Lean and Six Sigma in service and manufacturing industries

Lean and Six Sigma applications are different between service industries and manufacturing industries.

Is that statement really true?
There is no straightforward answer. The answer is ambiguous. It can be: no, there is no difference. But it can be: they are the same to certain extend. The answer can also be: yes, the application is different. An additional possible answer might be : it depends on the kind of activity.

No, there is no difference. Regardless if you are in a service of manufacturing environment, the work unit in progress is transformed from an input to an output ready to meet customer demands, using a process. Regardless if you are in a service of manufacturing environment you need universal “core processes”: a process to develop products/services, a process to bring them to the market, a process to produce them, a process to cash in revenue generated by them and a process to take care of your customers during use of them. Of course, you also need processes that support the “core processes”. If you have a process, you can apply Lean and Six Sigma principles and tools.

They are the same to certain extend. In theory the universal processes needed in service and manufacturing organizations are perhaps of a similar nature, in reality they are not fully comparable. An example: the typical life time of a car generation in the automotive industry is about 4 – 6 years. The typical life time of a communication product generation is a couple of months, 2 years maximum. There is clear difference in product generation turnover. Consequently, processes need to be designed and put into production a lot quicker, there is less time to optimize and lean them out to the full extend. This would suggest quick changing service industries should get their products and processes as defect free as possible before launching them. As this is certainly not always the case, service organizations may end up in endless loops of fire fighting. It might explain the current success of DMAIC and DFSS in service industries. (At least if success can be measured on the amount of white papers and book publications on this subject)

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Yes, it is different. In manufacturing industries you can see the raw materials or semi finished product transform into the final product along the production line. In a service environment at best you can follow a paper flow, but in most cases you’ll need to trace the production history of the service in the computers. This creates certainly differences in the application of some of the tools. Take Value Stream Maps as an example. In manufacturing you can go see the shop floor and count the work in process in between the different work stations. In service industries you’ll need to dive into the computers and torture them until they give away their secrets and tell you where the work in progress is waiting to be processed. This can be a discipline in itself.
The type of data is different. Sure, you’ll find continuous and attribute data in service and in manufacturing, but not in the same amounts. In manufacturing, most of the data is continuous. In service the data I come across mostly is attribute. This has consequences on the application of many analysis tools (graphical tools and hypothesis tests), determining process capability and control charts.

It depends on the kind of activity. There is no such thing as the service industry and the manufacturing industry. A car glass repair specialist with workshops and mobile workforces is a total different kind of service then banking or insurances. Chemical process industry is a totally different kind of manufacturing industry then automotive assembly. Consequently, there might be big differences in the application of Lean and Six Sigma principles in service and manufacturing industries, depending on the type of activity.

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Please feel free to comment on my thoughts and elaborate further on them, especially if you have had the opportunity, like me, to gather experience in both types of industry.

Comments 5

  1. Joren


    Voor mijn scriptie aan de universiteit van Gent onderzoek ik de mogelijkheden van Six Sigma in dienstenprocessen.(wat de verschillen en overeenkomsten zijn met productieprocessen wat six sigma betreft en dergelijke) Net hetgeen waar uw artikel over gaat dus!

    Ik had dan ook erg graag persoonlijk contact met u opgenomen om eventueel eens over dit onderwerp te praten.

    U kan me steeds mailen op mijn e-mailadres: [email protected].

    Hopelijk tot binnekort!

    Vriendelijke groeten,

    Joren Groenvynck
    (2e licentie TEW optie TBK)

  2. KAREN

    my name is karen royo from the philippines and i’m a newly graduate industrial engineer and want to learn so much more about process improvement. I enjoyed reading your blog about service and manufacturing .I think i can also say that service and manufacturing are different in terms of tangibility. In service, product is created while it is being produced, while in manufacturing like assembly (the kind of which im currently working at) you see a tangible unit of your product. So i therefore say, the difference in the application of tools of sixsigma is dictated really by time.

  3. cesar

    Great article.
    I am with a company that offers services, (handling, logistics, reclaiming) to the mill steel industry and we are applying lean concepts to go ahead and improve our processes.

  4. tONY

    I am with a company that offers services, (handling, logistics, reclaiming) to the mill steel industry and we are applying lean concepts to go ahead and improve our processes.

  5. Pedro Chipana

    Lean Manufacturing and Six Sigma definitely are not the same, but both try to satisfy costumers worldwide.

    In both situations (Service/Manufacturing) there are customers, therefore our duty as good managers is to meet theirs needs. This depends on the strategy of our business and the flexibility to meet the competitive market that adopts Six Sigma or Lean Manufacturing.

    In Lean Manufacturing, for example, there are steps in the application of this system that we can apply for service and manufacturing. For service we have to skip one of two steps depending on the situation. In another words, the applications is the same. The same thing happens with Six Sigma.

    Thank you for the article Karen,

    Pedro Chipana.

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