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A major challenge that all customer-facing service organisations have is that customers require the service when it suits them, rather than as it suits the supplier. This presents an acute version of the common challenge to match the more or less fixed capacity of a process to serve a customer with fluctuating demand patterns that all operations face.

In a response to a recent blog by Katie Anderson Mark Graban, the author of “Lean Hospitals”, wrote:

“In manufacturing, they keep the production rate (the daily schedule) pretty steady or almost always the same. Demand fluctuates, but they use inventory of cars at the dealers and the supply chain as a buffer. Healthcare must react to variation in demand with flexible capacity and staffing levels… manufacturing can choose to buffer with inventory. That’s a key difference between lean healthcare and lean manufacturing.”

People queuingIn effect, the moment a customer walks in to a service process, they become inventory to be processed. Apart from the fact that most conventional inventory can be stored, making it possible to create a buffer to absorb demand fluctuations, the main difference between inanimate and live inventory is the fact that people in inventory tend to complain – often vociferously!

In our work with service organisations we often come across this problem. Whether you are trying to sell popcorn to patrons before a movie, get students registered during registration week, serve a hot meal to conference participants at lunch time or get medical records for patients arriving at the outpatients unit in a public hospital, the extreme peak demand requires innovative operational strategies to cope well.

One form of innovation is ‘organisational innovation’: simply doing something differently from the way it has been done previously within that organisation. This requires breaking the mindset of “we don’t do that around here”.

In Lean Institute Africa’s work in the justice and health systems in the public sector we have Clock waitingcome across the mental block to address this problem too often. Clients coming to court and hospital outpatients are encouraged to come as early as possible creating a severe early morning demand peak. This results in heroic efforts by staff to process these customers under very difficult circumstances. Incremental continuous improvement projects can, and do, make a difference by eliminating the obvious wastes in the system, however, there is only so much that you can do before you need to make a systemic change to flatten demand and stabilise the process to achieve fast, even flow through the system.

Options such as demand management to shift the arrival of clients, and patients to arrive later in the day, often seem to be inconceivable to staff and managers working in the South African service sector. Flexible staffing schedules run up against inflexible policies and conventions. Staff who are idle in the afternoon are blamed for ’poor attitude’, when management should take responsibility for placing them in a system that works in this unproductive way.

Contrast this with Thedacare, the hospital group where Dr John Toussaint, the keynote speaker Center-Logo-pmsat the upcoming Lean Healthcare Summit, developed and proved the success of lean management in healthcare. At Thedacare they open and close wards on a day’s notice, depending on patient demand. They have developed small modular wards, staffed by flexible teams that can be opened as required. Developing this deep institutional capability to match demand with capacity did not happen overnight, but rather through many experiments and a continuous goal to make the system better. Thedacare’s 12 year lean journey so far has resulted in a system transformation. You have the unique opportunity of hearing first-hand from Dr Toussaint how to do this in your own organisation at our Lean Healthcare Summit on the 26th October in Johannesburg. Visit our website for more information about Dr Toussaint and the Summit programme. You can register online now or contact us on +27 11 268 1859 or to book your seat.

Kind regards,

Anton Grütter

P.S. Join our Chairman, Prof Norman Faull, at the University of Cape Town Graduate School of Business on Friday 11 September at 1pm for a Lunchtime Chat entitled ‘Real results from the early stages of advising the Presidency: an update on last year’s talk’ . To book your seat at this event, please click on this link. This talk is an update on last year’s Lunchtime Chat ‘Advising the Presidency on Operations Management’, as Lean Institute Africa has had a chance to implement and test the plan Norman talked about, and we are getting really encouraging results. You can listen to last year’s talk by clicking here.

And, remember we have just a few more lean workshops scheduled in 2015. Visit our website to see the workshop schedule.