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Implementation of Lean-Kaizen in the human resource service process

A case study in a Mexican public service organisation
Manuel F. Suarez-Barraza
Graduate School of Business Administration and Leadership (EGADE) Zona Centro, Tecnologico de Monterrey at Toluca, Toluca, Mexico, and

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Received October 2008 Revised October 2009 Accepted October 2009

Juan Ramis-Pujol
Operations Management and Innovation Department, ESADE Ramon Llull University, Barcelona, Spain
Abstract
Purpose Over the last decade, some Mexican public organisations have begun to enter into a dynamic in which issues such as service quality, ongoing improvement, and internal and external customer orientation are becoming essential to their day-to-day management. The purpose of this paper is to present a successful example of how Lean-Kaizen is implemented in the human resource service process of a Mexican public service organisation. Design/methodology/approach The research method adopted is the case study. Research is carried out in a Mexican public service organisation, and adopts a retrospective focus. Four methods are used to gather data: direct observation; participative observation; documentary analysis; and semi-structured interviews. Findings The Lean-Kaizen approach helps this public service organisation to improve cycle times in the human resource selection and hiring process. Various enablers and inhibitors are also identied during implementation. Research limitations/implications Research is based on a single case study. However, rather than seeking empirical generalisation, it tries to examine how the Lean-Kaizen approach can be successfully implemented in a service process. Practical implications The research is effectively a guide for practitioners (public managers) wishing to apply or already applying Lean-Kaizen in their service processes. Originality/value A review of academic and practitioner literature on the subject indicated that implementation of the Lean-Kaizen approach has hardly begun to be explored. It is also signicant that in Mexico and Latin America, examples of the transfer and implementation of this kind of approach are practically non-existent in academic literature on the subject. Keywords Continuous improvement, Public sector organizations, Mexico, Human resource strategies Paper type Research paper
Journal of Manufacturing Technology Management Vol. 21 No. 3, 2010 pp. 388-410 q Emerald Group Publishing Limited 1741-038X DOI 10.1108/17410381011024359

1. Introduction Over the last decade, Mexican public service organisations have been subject to pressure from their external environment including the countrys citizens, the civil sector, international economic organisations such as the Organisation for Economic Cooperation

and Development and the International Monetary Fund, amongst others in addition to changes in international markets (effects of globalisation), etc. Other pressure has come from the federal government, through government programmes such as the National Agreement for the Raising of Productivity and Quality (1992), the National Programme for the Modernisation of the Public Company (1990-1994), and the Programme for the Modernisation of the Public Administration (1995-2000) (Moyado-Estrada, 2002). Owing to both external and government pressures, public service organisations have gradually changed their concept of management, and have become involved in looking at ways of improving both their work processes and the public services which they provide (Campero-Cardenas and Carrillo-Castro, 2004). The regulatory framework behind Mexicos public administration and public services is based on the constitution of the USA of Mexico, dating back to 1917 (Carrillo-Castro, 1982). Specically, the fth section of the constitution (Articles 115-122) provides explicit guidelines for government and its administration in the areas of the federal states and municipalities (Cienfuegos-Salgado and Rodrguez-Lozano, 2009). According to Carrillo-Castro (1999), public services are provided to the general public under an organisational structure focused on administrative departments or ministers of state: structural models and organs based on the constitution and the subsequent amendments which have been made to this constitution. In this context, a public service in Mexico is dened as:
[. . .] all those technical activities designed to meet a general need, whose uniform and continuous provision should be permanent, assured, regulated and controlled by administrators or leaders, whether through the Public Administration [bodies] or by individuals authorised to do so, to the indiscriminate benet of every citizen (Fernandez-Ruz, 1995, p. 165).

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As such, one of the ambits of Mexican public services in which change has been most sought since the 1980s a result of the pressures outlined above has been the creation of more exible forms of governance to help meet the growing needs and demands of citizens. In other words, the need to achieve better quality standards in public services delivered to citizens has highlighted the need to put forward new management mechanisms to deal with the obsolescence of the administrative model of the Public Administration in Mexico (Cienfuegos-Salgado and Rodrguez-Lozano, 2009). In the opinion of Serrano-Migallon (2008), the efciency and smooth running of national governments cannot be assumed as an effect of democracy. However, according to these authors, democracy requires better and more modern methods of administration in order to respond to demands for better public services from a society (in this case Mexican) that has already entered into the twenty-rst century. In this regard, some Mexican public service organisations, at the federal level including the Human Resources Ofce (HRO: a service area of one of these public service organisations) studied in this paper have committed to a systematic and in-depth effort to improve and innovate their public services. This was devised to address the general inefciency, bureaucracy, excessive regulation, as well as the processes and procedures involved in providing public services to citizens (Carrillo-Castro, 2002). So much so that some public service organisations have now begun to explore how to transfer certain practices, techniques, and tools from the manufacturing sector (Suarez-Barraza, 2001; Spear, 2005); an approach that has already been successfully tried out in several international organisations (Spear, 2004; Liker, 2004).

