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How Services Can Become Lean

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Lean Manufacturing Work

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How Services Can Become Lean

  1. 1. Gass 1 How Services Can Become LeanIntroduction I recently took a vehicle into Liberty Ford in Parma Heights, OH for service to becompleted on the vehicle due to the check engine light being displayed and thendisappearing from the instrument panel. This problem did not seem normal so I wouldneed an experienced and reputable technician to look into the problem and fix it.Process The first process for me, as the customer, was to locate a nearby dealership that couldservice the vehicle. I first searched online for local Ford dealerships. I then narroweddown the search by proximity to where the vehicle was located. After searching andgetting information on each dealership, 15 minutes had passed. I then called the LibertyFord to explain my problem and booked an appointment to take the car in on Friday at 8AM to be serviced. This part of the process was very quick and only took approximately5 minutes. Tuesday arrived so I drove the vehicle to Liberty Ford taking roughly 30 minutes.Once at Liberty Ford I parked the vehicle and walked inside into the service department.I was greeted by the three gentlemen at the counter and informed them my name andthere for my 8 A.M. appointment. They acted like they had never talked to me beforeand got all my information and what was wrong with the vehicle. It seemed the phonecall and research was useless. To my disappointment, I was informed their computer andphone systems were not functioning due to the severe weather from last night. They didinform me they would get to the vehicle as soon as possible. The guy at the counterwrote out a bill of work for the maintenance and went outside to get more information
  2. 2. Gass 2about the problem and get more vehicle information. I handed him the keys to thevehicle and waited for at least 15 minutes until he came back. He pulled the vehicle tothe front bay door of the maintenance garage and came back inside to inform me hedidn’t see the problem as well. He mentioned there was a red brake light lit up on theinstrument panel as well and they would be happy to check that out. I politely informedhim that was the light for the emergency brake of the vehicle. We discussed cost to do aninitial diagnostic of the vehicle. He went to pull the vehicle inside and could not get backin the vehicle. The associate had left the keys in the car when he shut the door whichcaused the automatic locks to activate resulting in keys locked inside the car. I stoodaround the building for at least an hour watching associates run around and not informingme of what is going on. Finally, I went back to the counter and asked another associatewhat the problem was and learned that they were having trouble getting a key because thecomputer software contained the type of key information was not accessible. I askedwhere my shuttle ride was and informed them to call me when they could get to the car. The next day I made and received multiple calls to become informed of the diagnosticresults, how to fix it, along with time needed and total cost. This step of process tookaround two hours time after combining all the calls made. The following day, I makeseveral calls to find out the status of the car and learn that the parts were delivered brokenand unusable. It would take another day before they would get their shipment of partsand be able to fix the car. So waiting another day, I finally get a phone call informing meof the cars completion. A trip to the dealership is done and payment is made to get thekeys and car. The car was finally driven back home. The first step in the process, from the dealerships perspective, was to answer the phoneand get the details like my name, problem, and appointment time and input this
  3. 3. Gass 3information into their database. At the day of the appointment, they greeted me at thedoor and found out why I was there. They did mention the difficulties that day andmanually used a system to get my information and problem of the vehicle since thedatabase was down. The associate processed the form and went to get more informationfrom the vehicle like the VIN, mileage, plate number, etc. He moved the vehicle to theentry of the garage and exited the vehicle to come inside and explain his findings to me.The vehicle was to be moved inside for an initial diagnostic test but the keys were lockedinside so everything was put on hold. The associate was running around and trying tofind a way to get the keys out of the vehicle. They asked me if I had a spare as well.Eventually, the associate arranged for a lower level employee to step aside and drive meback home. I would assume the vehicle was eventually opened by a lockout tool (Slim Jim) andmoved to the parking lot since many vehicles were delayed and backlogged in theprocess. The next step would be run a diagnostic on the vehicle and find out what iswrong with the vehicle. This was done the next day and called the customer later thatday to get authorization to order the parts. This was completed and the parts weredelivered the next morning. They discovered that the parts were broken in transit so areorder for the parts was completed. The following morning the parts arrive and thevehicle was moved inside where a technician repaired the faulty airbag wire and relayswitch. The vehicle was taken on a road test before final inspection of the vehicle wasmade. The passed inspection would be passed to the main office where the customerwould be called and informed that car was ready to pick up. When the customer arrives,the bill is retrieved and payment is taken. The keys are given back and the process isclosed out on the system.
