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The use of lean indicators for operations management in services

Article  in  International Journal of Services Technology and Management · January 2004

DOI: 10.1504/IJSTM.2004.006278 · Source: DBLP

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Int. J. Services Technology and Management, Vol. 5, Nos. 5/6, 2004 465

The use of lean indicators for operations

management in services

Angel Martínez Sánchez* and

Manuela Pérez Pérez
Departamento de Economía y Dirección de Empresas,
Centro Politécnico Superior, María de Luna, 3, Zaragoza 50018, Spain
Fax: +34 976 762 189 E-mail:anmarzan@unizar.es
E-mail: manuela.perez@unizar.es
*Corresponding author

Abstract: This paper develops a framework model of lean indicators to assess

the changes towards leanness in services. The paper also reports the results of a
survey of services located in the Spanish region of Aragon, to identify the use
of these lean indicators as well as some of their driving factors.

Keywords: lean operations; services; company size.

Reference to this paper should be made as follows: Sánchez, A.M. and

Pérez, M.P. (2004) ‘The use of lean indicators for operations management in
services’, Int. J. Services Technology and Management, Vol. 5, Nos. 5/6,
pp.465–478.

Biographical notes: Angel Martínez Sánchez is an Associate Professor of

Business and Production Management at the University of Zaragoza (Spain).
He holds a PhD in Engineering and an MBA. Sánchez has been a Research
Fellow at universities in Europe, North America, Australia and Japan. He has
conducted research and consulted on R&D management, technology policy,
and supply chain management, and has published more than 100 research
papers in national and international journals.

Manuela Pérez Pérez is an Associate Professor of Production and Business

Administration at the University of Zaragoza (Spain). She holds a PhD in
Economics and Business Administration. Pérez has conducted research on
production management, telework, and human resources management, and has
published several articles on these topics.

1 Introduction

The principal objective of leanness is the complete removal of waste in order to achieve
competitive advantages (Womack, Jones, and Roos, 1990). Although the focus of the
early studies on lean production was the automobile industry, the same researchers who
diffuse the concept of lean production stated that the principles of lean production can be
applied equally in every industry (Womack and Jones, 1996). Thereafter, lean production
has been studied in other manufacturing industries (Moore and Gibbons, 1997). On the

Copyright © 2004 Inderscience Enterprises Ltd.

466 A.M. Sánchez and M.P. Pérez

other hand, Lamming (1995) explained that the concepts of lean production have been
clearly developed to include applications in many other areas, not only in manufacturing.
The interest on leanness is mostly based on the empirical evidence that it improves
the company’s competitiveness (Billesbach, 1994; Oliver, Delbridge and Lowe, 1996;
Lowe, Delbridge and Oliver, 1997). The primary goal for introducing a lean production
programme in a company is to increase productivity, reduce lead time and cost, improve
quality, etc. (Sriparavasta and Gupta, 1997). However, according to Ahlström and
Karlsson (1996) it is not always easy to justify the implementation of a lean production
programme due to productivity decreases in the early implementation stages which are
strongly discouraged under the traditional management accounting systems. Therefore,
some intermediate indicators are needed to assess the changes taking place in the effort to
introduce leanness. Some scholars, like Karlsson and Ahlström (1996) have developed
operational models based on the conceptual framework created by Womack, Jones and
Roos (1990) and on case studies in manufacturing companies.
However there are not any studies that have analysed the use of intermediate
indicators to assess operations changes towards leanness in services. In manufacturing
industries, productivity and other performances have a long history of measurement
based on labour hours, capital expenditures, material costs, and outputs. Accurate
measurement of the inputs and outputs in manufacturing is difficult, but the character of
production of many services makes the measurement of inputs and outputs more
problematic (Guile and Quinn, 1988).
This paper wishes to contribute to the empirical literature on lean production with a
study on the use of lean indicators for operations management in services companies.
Following the work of Karlsson and Ahlström (1996) the paper develops a checklist
model of lean indicators which can be useful for services operations, and tests their use
and importance in a sample of services companies. The paper is structured in the
following way: the next section explains the model and the lean production indicators;
the third section shows the results of a survey of services companies on their use of lean
indicators; finally, some concluding remarks and further research are included.