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This paper therefore presents a case study that describes how one of these manufacturing sector practices, Lean-Kaizen, was transferred to and implemented in the human resource service process of a Mexican public service organisation. The research question that has guided this entire study is: RQ. How can Lean-Kaizen be implemented in a service process within the context of a public organisation? From this, two sub-questions emerged: RQ1. What kind of enablers can help successfully achieve this implementation? RQ2. What kind of inhibitors could block the implementation effort? This paper rst provides a review of the literature on the Lean-Kaizen approach from its original perspective in manufacturing and also describes the rst indications of the practices appearance in the services sector in a public context. It continues by reviewing the implementation of public service organisation performance management, and concludes by analysing the literature on human resource management (HRM) practices to improve the performance of private and public organisations. It then goes on to set out the research methodology used, and also provides a description of the implementation of Lean-Kaizen in this case study. The paper ends by detailing the implications and conclusions of the research. 2. Literature review 2.1 The Lean-Kaizen approach in manufacturing The Lean-Kaizen approach focuses on improving the quality of processes in organisations by reducing their cycle time and operating costs, creating continuous ows, satisfying customers and eliminating waste (or muda, to use the Japanese term) (Taylor and Brunt, 2001; Liker, 2004). It is based on a combination of two kinds of approach to, or programmes for, improvement: Lean production or Lean thinking; and Kaizen. The term Lean production or Lean thinking originated in the Toyota Motor Corporation as part of the Toyota Production System (TPS). The idea was conceived by Taiichi Ohno in the mid-1960s to try to improve the competitiveness of his organisation (Dahlgaard and Dahlgaard-Park, 2006). In fact, TPS only came to prominence in the Western world after the 1973 oil crisis (Sawada, 1995). The term Lean production or Lean thinking itself was coined by James P. Womack and Daniel T. Jones in their well-known book The Machine that Changed the World (Womack et al., 1990). The concept can therefore be summed up as a systematic approach to the search for activities that add value through eliminating muda in all aspects of organisational processes. The term Kaizen, on the other hand, is a Japanese word that basically means continuous improvement or the principles of continuous improvement (Lillrank and Kano, 1989). It was coined and disseminated within the eld of operational management by Masaaki Imai (1986), in his well-known book Kaizen, The Key to Japans Competitive Success. Brunet and New (2003, p. 1428), authors of recent research on the subject, dene Kaizen as: Pervasive and continual activities, outside the contributors explicit contractual roles, to identify and achieve outcomes he believes contribute to the organisational goals. Some authors have indicated that because the elimination of waste is the main objective of Lean thinking, the instrument for conducting this constant search for

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muda at all times, by all workers and throughout the work area, is Kaizen (Imai, 1986, 1997; Wittenberg, 1994). The techniques and tools considered as the cornerstones for starting to eliminate muda are thus referred to as Kaizen building blocks (Imai, 1997; Bateman and David, 2002). In other words, a Lean thinking effort can begin by implementing basic Kaizen techniques and tools such as: the ve Ss, Kaizen teams, standardisation and elimination of muda in working processes (Nemoto, 1987; Gondhalekar et al., 1995; Brunet and New, 2003; Suarez-Barraza et al., 2008). This thinking evolves towards more complex techniques and tools that are considered to be part of Lean thinking, such as: just-in-time (JIT) manufacturing (producing for transfer to the next customer only what is needed, when it is needed), kanban, poka-yoke (error-proong), andom (visual display boards and lights), single minute exchange die, total productive maintenance, and heijunka (levelling production batch size and variety) (Lewis, 2000; Bateman and David, 2002; Bateman, 2005). In view of this, some authors consider that the effort initiated through the use of Kaizen may lead to consolidation within the organisation of a Lean thinking type management system, combining the two concepts to coin the term the Lean-Kaizen approach (Alukal and Manos, 2006; Manos, 2007). 2.2 The Lean-Kaizen approach in the service process and the public sector In practice, it was two seminal articles published in the Harvard Business Review by Levitt (1972, 1976) that launched attempts to explain how manufacturing concepts (mass production) can be transferred to the services sector. On the basis of these two articles, other authors have recently focused their research on locating some basic requirements for the transfer of manufacturing concepts to the services sector. The most important of these is that the services must operate in a similar way to their manufacturing counterpart, in the sense that their operation must involve the transformation of inputs to outputs through a series of processes (Johnston and Clark, 2001). Taking a similar line, that is, the transfer of operations management techniques to the services sector, are the empirical works of Vargas and Manoochehri (1995), Bowen and Youngdahl (1998), Wright and Mechling (2002) and Prajogo (2006). However, given the lack of literature on the subject so far, there is a great need to build theory on the matter. Aside from this, practitioner literature on the subject has started to offer case studies that give examples of the transfer and implementation of Lean-Kaizen in the services sector. In some of these, the application of the TPS can be observed in a clinic in the health services sector (Collins and Muthusamy, 2007), there are cases of fast food restaurant chains like Taco Bell and McDonalds (Bowen and Youngdahl, 1998), and there are even examples of banks, hotels, and restaurants (not the franchise format) (George, 2003; Suarez-Barraza, 2008). On the basis of this literature, some authors are starting to use the term Lean service for this transfer and implementation, which according to them is characterised by the following aspects: . The organisations strategic and operational goals are oriented towards efcient and exible compliance with the customers requirements and expectations. . There is an effort to minimise the preparation and cycle times of working processes to improve service ows and response times. . The JIT principle is applied in inventory control for both inputs and outputs of each service.

