An MIT study published in 1990, intriguingly called “The Machine That Changed The World”, forced carmakers worldwide to think carefully about fundamental issues relating to the organization of production and work distribution. The report challenged conventional approaches to mass production. Developed by the Japanese and coined by Womack, Jones and Ross, “lean production” was turning out to be much more efficient. According to Joachim Gund, MBA student at Steinbeis University Berlin who also works for the Institute for Innovation and Management (IIM), the fact that lean production is still on most manufacturers’ agenda confirms that this groundbreaking approach remains relevant.
When they completed their study, Womack, Jones and Ross were convinced that the principles and methods of lean management would be effective in fields beyond manufacturing. Until now, this view has only partly been proven true: few companies could honestly be described as practicing interdepartmental “lean thinking” in the ways Womack and Jones predicted in the late 1990s. For many European and American carmakers, developing and introducing their own production system is already “state of the art”, but they only partially succeeded in translating their achievements into indirectly affected areas such as sales, after sales, and research and development. In other words, manufacturers have yet to transfer lean production into the all-encompassing practice of lean management.
Until a few years ago, there was no need to do so. Since World War II, with a small number of exceptions, all companies have watched their sales improve year on year. So it is understandable that the focus always lay in production. But markets have changed radically in recent years. These days, companies compete on carbon footprints and engine efficiency. As a result, R&D departments now play a much more pivotal role in a company’s survival.
The same applies to after sales – an increasingly important link in the automotive value chain. Especially in the used car business, after sales is becoming more and more crucial. A decade ago, it was the product that stood firmly in the limelight, not the service that went with it. But as competition intensified, the goal posts shifted. For many large road haulage companies, for example, a comprehensive service network and the quality (and punctuality) of service unit support are central to the purchase of new vehicles. Customers see vehicle quality as a given; service criteria are gaining importance. Customer requirements have thus shifted: these days, the most important issue is the most productive use of vehicle time – companies only make money when the vehicle is fully operating.
Compared to the old days, after sales in the automotive sector is viewed from an economical angle – as an essential source of turnover and profit. On a strategic level, after sales can be used as an effective marketing instrument, improving customer loyalty and positioning the brand. According to Leif Östling, CEO at Scania, one of his company’s future challenges will be to ensure that trucks stay on the move, from the point of departure to the destination, and that drivers receive all the support they need to complete their task. To pursue this goal, Scania has made organizational changes in recent years: 40 per cent of the company’s assets and human resources are now committed to sales, frontline selling, and service provision. This figure used to be a mere 10 per cent. Östling is clear about the path the company needs to pursue: designing trucks for commercial use is now a given. In the future, the company will need to maximize customer benefits through improved services.
A number of car and commercial vehicle makers have set themselves similar objectives. To achieve them, they have introduced lean management principals and methodologies. The results of transfer projects in around 200 after sales units in Germany and other countries have shown that applying these principles and methods has a positive effect on productivity and thus indeed helps companies achieve their objectives. Experience also shows that the degree of transfer is much higher than is currently considered possible.
Despite this, transferring lean principles from production to after sales always poses a challenge. Inevitably, translating concepts and ideas from one department to another will lead to culture clashes. The key difference between the two cultures lies in the mindsets of the respective managers and workers. In production, in keeping with lean management principles, people tend to be proactive and thus stabilize processes. In after sales, people are more likely to tackle problems reactively.
On the one hand, this reactive approach can lead to late, incomplete or incorrect service provision, resulting in more work and dissatisfaction among staff. On the other, however, people enjoy the boost in self confidence – stemming from their ability to master all the problems encountered during the working day. The extra effort and associated costs are thus often ignored. Poor working practices are tolerated – until the next serious problem arises. This double-edged sword – staff are dissatisfied with the extra work and pressure, yet proud when they go home that they somehow solved the problem – poses a tremendous risk when the ultimate aim is to provide customers with the best possible service.
For many after sales departments, the ultimate aim justifies disproportionate time investment. After all, it is about the benefit to all customers, those who arrange appointments in advance just as much as those who unexpectedly need a service. Frequently, people perceive unplanned customers as the main cause of disruption in daily routines, so they are often portrayed as “the bad guys”. As a result, people fail to see why processes therefore need improvement. Yet if processes were to be improved, managers and workers would start thinking differently. “Unplanned customers” would no longer be disruptive, they would be a profit-related use of capacity that helps secure jobs.
Analyzing processes and applying 5S-method in after sales departments – as part of the move to organize and standardize workstations – had the desired effect from the very beginning: managers and workers became involved and willing to work on transfer projects. Analyzing the processes made it possible to show clearly which overlapping areas required action. To do this, client and supplier-side process quality was evaluated. Using 5S-method made it possible to establish basic orderliness and cleanliness. This made improvements tangible and perceivable – for employees and customers. A continuous improvement process (CIP), one of the fundamental principles of lean management thinking, was then successfully implemented to eradicate problems pinpointed in overlapping areas. The outcome: an improved after sales process that frees up time for managers and workers to act more flexibly in dealing with customers, and stay calm when unexpected developments threaten to destabilize the process.
Institut für Innovation und Management (IIM) (Ostfildern)