Mapping Consumption and Provision to Save Time and Money

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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 Academy

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Mapping Consumption and Provision to Save Time and Money

  1. 1. Lean Enterprise Academy www.leanuk.org Mapping Consumption & Provision to Save Time & Money David Brunt, John Kiff, Pedro Simão & Ricardo Lopes
  2. 2. 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)
  3. 3. Lean Enterprise Academy www.leanuk.org What Consumers Want • How the industry sees it New Service BodyUsed Parts
  4. 4. Lean Enterprise Academy www.leanuk.org • How they see it What Consumers Want New Service BodyUsed PartsMobility Acquisition Maintenance
  5. 5. 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 & Delivery Quality & Delivery “Customer Fulfilment”
  6. 6. 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
  7. 7. 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
  8. 8. Lean Enterprise Academy www.leanuk.org The Kano Model “basic” “performance” “delighter” Neutral Delight Dissatisfaction Degrees of Customer Satisfaction Absent Present Attribute 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!
  9. 9. 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”
  10. 10. 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!
  11. 11. 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?
  12. 12. Lean Enterprise Academy www.leanuk.org Reasons for Lack of CF Used Car Sales, Brand B: Autumn 2000 Problems with Fin. docs or funding 3% Customer failed to provide insurance details, address etc 20% Mech./ Elec. failure (Warranty) 7%Spec. failure after 1 month 3% Inadequate Valet 23% Spec item incorrect or missing at handover 7% Inadequate Prep 7% Spec. failure at handover 17% Delay due to Prep process & planning 13% Overall CF for period: 69%
  13. 13. 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
  14. 14. 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)
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. The Long & Winding Repair Path 6. Authorise 7.Delay call 1.Search for repairer 2.Book Repair 3.Drive to facility 5.Wait for loaner car 4.Queue, discuss problem 25 min. 5 min. 20 min. 10 min. 20 min. 8.Queue & pay 8.Drive home 25 min. 15 min. 14. Authorise 10.Book Repair 11.Drive to facility 13.Wait for loaner car 12.Queue, discuss problem 5 min. 20 min. 5 min. 20 min. 15.Queue & pay 16.Drive home 25 min. 15 min. Box Score Consumer time: 210 min. Second Visit
  19. 19. Many Steps, Mostly Waste 6. Authorise 7.Delay call 1.Search for repairer 2.Book Repair 3.Drive to facility 5.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 & pay 8.Drive home 25 min. 15 min. 14. Authorise 10.Book Repair 11.Drive to facility 13.Wait for loaner car 12.Queue, discuss problem 5 min. 20 min. 5 min. 20 min. 15.Queue & pay 16.Drive home 25 min. 15 min. Box Score Consumer time: 210 min. Value Creating time: 58 min. Value/total time 28% Second Visit
  20. 20. Was My Experience Really That Bad? 6. Authorise 7.Delay call 1.Search for repairer 2.Book Repair 3.Drive to facility 5.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 & pay 8.Drive home 25 min. 15 min. 14. Authorise 10.Book Repair 11.Drive to facility 13.Wait for loaner car 12.Queue, discuss problem 5 min. 20 min. 5 min. 20 min. 15.Queue & pay 16.Drive home 25 min. 15 min. Box Score Consumer time: 210 min. Value Creating time: 58 min. Value/total time 28% Second Visit
  21. 21. 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
  22. 22. Should the Repair Shop be Repaired? 8. Call customer 9.Seek parts 1.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 car 16.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 availability 11. Car to store 12. 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
  23. 23. Why Isn’t Work More Satisfying? 8. Call customer 9.Seek parts 1.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 car 16.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 availability 11. Car to store 12. 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
  24. 24. Car Repair Before Lean Processes 7.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 storage 5.Fetch loaner 6.Pass to w/shop 7.Pass to tech. 8.Diagnose problem 9.Check parts 10.Car to storage 11 Pass to office 12.Pass to serv rep 14.Pass to w/shop 13.Phone customer discuss diagnosis 18.Road test 15.Pass to tech 16.Collect parts 17.Repair car 19.Car to storage 20.Pass to office 21.Pass to serv rep 25.Park loaner 22.Invoice 23.Fetch car 24.Hand over car 6.Discuss, authorise repairs 5 minutes 25 minutes ConsumerProvider 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
  25. 25. Car Repair After Lean Processes 1.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 parts 10.Collect car 11.Repair car 12.Road test 13 Park car 15.Hand over car 16.Park loaner 6.Receive car 5 minutes 5 minutes ConsumerProvider 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 car 6.Confirm diagnosis 7.Park car 8.Update plan 14 Invoice 7.Drive home ConsumerProvider Time Saved 120 minutes 69 minutes 53% value- creating time 94% value- creating time 207 minutes 101 minutes 27% value- creating time 59% value- creating time
  26. 26. 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
  27. 27. Lean Enterprise Academy www.leanuk.org Mapping Consumption & Provision to Save Time & Money Discussion
  28. 28. Lean Enterprise Academy www.leanuk.org Mapping Consumption & Provision to Save Time & Money David Brunt, John Kiff, Pedro Simão & Ricardo Lopes

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