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The organisations services are run like a value chain, that is, by applying analysis of value maps and ow diagrams to recognise, nd and eliminate any activities that do not add value to the process and the service (muda). Staff are trained and/or taught to develop behaviours and abilities that focus on customer service, and to orient and sensitise customers themselves on how they can contribute, collaborate, and participate in building and guaranteeing quality in the service. There is signicant investment in mechanisms for staff involvement and participation, including work teams, and ideas for improvement.

There is even less literature relating the transfer and implementation of Lean-Kaizen in the services sector within the public service organisation context. What little there is takes two main forms. One of these forms consists of authors who present relatively successful cases of Lean-Kaizen implementation (Yasin et al., 2001; Hasenjager, 2006; Krings et al., 2006), indicating that:
There is little doubt of the applicability of Lean to the public sector [. . .] many of the processes and services in the public sector can gain greater efciency by considering and implementing Lean (Radnor et al., 2006, pp. 75-6).

The focus of this rst form targets the start of the management transactions, already referred to, in which all the work processes created by any service, including the public services, are basically the same (inputs-transform-output). However, the literature also indicates that to achieve and consolidate the successful transfer and implementation of Lean-Kaizen certain facilitating elements (enablers) must be present. Examples of this are the commitment of senior civil servants and politicians (Furterer and Elshennawy, 2005), the involvement and participation of ofce workers (who process and grant the service) (Suarez-Barraza and Lingham, 2008), the focus, improvement and measurement of processes (Suarez-Barraza and Ramis-Pujol, 2008), and the capacity to try out and experience improvement actions (Collins and Muthusamy, 2007). In fact, some of this research has begun to create a body of evidence that inclines us to believe that Lean-Kaizen can be implemented in service processes in a public context when it concentrates on eliminating activities that do not add value (muda), with a clear focus on the outcomes produced for the citizen-customer (Furterer and Elshennawy, 2005; Radnor et al., 2006; Krings et al., 2006; Collins and Muthusamy, 2007). Finally, the Lean-Kaizen techniques that the literature refers to here are: value stream mapping, ve Ss, process mapping, Kaizen Blitz or quick Kaizen, Lean-Six Sigma, process redesign, problem-solving methodologies and seven basic quality tools (Furterer and Elshennawy, 2005; Radnor and Walley, 2008; Suarez-Barraza et al., 2009). The second of these forms involves research, including that of Swiss (1992), Cohen and Eimicke (1994) and Bhatia and Drew (2006), that questions the viability of transferring Lean-Kaizen to the service processes of public organisations. These authors state that when implementing Lean-Kaizen or similar approaches to achieve improved quality in services provided to citizens and in the response time of services required by citizens, the special characteristics of each public context, whether in the USA or Europe, must be taken into account. They quote the following as examples of these special characteristics, by which a series of factors become inhibitors of such improvement initiatives or effort: the very heterogeneity of the public services;

