Anyone who lived through the 1970’s will remember the sea change that occurred in the auto industry as the Japanese, led by Toyota, began eating away at the domestic auto market with high quality affordable products.
That is also when the epithet “rice burner” entered our vocabulary.
At the core of Toyota’s success was what became known as the Toyota Production System (TPS) and was profiled in the book The Machine That Changed The World by James P. Womack, Daniel T. Jones and Daniel Roos of the Massachusetts Institute of Technology.
Toyota describes TPS as “… a framework for conserving resources by eliminating waste…” and evolved into “lean production” with its focus on eliminating waste and reducing cycle times to improve efficiency and profits.
Waste (“Muda”) is defined as anything that does not add value or that the end customer would be willing to pay for.
Toyota organized “waste” by type into seven categories.
- Over-processing – Defined as doing more than needed to get the job done or for which the customer is willing to pay.
Ironically Toyota drew inspiration from Henry Ford’s vision about manufacturing and Dr. W. Edwards Deming’s management ideas. A key piece of the TPS is to organize the workplace so that what is needed is readily accessible, convenient to use and easy to put away.
While TPS has many facets, such as Kaizen, Baka-yoke, Value Stream Mapping and Takt Time etc., one in particular, the 5S methodology stands out for its simplicity.
Each “S” stands for the word (in Japanese of course) that defines a step, and no surprise, there are five of them.
- SEIRI = Tidiness or Sort
- SEITON = Orderliness or Set in Order.
- SEISO = Cleanliness or
- SEIKETSO =
- SHITSUKE = Discipline or
So what does all this manufacturing gibberish have to do with an auto shop?
As it turns out; quite a lot!
When applied to non-manufacturing settings it came to be known as “Lean Service,” because it focuses on the “soft” economy of service rather than the ‘hard” economy of physical goods and is defined as standardizable systems of service operations that provide customers what they want, when they want it without wasting their time.
Considering that in 2014, 78% of US GDP is from the Service Industry (source World Bank Group), it comes as no surprise that “lean” is catching on with such diverse companies as Taco Bell, Southwest Airlines and Wal-Mart.
In fact, the benefits of an organized, process driven, “lean” approach to production found an almost immediate home in Healthcare and can be seen most dramatically in hospital emergency rooms and pharmacies where getting it right the first time and reducing the chances for infection can mean the difference between life and death.
Even Nissan USA is encouraging dealers to adopt “lean” practices to reduce inefficiency and increase throughput and fixed absorption in the face of capacity constraints.
Consider how a typical shop is organized. It’s a production line designed to manufacture road worthiness into vehicles. So why wouldn’t the same practices yield similar results?
The answer is that they do.
And the best news is that it costs little beyond hearts and minds to implement.
Using value added to the end customer as the standard; identify each step of the process in question.
Then eliminate “wastes” that do not create value.
For example, shop waste might look like this:
- Overproduction (shop overloaded vs. skill mix)
- Inventory (wrong or missing parts or tools, missed sales opportunities)
- Waiting (techs waiting for parts, access to tools, sales authorization.)
- Motion (unnecessary movement of people to accomplish their tasks such as techs walking to the lot to find vehicles or fill up at the oil bar or advisers walking the shop to determine repair status)
- Transportation (unnecessary movement of vehicles, parts, tools, etc.)
- Rework (comebacks, mistakes)
- Over-processing (duplication of tasks, lack of communication clarity which adds time to repairs, invoicing, authorizations, etc., free car wash)
Finally organize the value creation steps in a tight sequence to perform the task in the shortest amount of time.
Take appointment setting for example.
Many stores still invite their all customers in first thing in the morning. If the objective is to bring value to the end customer, does that practice deliver?
If the answer is “no” then what can be done to change that? 5S methodology might work something like this.
GOAL: Provide a steady stream of qualified prospects.
SORT: Create a Value Stream Map of the appointment process to identify what elements create customer value and what ones waste their time.
SET IN ORDER: Organize the work station and provide tools such as headsets, software, etc. so that the person taking appointments can work efficiently and away from distracting ambient noise.
SHINE: Keep the workspace tidy and organized.
STANDARDIZE: Put into writing exactly how the appointment steps should be executed to eliminate waste and provide the most value. For example, data purification, customer request detail and quality, suggested selling, etc.
SUSTAIN: Train and train some more.
The service “factory” is a big puzzle with many integrated pieces and each one is ripe with possibilities that lend themselves well to “Lean Service” improvement methods.
For example, if recon vehicles are backing up, “lean” can help. If quick service customers are waiting more than 30 minutes, “lean” can help. If the shop is clogged with recall vehicles, “lean” can help. And while this article was about Service, it works equally well for Parts, Sales, the office, almost any function that you can think of.
With NADA reporting that shop traffic up 6.5% in 2016 and techs and work space in short supply, maybe it’s time to take a structured look at your processes and “manufacture” your own service success?
Author: Rob Kealey
Rob Kealey is a 35-year Fixed Operations veteran and founder of Sigma Marketing. EMAIL: firstname.lastname@example.org.