Cae in Point: Working toward ‘continuous improvement’ in a services setting

July 12, 2013

The Big Idea: Tools for “continuous improvement” often are focused on making things in a better way. But how can they be used in a department that provides a service — a cost center rather than a profit center — where making an end product isn’t the goal?

At the Darden School of Business at the University of Virginia, we conducted a series of improvement workshops that did exactly that. We took the publishing department (an internal service) and applied the same techniques that one might use to improve the productivity of an auto manufacturer — with great results.

The scenario: Darden Business Publishing (DBP) had nearly 140 documents in the editing work-stream at any given time. It took an average of six months from the point when a document was submitted for editing until the document — which might be needed for an upcoming MBA course — could be published and used.

Clearly, this long lead time and huge backlog needed to be reduced so that DBP could effectively support Darden’s faculty and students, and all the other folks who buy and use Darden case studies.

The resolution: Austin English of RCF Associates set up a week of half-day workshops with the extended DBP team to hash through a solution. English walked the group through his innovative approach to using CI tools in a services setting. English conducted an exercise to define each customer group’s criteria for happiness. We identified key criteria such as brevity, timeliness, freshness, cost and accuracy.

English then asked the team to consider the pattern of publishing requests that had come in over the previous 12 months. If DBP kept clear records of all incoming requests, he said, it would be better able to understand historical demand patterns — and, more importantly, how and when these patterns tended to fluctuate. Were the demand peaks seasonal? Did they coincide with the needs of the MBA semesters? Indeed, demand did peak at several times during the year — and fluctuating demand is often a big culprit underlying a backlog of work-in-process and increasing lead times.

Among the changes, English worked with DBP to create a new system to smooth out the demand of incoming work. Now, a document would be accepted for review only when a faculty member could commit to a review date. Not surprisingly, busy professors would often submit a case to DBP, only to be occupied with other worthy duties when editors were ready for their input. Preparing a document ready for the Darden case collection took cooperation, and the new system brought work-in-process down to as few as 26 cases and reduced lead time to less than one month. What a transformation!

The lesson: Process improvement principles can be extremely effective in a services setting, especially when work activities are rethought in service of the product and the criteria of that product’s customers. Smoothing demand for the “products” of a service operation, in collaboration with customers, is often one of the most effective ways of immediately reducing work-in-process and lead times — which increases the happiness of all concerned.

— Elliott N. Weiss and Rebecca Goldberg

Weiss is the Oliver Wight Professor of Business Administration at the Darden School. Goldberg is a management consultant and educator at Goldberg Productions.

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