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Customers

Who is a customer in the modern world? He is demanding. He wants his product immediately. He wants value, but that doesn’t mean cheap. It just means that he wants to feel like he gets a little more for his money. And he wants products that work, and services that deliver on their promises.

These demanding customers are the reason Lean exists at all. The demands they place on companies, and their willingness to vote with their wallets and feet makes continuous improvement a business imperative. If your company does not do it, your customers will quickly find one that does.

The nature of the customer-supplier relationship is getting murkier as the world gets more complicated. Customers trade something to get something. Most often, the customer-supplier relationship is defined by the flow of money. In the old barter systems, it was hard to distinguish who was the supplier and who was making the purchase, but now, the money trail defines the relationship.

Sometimes, though, a customer gets something without paying—for example, free Lean training materials for signing up for a newsletter. Even though that specific exchange had no money, there is an exchange of information that enables a transaction down the road after the relationship is cultivated. That projected exchange of money defines the relationship as one of a customer-supplier.

In addition, two companies often buy from each other. In these cases, when the size of the transactions are more or less equal, the relationship is more of a partnership than a customer-supplier relationship. In most cases, though, one of the parties will buy significantly more from the other.

Customers are the reason companies exist.

One of the reasons that Lean is so effective is that it focuses on the value stream from the eyes of the customer.

The common view of a customer is of the one above—the external person or organization working with yours. The term ‘customer’ gets confusing, though, when it is applied in an internal context. Why? Because the money trail goes cold.

A paint shop may be the customer of a weld shop. Station 4 is the customer of Station 3. But these internal customer relationships have one significant problem. There is no money exchanged to highlight what the customer really values.

When an external customer says that something is important, they have to back it up with a checkbook. If you asked your customer what extra features they would like, they might list 10 of them. It you put those same 10 features on an order form, they would likely check far fewer if they were actually paying for them.

So, for an internal Lean customer—the downstream employee—how much value is reasonable to provide? That’s a hard question to answer—without an exchange to pinpoint what the customer really values. For most people, it is too much of a psychological stretch to spend without actually parting with something of value.

Instead of focusing on that, though, consider job rotations where possible. You may not be able to do it between paint and assembly, but you certainly can within an assembly line. That way, you get a real understanding of what is valued—people have to work on both sides of the transaction, so they will make sure that the expectations are reasonable.

 

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