Lean Solutions: How Companies and Customers Can Create Value And Wealth Together

Lean Solutions: How Companies and Customers Can Create Value And Wealth Together

IndustryWeek takes a few excerpts from the book, Lean Solutions, that won a Shingo Research and Professional Publication Prize for 2006.

Tackling the next generation of Lean, authors Jim Womack and Dan Jones instruct companies on how to apply its principles to consumption.

Excerpts From The Book

We needed to ask what consumers really want in the era ahead. Then we needed to rethink consumption from first principles as a process -- like production, but from the opposite direction -- in order to discover a better way for consumers to obtain the goods and services they now want. We call this improved process lean consumption.

Lean consumption must have a companion process. Firms must provide the goods and services consumers actually want, when and where they are wanted without burdening the consumer. We've used the term "lean production" in the past, but too many managers act as if production stops at the office door or the factory gate. So we now use the term lean provision, which comprises all of the steps required to deliver the desired value from producer to customer, often running through a number of organizations.

As we continued our investigations -- visiting many companies in many industries in many countries -- we began to see that if truly lean provision can be married to truly lean consumption, life can be better for consumers, more satisfying for employees, and more profitable for providers. A win-win-win is possible in which providers, employees, and consumers create lean solutions together.

As we reflected on consumption problems, we began to see five key trends that collectively create the challenge now facing consumers:

  1. Producers are relentlessly adding choices as they "mass customize" their product offerings and steadily increase the number of channels through which products can be obtained. Choice is wonderful but it requires more and more decision time from the consumer.
  2. The regulated economy of the mass production age is steadily contracting. This gives all of us more freedom -- which is good. But it also gives us many more activities to manage and decisions to make: How do we invest our pension funds? Which telecommunications providers do we sign up with? What airline/rental car/hotel combination do we pick? The cost associated with making the right choice from this busy menu can easily exceed the time and energy required to make it.
  3. We are shifting from a service to a self-service economy in which we obtain more and more personal capital goods to manufacture our own value - like the computers, printers, scanners, personal digital assistants, and software that surround us as we write this book. (Our fathers and mothers had secretaries with typewriters; we have PDAs and PCs.) And we don't just obtain these personal capital goods. We must also install, maintain, upgrade, and recycle them, often integrating goods and services from many vendors, using our own time and energy.
  4. Households are changing in every advanced economy in ways that create time and energy pressure for consumers. Workforce participation has risen dramatically, meaning that in two-adult households the member of the household (typically female) who previously managed consumption is now working. And in a growing fraction of households there is only one adult present to earn the living and to manage the consumption. This may mean more money per capita to buy more goods and services, but there is less time to manage them.
  5. The advance of the Internet and information technology are steadily blurring the distinction between consumption and production, often pulling the customer into the provision process. For example, one of our wives recently ordered office equipment online from a well known manufacturer. Due to confusion about a taxpayer identification number, the order was rejected, but no e-mail with this information was sent. When the equipment failed to arrive on the promised day several weeks later, a trip to the web showed that the order had been canceled. When a human was finally reached at the manufacturer's help desk to discuss how this could have happened, the "customer relationship manager" explained that it is now the customer's responsibility to check the Web frequently to make sure the production and shipment process is proceeding to plan. As the wife noted, "I had been appointed operations manager at this company at zero pay, but they forgot to tell me." This widespread trend toward transparency and direct participation by the consumer in the production process is touted by providers as an unalloyed boon. But to busy consumers with other priorities, it often feels like the gift of unpaid work.

By James P. Womack and Daniel T. Jones
Publisher: Lean Enterprise Institute
Pages: 360
Price: $30

To learn more about the book visit www.lean.org

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