Systems Thinking

Quit Treating Your Contact Center Like a Manufacturing Plant

Tripp Babbitt
Contributor: Tripp Babbitt
Posted: 07/13/2010

The mass production, economies-of-scale mentality that has a place in the demise of manufacturing in the United States has long been the model copied in contact centers. With more and more manufacturing going away, we are getting former manufacturing managers bringing this mentality to service business. Service is not the same; and copying failed concepts in manufacturing will surely lead to trouble in service.

Mass-production in manufacturing was soundly defeated by better thinking, which post-WWII Japan adopted from the likes of W. Edwards Deming. It wasn’t even close. The United States had all the economies of scale and resources to boot and we lost to a country that was beaten up and had few natural resources. It was possibly one of the greatest upsets in economic history.

Even with this history contact centers have been set up to perpetuate the mass production thinking that was routed in manufacturing. Contact center managers still emphasize activity and not flow.

In part this is the work design, as contact centers are regularly considered stand-alone profit centers. Functionally separated from the rest of the organization, contact centers try to optimize what they can "control," leading to sub-optimization. Customers experience the functional separation of work that results in transfers to other departments, specialists.

The end result for the customer? Frustration.

And the end result for the contact center and the organization it serves is increased costs.

Customers don’t care about your profit center or the other departments; they care about a system that delivers end-to-end service that serves their purpose. Functional separation of work is internally-focused and what matters to the customer becomes secondary or even tertiary.

Management is concerned with the number of calls, how long to handle them and what service level to provide. These are measures similar to the mass-production mindset of manufacturing. They are not representative of the end-to-end measures customers are concerned with when service is provisioned to them.

Additionally, the focus of these measures leads to dysfunctional activity like focusing on reducing costs by outsourcing for lower transaction costs. They ignore failure demand (demand caused by a failure to do something or do something right for a customer) and treat all demand as demand to be worked. This leads to the outsourcing of failure demand and waste.

Now, we even have Lean tools that were developed for manufacturing that are being used in contact centers. Contact centers (and service organizations) have a different problem then manufacturing: variety. The variety of demand in service is greater than manufacturing, and the move to standardize using scripts, best practices, IVRs and technology does not allow for the absorption of variety. When contact centers cannot absorb variety, the result is failure demand.

Demand offers us an opportunity to approach service problems differently than manufacturing. Well-designed work that achieves what matters to customers is what creates value and less failure demand. This requires contact centers to study customer demand and derive new measures pertinent to customer purpose (what matters).

Managers with better customer measures to improve the business can focus their attention on working on the flow and waste (the causes of costs). This is a better approach than focusing on costs, activity reports and functional targets that destroy both value and flow. The paradox is that the focus on flow and waste reduces costs.

Tripp Babbitt
Contributor: Tripp Babbitt
Posted: 07/13/2010

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