  4. 4. Gass 4Process Maps Figures 1 and 2 are included below to display the processes for the consumer andprovider. Figure 1 is of the current state of processes at Liberty Ford. Figure 2 is animproved map that reflects what all the processes would be like in a future state. AsFigure 2 shows, the whole system is more efficient and precise. The delays from waitingand redefining the problem are eliminated. The consumer simply drops the car off andmakes sure the technician understands what happened. The keys are given and a shuttleride is given. Meanwhile, the car has a diagnostic done a short time later that day and theresults are given. The parts are approved and properly delivered. The car is fixed andreturned the next day. Figure 2 also displays the provider’s overall steps in the process. The elimination ofwaiting and reordering parts is eliminated in the system. The reworking of inputting thedata is also eliminated from the system. The overall process of fixing the car issimplified and corrected in the future state. A major factor of time is something that isgoing to be an issue in this type of industry. Since the parts are ordered and deliveredonly once a day, it causes a delay for both the consumer and provider. An ideal statewould correct this but the future state is making small changes and excluding the partssupplier in this figure must be done for now.Waste Streams There were many forms of waste present in the processes of Liberty Ford. The formsof waste range from waiting, transportation, incorrect processing, unnecessarymovement, and unused employee creativity. There may be more waste in the currentsystem. However, being unable to go behind the counter and into the garage where thetechnicians limits the transparency of waste in defects.
  5. 5. Gass 7 The first form of waste was waiting. The customer had to wait when they first arrivedbecause the technician went outside to gather more information about the car. A largeportion of waiting occurred in the process when the keys were locked in the car and theassociate didn’t know how to get back in the car. A normal wait occurs in the systembecause they are backlogged and running behind because of all the work in process. Theparts being delivered only one time a day is also a significant point to consider whenanalyzing why waiting happens. If they received shipments multiple times a day then thedelay and holding cars overnight would not result. This would allow the workers to bemore productive as well. Taking a technician off the line and making them give rides tocustomers also caused waiting. The customer had to wait a significant time before ashuttle ride was available. Waste occurs because an established driver was not ready toleave and the customer stood around until someone was ready. Another form of waste was the transportation that occurred in the service department.The transportation of vehicles to and from the garage was unbelievable. The car wastaken to and from the garage many times during the maintenance process. The initialdiagnostic was performed and then car back to the lot. Then, car back to the garage afterparts are delivered. Broken parts being delivered caused the car to go back to the lot untilthe next batch is delivered for final repairs. This transportation of back and forth fromthe garage to lot caused a lot of waste in the system. The incorrect processing of the documentation also causes waste in the system. If Iwould not have known better, the representative would have documented a brake lightwas lit up on the instrument panel. The emergency brake being engaged caused this butwho knows how what kind of waste would have occurred because he notated this. Inaddition, if errors are made with documenting what is wrong with the vehicle then the
  6. 6. Gass 8technician will waste time trying to correct the wrong problem. A service representativecould also over process what is wrong with the car and cause a lot of wasted time offixing the wrong problem. There was a lot of unnecessary movement in the processes at the dealership. Theservice representative at the counter was running around everywhere in the garage. Hedisappeared for a very long period of time when the keys were locked in the car. Due tohim being away from the counter, a back up of other customers resulted in the lobby.The computers and phones also being unavailable resulted in many different employeeswith the service department running around and getting orders. I would also think thatthere is unnecessary movement by the technicians working on vehicles as well. If partsare broken or missing, then they would have a lot of waste. Based on the data and processes seen, an assumption could also be made that theorganization has a top down strategy and there is a lot of unused employee creativity inthe service department. The strategies and processes in place are not in touch with theeveryday work flow that occurs in the system. The breakdown of the computers andtelephones put their system in a complete breakdown. The system could definitely beimproved if the technicians would be allowed to submit their input and make the systemmore efficient. Sources of Variation The causes of variation in the system can be due many factors. Since this is a customerdriven business, variation can arise at any point in time because of the difficulties thatsurface. These difficulties can be from delays due to process inefficiencies, change insupply and demand, or change in process capacity. Each factor will cause some sort ofproblem for the overall system and result in delays or waste.
