UPFRONT When lean means more

The path that goods travel from producer to customer may be more multi-tracked, super-fast, and highly discounted than ever before – but that doesn’t mean people get what they want, where and when they want it.
As well as dealing with greater profusion of choices and market channels, consumers frequently find themselves travelling the extra mile – either literally or figuratively (eg, filling in web-based order forms, chasing down the vital element that makes that computer work with this printer, trolling miles of shelves in the big-box shop) to complete purchase. And what most customers have least of these days, is time.
Enter the concept of “lean consumption”. It may sound like an oxymoron – but in this case less can and is delivering more both in terms of customer benefits and company profits, according to the guru of “lean”, Daniel Jones.
Chair of the Lean Enterprise Academy and author (with James Womack) of Lean Thinking: Banish Waste and Create Wealth in Your Corporation (Simon & Shuster, 1996), Jones was in New Zealand recently explaining how “lean thinking” can eliminate waste from the processes of consumption as it has in manufacturing – and why that needs to happen.
“These days we’re all managing increasingly complicated consumption tasks – whether it’s our pension or investments or which airline we use – and the one thing we don’t have more of is time. So what is getting squeezed is our leisure time,” he says.
Companies may think they can save time and money by offloading work to the consumer – but the opposite is true. By streamlining systems for providing goods and services and making it easier for customers to buy and use them, growing number of companies are lowering costs while saving everyone’s time, says Jones.
The trick is to make consumption problem-solving process that runs from the customer back rather than assets forward.
“Instead of businesses thinking – I have these assets so how do I push them out there – it’s an approach that focuses on the problems customers have and how best to solve them.”
There are, he says, six basic principles for lean consumption:
1 Solve the customer’s problem completely by ensuring all goods and services work and work together (Jones describes help lines as symptomatic of “failure industry” because their management goal is to minimise the time needed to get the customer off the line while avoiding the hard work of getting to the problem’s root cause);
2 Don’t waste the customer’s time (reconfigure the service supply line to take out customer time and hassles);
3 Provide exactly what the customer wants…
4 exactly where the customer wants it…
5 and when;
6 Continually aggregate solutions to reduce the customer’s time and hassle.
Jones notes that while manufacturers are dealing with fewer suppliers in order to streamline their processes, most consumers are having one-off interactions with an increasing range of suppliers thereby increasing time and energy expenditure.
Citing Toyota as an exemplar of lean thinking, Jones quotes its CEO as saying the company’s success strategy is about process – getting brilliant results from average people managing brilliant process while observing competitors getting average or worse results from brilliant people managing broken processes.
“It’s all about working back from the customer, correctly defining what the organisation is trying to deliver to them and how to do it most efficiently and effectively. Instead of managing those steps as isolated departments or even separate companies – how do we manage that as seamless chain of activities and eliminate what is tremendous amount of waste.”
A good case study for the lean consumption model is UK megastore Tesco which is both growing its market share and increasing customers’ satisfaction levels through systems of rapid replenishment (it collects instead of waiting for deliveries) and broader channel options.
It is moving into old corner stores and using sophisticated replenishment systems, backed by big buyer grunt to deliver goodies where and when they’re needed – as well as building up its internet shopping. Such moves not only save consumer time but reduce environmental pollution as all those consumers’ cars heading for the big box stores represent about two thirds of carbon emissions generated throughout the whole production/consumption cycle, says Jones.
He reckons the big store revolution is peaking – in France they are already losing customers back to the ‘high street’. Not far over the horizon is the need to design less car-dependent communities – and Jones believes business can take lead in redesigning supply chains that function more sustainably.
More information at www.leanuk.org