Creating customer value with Lean Thinking

Blog from WinMan’s Jonathan Davies…

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:

1. Value 
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.

2. Value Stream
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.

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The concept also highlights partnerships, where it encourages the building of strong supply chains and customer relationships. By working on these value streams any waste eliminated, improvements made or operational savings, the additional value can be passed onto the customer.

3. Flow
For manufacturers to truly eliminate waste, they will need to consider flow. If value chains stop, it is inevitable that waste will occur, so value streams need to be continuously working, without stopping. It is most effective when every aspect of production, supply chain, delivery and other elements of the manufacturing process is all working in synchronisation. By carefully designing flow throughout the value chain, manufacturers can minimise waste and increase customer value.

4. Pull 
By adopting a pull approach, manufacturers can create a balance between customer demand and production, as products are made when customers place their orders. This principle requires manufacturers to have a flexible approach, with short cycle times for production and delivery which can be achieved by implementing lean thinking principles alongside an integrated business system.

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5. Perfection 
Lean manufacturers set targets for perfection, with the idea of complete quality management. This type of management allows manufacturers to systematically remove the causes of poor performance from their processes and have a continuous improvement programme in place.

How can CRM systems be utilised to create customer value?
Lean thinking is focused on understanding what demands customers have, and then works by pulling these items through the supply chain of a manufacturer. It’s essential to understand customer expectations when implementing a CRM system.

CRM systems enable manufacturers to provide effective communication when it comes to meeting the needs of their customers; while helping to maintain quality, improve customer satisfaction and add additional value to product and services.

By combining the benefits of CRM systems and lean principles when applied to production, it would address the issue of waste and inefficiencies during the manufacturing process. Resulting in cost and resource savings, which can be reinvested elsewhere within the business or passed onto customers.

Manufacturers can significantly improve customer satisfaction as a result of lean thinking principles. By adopting these principles, manufacturers can create customer value.

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