their classical bureaucratic type organisational structure; the specic role of the public service regulator; and the different roles (not only as customer) that citizens may have as regards the public company. Hines et al. (2004) state that to be able to implement an approach such as this in the public arena, taken from organisations in the private manufacturing sector, its concepts and even the techniques used must be adapted extensively, abandoning the orthodox implementation of Lean-Kaizen. 2.3 Implementing performance management in public service organisations The performance management model is the process by which the organisation integrates performance with its corporate strategies and objectives (Bititci et al., 1997). Performance management literature is beginning to link the efforts of improving public service organisations in areas such as strategy formulation and processes and services operation (Atkinson and McCrindell, 1997; Mwita, 2000; Moore, 2005). In general, there is consistent literature on performance management (Kaplan and Norton, 1996; Kloot and Martin, 1998). However, when referring to public service organisations, research is specically focused on describing the performance management effects in public services and processes through the three Es (economy, efciency, and efcacy) (Ghobadian and Ashworth, 1994). Furthermore, other studies have attempted to link performance management with measurement techniques such as balanced score cards (Wisniewski and Olafsson, 2004), a system approach (Bowland and Fowler, 2000), process redesign, standards, and Kaizen (Suarez-Barraza and Lingham, 2008), strategic planning techniques and benchmarking (de Bruijn, 2002) and other techniques related to public participation (Curtis, 1999). However, studies have also indicated that the transfer of implementation techniques associated with performance management from the private sector should take into account the specic peculiarities of the public sector (Brignal and Modell, 2000). In particular, and in reference to these features, four fundamental aspects have been discussed in the literature. First, the need to understand the multiple needs of stakeholders in the public sector, and not just citizens; this includes internal customers, executives, and managers of public service organisations (McAdam et al., 2005). Second, by taking into consideration all the possible needs of stakeholders, a multitude and surplus of performance measures can be created, which are difcult to manage due to their quantity and magnitude, and even more so when there is an absence of a measurement culture within the public service organisation (Pollanen, 2005). Third, the lack of clarity in the management- and improvement-related goals and objectives of the processes that produce services, leading to a lack of responsibility (ownership) towards measurement or, in other words: who is responsible for measuring the performance of processes and services specic to each public service organisation? Moreover, the lack of skilled personnel to carry out the measurements may add to this lack of clarity and the ambiguity associated with the mechanism for measuring process performance (Wilson et al., 2003). And nally, as a fourth point, the lack of measurement of effectiveness (as a fourth E), i.e. the capacity to measure the true social impact of those services that add public value for all citizens and other stakeholders through public organisation processes and services (Moore, 1998; Rantanen et al., 2007). Mwita (2000) refers to this as the need to assess processes and services not only from an economic and efciency perspective but also from the perspective of social value and management (impact on the human factor and internal customers).

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2.4 HRM practices in the use of service level agreements to set performance thresholds A signicant body of research has also suggested a specic set of HRM practices that can help set agreed service levels to enhance performance and obtain competitive advantages in both public and private organisations (Delaney and Huselid, 1996; Ahmad and Schroeder, 2002; Guest et al., 2003; Theriou and Chatzoglou, 2008). And although named differently in the literature found on HRM practices that generate a higher level of performance in organisations, including best HRM practices (Pfeffer, 1994), high performance work systems or practices (Lawler, 1986) or high commitment practices (Wood, 1996), the term best HRM practices will be used in this paper to refer to those HRM practices and techniques which have been identied as capable of effectively improving the performance of public service organisation processes (Guest et al., 2003; Marchinton and Wilkinson, 2003). In this way, given that the literature provides sufcient evidence to link the best HRM practices with an organisations performance (Terpstra and Rozell, 1993; Youndt et al., 1996; Guest et al., 2003; Michie and Sheehan, 2005), the best practices referred to in the literature on this subject are listed as follows: . high levels of teamwork; . performance-related to incentives, recognition, and pay; . extensive training and internal career opportunities; . employee involvement, participation, and internal communication arrangements; and . comprehensive employee recruitment and selection procedures. In this respect, and setting the conceptual framework on our empirical research, four of the best practices reported in the HRM literature have been analysed. First, concerning the practice of high levels of teamwork, it is possible to highlight that, teamwork has always been reported as an HRM practice capable of enhancing employees involvement in their work so that they feel more satised with what they do in their jobs, and thus contribute to the organisations performance (Wageman, 1995; Bon Ooi et al., 2007). In this way, Cohen and Bailey (1997) suggest that the use of teamwork as an HRM practice can generate more favourable attitudes among employees, improve the quality of work life and also improve the organisations productivity, performance, and effectiveness. Specically, in the literature on service organisations, Gupta et al. (2005) empirically conrmed that the focus on teamwork as an HRM best practice in organisations can contribute towards service organisations supporting structures and initiatives to improve the quality of services delivered. In fact, and in the same vein, Sureshchandar et al. (2001) conclude that employee involvement through teamwork is vital to the implementation and sustainability of any improvement initiative in a service organisation. Finally, in public sector organisations that have used this HRM practice, a high correlation between teamwork and improving service processes has been reported in quantitative empirical studies (through techniques transferred from the private sector), with client and employee satisfaction (Foster et al., 2002, p. 97; Suarez-Barraza and Lingham, 2008, p. 16). The second best HRM practice that can be contextualised and which has been documented in the literature has been performance-related incentive, recognition,

