Ψ Practical Service Improvement

Sunday 9 October 2011

Solution 3: Understand the variable flows

Some processes have been engineered to create a single standard route e.g. you can have any colour so long as it is black.
Often, and especially in services, then a standard and non-standard items are passed through the same process. The Pareto principle usually applies: 80% of the items are standard and 20% are non-standard; and the non-standard items consume 80% of the capacity of the the process.

If you do not understand the difference between standard and non-standard items then this will kill your pig. Often the true cost of non-standard process are not factored into the cost of sales. If you can get your customers to pay Saville Row prices for off the peg delivery then well done.

You should simplify your standard flow; so that it becomes "boring" and you can meet commodity pricing expectations.


The non-standard process route needs to be resourced appropriately: in the service sector this usually means highly qualified subject matter experts to deliver complex solutions. Have you priced things so that higher production costs will be covered?

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