"Myth buster- Kaizen is not for the service industry"

In my previous blog, I have written about Kaizen with examples from the manufacturing industry. I have received few comments about the possibility of Kaizen in the service’s industry. Many a times Kaizen gets cornered out as a manufacturing practice. Is it really manufacturing centric? I disagree! Kaizen is the way of life for any industry, Period.

 

Can we do Kaizen in service industry?

Kaizen programs are highly prevalent in the manufacturing industries. These industries have achieved long lasting success with ensuing benefits such as superior quality, faster throughput, reduced costs, lower inventories and engagement of people in problem solving. Kaizen, in service industry, can be applied to create value to customers by providing fast and efficient response to customer requirements, reliability, and assurance. Below are 2 generic cases from the service industry that applied Kaizen.

 

Real life Examples of Kaizen in Service Industry

Bank Kaizen: A major national bank started using the five-day Kaizen approach whenever it wanted to attack process speed and efficiency problems. The bank used suggestion box to receive suggestions from customers and employees. It used the Pareto Chart to analyze the problems and found around 80/75 percent of the problems stem from 20/25 percent of the causes. It used kaizen to work on this causes. Pareto analysis was used by the bank for the selection of a limited number of tasks such as: Cycle-time improvement; administrative process; complaint resolution that produce a significant overall effect. The bank achieved the following results:

·      Cycle-time improvements have ranged from 25 percent faster to nearly 90 percent faster, measured sometimes in minutes and other times in days. One administrative process went from 20 min to 12 minutes, and a complaint resolution process dropped from 30 day to 8 days.

·         Fiscal indicators have all been positive. One high level project has allowed the bank to start charging for a service that previously was offered free to customer. New revenue are expected to total between Rs 6 crore to Rs. 9 Crore per year. Other projects have led to cost reduction or loss avoidance in corer of rupees.   

 

Hotel Kaizen:  Simplicity is the highest level of sophistication. Sometimes, simple actions such as a suggestion box can create high impact in the hotel industry. A suggestion box was placed in the hotel and it was opened every quarter for action. Based on the suggestion received from the guests, the hotel used the Pareto Chart for the selection of a limited number of problems that cause the most failures. Following this, a kaizen workshop was conducted for the employees. Teams were formed to implement kaizen in process areas such as: Front desk, Housekeeping, Laundry, Restaurant and Room service. Performance indicators were identified as shown in the table below for each process area. The hotel achieved the following benefits by implementing kaizen.

 

Process Area	Indicator	Benefits realized
Front Desk	Average time to check- in guests	Reduced
Front Desk	Average time to check-out guests	Reduced
House Keeping	Average time to turnaround rooms	Reduced
House Keeping & Laundry	Average time to turnaround linen	Reduced
Restaurant	Guest satisfaction score	Enhanced
Room Service	On-time ; in full ; error-free delivery rate	Increased

 

 

Sources:

http://www.slideshare.net/DivyakumarSoneji/kaizen-in-hotel-industry

https://southindianbank.com/UserFiles/245.pdf