and salary (pay). Various authors have reported on the benets relating to incentives, recognition, and salaries both in the private sector (Murphy, 1999; Saruta, 2006; McCausland et al., 2005) and in the public sector (Radnor et al., 2006). In this eld, for example, the use of explicit incentives to improve the provision of public services on the UK Governments agenda is a crucial issue and one which the government has been applying for some time (Burgess and Ratto, 2003). And although the literature has shown empirically that better-paid employees are more satised with their jobs, resulting in higher productivity, it has also been found that there is a need to further explore the connection (McCausland et al., 2005, p. 653). Similarly, other studies have argued that other types of incentives and recognition (non-monetary), such as participation through teamwork, public recognition through diplomas and in-kind incentives, training, and developing potential with a view to career enhancement within the organisation are vital in terms of improving not only employee productivity but also the performance of any organisation (Ulrich et al., 1995; Jackson and Schuler, 1995; Ahmad and Schroeder, 2003; Saruta, 2006; Bon Ooi et al., 2007). In Mexico, however, due to the existing cultural environment, managers of certain organisations studied adjust their salary or award recognition according to their own criteria, creating a perception among employees that in order to obtain incentives, improve pay, and/or gain recognition the only thing that matters is their personal relationships with the manager (Davila and Elvira, 2007, p. 398). Therefore, in this context, we should nd new ways of implementing this HRM practice, such as a psychological contract to create an organisational climate aimed at improving the performance of processes and services delivered in both public and private organisations (Rynes, 2004; Davila and Elvira, 2007). Following the previous practice, both extensive training as well as employee involvement, participation, and internal communication arrangements (third and fourth practice analysed), are reported in the HRM practice literature as essential practices in achieving higher productivity and improved performance in service organisations. McClellands (1986) studies found that poor employee training leads to lower productivity and poorer relations among employees. The literature has been empirically validated to estimate training outcomes with respect to the organisations performance and productivity is quite extensive and validated (Holzer et al., 1993; Lowenstein and Spletzer, 1999). In particular, in relation to service organisations, Pollit (2008, p. 35) indicates that these organisations increase their productivity, improve their performance and deliver better services through an HRM system that trains employees in order to improve their skills to better deal with customers. Another area of this best HRM practice that has begun to be studied is known as on-job training (OJT) (Frazis et al., 1998), understood as providing training in the workplace, where the transformation of products and services takes place, and where employees know what they are doing in relation to their work (Liu and Batt, 2005). OJT has become associated with the Japanese approach of Kaizen known as gemba (Japanese word meaning workplace) management training as this practice is considered one of the critical factor of success in terms of increasing the productivity and organisational performance of organisations that have put it into practice (Deming, 1986; Imai, 1986; Conti, 2005; Osono et al., 2008). For both manufacturing and service organisations, the empirical relationship between OJT and increased productivity

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and improved work process performance has been shown in empirical studies for the private sector (Liu and Batt, 2005; Aghazadeh, 2007). However, the literature on this subject has so far made no reference to the public sector. Besides, and as indicated by Gruenber (2004), the effects of training on both the organisations productivity and performance vary depending on the sector in which the training is conducted; hence the importance of lling this gap in the literature. Finally, Zairi (1994) and Herron and Braiden (2006) have all reported that in order for employees to behave effectively in terms of job-related improvement and innovation, the implementation of good HRM practices is required, which includes: interaction and dynamic employee participation; good communication channels; involving employees directly in the improvement efforts to identify and resolve problems; and active leadership by senior and middle management. Referring to this, Aoki (2008, p. 522) concludes that to achieve the transfer of Kaizen improvement and innovation activities between countries, it is necessary to have systematic and formal HRM practices, among which the author indicates as a priority in his study: active communication between employees; discipline in the workplace; and employee involvement through self-led improvement initiatives. 3. Methodology Research was conducted using interpretative-based qualitative methodology and the case study research strategy (Yin, 2003; Stake, 2000), a perspective that was adopted with a view to constructing theory (Eisenhardt, 1989; Eisenhardt and Graebner, 2007). Theory construction was based on studying how the HRO of this public service organisation had implemented Lean-Kaizen for several years (van de Ven and Poole, 1995). Research was retrospective (Leonard-Barton, 1990). Data collection was performed by applying four research methods in the following sequential order: (1) direct observation; (2) non-intrusive participative observation; (3) documentary analysis; and (4) semi-structured in-depth interviews. During data collection, special attention was placed on triangulating the four methods, which converge on the same series of facts. A total of 14 semi-structured interviews were conducted, which helped to corroborate and reafrm what had been obtained from direct observation data and non-intrusive participative observation data. Each interview lasted between 40 and 120 minutes and was transcribed over the ensuing two days to avoid information loss. Interviews were held with the HRO assistant manager, the directors of the areas carrying out human resource recruitment (four in total: employee selection; employee-management services; service provision; operational and organisational structure control). In addition, interviews were held with ve mid-level professionals responsible for the analytical part of the process. The interview processes conclude with four non-career orientated, union afliated, and public service organisation employees working in staff recruitment. A database was constructed to analyse the data along with matrices and networks of the patterns obtained. Similarly, once all the data had been reviewed,

