Mapping Consumption and Provision to Save Time and Money

Lean Enterprise Academy www.leanuk.org
Mapping Consumption &
Provision to Save
Time & Money
David 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 &
Delivery
Quality &
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 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!

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 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%

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
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

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
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
15.Queue &
pay
16.Drive
home
25 min. 15 min.
Box Score
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
facility
5.Wait for
loaner car
4.Queue,
discuss
problem
25 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
15.Queue &
pay
16.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 parts
1.Answer
call
2.Book
repair
3.Check
in
6.Diagnose
problem
5.Fetch
car
13.Fetch
car
16.Invoice
20 min. 25 min.
24. Call
customer
18.Book
Repair
19.Check
in
22.
Diagnose
problem
21.Fetch
car
25.Carry
out repair
28.Invoice
30 min. 30 min.
Box Score
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

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
13.Fetch
car
16.Invoice
20 min. 25 min.
24. Call
customer
18.Book
Repair
19.Check
in
22.
Diagnose
problem
21.Fetch
car
25.Carry
out repair
28.Invoice
30 min. 30 min.
Box Score
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

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
35 minutes
35 minutes85 minutes
Ref: Womack & Jones, “Lean Consumption” HBR March 2005

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
25 minutes
22 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

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

Mapping Consumption &
Provision to Save
Time & Money
Discussion

Mapping Consumption and Provision to Save Time and Money

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