  7. 7. Gass 9 The first source of variation results from delays due to process inefficiencies. Thebreak down of the computer system and phones at Liberty Ford caused a major disruptionin the system. The processes that normal work did not and caused disruptions in workflow. These inefficiencies lead to longer wait times to check your car in and find outwhat was wrong with it. Usually the representative would be able to enter your car intothe database system and this information would be able to be seen by a technician. Sincethis was unavailable, a delay resulted because a paper bill of work was made and filedinstead. With a paper bill of work being done, the sense of time was lost and a longerwait time resulted from it. Another factor to consider is the set up times required for eachvehicle. Since there is a lot of work in process, the cars are moved into the lot and haveto be pulled back into the garage when the technician is ready to work on each vehicle.This adds waste to the system and amounts to a lot since they have to go to the key box toget the keys and then find the vehicle. After driving it back into the garage they then willhave to find out what is wrong and then start the process over again. A lot of waste ishappening here. The inefficiencies in each process add up and caused very long waittimes like I had to experience. From the customer’s point of view, this is unacceptableand very frustrating. The change in supply and demand of customer’s also causes issues for the servicedepartment. Since the check in process is relatively easy for the service representative atthe desk, it should not cause a pile up of people waiting. This is an incorrect assumptionbecause many people decide spur the moment on what day to take their vehicle and notmake an appointment. The customers with an appointment and delayed because of thechange in vehicles needing to be serviced. This variation causes the associate at the deskto become overwhelmed since the walk in person is not familiar with the problem they
  8. 8. Gass 10are having with their vehicle. The confusion and unexpected guest will cause a simplecheck-in to become confusing and difficult resulting in a stockpile of guests waiting. Inaddition, the change in supply and demand will also affect the availability of parts thefacility will have to fix a problem. If a stock out occurs, then the car will set until thenew parts can be delivered. The wait that occurs will make the customer becomefrustrating since they are without a vehicle during that time period. The service department may also experience a change in process capacity as well.Since the computers and phones were down the day of my appointment, I witnessed avery low capacity at the service department because the workers were frazzled andseemed to be at a loss on how to get the vehicles done without a computer systeminforming them of the details and work order. The changes from hour to hour causedmajor delays in productivity that day.How to reduce variability After finding and reviewing the waste identified above, Liberty Ford can developdifferent strategies on how to minimize the effect from waste and variability. Thepotential gains from eliminating waste are huge in services. This concept is done throughimplementing different tools of lean. The first step in reducing the effect that variability has on the system at Liberty Ford isto determine the lead time required. Michael George in Lean Six Sigma for Serviceinforms us that this is “how long it will take any item of work to be completed (lead time)simply by counting how much work is sitting around waiting to be completed (work inprocess) and how many ‘things’ we can complete each day, week, etc. (averagecompletion rate)(26).” This is especially important to know at Liberty Ford because thetime it took them to complete the vehicle I brought them makes me believe that they have
  9. 9. Gass 11an extremely high amount of work in process at their location with a low averagecompletion rate. My belief is backed by the fact that it took four days to complete myvehicle when a future state may have taken two days at most. This process is alsoimportant because it will help define how many customer requests or phone calls toreturn as well. I had to call three times one day to find out what was wrong with thevehicle from the diagnostic taken that day. By defining these tasks in process, the systemwill benefit by cutting waiting time and incorrect processing. By cutting the waiting timethe customer will be more happy and delighted with the turn around time to completetheir vehicle. This can be managed by implementing a pull system. Currently, Liberty Ford has a system in place that does not resemble a pull system. Iknow this because their system can be politely described as a train wreck. Thetechnicians push the cars in the system by starting a bill of work and do an eyeinspection. From there, the system falls apart and the car disappears to the parking lot. Apull system is sort of used because the technicians go and get the car when they are readybut this is due to the natural flow in the system. This could be considered a gooddiscovery if they would correct the system to take advantage of the flow. This method oflean is very important because it allows the system to flow smoothly and withoutstockpiling a lot of work in process. In addition, all the appointments that they currentlytake by phone are essentially worthless because it seems like they don’t remember you onthe date of your appointment when you arrive with your car. If they would only accept somany appointments by phone and then take names along with phone numbers and putthose in a “waiting to be booked” file, they would condense their work in process becausethose waiting are not in the system yet. This would reduce the number of customers inthe system and allow their technicians to complete a certain amount of vehicles per day
