Lean Manufacturing Principles Application in the Service Industry

Clever global manufacturers have learnt how to save billions by following the Toyota method of lean production, perfected by the Japanese car maker over decades. Peter Day finds out why the service industries seem to be far behind.

During the discussion, Peter spoke to James Womack (President, Lean Enterprise Institute) and uncovered scenarios that could benefit with lean manufacturing thinking. He quoted examples of Circuit City misguided use of contingent staff in critical customer facing roles to reduce wage bill. In the long run, the company suffered higher cost of revenue and dissolved itself from the important customer dialogue and feedback.

When a company removed itself from direct customers dialogues, the company would not be able to make the right strategic decision to maintain customers’ relevance and retain their patronage. Along the way, the company could end up making expensive and wasteful decisions, detriment to their obligation to shareholders – to deliver on-going and long term value.

Download the podcast (mp3, BBC World Service)

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