2 A model of lean operations indicators

Lean production is a conceptual framework based on a few established principles and

techniques. Some of them have an exclusive influence on the operations department,
while others require the involvement of different company functions;the rationale behind
is going to lean centres on waste removal both inside and between companies. Womack
and Jones (1996) highlighted the huge amounts of waste that occur in most organisations.
A systematic attack on waste, both within companies and along the supply chains, can
benefit the short run profitability and long-term prospects of companies and
organisations. Few products or services are provided by one organisation alone, so that
waste removal has to be pursued throughout the value stream, i.e. the entire set of
activities across all the firms involved in jointly delivering the product or service.
The lean approach may be briefed into five principles:
 The use of lean indicators for operations management in services 467

• specify what does and does not create value from the customer´s perspective and not
from the perspective of individual firms, functions and departments
• identify all the steps necessary to design, order, and produce the service across the
whole stream to highlight non-value adding waste
• make those actions that create value flow without interruption, backflows, waiting or
scrap
• only make what is pulled by the customer
• strive for perfection by continually removing successive layers of waste as they are
uncovered.
These principles are fundamental to the elimination of waste. The starting point is to
recognise that only a small fraction of the total time and effort in any organisation
actually adds value for the end customer. By clearly defining value for a specific product
or service from the customer’s perspective, all the non-value activities – or waste – can
be targeted for removal step-by-step. The empirical evidence indicates that the
implementation of lean principles should be made gradually (Zayco et al., 1997;
Ahlström, 1998). But one of the main difficulties when companies try to apply lean
thinking is a lack of planning and a lack of adequate project sequencing. For success,
senior managers should (Hines and Taylor, 2000):
• develop critical success factors
• review or define appropriate business measures
• target improvement requirements over time for each business measure
• define key business processes
• decide which process needs to deliver against each target area
• understand which process needs detailed mapping.
The first two steps are very important to the success of the lean implementation process.
Womack and Jones (1996) talked about lean enterprise but very few empirical studies
have addressed the issue of defining appropriate business measures to apply lean
thinking. The model proposed in this paper distinguishes six groups of lean indicators
following the model proposed by Karlsson and Ahlström (1996): elimination of waste;
continuous improvement; multifunctional teams; just-in-time delivery; suppliers
involvement; and flexible information systems. These categories are consistent with other
empirical studies that have tested empirically the core characteristics of a lean production
model in a manufacturing context (Oliver, Delbridge and Lowe, 1996; Sohal and
Egglestone, 1994), while the contribution of this paper is to test its validity in a services
context. The measures included in the analysis indicate the performance of a lean
production system. The determinants of a lean production system are the actions taken,
the principles implemented, and the changes made to achieve leanness. Lean performance
and lean determinants are not the same thing, and this article is focused on lean
performance indicators. Each group derives from common basic lean production
practices which contribute to improve the company’s performance. Companies do not
implement all these groups at the same time but they do it step-by-step. However, we
assume that a company will eventually adopt all these practices. Then the company will
need a comprehensive checklist to assess changes towards lean operations.
468 A.M. Sánchez and M.P. Pérez

The number of indicators in the checklist has been kept to a minimum. The purpose is
to make the model simple to use for small and medium-sized services companies. Some
of the proposed indicators have already been found in the literature on lean production.
Others have been specifically developed for this research. Each indicator has been
defined in order to be more quantitative than qualitative, simple to understand and use,
and based on user control magnitudes (Neely et al., 1997). The next paragraphs briefly
describe each group of lean indicators.

2.1 Elimination of zero-value activities

Inventories are one of the main sources of inefficiency in companies. Generally,
inventories do not add value and should be eliminated whenever possible. Furthermore,
inventories frequently hide other problems, preventing their solution like, for example, a
defective maintenance that compels to accumulate stocks to prevent breakdowns.
Another source of zero-value activities is the movement of documents or other items
around the company. This activity neither adds value to the service, but increases lead
time, which therefore is somehow essential to reduce it. Table 1 indicates several
indicator related to the elimination of zero-value activities in the company.

