mapping consumption and provision to save time and money
DESCRIPTION
by David Brunt and John Kiff of Lean Enterprise Academy with Pedro Simao and Ricardo Lopes of Grupo Fernando Simao shown at the Frontiers of Lean Summit 2005 on 31st October 2005 run by the Lean Enterprise AcademyTRANSCRIPT
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Lean Enterprise Academy www.leanuk.org
Mapping Consumption & Provision to Save
Time & MoneyDavid Brunt, John Kiff,
Pedro Simão & Ricardo Lopes
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Lean Enterprise Academy www.leanuk.org
Agenda
• The need to define value through the eyes of the customer
• Understanding the value streams in the organisation (provision processes)
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Lean Enterprise Academy www.leanuk.org
What Consumers Want
• How the industry sees it
New Service BodyUsed Parts
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Lean Enterprise Academy www.leanuk.org
• How they see it
What Consumers Want
New Service BodyUsed PartsMobility
Acquisition Maintenance
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Lean Enterprise Academy www.leanuk.org
Value - in the Eyes of the Consumer
Acquisition• “The right car in
the right place at the right time”
• At the right price
Maintenance• “Fixed right first
time on time”• At the right price
Not Measured!Not Measured!Quality &DeliveryQuality &Delivery “Customer
Fulfilment”
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Lean Enterprise Academy www.leanuk.org
Value Workshop
• In groups, discuss how you define value that you provide for your customers
• How do you think your customers define value
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Lean Enterprise Academy www.leanuk.org
Service
How customers are treated
Information, Care,
Consideration
Convenience
Ease of the Event
Distance, Time,
Remembering, etc.
Value:Extending the Concept
Quality &Delivery
Acceptable
Price
Right First Time
On Time
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Lean Enterprise Academy www.leanuk.org
The Kano Model
“basic”“performance”
“delighter”
Neutral
Delight
Dissatisfaction
Degrees of Customer
Satisfaction
Absent PresentAttribute
But today’s ‘delighter’s’
become tomorrow’s ‘basics’ !!
Human, personal, value-adding–Different aspects each time–Not a replicable ‘formula-solution’
The basis of real relationships!
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Lean Enterprise Academy www.leanuk.org
Satisfaction & Retention- An Asymmetric Link
• Satisfaction (in itself) does not necessarily deliver loyalty or retention
• Avoiding dissatisfaction is more important in order to avoid disloyalty
Ref: Anderson & Mittal, Journal of Service Research, 2000
“Dissatisfaction has a greater impact on repurchase intent than
satisfaction”
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Lean Enterprise Academy www.leanuk.org
So for Loyalty / Retention... ...Priority Should Be:
• Focus on:• Doing what we said we were going to do, or• On what customers basic expectations are
• Focus on the process and…• Getting it ‘Right First Time on Time’
• i.e. Customer Fulfilment
• Leaner processes (better Q&D, lower cost)• Release resource for customer handling
Therefore it’s vital to measure our ability to do this!
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Lean Enterprise Academy www.leanuk.org
Customer Fulfilment Summary
I D UK • New Cars 48% 55% 52%• Used Cars 60% 84% 68%• After-Sales 80% 66% 64%• A-S Revisits n/a 60% 51%
Source: © ICDP Customer Fulfilment Dealer Survey
Did Every Step of the Process Go Right First Time On Time?
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Lean Enterprise Academy www.leanuk.org
Reasons for Lack of CFUsed Car Sales, Brand B: Autumn 2000
Problems with Fin. docs or
funding3% Customer failed
to provide insurance
details, address etc
20%
Mech./ Elec. failure
(Warranty)7%Spec. failure
after 1 month3%
Inadequate Valet23%
Spec item incorrect or missing at handover
7%
Inadequate Prep7%
Spec. failure at handover
17%
Delay due to Prep process &
planning13%
Overall CF for period: 69%
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Lean Enterprise Academy www.leanuk.org
Lean Thinking Principles• Specify what creates value from the
customers perspective • Identify all steps across the whole
value stream• Make those actions that create
value, flow• Only make what is pulled by the
customer just-in-time• Strive for perfection by continually
removing successive layers of waste
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Lean Enterprise Academy www.leanuk.org
The Essence of Lean Thinking
• Where is the time in your value stream?• e.g. A U.K. customer has to wait on average 43
days for their custom-built vehicle to arrive• It takes under 30 hours to produce in the
factory!!!
