The starting point for Lean Thinking is the (added) value in general. This is defined and specified only by the end customer and must relate to a specific product (whether service or goods). It is also important that the added value is delivered at a specific price and at the required time. Only in this way can the customer be fully satisfied.
A clear division of roles
The added value is created by the "producer". This does not only mean the physical production of a good. It also includes the supply of a service or a combination of both. In most cases, it is very difficult for the producer to understand the customer value added. When executives in large companies are asked about this, cost reduction measures are often mentioned. These include, for example, price negotiations with suppliers or personnel cost savings. In most cases, it is only after specific demand for the product or service that one understands what is meant by customer added value.
The lack of understanding of the customer added value becomes even more apparent when the persons concerned are asked whether they can understand the entire process. This extends from initial planning, through production, to handover to the customer. It becomes problematic when the decision-makers do not know exactly how and what added value they should deliver to the end customer. This is because the entire strategic orientation cannot be based on the end customer. Instead, the focus is placed on the business interests. Thus, decisions are made against a short-term and not end-customer-related background.
Who provides the added value?
Some companies define the customer added value themselves without including the customer. Occasionally, there are examples, such as Apple, in which the company tells customers what they want and need. Most of the time, however, this approach does not work. Usually, this type of definition of customer value added ends up with the customer not accepting the product or not accepting it as hoped. The companies/producers then often blame the lack of acceptance of the product on the fact that the customer is not yet "ready" for the product.
A third approach is the method of the Japanese, from whose production methods "Lean" also emerged. The car manufacturer Toyota in particular has made a significant contribution to the development of lean management with its Toyota Production System (TPS). The first step is to consider and understand the process from order placement/conception of the product to the receipt of money from the end customer. Once this process is understood, the question "What is the customer willing to pay for? Lean Thinking then begins with a precise definition of the customer added value in relation to a specific product. To deliver this, one must ignore the company's existing structures and technologies and think on a product basis. The role of the producer must be clearly defined as "supplier of added value" to the customer. This includes redefining the role of a company's technical experts. One should also rethink where they create value. Realistically, no manager can actually implement all these changes immediately. But it is important to have a clear overview of what you really need.
In summary, the precise specification of value is the crucial first step in Lean Thinking. Delivering the wrong product or service in the right way is still not what the customer actually wanted.