Table 1 Lean operations indicators of zero-value activities elimination

Indicator Definition Change

W1 Percentage of common activities in the different services ↑
W2 Value of work in progress in relation to sales or output ↓
W3 Inventory rotation ↑
W4 Number of times and distance documents and other items are transported ↓
internally within the company
Notes: ↑ The indicator should increase to progress to lean operations
↓ The indicator should decrease to progress to lean operations

2.2 Continuous improvement

Another lean production principle is the search for continuous improvement (Oakland,
1993). This process requires the involvement of all employees and the support of top
management. Both are necessary to create improvement teams and to train them. Table 2
shows the lean indicators related to continuous improvement. The number of suggestions
per employee and year is a basic measure of the change towards this objective, while the
percentage of these suggestions that are eventually implemented in the company
measures both the top management support and the quality of the suggestions. Therefore,
a lean company may have fewer employees working in quality activities, since all
employees can be in the position to make contributions to achieve the zero defects
objective.

2.3 Multifunctional teams

Work organisation in multifunctional teams greatly facilitates task rotation and flexibility
to accommodate changes in production levels. Table 3 enumerates the indicators used to
 The use of lean indicators for operations management in services 469

assess changes towards multifunctional teams. The first indicator – percentage of

employees in teams – is the usual measure related to an early success or failure of this
programme (Sillince, Sykes and Singh, 1996). The last indicator (MT5) is useful to later
stages of lean operations implementation when team leaders are not elected by
company’s managers but by their own co-workers (Amelsvoort and Benders, 1996).
However, increase in the number of tasks accomplished by each employee, requires a
greater company’s training effort on quality and other activities. Several studies have
found a positive relationship between training and lean operations (Boyer, 1996; Hancock
et al., 1998).

Table 2 Lean operations indicators of continuous improvement

Indicator Definition Change

CI1 Number of suggestions per employee and year ↑
CI2 Percentage of employees’ suggestions implemented by the company ↑
CI3 Savings and/or benefits from the employees’ suggestions ↑
CI4 Percentage of defective services amended by front line employees ↑
CI5 Percentage of time computers and other equipment standing due to ↓
malfunction
CI6 Value of repeated services due to quality problems in relation to sales ↓
CI7 Number of people dedicated primarily to quality activities ↓
Notes: ↑ The variable should increase to progress to lean operations
↓ The variable should decrease to progress to lean operations

Table 3 Lean operations indicators of multifunctional teams

Indicator Definition Change

MT1 Percentage of employees working in teams ↑
MT2 Number and percentage of tasks performed by the teams ↑
MT3 Percentage of employees rotating tasks within the company ↑
MT4 Average frequency of task rotation ↑
MT5 Percentage of team leaders that have been elected by their own team co-workers ↑
Note: ↑ The indicator should increase to progress to lean operations

2.4 Just-in-time delivery

Just-in-time delivery has been a key element in the development of lean operations in
many companies (Hines, 1996). The change towards just-in-time delivery is usually made
step-by-step and therefore one of the indicators in Table 4 makes reference to the
percentage of deliveries that are received just-in-time (D2). There are different
development levels within a just-in-time delivery system, and this is why another of the
indicators (D3) assesses the degree of integration between the supplier’s delivery and the
customer’s operations systems.
470 A.M. Sánchez and M.P. Pérez

Table 4 Lean operations indicators of just-in-time delivery

Indicator Definition Change

D1 Lead time of customers’ orders ↓
D2 Percentage of items delivered just-in-time by the suppliers ↑
D3 Level of integration between suppliers’ delivery and the company’s production ↑
information system
Notes: ↑ The indicator should increase to progress to lean operations
↓ The indicator should decrease to progress to lean operations

2.5 Suppliers involvement

The involvement of suppliers in the design of services may have a positive influence on
the company’s operations. Some scholars (Dyer, 1996) have shown that buyer-supplier
relationships are a source of competitive advantage. The main advantage to the customer
from the supplier’s involvement in services design is that it may help to reduce
development times, and therefore to reduce costs and gain competitive advantage in the
market. The checklist (Table 5) assesses the degree of supplier involvement with the
number of suggestions made to the company’s suppliers (I1). The other group of
checklist indicators deals with information exchange, measured by the number and length
of visits or stays between the personnel of the services company and their suppliers
(I2 and I3) and the number and value of the documents interchanged with suppliers (I4).
An increase in these indicators also represents a change towards lean operations because
it reduces inefficiencies and eliminates activities without value addition (Banerjee and
Srivam, 1995). Similarly, the use of EDI (Electronic Data Interchange) enables more
advantages to the companies with just-in-time delivery (Banerjee and Golhar, 1993).
Finally, another positive influence of supplier involvement is the reduction in the number
of suppliers and the increase in length-contracts (Sohal and Egglestone, 1994), which
enables the suppliers to increase the frequency of just-in-time deliveries (Dyer, 1996).

