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External and Internal Customers in Lean

How are external and internal customers different?

Lean focuses on the customer. That’s one of its bedrock principles, and is reinforced with every value stream map.

Value for an external customer is fairly easy to pinpoint. If a customer is willing to pay for something, they value it. But if they aren’t willing to pay for it, you have to ask if they really see worth where they say they do. There’s a big difference in the number of ‘yes’ responses if you ask a customer “Would you pay for this feature?” versus “Will you pay for this feature?”

External customers show what they really value with their wallets.

But there is no money exchanged in internal customer-supplier relationships. So the big difference between external and internal customers is cash.

So, the question is, without a monetary transaction, how do you know what an internal customer really values?

It is a virtual psychological impossibility to just ask them. When there is no cost, it is easy to request things. When there is a price, you learn what people truly value.

So, given that Station 6 won’t get away with billing Station 7 for products, what can a Lean company do?

Cross-training and job rotation.

It provides a cost to what people say they value. This week’s customer becomes next week’s supplier. If people know that they’ll be trading places with their supplier soon, they will be reasonable in their expectations. And having reasonable expectations goes a long way toward improving inter-employee relationships and raising job satisfaction.

Now, this isn’t possible in every situation. Paint shops and assembly lines have a hard time rotating employees between them. But that doesn’t mean you shouldn’t use it where it will work.

I’d love to hear about any successes you’ve had in improving internal customer-supplier relationships, especially between functional groups where job rotation doesn’t work?

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By Jeff Hajek

© 2009-2012 by Velaction Continuous Improvement, LLC. All rights reserved.

August 21st, 2009

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