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Process Improvement in the Service Industry
In the past, competitive success was driven by marketing expertise, financial resources, and technology. Today, a competitive advantage results from superior core process design and a  workforce committed to delivering outcomes that are valued by the customer.
What is Process Improvement?
A process is a set of logically related tasks performed to achieve a defined outcome. The process can be making a product or providing a service. Process improvement techniques help companies focus on improving their overall throughput, identifying pinch points that are limiting overall performance, and developing strategies that exploit them for significantly improved revenues and profits. There have been many innovative process improvement techniques developed such as:
Process Improvement Methodologies
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The Service Sector Advantage
Process improvement techniques have been part of manufacturing for decades. The techniques started in closed system manufacturing (e.g. Chemical Processing Industry & Food Processing Industry) where a total process perspective was necessary and then progressed to discrete manufacturing (e.g. Automobiles). More recently, the service sector has discovered the value of these techniques. Process improvement in the service industry has an advantage - Labor costs are higher so making their core process more efficient can have a substantial impact.
| Manufacturing Sector Labor Cost Range: |
7 – 10% |
| Service Sector Labor Cost Range: |
25 – 30% |
The Service Sector Challenge
The service industry differs from manufacturing in several ways.
 Simultaneous Production/Consumption – Quality can’t be inspected in.
Perishable – Services can’t be saved or inventoried.
Intangible – The product is performance, ideas, concepts, etc.
Process improvement techniques have evolved and today are very adaptive to the unique challenges of service industry. The manufacturing industry has found that building quality in, is preferable to inspecting quality in, and today's process improvement techniques are focused to that end. So, simultaneous production and consumption are not really an issue. Also, in manufacturing, the trend is moving away from building Inventories to building to order. The process for intangible products is not unlike that of tangible products. It involves a series of steps to achieve the final result.
When you improve your core business processes, you improve customer satisfaction, you improve employee satisfaction, and you increase profits. We typically accomplish the above with no additional labor and no capital expenditure! Major improvements are usually achieved in 4 to 6 weeks with minimal interruption.
What can your company expect?
Western Union reduced credit review from 19 days to 12 minutes, and agent enrollment from 50 days to 13 days. Their saving - $3 million.
An American family insurance company eliminated the lapsing of 4600 policies per month due to internal delays. Their savings - $100,000.
A Florida regional hospital reduced LOS from 5.2 days to 4.5 days. Their revenue gain - $12 million.
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The consultants at HPK Group have helped service-sector organizations make significant improvements in their core processes that translated into significant savings, increased customer satisfaction, and increased employee satisfaction. Our workshops are also useful for the service industry. Contact us now to see how we can help your organization.
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