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Lean and consumer empowerment

Posted on: Wednesday 21st of December 2011

A video of a talk I gave recently to a conference of lean practitioners has just gone up on YouTube. In it I discuss two themes.

First I argue that, as individuals emerge as managers of their own data and with voice – the ability to express their plans, preferences and specifications to suppliers – the lean goals of making exactly to demand and getting things right first time on time can now be taken to a new level.

There are two ways of thinking about lean. The first, traditional factor, treats ‘the customer’ as an out-there exogenous factor: a source of demand. Under this model, to ‘do lean’ you need to get your own internal processes right and deliver value to the customer but basically it ends there.

The second, emerging viewpoint (long espoused by Dan Jones at the Lean Enterprise Academy) is that a new information sharing relationship with customers means they are no longer strangers and can be involved in the process of value specification, planning, creation and delivery. My point in this talk is that the world is now moving towards this second viewpoint, creating massive opportunities for product and service suppliers to streamline and improve their service delivery.

My second point represents a more fundamental challenge to today’s lean movement. Five years ago, the two great gurus of lean in the west James Womack and Dan Jones, wrote a brilliant book call Lean Solutions. In it, they said “we now know what lean product looks like, but what about lean consumption?”

They wrote: “We need to rethink consumption from first principles as a process – like production, but from the opposite direction – in order to discover a better way for consumers to obtain the goods and services they now want”.

Womack and Jones outlined the core goals of lean consumption thus:

  • solve my problem completely
  • don’t waste my time
  • provide exactly what I want
  • deliver vlaue where I want it
  • supply value when I want it
  • reduce the number of decisions I must make to solve my problems.

This restates, in a different way, the control shift we’ve been talking about for a long time: the shift from an organisation-centric view of value to a person-centric one: where value is defined in terms of helping the individual better achieve what they wants to achieve, rather than in terms of the particular attributes of particular products or services; one which is organised around improving the customer’s metrics.

The challenge is this. While the ‘lean consumption’ idea was spot on, it couldn’t happen then because it is (usually) impossible for one individual supplier to deliver all the necessary ingredients. Most lean solutions require the orchestration of many different inputs from a range of different suppliers. And as long as lean remains an organisation-centric disicpline – focused on improving the operations of one particular firm inside its own boundaries (or perhaps a ‘supply chain’ in its boundaries) – then it can never make the leap to this person-centric approach.

The really new and exciting thing is that the emergence of individuals as managers of their own data, and as the natural point of integration of information about their own lives (see our Personal Data Landscape briefing) means that this integrating, orchestrating role is now becoming possible. And this, in turn, means that lean solutions are now becoming possible too. Information logistics (getting the right information to and form the right people at the right time) is merging with traditional physical logistics; the worlds of lean and consumer empowerment are (slowly) converging.

This is really good news. Why? Faced with the prospect of empowered customers, many organisations just see the downside: higher costs and reduced revenue making opportunities. But by linking of information sharing to lean processes the waste and cost reduction and value creation opportunities mulitply.

This is a whole new arena of innovation that’s just waiting to be explored.

Alan Mitchell