Mapping Consumption and Provision to Save Time and Money

Lean Enterprise Academy www.leanuk.org

Mapping Consumption & Provision to Save

Time & MoneyDavid Brunt, John Kiff,

Pedro Simão & Ricardo Lopes


Agenda

• The need to define value through the eyes of the customer

• Understanding the value streams in the organisation (provision processes)


What Consumers Want

• How the industry sees it

New Service BodyUsed Parts


• How they see it

What Consumers Want

New Service BodyUsed PartsMobility

Acquisition Maintenance


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”


Value Workshop

• In groups, discuss how you define value that you provide for your customers

• How do you think your customers define value


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


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!


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”


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!


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?


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%


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


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)


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


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


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

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


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

Many Steps, Mostly Waste

6. Authorise

7.Delay call

1.Search for

repairer

2.Book Repair

3.Drive to



25 min.

Value Creating Time Wasted Time


pay8.Drive home

25 min. 15 min.

14. Authorise

10.Book Repair

11.Drive to

facility13.Wait

for loaner car



pay16.Drive

home

25 min. 15 min.

Box Score

Consumer time: 210 min.Value Creating time: 58 min.Value/total time 28%

Second Visit

Was My Experience Really That Bad?

6. Authorise

7.Delay call

1.Search for

repairer

2.Book Repair

3.Drive to



25 min.



pay8.Drive home

25 min. 15 min.

14. Authorise

10.Book Repair

11.Drive to

facility13.Wait

for loaner car



pay16.Drive

home

25 min. 15 min.

Box Score


Second Visit


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

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


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


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


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


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


35 minutes

35 minutes85 minutes

Ref: Womack & Jones, “Lean Consumption” HBR March 2005

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


25 minutes

22 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


207minutes

101minutes




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



Time & Money

Discussion



Time & MoneyDavid Brunt, John Kiff,

Pedro Simão & Ricardo Lopes

Education

Mapping Consumption and Provision to Save Time and Money