  10. 10. Gass 12and also allow so many walk in vehicles to be serviced per day. This would no longercause long stockpiles in their system but rather a more efficient and synchronized pullsystem. The technicians would finish their appointment and it would result in arepresentative being signaled to call a potential client and book an appointment in thefuture. However, a more realistic approach might need to be taken because they have aconsumer base that consists of people with difficulty dropping everything and driving tothe dealership and leaving their car there. With that said, Liberty Ford could increasetheir average completion rate because they will still face a changing demand fromsporadic customers. This can be offset by using Queuing Theory. At this company, thenumber of technicians in the office could be designed to target key times when demand ishigh. This could be done by setting up a triaging scheme. High difficult vs. low difficultmaintenance could be determined so productivity could be increased. The cross trainingof technicians could help with more difficult maintenance as well. Another way to facedemanding customers is to look into the data like queue times, lead time, takt time, andcycle time and come to a strategy of how to send quicker fixes to certain mechanics andmore detailed and lengthy fixes to more experienced technicians. This way the difficultjob gets done as quickly as possible without rework needing to be completed. A way toget high productivity would be to rate the cars in queue from more difficult to quickfixes. The easier fixes may get priority because they can be done in 30 minutes to anhour whereas a longer fix may occupy a lift for days. Another related concept that couldbe used to increase the average completion rate is through the use of a giant takt board inthe garage. The board would have the times of operation listed in a defined interval. Theinterval would show the actual number of cars completed compared to the scheduled
  11. 11. Gass 13number of cars that should have been completed. This would motivate the technicians toincrease their work count. Using motivation as a tool to increase productivity is a difficult task to accomplish.The management staff at the dealership should look into creating a more standardizedprocess for the technicians and front counter representatives. The current system inprocess is right at the edge of having evolutionary creativity but it will require openingtheir eyes to see the problem and seeking continuous improvement instead of having allkinds of banners praising the current award winning service they guarantee to theircustomers. The current system is a guarantee that the consumer won’t go back to theirdealership. The dealership was justifying their service by the money being spent into thetechnology involved. However, I soon found out that didn’t mean the service was anybetter. They were using a push system the day I took my vehicle in. The system had toomany complex problems involved. The use of technology had caused a dependency byeveryone in the staff and the whole process crashed that day due to that dependency. Dueto the crash, nothing was being completed. The counter personnel had no way tocommunicate with technicians and vice-versa. They had to walk back to the shop inorder to speak to someone. This caused a lot of waste by the unnecessary movement. Away to correct all this complexity would be to have a supervisor oversee the productionin the garage and complete a bill of work ticket and bill of materials ticket for eachvehicle. With the technology down, this person would deliver it to the clerks at the frontwho would communicate with the customer. This would have saved so much timeinstead of trying to bring the database back online only to find out it wasn’t working.The use of each ticket would allow the counter associate to document all the details of thevehicle and time into the system. The technician would pull the vehicle when they are
  12. 12. Gass 14ready to do a diagnosis and repair it as well instead of pushing it in the system and thenletting it sit outside in queue. A simple process would work better because theinformation flow would be more efficient and timelier. The system would no longerrequire the car being pushed into the system and then being taken back and forth from thegarage to the lot. In addition, a more simplified approach can be taken because a garagesupervisor is between the technician and the front desk clerk and could control theinformation being moved from the technician to the front desk. This would allow reworkand defects as well as unnecessary movement of the technician. The standardizationwould create consistency because fewer errors would result as well as more productionsince the time required would decrease. The consistency would eliminate the guess workas well. The technician would have a second person checking them and making sure theproblem is actually being fixed. This would allow a better way to control the process aswell. With standardization of the system completed, the improvements of the processesshould be monitored and controlled. The first step is to allow the system time and let itplay out to see the results. In addition, the garage supervisor should not be standing rightnext to the technicians and causing disruptions in the work being completed. This willmake errors to happen and the maintenance quality to be abnormal. Once some time haspassed, the management staff should look at the data to see if the direct flow ofinformation and simplified processes are better for the customer. The staff and garagemanager could do a kaizen event or conduct weekly meetings to get feedback as well asto discuss key issues that the staff should be aware of. These steps will allow the systemto be controlled better. The data collected could be used to educate the staff that certainprocesses are not being met and should be focused upon so the process becomes more
