Manufacturing Better Service Operations

By Richard Golden, Director of Operations, Material Handling Distributor


Back in 1990 manufacturing was dramatically transformed with the development of what is commonly referred to as Lean or Continuous Improvement. The result of a manufacturer adopting this system was that they could produce widgets faster, safer and at a lower cost while improving quality. As the success of manufacturers continued, the ideas also caught on with service providers. The successful adopters achieved a competitive advantage by giving their customers what they wanted, at a fair price, while making greater profit. The thinking behind all of these lean or continuous improvement systems is similar, and manufacturers and service providers choose to implement one over the other based on which one fits their culture best. The main ideas behind these practices are:

  1. Adherence to a long-term philosophy of generating value for customers, society and the economy
  2. Providing customers the value they are looking for through efficient processes
  3. An unrelenting quest to eliminate waste and continuously improve processes
  4. An intense focus on continuously learning and the development of employees and business partners

The same thought processes can also be successfully applied to equipment service operations. Instead of manufacturing widgets, an equipment dealer is manufacturing equipment uptime.

The general term “continuous improvement” is used because this is a journey not a destination. To be successful a company has to adopt the philosophy in addition to learning the methodologies.

Company Philosophy

To be successful as a Lean Service Provider, you must live and teach the philosophy as your business’s foundation. This is why you are in business, your company’s culture, your mission. Most companies have a mission statement that they post on a plaque in the office and put on all their marketing material. But what really happens at the critical contact points when customers interact with employees? All too often, what the customer experiences is not in line with the mission statement they read. This disconnect can lead to mistrust and customer dissatisfaction. As an owner, officer or manager all your management decisions should be based on this long- term philosophy, even if it is at the expense of short-term financial goals. This is how you expect all your employees to relate to customers. This philosophical mission is the foundation for everything you do.

As part of this philosophy strive to generate value for the customer, society, and the economy. By generating value, you make your services unique and desirable. Discovering what is valuable to the customer is the key to developing services that will be in high demand.

Service Processes That Add Value

In manufacturing processes, raw materials are manipulated and assembled to produce a product. For service processes, labor, parts and knowledge are combined to produce a fully functional piece of equipment. In each case the process is initiated with some form of customer demand. Either an order is placed for a widget or it’s a scheduled maintenance that is due or a breakdown call is placed.

The underlying ideas that transformed manufacturing and that can be adapted to service are:

  • One-piece flow – means to build each complete unit in a continuous process in order to prevent the buildup of “work in process” at a work station. If at any step a defect is noticed, the production stops to prevent the defect from getting into the finished product. This brings problems to the surface to be fixed immediately rather than pulling the defective piece off the line and continue building.
  • Standardized work – documentation of each task so that it is repeatable and trainable. There are detailed work instructions and training for each work station. When a new person arrives at the work station they are shown the standardized work and trained accordingly. Each person is the quality check for the previous step in the process and they are empowered to recognize problems and report the issue immediately. Standardized work also provides the documented process that can now be improved.
  • Visual controls – Make it possible for everyone to know where things go and what to do without having to ask.

These ideas can easily be applied to equipment servicing processes to improve the uptime for customers.

  • One-piece flow – In many service organizations work in process (WIP) is a major issue. Any WIP means that a customer’s equipment is down or is at a higher risk of downtime. It is recommended that technicians are given only one job at a time. Once a technician hits a snag in the repair, he/she is empowered to relay that back to the office. The parts, service and technical departments then work as a team to address the issue with the goal of immediate correction. If this is not possible, the technician is sent to the next job until a resolution is achieved. Although this is a departure from manufacturing, it achieves the same goal while addressing the complication of the technician not being able to work during the resolution process.
  • Standardized work – Although equipment manufacturers provide repair manuals and training, this only covers a small amount of the work that is typically performed by equipment dealers to minimize customer downtime. Although there are many ways to perform routine tasks such as a scheduled maintenance service, there is only one best way. The challenge is to find the one best way then train everyone with this preferred method. This reduces the chance of errors, the variability in time to perform the job, and ensures the customer receives a consistent level of service regardless of the technician performing the work. In short it provides a better customer experience.
  • Visual controls – Some of the largest contributors to lost time at an equipment dealer are on boarding a new employee, looking for a misplaced tool or document, or an injury/accident resulting from not wearing the appropriate safety gear or following necessary procedures. Using signs, posted instructions, facility maps and floor markings to guide and instruct people makes it possible to reduce lost time by making it more simple to find items, put items away, train new people and avoid accidents, spills, damages or injury.