“All we are doing is looking at the time line - from the moment the customer gives us an order
to the point where we collect the cash. And we are reducing that time line by removing the
non-value-added wastes” Ohno (1988-ix)
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Lean Enterprise Academy www.leanuk.org
Improving Provision is Just the Start
• We can apply the logic of lean production to how we use products and services
• By learning to see consumption as a process we can improve the products and services we provide
• Benefiting the provider and the consumer
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Lean Enterprise Academy www.leanuk.org
Principles of Lean Consumption
• Solve the consumers problem completely• Don’t waste the consumer’s (or the
provider’s) time• Provide exactly what the customer wants• Deliver it where it is wanted• Supply it when it is wanted• Continually aggregate solutions to reduce
the consumers time and hassle
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Lean Enterprise Academy www.leanuk.org
Learning to See Consumption• The customer’s gemba is the path they follow to
solve their problems• See all the steps the consumer must perform to:
• Research• Obtain• Install• Integrate• Maintain• Repair• Upgrade• Recycle
• The goods & services needed to solve their problem
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The Long & Winding Repair Path
6. Authorise
7.Delay call
1.Search for
repairer
2.Book Repair
3.Drive to
facility5.Wait for loaner car
4.Queue, discuss problem
25 min. 5 min. 20 min. 10 min. 20 min.8.Queue &
pay8.Drive home
25 min. 15 min.
14. Authorise
10.Book Repair
11.Drive to
facility13.Wait
for loaner car
12.Queue, discuss problem
5 min. 20 min. 5 min. 20 min.15.Queue &
pay16.Drive
home
25 min. 15 min.
Box Score
Consumer time: 210 min.
Second Visit
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Many Steps, Mostly Waste
6. Authorise
7.Delay call
1.Search for
repairer
2.Book Repair
3.Drive to
facility5.Wait for loaner car
4.Queue, discuss problem
25 min.
Value Creating Time Wasted Time
5 min. 20 min. 10 min. 20 min.8.Queue &
pay8.Drive home
25 min. 15 min.
14. Authorise
10.Book Repair
11.Drive to
facility13.Wait
for loaner car
12.Queue, discuss problem
5 min. 20 min. 5 min. 20 min.15.Queue &
pay16.Drive
home
25 min. 15 min.
Box Score
Consumer time: 210 min.Value Creating time: 58 min.Value/total time 28%
Second Visit
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Was My Experience Really That Bad?
6. Authorise
7.Delay call
1.Search for
repairer
2.Book Repair
3.Drive to
facility5.Wait for loaner car
4.Queue, discuss problem
25 min.
Value Creating Time Wasted Time
5 min. 20 min. 10 min. 20 min.8.Queue &
pay8.Drive home
25 min. 15 min.
14. Authorise
10.Book Repair
11.Drive to
facility13.Wait
for loaner car
12.Queue, discuss problem
5 min. 20 min. 5 min. 20 min.15.Queue &
pay16.Drive
home
25 min. 15 min.
Box Score
Consumer time: 210 min.Value Creating time: 58 min.Value/total time 28%
Second Visit
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Lean Enterprise Academy www.leanuk.org
Learning to See Provision• Record all the steps taken & the amount of
human effort expended by employees• As we walk look for the interconnections
between consumption & provision• Where consumer & provider directly engage
each other• Group steps into blocks of actions
whenever they occur as a flow• A rapid sequence
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Should the Repair Shop be Repaired?
8. Call customer
9.Seek parts1.Answer
call
2.Book repair
3.Check in
6.Diagnose problem
5.Fetch car
25 min. 5 min. 20 min. 40 min. 10 min.13.Fetch
car16.Invoice
20 min. 25 min.
24. Call customer
18.Book Repair
19.Check in
22.Diagnose problem
21.Fetch car
5 min. 15 min. 5 min. 10 min.25.Carry out repair 28.Invoice
30 min. 30 min.