  13. 13. Gass 15efficient. Hopefully, the quality of the maintenance has improved and become moreconsistent. The more detailed and difficult tasks given to more experienced technicianswould allow for faster service for those that have minor issues and quick fixes to be madeto their vehicle. The leveling of the tasks is a key concept that could also be used in thestandardized process. The kaizen and meetings would show the efficiency or waste in theprocess. The staff would be able to understand how to fix this and become moreproductive.Potential Issues and/or Barrier to Implementation A large portion of risk involved with redoing the system at Liberty Ford would begetting the technicians and staff to buy in to the process. These guys work hard and arealways behind in the system (I believe that management makes it this way so they haveno idle time causing profits to be lost). Since they are used to being over worked andunder paid, making changes that show increased productivity may spark anger and walkouts. They will be thinking that the system will have even more cars sitting around andtheir efforts to be pushed even more. Getting them to understand that a standardized andefficient system will actually cause them to give an equal amount of effort but have morecars being completed. This will be a difficult task since many of the technicians will beguys of habit due to their many years of experience doing their job. The technicianknows best ego may surface and cause difficulty for any change to be implemented. Inaddition, many of the workers may be used to sandbagging and causing delaysintentionally because of the nature of the work. They know the process will get donewhen it is done since no one else can do the work. Management will need to eitheraccount for these delays when designing the new processes or fire the obstacles. Themanagement may overcome these issues by including the workers in the steps of
  14. 14. Gass 16designing a new efficient process. By including them, a sense of ownership will occurand transparency between the management and workers will be seen. Another potential barrier to implementation is the need to push cars into the system.This type of business makes a business to want to push more into the system since theowners will have no option but to wait until the process is over. The desire to do thismakes sense but also causes a stockpiling of work in process. A potential solution wouldbe to allow customers to be put on a wait list for that day. The wait list would show howmany vehicles are to be pulled into the system before that customer. This would give arealistic figure so the client could decide if they should leave their vehicle or not. Thiswould eliminate the “we will get to you as soon as we can attitude” and develop a newconsumer based logic of thinking. This wait list would be for walk-ins only. All bookedappointments would be done accordingly and give priority. The walk-in customer wouldbe put in this wait list which would be a way to pool customers and allow technicians topull from when they are ready. In addition, this type of business will always have demand since cars are alwaysneeding repaired. A system to control the demand is very tricky and not always going tobe successful. It may be difficult to have a full pull system since the demand isunpredictable. The level of demand maybe too much and additional staff may be need tobe hired in order to handle it. Or, the demand may not be very much at certain times.Having a leveled staff or cross-trained staff to offset the peaks and valleys of demand isneeded. A plan will need to be developed for each type of demand though. Another potential problem is the type of maintenance needing to be completed. Oneday may have all oil changes needing to be done. The next day may have severaltransmission rebuilds to be done. The type of maintenance is unpredictable and difficult
  15. 15. Gass 17to account for. Again, having a cross-trained staff will be necessary. The moreexperienced technicians will be able to take most of the work, but they may need help atcertain periods. Concluding Remarks The overall system that is in place at Liberty Ford does not meet the current demandthat is being presented. The company needs to look at restructuring the processes that arecurrently in place. The current system in place causes all sorts of waste which ultimatelyends up with customer frustration. I would recommend that company decreases thewaiting time because this is the most important factor that the customer encounters. Withthe waste being cut from the processes, Liberty Ford could seek to try a pull system thatwill have an end result of less wait and with efficiency. The standardization that will beput in place for the overall maintenance department will allow the dealership to increasethe number of vehicles seen per day which in turn will increase profitability.
  16. 16. How Services Can Become Lean Jason Gass OSM 517

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