Table 5 Lean operations indicators of suppliers involvement

Indicator Definition Change

I1 Number of suggestions made to suppliers ↑
I2 The frequency with which suppliers technicians visit the company ↑
I3 The frequency with which company’s suppliers are visited by technicians ↑
Percentage of documents interchanged with the company’s suppliers via EDI
I4
(Electronic Data Interchange) or intranets ↑
I5 Average length contract with the most important suppliers ↑
I6 Average number of suppliers for the most important items ↓
Notes: ↑ The indicator should increase to progress to lean operations
↓ The indicator should decrease to progress to lean operations

2.6 Flexible information system

Lean operations imply a decentralisation of responsibilities to employees and a
simplification in the company’s organisational structure. The efficient operation of a lean
 The use of lean indicators for operations management in services 471

organisation requires the diffusion of information to an organisational level with the

purpose to deliver timely and useful information down to the employees (Womack, Jones
and Roos, 1990; Womack and Jones 1996). Table 6 enumerates the indicators related to
the flexible information system. Besides the frequency and number of meetings, the
checklist also emphasises the employees’ autonomy in the company operations, decision
making, and the existence of written procedures for operations control. Both indicators
are related to the employees’ capacity to perform operations without the supervisor’s
control and information, which simplifies the management of operations and increases
the leanness of the operations process.

Table 6 Lean operations indicators of flexible information system

Indicator Definition Change

S1 The frequency with which information is given to employees ↑
S2 Number of monthly informative meetings that top management has with ↑
employees
S3 Percentage of written procedures for operations control in the company ↑
S4 Number of decisions employees may accomplish without the supervisor’s ↑
control
Note: ↑ The indicator should increase to progress to lean operations

In order to analyse the use of these lean indicators in services, a survey was carried out
among a sample of Spanish services companies. The objective of the survey was to study
the use of lean indicators and their differences according to the company’s size and
operations management objective. The next section explains briefly the methodology of
the empirical study.

3 Methodology

A mail survey was carried out during the first quarter of 2002 among a sample of services
companies located in the Spanish region of Aragón. The population objective included
350 companies. A mailed questionnaire was addressed to the Operations Manager of the
firm. Prior to the actual data collection, a draft version of the initial questionnaire and
cover letter was examined by managers in three different companies, in order to eliminate
confusing questions and identify interpretation difficulties. After a follow-up process and
a second mailing, 108 useful questionnaires were eventually received. The response rate
was 30.8%, which is high considering the response rates of mail surveys in Spain
(Grande, 1996). The statistical distribution of the questionnaires received by industry and
company size (Table 7) indicates that there are no significant differences with the original
population. We also did not find any statistical difference in the size of the respondents to
our first mailing versus those who responded to our second mailing, so we concluded that
there is no significant respondent bias in the study. However, due to the limited sample
size, the empirical results reported next in this paper must be considered to be of an
exploratory nature.
The survey had two main objectives. Firstly, to get to know the use and usefulness of
these lean operations indicators among services companies. Secondly, to find preliminary
statistical relationships between lean indicators. These relationships would suggest a
472 A.M. Sánchez and M.P. Pérez

possible dependence between the lean practices on which those indicators are based.
The next section shows the results followed by their discussion.

