By Craig C. Foreback, PhD

This post is a companion article to the CLP July 2014 feature, “Lean Thinking in the Medical Laboratory.”

Lean manufacturing is a management philosophy derived mostly from the Toyota production system, an integrated sociotechnical system that encompasses both a management philosophy and specific practices. A major factor in making and keeping Toyota a top-tier auto manufacturer, the “Toyota Way” focuses on designing out inconsistency and overburdening steps, and eliminating waste.

A sociotechnical system is an approach to complex organizational design that recognizes the interaction between people and technology in workplaces. As implemented by Toyota for the purposes of streamlining and improving its production processes, the Toyota philosophy—and it truly is a philosophy—gave rise to the notion of Lean principles that can be applied broadly in a variety of settings.

Toyota’s success with Lean principles encouraged other manufacturers to embrace the system. Companies such as Caterpillar, Ford Motor Co, Intel, John Deere, Kimberly Clark, Motorola, and Nike all enjoyed success by adopting the Lean approach, resulting in the concept being replicated in even more companies worldwide.

Because the principles of Lean production and industrialization originated and were developed with manufacturing in mind, however, companies in the service sector have been slow to apply them in their own realms. One reason for such indifference is the fact that the waste and inefficiency that can interfere with service firms—such as those in the fields of accounting, finance, healthcare, human resources, and travel—are rarely obvious.

In factories, idle workers and stacks of inventory are clear signs of broken processes. But when it comes to service sector firms, companies often see only fleeting glimpses of their problems, which tend to lurk in-between functions, departments, or regions. In service firms, waste is usually hidden, difficult to detect, and engrained in long-standing company policies and practices.

Nevertheless, in recent years some service firms have begun to embrace Lean principles, and have discovered that the application of Lean practices to service functions can cut error rates and increase a company’s overall responsiveness and customer satisfaction.

In the context of service firms, the notion of eliminating waste refers not only to materials, but also to time—such as a consumer’s time spent waiting for assistance or for product delivery, or the cumulative time wasted in unnecessary movement. The application of Lean principles relies on such processes being as flexible as possible in order to reduce stress on the system, which in turn eliminates burdensome processes and reduces waste.

By rethinking and streamlining their service processes, most companies—including companies and institutions in the healthcare sector—can make significant cuts in expenses and, at the same time, improve the satisfaction of internal and external customers.