analysed and coded, a rst draft of each case study was written up, and these were submitted to HRO executives and managers responsible for strategic projects and continuous improvement. The revised rst draft of the case study not only helped to validate the data collection process, but also served to identify possible gaps and obtain more data, patterns and opinions relevant to the study. By successively comparing empirical data against the theory to observe possible differences, and then once again analysing eld data, made it possible to create an iterative data analysis process (Pettigrew, 1997). 4. The Lean-Kaizen approach implemented in a human resource service process: a case study 4.1 Public service organisation background This case was set against one of the 60-120 Mexican public service organisations that, according to the literature, still exist in spite of recent political upheavals and changes in the Mexican public environment (Acle-Tomassini and Vega, 1986; Secretara de Gobernacion, 2004). Specically, as already indicated, research focused on and was limited to the experience of one of its service areas, the HRO. At the time of compiling the case documentation, the HRO consisted of approximately 220 employees and was classied as an organisational structure based on Mexicos current Federal Employment Law. In other words, the ofce employed both staff who were trade union members and also specialist personnel (with professional qualications), including the managers of the area in question. The ofce ran ve separate sections or areas that were in charge of administering human resources tasks (Figure 1). Judging from the evidence found, the HRO had a hectic schedule, and was responsible for providing around 40 macro-services (practically all related to administering the human factor, and including nearly 500 micro-services) to a population of 1,200 public service organisation employees (population based throughout the public organisations geographical region). This meant that there was one HRO employee to serve approximately ve internal customers in this region.
HRO Providing services to staff Worker / management liaison Structural & organisational control

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Staff selection

Work operation

Section interfaces Selection & recruitment service process

Muda Process fragmented (between sections)

Muda Excess muda Muda Invisible process (only work of own section perceived)

Figure 1. HRO organisational structure (muda detected)

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As well as its intense activity and public nature, the HRO was also affected by certain characteristics (or effects) of the classical bureaucratic model of its organisational structure and management system. This made it even more difcult for the public services it delivered to comply with the needs and requirements of its internal customers (the operational areas). From the evidence found, these characteristics are described in Table I. 4.2 Denition of the problem The HROs main problem was to do with human resource selection and hiring. Its main aim was to provide support to essential business processes, and so its internal customers were the technical areas of the public service organisation that operated its core process business. After its operations had been observed over two years, it was clear that the HROs internal human resource selection and hiring process was inefcient as regards both timescale and method. There was a direct impact in the form of delays affecting the public service organisations technical transactions, that is, its core process business, resulting in an avalanche of complaints from its internal customers. In particular, the human resource selection and hiring process had a very long cycle time (16 days), and it was unable to meet the needs and time requirements of its internal customers (Figure 2). The service process had become a real operational problem, creating delays in administrative procedures, costs, job insecurity, and great dissatisfaction among its internal customers (the public service organisations technical areas). 4.3 Organisation for improvement (Lean-Kaizen) The origin of this change was the HROs own awareness that it had to improve, given that the crisis of complaints from internal customers was affecting its day-to-day operations. So, on the HROs own initiative a Lean-Kaizen-type management team was formed. The target was to improve and completely overhaul the management system, which would help to solve its main problem (delays in the human resource hiring process). The main actions of this team focused on drawing up an organisational strategy for the work area consisting of a vision, mission, and values. This strategic planning led to the deployment of a series of policies, including specic
Characteristics The staff control (human resources) ofces were created to deal with employeemanagement issues Its structural organisation and functions were designed to respond to administrative commitments to the trade union and also to political guidelines It focused exclusively on strict compliance with employment guidelines, without consistent attention to the objectives of the whole organisation, service quality or internal customer satisfaction Evidence Even here, the feeling is that we only perceive employment problems to be dealt with (E-Ac-4-01) The trade union has a very strong inuence on the HRO, sometimes changes have been tried, but they come to nothing, and since every section works in isolation, theres no continuity (E-Ac-1-00) In my opinion, we dont really stop to think about the quality of service we give; we only see that procedures full the regulations that are currently in place. Our customers, in other words the poor operational areas, put up with a lot from us (E-Ac-6-01)

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Table I. Organisational characteristics of the public companys HRO

Current state Flow diagram of process in current state

Measurement current state Measurements of process in current state Elements measured:

Analysis Find activities that do not add value plus muda

Improved process Reduction of activities that do not add value Improved flow diagram

