“Lean Production”
These five principles are the foundation of the philosophy of “lean production:”
Most businesses now take these principles for granted, assuming they must provide customers with high-quality products at the lowest possible prices. Yet most consumers are still unsatisfied. Lean production was not enough; to make your customers happy, you must apply lean principles to consumption as well.
Five Inexorable Consumption Trends
In its complexity, consumption resembles production. Five trends are shaping the way consumption works:
What Customers Want
Customers want you to address their problems with solutions that are total, permanent, time- efficient, convenient in place and time, and tailored to their requirements. This may require reaching for new alternatives, instead of just shuffling the “options” you now offer.
The technology and the organizational models necessary to provide such solutions already exist. But, to use them properly, you must learn to think about consumption in a new way. It is not an adversarial process involving strangers. Collaborate with your customers to identify, define and resolve problems. Fortunately, because every producer is also a consumer, your personal experience will help you diagnose problems and determine solutions. Having both perspectives matters, because to activate lean consumption, the
“efforts of the consumer must fit together with the efforts of the provider.”
Mapping Consumption Patterns
Mapping the process of consumption step by step can help you understand the value you deliver or destroy at each step. Because consumption and provision are two sides of the same coin, don’t stop at mapping one or the other – map both. Identify all of the steps involved in, for example, a car repair. Once you calculate how much time each step takes, including the time consumers must spend on activities such as waiting and checking the work, you will see the difference between perceived time and clock time.
The map will show you the entire value stream at a glance. Often, the map will reveal that customers are effectively paying a tax of time for your services. This leads to customer dissatisfaction and, eventually, to customer loss. For example, many companies now force customers to engage in “unpaid work,” such as checking shipment and delivery schedules, installing software, maintaining computers and recycling packaging. From the customer’s point of view, this is an inefficient nuisance. “But when these vendors and elements are combined into a single touch-point, the unpaid work in consumer’s lives can be reduced dramatically.”
Linking Consumption and Provision
Forge links between consumption and provision. Re-examine all of your relationships with suppliers and distributors: define value; determine how you will create and deliver it; then, design and implement a new lean process that works for your organization. Together with your customers:
Define the purpose of the process – The process comprises both the customer’s and the organization’s purposes. Production processes that do not achieve both objectives won’t survive.
These five principles are the foundation of the philosophy of “lean production:”
- Offer customers what they want, not what you want to give them.
- Each project or service has a value stream, consisting of all the actions necessary to take it from the initial concept to the hands of the customer. Test each procedure to determine whether it creates value. If it does not, change or eliminate it.
- Make flow continuous by doing away with waiting time and unnecessary inventory.
- Rely on customer pull instead of manufacturer push.
- Keep seeking perfection through these principles.
Most businesses now take these principles for granted, assuming they must provide customers with high-quality products at the lowest possible prices. Yet most consumers are still unsatisfied. Lean production was not enough; to make your customers happy, you must apply lean principles to consumption as well.
Five Inexorable Consumption Trends
In its complexity, consumption resembles production. Five trends are shaping the way consumption works:
- Mass customization offers customers more choices but requires them to put more time and effort into decision-making.
- Deregulation increases both freedom and risk for the customers.
- The economy is moving beyond service to self-service. Customers must invest energy and time in installation, maintenance, upgrading and recycling.
- People have more money and more purchasing power but less time to manage their purchasing decisions.
- The Internet is bringing the customer into the production process. Some companies demand that customers check Web sites to ensure that production and delivery processes are moving along as they should.
What Customers Want
Customers want you to address their problems with solutions that are total, permanent, time- efficient, convenient in place and time, and tailored to their requirements. This may require reaching for new alternatives, instead of just shuffling the “options” you now offer.
The technology and the organizational models necessary to provide such solutions already exist. But, to use them properly, you must learn to think about consumption in a new way. It is not an adversarial process involving strangers. Collaborate with your customers to identify, define and resolve problems. Fortunately, because every producer is also a consumer, your personal experience will help you diagnose problems and determine solutions. Having both perspectives matters, because to activate lean consumption, the
“efforts of the consumer must fit together with the efforts of the provider.”
Mapping Consumption Patterns
Mapping the process of consumption step by step can help you understand the value you deliver or destroy at each step. Because consumption and provision are two sides of the same coin, don’t stop at mapping one or the other – map both. Identify all of the steps involved in, for example, a car repair. Once you calculate how much time each step takes, including the time consumers must spend on activities such as waiting and checking the work, you will see the difference between perceived time and clock time.
The map will show you the entire value stream at a glance. Often, the map will reveal that customers are effectively paying a tax of time for your services. This leads to customer dissatisfaction and, eventually, to customer loss. For example, many companies now force customers to engage in “unpaid work,” such as checking shipment and delivery schedules, installing software, maintaining computers and recycling packaging. From the customer’s point of view, this is an inefficient nuisance. “But when these vendors and elements are combined into a single touch-point, the unpaid work in consumer’s lives can be reduced dramatically.”
Linking Consumption and Provision
Forge links between consumption and provision. Re-examine all of your relationships with suppliers and distributors: define value; determine how you will create and deliver it; then, design and implement a new lean process that works for your organization. Together with your customers:
Define the purpose of the process – The process comprises both the customer’s and the organization’s purposes. Production processes that do not achieve both objectives won’t survive.
- Design metrics – These will show whether the process is serving both purposes. Assess how well the existing process provides precisely what customers demand, when and where they demand it. Calculate wasted time, and analyze costs in reference
to customers’ standards of what they want to pay. - Don’t focus on what ought to be – Focus on what is.
- Test each step – Eliminate steps that do not create value. Conduct statistical analysis
examining the ratio of time spent creating value to total process time, the ratio of work that creates value to total work and the ratio of expenditures that create value to total expenditures.
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