Table 7 Sample survey of service companies: distribution by industry

Services Industry No. %

Transportation 12 11.1
Comunications 6 5.5
Trade 29 26.9
Finance 10 9.2
Business and personal services 22 20.5
Hotels 21 19.4
Travel agencies 8 7.4
Total 108 100.0

4 Results

Table 8 shows the descriptive statistics on the use of each lean indicator, as well as the
importance or usefulness given by users and non-users to assess lean operations changes.
The three more used indicators (in more than 70% of the companies) were the level of
customer’s orders (83.3%), the number of suggestions per employee and year (74.1%),
and the percentage of common activities in the different services (70.3%). The less used
indicators (in fewer than 5% of the companies) were the frequency of technical visits to
suppliers (4.6%), and the percentage of team leaders who have been elected by their own
colleagues (0.9%). Regarding the six groups in the checklist, the most averagely used is
just-in-time delivery (47.1% of average use) followed by the elimination of inefficiencies
(46.4%) and continuous improvement (44.4%), while the least used group of indicators is
the involvement of suppliers (14%). Table 8 also shows the percentages of use of each
lean indicator according to the company size. It was expected that larger companies
would use more of these indicators than smaller companies because some lean operations
practices, e.g. flexible information systems or just-in-time delivery, require large
investments in Information and Communication Technologies. Most of the indicators are
used more by large companies than by small and medium-sized companies. Most of these
differences are statistically significant.
Regarding the degree of importance of each lean indicator for operations
management, Table 8 shows that the three most important indicators in the services
companies were the lead time of customers’ orders (D1), the percentage of employees
rotating tasks within the company (EQ3), and the percentage of items delivered
just-in-time by the suppliers (D2). The three less-valued indicators were the average
length contract with the most important suppliers (I5) the frequency of technical visits to
suppliers (I3) and the frequency with which suppliers technicians visit the company (I2).
All these three least important indicators are related to the supplier involvement.
This group of indicators was also the least used in the services companies, and besides
they are the least important among the user companies. The last two columns on the right
of Table 8 indicate that the degree of importance of lean indicators is greater among
 The use of lean indicators for operations management in services 473

larger company users than among smaller companies, and the differences are statistically
significant for most of them.

Table 8 Percentage of use and degree of importance of different lean indicators

Use (% Use in Small Degree of Degree of

Firms) Use in Large Degree of
and Medium Importance by Importance by
Companies Importance
Indicator N = 108 Sized Firms Small Companies Large Companies
W1 70.3 46.2 87.0*** 3.34 2.98 4.43***
W2 50.9 38.4 70.0** 2.83 2.15 3.07**
W3 41.6 23.1 64.8*** 2.94 2.24 3.35**
W4 23.1 3.7 56.1*** 1.57 1.05 2.74***
CI1 74.1 72.1 77.8 3.25 3.04 3.43
CI2 60.2 49.5 85.4*** 2.12 2.24 2.05
CI3 46.2 30.2 61.4** 3.27 2.56 4.15***
CI4 55.5 50.4 58.6 3.14 2.73 3.89**
CI5 25.9 12.3 89.4*** 2.85 2.35 4.32***
CI6 39.8 40.4 37.2 2.38 2.45 2.21
CI7 9.2 7.2 10.9 1.34 1.15 1.42
MT1 27.7 11.4 48.5** 2.95 2.06 3.97**
MT2 26.8 20.9 38.4* 2.67 2.35 3.05
MT3 44.4 31.5 61.4** 3.79 3.12 4.63**
MT4 13.8 11.4 15.2 1.79 1.85 1.62
MT5 0.9 0 2.4 1.34 1 1.55
D1 83.3 74.6 97.5** 4.18 3.57 4.64**
D2 37.9 19.4 68.3*** 3.56 2.15 4.59***
D3 20.3 2.9 48.2*** 2.18 1.38 2.45*
I1 18.5 5.9 39.0** 1.97 1.53 3.10**
I2 5.5 2.9 9.7 1.16 1.13 1.45
I3 4.6 0 12.2 1.24 1 1.63
I4 19.4 4.5 43.9*** 2.18 1.32 2.64*
I5 6.5 1.5 14.6** 1.24 1.11 1.58
I6 29.6 10.4 60.9*** 1.85 1.42 2.87**
S1 50.9 34.3 78.0*** 2.84 2.07 3.73**
S2 37.9 19.4 68.3*** 2.75 1.92 3.54**
S3 60.2 52.2 73.1* 3.45 3.15 4.04
S4 41.6 29.8 70.0*** 2.65 2.15 3.83**
Notes: The acronimes of the variables can be found in Tables 1 to 6
The percentage of use is over the total number of companies in each group
The degree of use of each indicator has been valued with a five-step Likert
scale from 1 (not important) to 5 (very important)
The differences of means in the degree of use and importance have been tested
with the t-student test
*p<0.1; **p<0.05; ***p<0.01
474 A.M. Sánchez and M.P. Pérez