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Muda

Activities of process (Number) Cycle time of process

Table of activities that do not add value Transfers Decisions 39 19 15 26 16 115

Actor Time Activity

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NO YES

No. of activities = 148 Average cycle time = 16 days

Checks Internal documents Delays Total =

2 Actor Time Activity 3 Actor Time Activity 4 Actor Time

6 Muda 7 Muda and activities that do not add value represented 77.7% of all process activities (148)

Activity No.of activities = 28 Cycle time of process = 14 days

Figure 2. Implementation of Lean-Kaizen in a service process

core policies for the HRO. Each of these specic policies in turn became a strategic objective. This meant that since the HRO already knew in general terms what was hurting it regarding the service it delivered, its main strategic objective focused on improving its staff selection and recruitment process. To close this stage, the Kaizen management team reached the following conclusions: . The human resource selection and hiring process was a core process that was essential for the public service organisation, which directly affected the operation of its core process (in time and costs) and the satisfaction of internal customers. . That this process was in fact a micro-process, and so could be analysed and improved by a Lean-Kaizen redesign methodology. 4.4 Evaluation of the current state (going round the gemba) After investigating and selecting the service process to be improved, the HRO endorsed the internal customers opinions, to take more specic note of their specic needs and requirements. From its ten interviews with the heads of operational areas, it acquired the key data that would guide the application of a Lean-Kaizen-based process redesign methodology. Here, the main demand or requirement that the HRO detected from its internal customers was that the service process for staff selection and recruitment should not take more than ve working days to recruit an employee. This would allow operational areas (internal customers) to operate reliably without affecting its technical processes. To apply the Lean-Kaizen process redesign methodology, a small improvement group had to be formed, consisting of ve HRO members: the heads of the recruitment and operations sections and two employees with a thorough knowledge of the process, and the HROs head of strategic projects and continuous

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improvement. After the improvement group was trained in gemba (specically OJT) using the techniques and basic tools of the process redesign methodology, under the Lean-Kaizen approach, the improvement group took on two basic tasks: it went round the work area (the gemba, in Japanese) to observe the ow and/or sequence of the service process, to detect all possible waste (muda) before analysing it in greater depth. In simple terms, it aimed to enable an improvement group to put its theoretical/practical training of just six hours (three hours each day, on two separate days) to good use by implementing the Lean-Kaizen tools and techniques directly in the gemba, i.e. each employee would have the ability to nd muda and problems in the process and then resolve these problems using the know-how that had been learned on the training course. Specically, depending on what they observed, when the improvement group made their visit to the gemba, as well as detecting muda, they asked staff working on the process about aspects including: do you think the tasks you perform are effective? If not, do you think they could be improved? When processing staff recruitment, are conicts produced with other sections of the HRO? The replies of all employees, plus observations of waste, became the starting point for applying Lean-Kaizen in this process. 4.5 Implementing a virtual production line With all the information from the gemba, the small improvement group held a Lean-Kaizen workshop to redesign the process in question. At this workshop, they analysed the service process, activity by activity, obtaining as a nal product a ow diagram of the process in its current state. This ow diagram formed a guide for the staff involved in the process to estimate the cycle time of the service process before being redesigned. From an analysis of the ow diagram, all activities that did not add value to the process were identied, in addition to the various kinds of waste (muda). An improvement action plan was then designed to minimise or eliminate them. The results of these actions are shown in Figure 2. During the analysis of the service process ow diagram, the improvement group discovered for themselves that one of the main obstacles that delayed the selection and recruitment process, as well as waste itself, was to be found at the interfaces between sections of the HRO. In other words, an interface occurred when the process ow went from one section to another. For example, when the procedure passed from the staff recruitment section to the service provision section, the process ow was obstructed and, as a result, delayed (Figure 1). The main action taken by the HRO improvement group to eliminate the inter-section barriers that were creating these interfaces was to implement a virtual production line of the complete service process (Figure 3). The objective of this improvement action was to increase internal customer-internal supplier relationships (eliminating the barriers). With this idea, put forward by the staff themselves, one of the essential characteristics of Lean-Kaizen was reinforced: that is, that most people are internal customers and suppliers in all organisational processes (the next process is the customer). This improvement action (bringing in the virtual production line) meant that activities that did not add value to the process, along with the muda detected, were totally eliminated (Figure 2). One example of this were all service process activities that created internal documents (ofcial letters, progress notes, intermediate reports, etc.)

Virtual production line (process) 12 Leader 10 8 6 4 Small improvement group 11 9 7 5 3 Staff Process output (service provided contracts delivered)

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Customer service point 1 Process input Applications from internal customer 2

Figure 3. Virtual production line of the service process

justifying delivery of the procedure to the next section in the ofce, the enemy, as some of the actors put it. Internal transfer was also eliminated (from the secretarys ofce to the analyst or between sections) with the unnecessary delay that this caused (excess authorisations that did not add value, etc.). Similarly, it was observed that after the virtual production line was introduced, staff working on it were at rst not used to handing over documentation to colleagues. This was mainly due to uncertainty, or because one was a unionised worker and the other a professional technician. Now in their new situation (the virtual production line), instead of being physically in another section of the public service organisation, they were sitting opposite or beside their colleague, and no longer on the enemy side (physically or organisationally speaking). 4.6 Evaluating the results of implementing Lean-Kaizen As shown in the eld work, with the improvement groups analysis of the process that resulted in the implementation of a virtual production line, a series of standards were established for the process cycle time that were governed by the internal customers request (no more than ve working days). These standards were established, after dialogue between members of the virtual production line on the capacity of the new process ow, the number of activities it contained, resources, and staff capacity and training. It was then agreed to set standards of between one day (1) as the lower limit of specication (simple recruitment) and four days (4), being the upper limit (more specic and complex recruitment), leaving tolerance in the specications (at least ve days). In its tangible results after two years and ve months of monitoring the performance of the virtual production line by the HRO, the process cycle time went down from 16 days to a standard time of between one and four days. In fact, on average 82.5 percent of contracts made during this measurement period fell within the standard (within a range of between one and four days) (Figure 4): this resulted in minimising the problem, in other words decreasing complaints from internal customers (the operational areas). In addition, 77.7 percent of process activities that did not