Box Score
Consumer time: 220 min.Value Creating time: 35 min.Value/total time 16%
Second Visit
4.Car to store 7.Estimate
10. Check parts availability11. Car to store12. Call customer
14.Repair car
15. Car to store
17.Hand over
20.Car to store
23.Parts list
26.Road test
27.Car to store
28.Hand over
Value Creating Time Wasted Time
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Why Isn’t Work More Satisfying?
8. Call customer
9.Seek parts1.Answer
call
2.Book repair
3.Check in
6.Diagnose problem
5.Fetch car
25 min. 5 min. 20 min. 40 min. 10 min.13.Fetch
car16.Invoice
20 min. 25 min.
24. Call customer
18.Book Repair
19.Check in
22.Diagnose problem
21.Fetch car
5 min. 15 min. 5 min. 10 min.25.Carry out repair 28.Invoice
30 min. 30 min.
Box Score
Consumer time: 220 min.Value Creating time: 35 min.Value/total time 16%
Second Visit
4.Car to store 7.Estimate
10. Check parts availability11. Car to store12. Call customer
14.Repair car
15. Car to store
17.Hand over
20.Car to store
23.Parts list
26.Road test
27.Car to store
28.Hand over
Value Creating Time Wasted Time
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Car Repair Before Lean Processes7.Queue & pay, receive car
8.Drive home
1.Search for repairer 2.Book appointment 3.Drive to facility
5.Wait for loaner car
4.Queue, discuss problem, hand over car
1.Answer phone 3.Check in
4.Car to storage5.Fetch loaner6.Pass to w/shop
7.Pass to tech.8.Diagnose problem
9.Check parts10.Car to storage11 Pass to office
12.Pass to serv rep
14.Pass to w/shop
13.Phone customer discuss diagnosis
18.Road test
15.Pass to tech16.Collect parts17.Repair car
19.Car to storage20.Pass to office
21.Pass to serv rep
25.Park loaner
22.Invoice23.Fetch car24.Hand over car
6.Discuss, authorise repairs
5 minutes
25 minutes
Con
sum
erP
rovi
der
5 minutes
2.Book appointment
Value Creating Time
Wasted Time
Technician’s Time
5 minutes 45 minutes
25 minutes
10 minutes
38 minutes 14 minutes
35 minutes
35 minutes85 minutes
Ref: Womack & Jones, “Lean Consumption” HBR March 2005
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Car Repair After Lean Processes1.Book appointment 2.Discuss problem 3.Drive to facility
5.Wait for diagnosis confirmation, authorise repair
4. Hand over car
1.Book appointment 9.Deliver parts10.Collect car
11.Repair car
12.Road test
13 Park car
15.Hand over car16.Park loaner
6.Receive car
5 minutes
5 minutes
Con
sum
erP
rovi
der
15 minutes
2.Discuss problem, create repair plan
Value Creating Time
Wasted Time
Technician’s Time
10 minutes 45 minutes
25 minutes
22 minutes
54 minutes 7 minutes
Ref: Womack & Jones, “Lean Consumption” HBR March 2005
3.Order parts
4.Fetch loaner
5.Receive car6.Confirm diagnosis7.Park car8.Update plan
14 Invoice
7.Drive home
Con
sum
erP
rovi
der
Time Saved120minutes
69minutes
53%value-creatingtime
94%value-creatingtime
207minutes
101minutes
27%value-creatingtime
59%value-creatingtime
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Lean Enterprise Academy www.leanuk.org
Summary• Lean Thinking on your existing processes
is just the start• Define value through the eyes of the
customer• Develop a value stream plan for each value
stream that will improve flow• Transfer the logic into developing new
products and managing the customer’s consumption experience
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Lean Enterprise Academy www.leanuk.org
Mapping Consumption & Provision to Save
Time & Money
Discussion
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Lean Enterprise Academy www.leanuk.org
Mapping Consumption & Provision to Save
Time & MoneyDavid Brunt, John Kiff,
Pedro Simão & Ricardo Lopes