After quantifying the use and importance of each lean indicator in the surveyed
companies, Table 9 shows the results of a contingency analysis to study dependence
relationships among the indicators and their underlying lean operations practices. The
strongest dependence relationship is between the percentage of employees in teamworks
and the number or percentage of tasks accomplished by the teams. This relationship
suggests that there is a progressive transfer of functions and responsibilities as the
teamworks grow in number.

Table 9 Contingency analysis between different lean operations indicators

Chi-square Likelihood
Hypothesis of Indicator Relationship
Test Ratio
Percentage of employees working in teams (MT1) – number and
37.34*** 31.49***
percentage of tasks performed by the teams (MT2)
Number of suggestions per employee and year (CI1) – savings and/or
28.73** 26.24**
benefits from the suggestions (CI3)
The frequency with which information is given to employees (S1) –
25.89* 29.04**
number of suggestions per employee and year (CI1)
Number of suggestions per employee and year (CI1) – percentage of
24.15* 28.41**
implemented suggestions (CI2)
Notes: *p<0.1; **p<0.05; ***p<0.01

Finally, the paper has made a preliminary evaluation of which lean indicators could be
related to the company’s operations focus. The company’s operations focus was assessed
by asking the Operations Manager to distribute 100 points among the objectives of cost,
quality, flexibility and lead time and calculating the standard deviation. When a company
scores 25 points to each dimension the standard deviation is zero which means the
company does not have any operations focus. Then, this value was used as a dummy
(with 0 when the value of the objective is 25 points or less, and 1 if this value is higher
than 25) in a logistic regression analysis to find which operations objective was positively
related to the use of each lean indicator. Table 10 indicates that quality and flexibility
were the most influential operation objectives for the use of lean indicators. Lead time
was the third important objective (3 lean indicators), while the least important was cost
(2 indicators).

Table 10 Lean indicators positively correlated with different operations objectives

Quality Flexibility Lead Time Cost

CI4 MT2 CI5 MT3
D2 MT1 S1 D3
D3 W1 I1 (D2)
S3 CI1 (CI1)
(CI2)
Notes: The acronimes of the variables can be found in Tables 1 to 6.
The indicators shown between brackets were found to be more used by larger
companies than by small firms
 The use of lean indicators for operations management in services 475

Quality explained, for example, the use of the percentage of defective services amended
by front line employees (CI4). Companies which gave more importance to quality as an
operations management objective, were using more intensively this lean indicator since it
emphasises the employees control over the operation process to avoid the delivery of
defective services. Flexibility explained the use of the percentage of employees working
in teams (MT1) and the number and percentage of tasks performed by the teams (MT2).
Companies which used these indicators are those with a focus on flexibility because the
use of teamworking in operations is actually a method to introduce functional flexibility
in the company’s workforce. Lead time explained the use of such lean indicators as the
percentage of time computers are standing due to malfunction, the number of suggestions
made to suppliers and the frequency of giving information to employees. Companies with
a reduced lead time must control any possible breakdown because it would delay
deliveries. They should also take care of suppliers and employees to help them reduce
their delivery times throughout a process of continuous improvement. On the other hand,
the strategic dimension of cost explains the use of two indicators: the percentage of
employees rotating tasks within the company (MT3), and the level of computer
integration with the suppliers. Task rotation allows to overcome such problems like
absenteeism with smaller costs while the use of management information systems with
suppliers reduces cost inventories.

