womack, J. P. (2005). Lean Consumption. Harvard Business Review, 10(3).
Juroff, K. (2003). Lean it’s not Just for the Shop Floor Anymore. Automotive Industries, Vol.
183, No. 12, 2003, p.45.
KennedyCPA, F. A., & BrewerCPA, P. C. (2005). Lean Accounting, What is it all about?
Strategic Finance, November 2005.
Kollberg, B., Dahlgaard, J., & Brehmer, P. (2007). Measuring Initiatives in Health Care
Services:Issues and findings. International Journal of productivity and performance
management, 56(1).
Lovelock, H., & L. Wright, L. (2001). Principles of Service Marketing and Management.
Chicago: Prentice Hall.
Maleyeff, J. (2006). Exploration of Internal Service Systems Using Lean System Priniciples.
Management Decision, 44.
Monden, Y. (1993). Toyota Production System: An Integrated Approach to Just-in-Time.
Norcross: Industrial Engineering management press.
Ohno, T. (1977). Toyota Production System.
OHNO, T. A. (1988). Toyota Production System. Prtland, Oregon: Productivity press.
Radnor, Z., Walley, P., Stephens, A., & Bucci, G. (2006). Evaluation of the lean approach to
business management and its use in the public sector. Edinburgh: Scottish Executive.
Rother, M., & Shook, J. (2003). Learning to See: value-stream mapping to create value and
eliminate muda. Brookline, MA: Lean Enterprise Institute. ISBN 0-9667843-0-8. .

25. 25
SCOTT, M. (2011). Staying Alive, How James Cowan makes the tough decisions to keep
American Railcar Industries in business? Smart Business St. Louis.
Senge, P. (1990). The Fifth Discipline. New York: Currency Doubleday.
Sheehan, L. (2002). A Contingent Approach to lean in the Medical Device and Pharamceutical
industry. Cardiff Univeristy Business School.
Systems, L. B. (2012, November 28). Lean Business Systems. (Lean Business Systems)
Retrieved November 28, 2012, from Lean Business Systems:
http://www.leanbusiness.ie/about_lean/lean_principles/lean_principles.html
Tapping, D. (2005). The Lean Office Pocket Guide: Tools for the Elimination of Waste in
Administrative Areas. MCS Media Corp.
TBR. (2012). Technology Business Research (Vendor Spotlight). 11 Merrill Drive, Hampton,
NH03842: TECHNOLOGY BUSINESS RESEARCH, INC.
Womack, J. P., & Jones, D. (1996b). Lean Thinking: Banish Waste and. New York: Free Press.