How to lower your service operation costs and improve the customer experience
Economic developments in 2020 have hit industries such as engineering, automotive and many others with full force. The economy will recover, but new investment in machinery and other capital equipment will be very restrained over the next few quarters. Companies are realising the obvious and are now focusing on designing and developing their services to sustain or develop their business.
However, many service-oriented companies recognise that they need to improve the productivity of their service activities to ensure a successful sustainable service business model. The problem is that it is difficult to do so. Simply put, there are many elements that need to be brought together into one solution to achieve complete success for the entire service business.
A significant number of field technicians record activities without high value added and are not effectively managed in terms of performance management. In most cases, the underlying causes of low field technician productivity are visible and can be categorised into four main areas:
lack of transparency on field technician performance
inefficient planning processes and complexity in the service back office
insufficient implementation of digital technologies for process optimisation and automation
poorly trained mid-level management in terms of effective performance management
To address gaps in the above areas, organisations have launched various individual initiatives to optimise their processes, organisation and digital infrastructure. Very often, comprehensive KPI dashboards are developed, regular meetings are held with technicians, but managers do not talk about the key performance indicators that go beyond security. Comprehensive, end-to-end workforce management systems are implemented, but they are too IT-driven. They focus on modules or functions, while the "end-to-end" process integration and contribution to competitiveness are lost.
All these initiatives, which make sense at the outset, need to be much more closely scrutinised during implementation in terms of increased productivity and customer satisfaction. Performance targets need to be set from the beginning and the service organisation needs to continuously work towards achieving them.
What is needed is the implementation of a general performance metrics-driven culture in service and a strategy with the goal of lean transformation in service. The focus is on increasing customer satisfaction and reducing costs, as well as promoting personal liability among middle managers to ensure that a performance culture is successfully embedded in the organisation.
How can a lean transformation be successfully implemented? We see a three-phase approach: Phase one: Strengthening the strategic foundation to ensure that Lean measures meet business objectives, that leadership ownership is lived, and that the urgency of Lean transformation is clearly communicated throughout the organisation. If credible communication fails, there is a very high risk that lean transformation activities will go nowhere. In phase two, goal setting, the current situation is assessed and quantitative goals are formulated using a top-down approach. The metrics for the success of the transformation must be transparent and verifiable. In phase three, the actual operational development and implementation of the lean management measures takes place using the PDCA method (Plan-Do-Check-Adapt) and nominating cross-functional teams.