5 Discussion

The critical challenge for managers today is to synchronise the needs of the individual,
the function, the company, and the value stream in a way that will yield the full benefits
of the lean enterprise while actually increasing individual opportunities, functional
strength, and the well-being of member companies (Womack and Jones, 1996).
Achieving this balance will require new management techniques, and principles of shared
knowledge. A way to do this is by developing an integrated framework of management
indicators. In particular, services are more in need of useful indicators to quantify the
performance of business operations.
From the results found in this paper, we can discuss the importance of various lean
indicators to develop operations strategies for different types and sizes of services
organisations. Future work should analyse the casual links between the use of operations
indicators and the company’s competitiveness, as well as the causal relationships between
lean practices and services performance. In the meantime, we can propose some
relationships based on our results that may be useful to the development of a checklist of
lean indicators for services.
We have associated each production indicator with at least one operations objective.
If a positive relationship was found between the use of two lean indicators (Table 9), the
second indicator was also included in the same operations objective group (Table 10).
This way we are able to design integrated groups of indicators according to each
operations objective. Companies that emphasise a specific objective in their operations
strategy may find it useful to include those indicators belonging to that operations
objective in their management information system.
For example, services with a focus on flexibility should control the percentage of
employees working in teams, and the number and percentage of tasks performed by those
476 A.M. Sánchez and M.P. Pérez

teams. Further research would have to be undertaken if there is any positive relationship
between the increase in the number of employees and tasks performed in teams, and the
services flexibility and competitiveness.
Other relationships between the use of lean indicators were tested but they were not
found significant. For example, the number of suggestions made by employees and the
level of information they received was not significant maybe because this information
was not related to the type of suggestions. Similarly, the percentage of team leaders
elected by their own team co-workers and the number of decisions employees may
accomplish without the supervisor’s control were not related indicators, maybe because
both types of decentralisation measures do not have to be implemented at the same time
but separately.
Concerning factors driving the need for using lean indicators, the empirical results
identified company size (measured by the number of employees) as the most important.
Company size is primarily an indicator of overall organisational complexity. Larger
services often had more extensive programmes in continuous improvement or supplier
relationships than the smaller ones. The more complex the services organisation, the
more important it seems to develop and communicate guidelines for operations
improvement or supplier involvement. If an organisation is small, the few people
concerned may simply agree on doing things a certain way, without (formally) labelling
and communicating it as guidelines or formal indicators. However, large-scale services
seemed in greater need of project management activities. When performing operations
where many different elements with a relatively high degree of complexity are involved,
the importance of coordinating development activities between different departments
and/or suppliers must be emphasised.
Another possible driving factor which could be further analysed in a future research is
the overall dependence/reliance on suppliers. One way to measure this dependence is by
purchasing share in turnover (purchasing ratio). The results obtained about the
importance of lean indicators related to supplier delivery and relationship suggest that
this could be another factor to explain the differences in the use of lean indicators.
The more dependent a company is on suppliers for producing and delivering its final
services, the more likely it is to be dependent on suppliers for developing that service.

6 Concluding remarks

This paper has tested the use of a checklist of indicators to assess changes towards lean
operations in services. Only eight out of twenty-nine lean indicators were used by more
than half of the surveyed companies. The results showed that the average use and the
degree of importance of most indicators were significantly greater in the large companies
than in the small and medium-sized firms. Some lean production practices, i.e. flexible
information systems, require resources that smaller firms cannot afford.
The second result of the paper has been to find a statistically significant relationship
between the use of some lean operations indicators. The strongest relationship was
between the percentage of employees in teamworks and the number or percentage of
tasks accomplished by the teams. The development of operations indicators which are
related to the company’s competitiveness is an important issue in the creation of a
management information system since these indicators link the top management strategic
 The use of lean indicators for operations management in services 477

vision and the employees’ actions. Following these results, additional work should be
undertaken in order to analyse the relationship between the use of these – and other – lean
indicators and the company’s competitiveness, as well as lean practices with services
performance. If the use of some indicators is redundant, this information should be taken
into account to design reliable groups of indicators. Those groups which contribute
positively to a company’s competitiveness should be sequentially analysed and
controlled.
The third and last implication is the influence of the company’s operations focus on
the use of lean indicators: quality, flexibility, lead time and cost. A company’s operations
focused on quality or any other dimension is one of the main determinants of
competitiveness for many services companies. However very little is known about the
relationship between the use of operations indicators and a services company’s
competitiveness. The model and the exploratory results contributed by this paper can be
used as a first step to analyse causal relationships between the implementation of lean
indicators to evaluate the competitiveness in services.

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