Exploration of Internal Service Systems Using Lean Principles

Any organization, whether it is classified as a manufacturing, service, non-profit, or

government entity, includes a number of internal professional service units that

ultimately affect its long term performance. Each unit provides one or more services to

internal customers, or to external customers, or to both. Examples of such units include

marketing, research and development, engineering, information technology, human

resources, and consumer affairs. Regardless of the organization's size, almost all

professional staff members deliver an internal service, as either their primary or

secondary job function. A manager or staff member whose department's primary

customer is internal would deliver an internal service as his or her primary job

function. Examples include a product designer whose customers include

manufacturing engineers; a marketing manager whose customers include product

designers; and a financial analyst whose customers include corporate executives. But

other personnel whose customers are external (e.g., consumers) also perform services

for internal customers. For example, managers perform annual performance

evaluations of their staff, customer service personnel report to appropriate.departments on the types of complaints received from consumers, and manufacturing

supervisors take part in continuous improvement efforts.

The effect that these internal service systems have on the organization's overall

performance is often difficult to quantify precisely. For example, it would be difficult to

measure the impact of a marketing department not identifying a potentially lucrative

opportunity to sell the company's product since the lost opportunity may not be readily

apparent. Further, given the diverse sets of activities that take place in an internal

service system, their design and management would appear to be a challenge. The

term transformation has been used to describe the process that takes place when a

system converts inputs to outputs (Chase et al., 1998, p. 7). While a manufacturing

organization is strictly devoted to creating physical