Production Management in Service Organizations: Operating Blind?

When you first say production management, I think most people envision an assembly line—perhaps at an automobile plant.

Production management in a service support organization is similar in that you know the type of work and process steps needed to execute the work, and the skills required to do the work.

What differs in a service organization is the visual—the ability to see all the parts needed to execute the work, and the state of completion for the work item. For more similarities and differences, read the Houston Chronicle article, “Service Operations vs. Manufacturing Operations.”

Operational visibility into order or service request processing differs by organization depending on the systems used and the complexity of the work processed. Most service organizations are challenged to gain a holistic view of all work types, processing requirements and capacity within their organization.

Many are unable to create a clear picture of who is doing what, when and how. To optimize employee utilization and process work efficiently and economically, organizations need to be able to:

• Capture work volume from multiple systems (including manual work items)
• Build holistic capacity plans to optimize utilization
• Allocate work by employee skill, availability and work priority/service goal
• Schedule resources to match demand.

Here are some steps you can take to improve production management in your service operations:

1. Build an activity-based capacity model. This model should factor in all work types (production and non-production), volume, and standard handle times for each work item, employee skills and availability.
2. Create activity-based schedules that align work volume and arrival patterns to individual employee schedules, thus optimizing employee utilization, productivity and service goal achievement.
3. Monitor actual performance against plan, making intra-day adjustments to resources as volumes, priorities and employee availability change.

A leading investment management firm was able to reduce overtime by 37 percent by analyzing work types and arrival patterns, as well as modifying shift start and stop times to adequately process incoming volumes while reducing backlog volume.

Effective production management is one of the five key components of an optimized back-office management process. To learn how your organization ranks against our Back-Office Management Process Maturity model, take the self-assessment survey.

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