Customer Value is the Primary Goal of #Lean – Never Forget It

Posted on May 3, 2013 | in Change Management, Quality, Small Business, Time Savings | by

pow miaThe National League of Families of American Prisoners and Missing in Southeast Asia was initiated by an uprising of servicemen’s families during the Vietnam War who demanded that action be taken to rescue and recover captured prisoners of war or those missing in action so that family resolution and closure could be achieved. The now famous POW-MIA flag is a symbol of the efforts of both the United States government and the National League of Families to bring prisoners of war or their remains home. The message of “You Are Not Forgotten” rings true in this mission.

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Companies are initially drawn toward certain benefits of Lean – cost savings, cleanliness, organization, high quality, consistent processes. They say “We need to go Lean!” but don’t really have a plan for doing so. They also think it’s something simple to do, like flipping a switch. When the investment of time and money aren’t turning into cost savings, improvements can fall by the wayside and Lean is considered a failure.

However, what is often forgotten by companies/organizations is that they need to focus our processes and improvements on the reason we get paid – by providing value to the customer. We spend our efforts on simply doing things faster or with fewer resources, but the highest priority instead needs to be “What does the customer require from us?”

When it comes to Lean implementation, there is an obsession with the by-products of Lean (moving faster, cost reductions) but they only matter as long as the improvements add value to the customer.

Providing customer value means giving the customer what they want, when they want it, where they want it, in the manner they want it. If you can verify you can do exactly that, why would you try to do or improve anything but that?

Do we already provide what the customer wants? If not, should we?
Can we give the customer what they want in the timeframe they request?
What are the specific requirements of their request? Any special needs? Can we meet them?

The best and most worthwhile improvements come when the improvement not only adds value for the customer but also when it improves the process by which we provide that value. Implementing expensive infrastructure internally (such as a new MRP system or sophisticated automation) might give the customer their value faster, but if it’s not cost effective for us we shouldn’t do it either.

The two worst things an organization can do is a) fail to meet the customer requirements for adding value (slow delivery, provide the wrong product/service, simply fall short of adding value) despite promising to meet it, and b) overhauling infrastructure to meet the customer expectation when it’s not cost effective to do so.

So never forget – we must know what adds customer value first. We only learn that from the customer. THEN we determine what needs improvement after we find out. It all starts with the customer. The suppliers who can achieve delivery of that value while providing it in the most efficient and cost effective way possible will reap the biggest benefits of doing so.

 

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