Pillars of Lean, Part 3: Adding Customer Value

In a previous article, This is Your Brain on LEAN, we laid the foundation that we will build on for future articles about building a Lean culture.  In that article we established 3 Pillars of Lean:

 

1. Eliminate Waste

2. Continuous Improvement

3. Adding Customer Value

 

In the last two weeks, we dove deep into Eliminating Waste and Continuous Improvement. This week are diving into Adding Value for our customers.

Remember, understanding these pillars on a deeper level IS WORTH IT. Once you understand and see the implications of lean in your shop, you will jump in with all you’ve got and NEVER look back.

 

Defining Customer Value

First let’s define what “customer value” really is. From my viewpoint, it is giving the customer precisely what they order, precisely when they need it, free from defects, and at the most fair price possible.  

It is giving the customer precisely what they order, precisely when they need it, free from defects, and at the most fair price possible.  

If you read that quickly enough, then it may seem that it is pretty simple and what we all already strive to do currently. However, when you dig in to the roots, you find that providing the value listed above is a serious call to action and challenge. It is much harder than it sounds.

What does it mean for your business to provide perfect customer value?  

It means that you will be the leader amongst your competitors. It means that you will be able to provide an amazing product at an amazing price in a short turnaround time.  

 

Value Points

For this article we will look at the value points and learn about what we can do to get as close as possible to the perfect customer value proposition.

 

  1. Give Them What They Order

  2. Give Them Their Order On time

  3. Give Them Their Order, Defect Free

 

Give them what they order

I remember that early in my career of cabinet making we struggled to get orders complete before they went out the door. Looking back it is crazy to think that we did this, but at the time it seems it was the only way we could keep up.

A customer does not pay us to make multiple trips to their job site, they don’t pay us to recut a board or mislabel a cabinet, or have a broken door that slipped through the cracks.  

The real problem arises when you spend time going back to those incomplete jobs and fixing things. Before you know it, spending time on old jobs makes you get behind on new jobs...and that cycle continues on and on.

Customer value is at the root of all the pillars of lean because by eliminating waste and continually improving, we are adding value for the customer. In short, we are giving them precisely what they order. A customer does not pay us to make multiple trips to their job site, they don’t pay us to recut a board or mislabel a cabinet, or have a broken door that slipped through the cracks.  

order-cabinet-components-online

Wherever the waste lies, the value for the customer gets further eroded. If you don’t take anything else from this series of articles, read that last sentence again because it ties it all together.

 

Give Them Their Order On time

This can often be the hardest one to deliver on. Timely delivery can be the biggest challenge in any manufacturing company.

If there is an area we struggle in our cabinet component company, it is timely delivery. Typically, we can stay on track but occasionally we will fall behind and have to play catch up.  

Do not take running late lightly, as it can erode customer value as quickly as being wasteful. By being behind on schedule, we have to work overtime and often do not have the materials we need when we need them. This causes the unexpected trip to the store to pay more for what we could of got on the next truck from the distributor.  

We have all done it more than we would like to admit, but I encourage you to imagine your operation being on schedule with the materials and goods you need to do your job exactly when you need them.

If staying on schedule is a challenge for your shop, consider reading our article "How to Make it in the Cabinet Industry - Outsourcing" or downloading our resource "How to Choose an Outsource Partner."

 

Give Them Their Order, Defect Free

It is easy to understand how defects erode customer value, but it does much more than that. It erodes your company’s reputation. That kind of erosion is hard to fix if it gets bad enough.  

flat-pack-cabinet-box-components

So how can you reduce defects?  

Do less. Then obsess.  

If you are doing a little bit of everything then it is hard to focus and be great at anything. Find something you are great at and hone your talent and focus on that alone.

Do less. Then obsess.

 

I believe that this, coupled with the crazy high cost to get into cabinet production, has fueled the rise in popularity of outsourcing. It is easier than ever to outsource your manufacturing so you can focus on what your company does best.

Take time today to write down what you do best. Then, give yourself 15 minutes to imagine what it would look like to only focus on that in your shop. If you like what you see, put a plan in place to get there! Don't settle for less.

cabinet-box-components

 

Clear your first hurdle

I hope you have enjoyed this series on the pillars of Lean and maybe it has inspired you to start creating a Lean culture of eliminating waste through continuous improvement to add customer value.  

Let us know when you clear your first hurdle. We want to be a part of your journey!  

Jeff FinneyComment