Adopting these simple ideas into your own processes will incrementally improve the value of your customer service.

Developing Your People and Partners

On the surface, processes would seem to be the most important aspect of providing industry leading customer service. This is not the case because it takes people to run the processes. Ideally what you’re looking for is 50% process contribution and 50% people contribution with your managers aligning both to the company philosophy.

Successful manufacturers learned early on that even though they developed exceptional processes, their long-term success depended on the respect they had for their people and their ability to develop them into future leaders. In order to achieve this in any organization the leaders must thoroughly understand the work, live the philosophy, and teach it to others. When I say leaders must thoroughly understand the work, it doesn’t mean they have to be a trained technician. It means that the leader must thoroughly understand what it takes for a service organization to maintain high customer equipment uptime while still generating profit for their company.

The leaders set the example. If they don’t live the philosophy, why should the people who work for them? Even good leaders can make the mistake of demonstrating to their team that they only have to live the philosophy when it is convenient. A good example of this is safety. Many organizations have a “Safety Culture” but how often does a manager bend the rules because they left their safety glasses in their office but since they won’t be in the shop long so it is okay. This casual adherence to the philosophy sends the wrong message.

Leaders need to be teachers. It is important for them to continuously develop their people and teams by challenging them to learn more and to adhere to the company’s philosophy in all situations. Ideally, someone from within the company will be the next leader so this is a significant responsibility for the current leadership. The same thinking should be applied to their extended network of partners and suppliers. Any company’s performance is in part dependent on their partner’s and supplier’s performance. So, challenge and help them to improve just as you would do for your own organization.

Continuous Improvement Through Problem Solving

One of the most important concepts to come from Lean is the concept of purposely looking for problems to solve. A lean organization associates continuous improvement and problem solving as the same thing. A key component of problem solving is the concept of “go see for yourself.” Dwight Eisenhower said “You know farming looks mighty easy when your plow is a pencil and you’re a thousand miles from the corn field.” He is right and as obvious as this seems, many managers will still try to solve problems from their office using reports, graphs or second hand information. This often ends up with a band aid or work around rather than a real solution. The problem doesn’t get solved so it is repeated over and over ultimately having a negative impact on customers and the company’s bottom line.

If you want to have a clear understanding of the root cause of any problem you have to go see for yourself. The best thing for any manager or supervisor is to insist they go to see or experience a problem for themselves. Once the root cause is understood, empower employees by involving them in the process of finding a solution. Once a decision is reached implement the solution rapidly.

Follow up on the implementation to ensure that it was the correct solution. This practice can be challenging for equipment servicing organizations because the problems are often in the field away from the office where a manager can’t just walk over and see what is going on. But, as you probably have guessed, for every problem there is a solution. Many dealers overcome this obstacle by utilizing field supervisors who are empowered to make decisions in the field based on what they see. This particular solution also addresses the concepts of developing your people.

With these practices, problems are no longer something to avoid, they are the start of your next improvement effort.

Continuous Improvement or Lean has been used with great success. The concepts are easy to grasp and the methods are easy to copy. The difficulty lies in the execution of the culture changes and the adoption of the philosophy. Put in the effort and you will see the results.

For over 30 years Richard Golden has been in all aspects of the material handling business. With a passion for problem solving and through the study of Toyota Lean Management, Six Sigma, and Six Sigma for service he discovered the potential and power of Lean Management, combined with his own perspective and methodologies he continues to use and share these principles.

Starting out at the local Crown dealer as a service technician he then moved on to technical trainer, field service manager, and parts manager for the 4th largest parts department in the Crown dealer network. Furthering his career, he moved from a dealership environment to the distributor and joined Toyota Material Handling USA where he developed training and programs to assist the North America Toyota dealer network with improving their aftersales operations. He honed his knowledge and skills working directly with lean experts from the U.S. factory and Japan, including participating in some of their global initiatives, authoring best practices and manuals, and travelling frequently to dealerships for consultation visits.

Whether it is on an individual level or to a company as a whole, he thoroughly enjoys teaching this principle and helping others to excel. On a personal level, Richard and his wife of 38 years enjoy spending time with their family, travelling, being outdoors and making memories. Feel free to reach Richard at