Lean who is the customer

Flexing its purchasing power, it ensures uniform pricing across all its stores. Consumers get what they want where they want it—without paying more for convenience.

For expensive, important items, such as automobiles, consumers typically plan purchases rather than buy on impulse. Encourage customers to share their plans with you and order in advance.

Collaborate with your retailers to presell products at a discount to customers willing to wait for delivery in exchange for desired features and lower prices. Then charge a premium to customers who want a customized product immediately. Over the past 20 years, the real price of most consumer goods has fallen worldwide, even as the variety of goods and the range of sales channels offering them have continued to grow.

Meanwhile, product quality—in the sense of durability and number of delivered defects—has steadily improved. So, if consumers have access to an ever-growing range of products at lower prices, with fewer lemons, and from more formats, why is consumption often so frustrating?

Why do we routinely encounter the custom-built computer that refuses to work with the printer, the other computers in the house, and the network software?

Why does the simple process of getting the car fixed require countless loops of miscommunication, travel, waiting, and defective repairs? Why does the diligent shopper frequently return from a store stocking thousands of items without having found the one item that was wanted? And why is this tiresome process of consumption backed up by help desks and customer support centers that neither help nor support? In short, why does consumption—which should be easy and satisfying—require so much time and hassle?

In fact, however, the opposite is true. In the process, these businesses are learning more about their customers, strengthening consumer loyalty, and attracting new customers who defect from less user-friendly competitors. What these companies are doing has a familiar feel: Just as businesses around the world have embraced the principles of lean production to squeeze inefficiency out of manufacturing processes, these innovative companies are streamlining the processes of consuming.

In the early s we popularized the term lean production to describe the ultra-efficient process management of our exemplar firm, Toyota. We believe it is now time to recognize lean consumption as its necessary and inevitable complement. When a person buys a home computer, for example, this is not a onetime transaction. The individual has embarked on the arduous process of researching, obtaining, integrating, maintaining, upgrading, and, finally, disposing of this purchase.

The way to do this is to tightly integrate and streamline the processes of provision and consumption. The challenge is not simply logistical: Lean consumption requires a fundamental shift in the way retailers, service providers, manufacturers, and suppliers think about the relationship between provision and consumption, and the role their customers play in these processes.

Customers and providers must start collaborating to minimize total cost and wasted time and to create new value. That may seem like a doubtful proposition. But some companies—along with their customers—have started the culture shift that will make lean consumption possible. Some companies—along with their customers—have started the culture shift that will make lean consumption possible. While lean consumption would be a sensible idea in any era, we see several convergent trends that we think make it inevitable and, indeed, a competitive necessity now.

With the regulated economy steadily contracting, consumers have a broader range of decisions to make, from how to invest retirement funds, to what telecommunications provider to use, to what airline to fly at what price. At the same time, they must cope with a growing profusion of choices as producers relentlessly customize their offerings, pursue product niches, and increase their sales channels.

In this demanding environment, information technology is steadily blurring the distinction between consumption and production. Consumers are doing increasing amounts of unpaid work on behalf of providers, such as entering data into Web-based order forms and tracking the progress of their own orders. And these consumers are spending more and more time and energy to obtain and maintain the computers, printers, PDAs, and other technological tools needed to solve routine problems—for themselves and for providers.

This growing burden on consumers might be sustainable if not for the changes consumers themselves are undergoing. Household configurations in every advanced economy are transforming in ways that create additional time pressures and energy drains.

Two-wage-earner and single-parent households, where no one has time to manage consumption, are increasingly common; and aging populations are confronted with an expanding array of choices but have declining energy to address them. Yet the situation also creates a major opportunity for providers.

The concepts underlying lean consumption boil down to six simple principles that correspond closely with those of lean production. For more on these principles, see our book Lean Thinking. Customers obtain goods and services to solve problems in their lives. Instead they search for, obtain, install, integrate, maintain, and dispose of them over an extended period—which is a lot more complicated. Rather, we search at length, find the right item, purchase it, and begin immediately to maintain, repair, and upgrade it over an extended period as our needs change.

This complex process rarely goes smoothly. Consider personal computing, which now involves your camera, your PDA, and your phones. Most of us are less interested in the specific features of all these items than providers seem to think. What we really want is for everything hardware, software, and support services to work together reliably and seamlessly with minimal drain on our time and emotions.

Yet we struggle endlessly with multiple providers of goods and services for our information and communication problems, all of which require our continuous unpaid management. Why is this? Their objective has been ever-greater efficiency in terms of their own resources at patching recurring customer problems.

Their management goal has been to minimize the time needed to get the customer off the line while avoiding the hard work of getting to the root cause of the problem.

Lean consumption principles suggest a radically different approach. Management can then put permanent fixes in place, integrating the various elements of the solution, so that consumers no longer need to complain. This approach has been pursued brilliantly by Fujitsu Services, a leading global provider of outsourced customer service.

Companies that contract with Fujitsu to manage their in-house IT help desks find that the number of calls their desks receive about a recurring problem inside the company—say malfunctioning printers—often falls to near zero.

What Fujitsu does is identify and fix the source of the problem—for example, replace the flawed printers with new ones fit for the particular purpose.

By seeking the root cause of the problem somewhere up the value stream often involving multiple companies , Fujitsu has pioneered a way to eliminate it. Other access options You may be able to access this content by logging in via your Emerald profile.

Rent this content from DeepDyve. Rent from DeepDyve. If you think you should have access to this content, click to contact our support team. Contact us. Please note you do not have access to teaching notes. Recently, we at West Monroe embarked on a project with a global credit card issuer to change this paradigm by connecting the two groups.

We are helping the organization develop a strategy that prioritizes investment only in projects that impact both customer and process alike. By pairing Customer Journey Mapping tools with Lean Process methodologies, we are able to create invaluable links between problem and solution. As shown in Figure 2, we can approach a common situation, such as applying for a new credit card, with the blended framework. We tie Lean principles to Customer Journey Maps to link customer emotions down to root causes.

Customer value is defined as the perception of what products and services are worth to customers. It looks at systems and processes, as well as mindsets and trends linked to customer value. There is growing pressure for manufacturers to meet customer demands and the expectations of customers becoming more complex. Lean principles can be applied throughout the business and can be adapted to help achieve customer satisfaction and create customer value. Here are some ideas on how it can:.

Manufacturers need to develop an understanding of what value s their customers place upon products and services. It is this value that will determine how much money customers are prepared to pay. This principle leads to a top-down target costing which focuses on what customers are willing to pay for specific products and services. So manufacturers can cost their products and service appropriately, eliminate waste and cut cost from their processes to achieve greater profits.

Value stream refers to the entire cycle of a product from the start through to when it reaches the customer. By analysing the value streams and understanding how much waste is created during the delivery of product and services, it can help manufacturers find potential ways of adding additional value to their products and services. The concept also highlights partnerships, where it encourages the building of strong supply chains and customer relationships.