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Defining Value in LEAN
Defining Value in LEAN
Learn how to define value from the customer's perspective
Learn how to define value from the customer's perspective
Identify the key factors that customers value in a product or service
Identify the key factors that customers value in a product or service
WHY
WHY
In lean philosophy, value is defined as what the customer wants and is willing to pay for. This can be increased by eliminating waste, which is anything that does not add value or that the customer does not want. Quality and flow can also be improved to increase value. Quality refers to how well a product or service meets the customer’s needs and expectations, while flow refers to how smoothly a product or service moves from one step to another until it reaches the customer. Understanding of value can be applied to your own work and organization by understanding what the customer wants and needs, creating solutions that match those needs, improving processes to make them faster, easier, cheaper, and safer, continuously learning from mistakes, and looking for opportunities to grow.
WHO
WHO
Customer: The person or group who buys or uses the product or service
Product Owner: The person or group who represents the customer and defines the value of the product or service
Product Developer: The person or group who creates the product or service that meets the customer’s needs and expectations
Process Owner: The person or group who oversees the process of delivering the product or service to the customer
Process Worker: The person or group who performs the tasks or activities that add value to the product or service
Quality Manager: The person or group who ensures that the product or service meets the quality standards and requirements
Improvement Manager: The person or group who identifies and eliminates waste, improves quality and flow, and fosters a culture of innovation and experimentation
WHAT
WHAT
Value Simplified
This is 100kgs of iron. It’s value is around $100
If you decide to make horseshoes, its value would increase to $300.
If, instead, you decided to make sewing needles, the value would increase to about $ 0.1 Million.
If you decided to produce watch springs, the value would increase to about $11 Million.
Your value is not just what you are made of, but in what ways you can make the best of who you are!
In Lean Philosophy, the customer is at the center of everything. Defining value from the customer's perspective is crucial to the success of any Lean initiative. Value is defined as anything that a customer is willing to pay for, and it is essential to identify and understand what customers perceive as valuable and requires a deep understanding of customer needs, wants, and expectations, which can be achieved through various methods such as surveys, focus groups, and interviews.
To define value from the customer's perspective, it is important to identify the key factors that customers value in a product or service. These factors can be broken down into two categories: must-haves and delighters. Must-haves are the basic features and functions that customers expect from a product or service, while delighters are the features that exceed customer expectations and provide an exceptional experience. Identifying and prioritizing these factors is essential to creating value for customers.
Once the key factors that customers value have been identified, it is important to align the entire organization around delivering that value which requires a shift in mindset from a product-focused approach to a customer-focused approach. All activities and processes should be evaluated to ensure they are aligned with delivering customer value and includes not only the product or service itself but also the sales and marketing processes, customer service, and support functions. By defining value from the customer's perspective and aligning the organization around delivering that value, Lean organizations can create a competitive advantage and drive customer loyalty.
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Article: What Is Value in Lean?
Demonstrate
Demonstrate
Value in lean is what the customer loves or pays for and reason why the customer chooses your product or service over others.
You can make and give more value by getting rid of waste and making quality and flow better.
Waste is anything that does not make the customer happy or that the customer does not need.
Quality is how well your product or service fits the customer’s needs and expectations.
Flow is how smoothly your product or service moves from one step to another until it reaches the customer’s hands.
You can also use value thinking for your own work and organization by listening to the customer’s voice, creating solutions that match their wishes, improving your processes, and always learning.
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