Nowadays, there are a lot of discussions regarding different ways of how companies can create better value delivery processes. In general, it all comes down to understanding your customer’s needs and providing them with as much help as possible.
However, if you want to take things to the next level, your organization needs to become more customer-focused. You can do that by implementing the Lean methodology which relies on delivering value, eliminating waste and continuous improvement. In order to tie that with creating superior customer value, follow the 5 steps below.
1. Understanding and Identifying Customer Value
The first step of the process is to figure out what your customers really want. In reality, they will give you their money, not because of the products that you deliver, but because of the problems that you help them solve. Because of this, you need to direct your team members towards thinking how they can satisfy your customer’s needs every time.
After figuring this out, you need to separate the value-generating activities from the wasteful ones. There are 7 types of waste in Lean and they are categorized as necessary and pure. The former support the value adding activities while the latter can only damage your process.
Understanding and identifying the value that your company brings to your customers will help you keep great connections with them. This way, you will be also able to boost the profits that your business generates.
2. Value Stream Mapping
Once you have understood and identified the value that you bring to your customers, the next step is to stream it from start to finish. In Lean, an easy way to do this is by using a Kanban board.
There, you will be able to visualize the entire cycle of creation to delivery that your product goes through. Along the way, you can find any extra waste to be removed or opportunities for creating additional customer value.
By mapping the value stream, your organization will achieve a lean process where the focus will be on helping your customers with their issues. This will transform you into the problem solver that they have been looking for, which will contribute to increased orders and profits for your business.
3. Optimizing the Workflow
The third step to creating superior customer value is achieved through the optimization of your workflow. Your goal here would to be to create a process that ensures the smooth delivery of any requests for products.
A problem that many companies experience is when they can’t process work due to internal or external factors. This generates waiting time where your team stays idle. Therefore, the delivery of the product is being delayed and you can lose credibility in your customer’s eyes.
According to the “Theory of Constraints” by Eliyahu M. Goldratt, this problems is known as a bottleneck. It means that there is a stage of your process which accumulates more work requests than its throughput capacity.
A solution lies within visualization and optimization. When you map your entire workflow with the help of a Kanban board for example, you will be able to spot where tasks get stuck.
Once you have spotted the issue, you need to optimize your process. A way to do that is by limiting the number of task items that your team is currently working on. In the Kanban space they are known as Work In Progress (WIP) limits. The logic behind them is that you can set them up in different stages of your workflow (using a Kanban board) to restrict the maximum amount of work items that your team is focused on.
If you see that there are too many work requests entering your flow, consider lowering your WIP limits. This way, you will make sure that current tasks are being completed first. Therefore you will be able to deliver value to your customers as fast as possible.
Optimizing your workflow is of huge importance to achieving customer value maximization. Make sure that the requested work goes through a smooth process and you will significantly reduce project delivery times. This will position you as a reliable resource in your customer’s eyes.
4. Creating Customer Value with a Pull Approach
The fourth step to creating superior value delivery is about integrating a pull approach. The idea here is that your team should start new work only where is a demand for it.
There are a lot of companies, especially in manufacturing, where work is processed in waves of large batches. When you are relying on a system where you are producing “just in case”, you are generating additional waste, related to keeping too much inventory. This is an ineffective method because of two reasons.
First, you will experience overproduction which creates additional costs for your business. Second, the amount of value delivery to the end customer will decrease, because your team members will strive to finish their tasks as fast as possible to start working on new ones.
When you integrate the pull approach within your system, you will be able to produce value that is actually needed by the customer. Your team will keep in mind what they have to do next, but their current focus will remain on finishing their existing tasks. This way, you can make sure that every single piece of work that you deliver to the end customer is of great quality.
5. Continuous Improvement
The last step to achieving customer value maximization is by implementing continuous improvement. Your goal should be to always seek ways to improve the processes in your organization.
This can be done by constantly monitoring the workflow in your company and enhancing the value-generating activities while removing as many of the wasteful ones as possible.
Another way to achieve continuous improvement is by always seeking and providing feedback. Make sure that every person of your team is responsible for their own tasks and provide them with tips on how they can improve.
Also, don’t be afraid to seek feedback from you customers. This way, you will be able to continuously refine your processes to the point where they create superior customer value delivery.
Creating customer value is of central significance to any company. It is how organizations separate themselves and achieve competitive advantage in their respective markets. That’s why, you need to make sure that you integrate Lean thinking in the way you deliver value, so you can make your business thrive.