Percentage of contracts made within the standard

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100 90 80 70 60 50 40

97 87 79 83 82 74 83 89 83 78 76 87 86 74 90 88 82 76 74 84

81 81

402

Total average 82.5%

30 20 10 0 July May June July June April March January October February October January December November September September November December February March April May

Figure 4. Quantitative results of the application of Lean-Kaizen

2000 Annual average 83.7 %

2001 Annual average 82.2 %

2002 Annual average 81.6 %

add value and contained waste (muda) were eliminated, reducing from 148 to only 28 the activities that were really effective and essential for the service provided (Figure 2). 5. Implications and conclusions The implementation of the Lean-Kaizen approach helped the HRO of this Mexican public service organisation to reduce the cycle time of its human resource selection and hiring process, maintaining its performance, adopting a standard set by listening to the customer, as observed in its results (Figure 4). This stabilised the service process and decreased complaints from internal customers. The transfer and implementation of Lean-Kaizen in the service process of a public environment is possible, as shown by the evidence presented in this case: a virtual production line. However, it is important to note that for this transfer and implementation to be achieved with potential benets for the service area, some enablers have to be in place during the implementation process, such as those that appeared in the patterns of this case: . Commitment to and wish for improvement. Great determination by senior management to change and improve their processes and services. . Clear resolve to improve. The establishment of resolve and specic objectives for improvement. . Focus on the simple and practical. Using simple Lean-Kaizen methodologies, techniques, and practices that stimulate the participation and involvement of staff familiar with the process and the service.

Active leadership. Both senior managers and middle management for improvement, going round the gemba and complying with the improvement actions established. The service is outcome/customer/stakeholder-oriented. The focus of the service process and its outcome should concentrate on what the internal customer wants, in order to set standards that help to minimise its degree of intangibility as far as possible. Therefore, it is not enough just to focus the efforts of public service organisations on the citizen-client, but these should also be focused on other stakeholders such as internal customers and even direct clients of the public organisation (Wisniewski and Stewart, 2004; McAdam et al., 2005). Holistic and transversal thinking. Lean-Kaizen facilitates holistic thinking (seeing the whole process) and transversality, breaking down and minimising interdepartmental barriers (interfaces) created by the classical bureaucratic model. Conrming the potential of this approach in terms of public services previously indicated in the literature (Bowland and Fowler, 2000). Establishing a system for measuring service process performance. A key enabler found during the case study was the establishment of a system to measure the performance for the improved service process. This ensured the potential improvement of the process after its redesign, because measuring its performance ensures nding areas of opportunity for improvement (within and beyond the assigned standard). Effective implementation of best HRM practices. Teamwork (small improvement group), effective communication throughout the redesigning process, involvement in the efforts to improve the process, and training in gemba (specically OJT) were all critical enablers in terms of achieving results to improve both the HRO process and service and in achieving greater employee involvement and satisfaction, conrming what has been indicated in the literature in this regard (Liu and Batt, 2005; Aghazadeh, 2007; Osono et al., 2008).

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In addition, a series of inhibitors also appeared which could block the transfer and implementation of Lean-Kaizen in a service process in a public environment. These are: . A classical bureaucratic mode organisational structure, creating small efdoms. . The inuence of trade unions with little interest in change and/or improvement. . Resistance to change by employees who enjoy their own quota of power (inuenced by the trade union) and their own way of doing things in the HRO sections (a legacy of the approach of this kind of area). . A lack of sound professional training in Lean-Kaizen techniques and tools. . A lack of credibility of certain middle management, with these efforts viewed as imposed by a management group in power or as a passing fad. . Excess regulation can block thinking about improvement and quality of services. . Resistance to generating measurement actions as a result of a decient or non-existent measurement culture in terms of service processes performance. . The lack of a strong link between Lean-Kaizen efforts and the HRM best practices required to consolidate them.

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According to the evidence, we can claim that the transfer and implementation of Lean-Kaizen can be an excellent way of improving the performance of service processes, and the corresponding quality of the public services provided to internal and/or external customers. This paper may therefore provide a good example for public managers and other practitioners wishing to implement or continue this process. However, the case as presented makes no attempt to generalise the results obtained, although an analytical generalisation can be made, based on the evidence found. Finally, further comparisons with other case studies or other kinds of methodological focus are required to strengthen the ndings of the study.

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