by Daniel T Jones of Lean Enterprise Academy shown at the Frontiers of Lean Summit 2005 on 31st October 2005 run by the Lean Enterprise Academy

1. Lean Consumption Meets Lean
Provision
Daniel T. Jones
Chairman, Lean Enterprise Academy
Frontiers of Lean Summit
October 31, 2005

2. Toyota’s Lean Strategy
“Brilliant process management is our
strategy.
We get brilliant results from average people
managing brilliant processes.
We observe that our competitors often get
average (or worse) results from brilliant
people managing broken processes.”
Lean Thinking is Process Thinking

3. Lean Principles
• Specify value from the standpoint of the consumer
- (not from your assets and organisation)
• Identify the value stream through the steps
required to create and deliver each product and
remove the wasted steps
• Make the process of value creation flow smoothly
and quickly to the customer
• But only in line with the pull of the consumer
• While pursuing perfection by constantly improving
the product and the value stream
As a result products are getting better and cheaper

4. What is Happening to
Consumption?
• So why is consumption still so frustrating?
– The custom built computer that refuses to work with the
rest of the kit in our home office
– The car repair involving so much waiting and complaints
about work done wrong
– The drive to the big box retailer with thousands of items,
where we fail to find exactly what we are looking for
– The medical procedure that involves so much time
– The business trip with endless queues, handoffs and delays
– The exasperation of “help desks and support centres that
neither help nor support
Consumers are drowning in a sea of brilliant objects

5. Challenges Facing Consumers
• Mass customisation has added to their choices
• The end of regulation has extended the number of
things they have to make choices about
• The self-service economy enables them to buy more
personal capital goods to replace services
• Two-income and single-parent households have less
time to manage consumption
• Ageing households have more time - but less energy
• The internet is blurring production and consumption
and has opened access to a global supply base
Managing household consumption takes more time

6. The Consumer’s Dilemma
• There are more consumption decisions to make
about more categories of products from more
suppliers and channels that all need to be obtained,
installed, integrated, maintained, repaired, upgraded
and recycled
• Plus the evolution of the production process,
facilitated by IT and more personal capital goods
claims more (unpaid) time and energy while blurring
the boundary between consumption and provision
• Most consumers will have less useful time and
energy in the future to manage this consumption
because of changing households and getting older

7. Lean Consumption and Provision
• We now understand that Production (including
design and supplier management) is a process. A
series of actions manufacturers must perform in the
proper sequence to create value for customers
• Consumption is also a process. A series of actions
consumers must perform in the proper sequence to
obtain the value they seek
• Provision is a third process. The actions that
someone must perform between the factory and the
customer to achieve the objectives of both parties
There is a yawning gap between the last two

8. The Consumption Process
• The key is to recognise that consumption not as an
isolated transaction between strangers
• But we need to learn to see that consumption is a
process of steps to enable the consumer to solve
their problem (not the object but it’s use)
• It involves searching, selecting, obtaining,
integrating, maintaining, upgrading, disposing and
replacing many items over time
• Interacting with several providers of goods and
services in a parallel provision process
Let’s follow an example

10. Principles of Lean Consumption
1. Solve the consumer’s problem completely
2. Don’t waste the consumer’s (or the
provider’s) time
3. Provide exactly what the consumer wants
4. Deliver it where it’s wanted
5. Supply it when it’s wanted
6. Continually reduce the consumer’s time
and hassle in solving their problems

11. Provision Processes are Broken
• Growing spending on “new” products, features and
options that fail to attract new customers
• Growing spending to increase customer loyalty as
customers become less loyal
• High out of stocks, lost sales and remaindering
• Larger investments in bigger assets which have a
shrinking ability to create competitive advantage
• Outsourcing customer support so direct contact with
the consumer is lost
• Employee dissatisfaction and high staff turnover
How can we improve provision and consumption?

12. Learning to See Consumption
and Provision
Daniel T. Jones
Chairman, Lean Enterprise Academy
Frontiers of Lean Summit
October 31, 2005

13. Mapping Consumption
• We always start by “Taking a Walk” through the
consumer’s Gemba
• Listing the steps – observing what is happening
• Distinguishing between steps that create value and
those that don’t
• And recording the consumer’s experiences with
each step
• Finally adding up the total “unpaid” time of
consumer

16. Unpaid Work
• What is happening to our Time?
• Personal Time – sleeping, dressing, personal
hygiene and eating – has stayed constant
• Paid Work Time – has declined for most
• Unpaid Work Time – cleaning, household chores,
and obtaining, installing, maintaining and disposing
of the goods and services we need – is rising for all
• Leisure Time – sports, exercise, entertainment,
travel for pleasure, relaxing with friends (and
experiential shopping?) – is being squeezed

17. Mapping Provision
• Again we start by “taking a walk” through the
provider’s Gemba – where value is created
• Listing the steps – observing what is happening
• Distinguishing which steps create value and which
don’t – but this time also paying attention to who is
performing them – in particular to the person who is
creating value – how much of their time is wasted?
• And recording their experiences of each element of
the work – and of their interactions with the
consumer

20. Connecting the Maps
• Lining up the two maps shows us the whole shared
process for the first time – including the points of
interaction between consumer and provider
• We can now see lots of wasted time, lots of
disconnects and lack of communication and
preparation, lots of frustration
• We can also see lots of opportunities for
improvement – although the provider will have to
take the initiative to realise them

22. Broken Processes
• Every one loses –
– Consumers are frustrated by the wasted time and
extra cost they are paying
– Employees are stressed by coping with frustrated
consumers
– Providers do not make an adequate return on
their investment or gain the market share they
could
• Everyone blames Bad People!
• But the root cause of the problem is a bad process
that no one can see or manage

23. “Don’t Waste My Time”
Daniel T. Jones
Chairman, Lean Enterprise Academy
Frontiers of Lean Summit
October 31, 2005

24. Don’t Waste My Time
• Your Time is Free! So it does not matter if you queue!
• Next time you see a queue ask two questions
– Is the amount of work done by the provider reduced
by having customers wait?
– Would there be a queue if the providers had to pay
customers for waiting time?
• We see queues everywhere – at airports, shops etc.
• We also wait for appointments with the doctor or for the
service technician to call
• There are also many queues and time wastes between
providers upstream – waiting for parts, information etc.

25. Wasting Time
• In reality the consumer and the providers time is
wasted by a poorly designed and disconnected
consumption and provision processes
• Mapping both processes and their interactions
reveals this wasted time and cost
• It is also the way to identify and prioritise the
opportunities for win-win collaboration to cut this
wasted time and cost for both parties
• And create a better future state

27. Rules for Saving Time
• Create a dialogue with consumers to understand their
needs and to level demand
• Pre-diagnose the problem to be solved – so you can
pre-order the parts and plan the work
• Save the time of your value creating employees by
– Matching capacity to demand
– Separating types of work into separate streams
– Creating standardised work flows and flows of materials to
support them
• Better outcomes create a virtuous circle with
customers, reduces costs and free up resources to
increase throughput and grow sales and profits