EG7322 Lean EngineeringSession 3: Lean Basics (VoC)Marina MarinelliMEng MSc PhD FHEAm.marinelli@leicester.ac.ukWhat does thecustomerwant?IdentifyCustomers &Specify ValueIdentify & MaptheValue StreamCreate Flow by Eliminating WasteRespondtoCustomerPullPursuePerfectionOptimalResponse toCustomerdemandWhat is the purpose of Lean?IdentifyCustomers &Specify ValueIdentify & MaptheValue StreamOptimalResponse toCustomerdemandLean System1. Define VALUE from thecustomer’s perspective andprovide what they want2. Identify the VALUE STREAM orprocess for each product orservice and reduce or eliminatesteps that do not add value3. Align the value‐added steps sothey FLOW continuously4. Allow the level of customerdemand to PULL the process,i.e. produce only what isordered5. Pursue PERFECTION throughcontinuous improvement1. Define VALUE from the customer’sperspective and provide what they wantLean Principles IdentifyCustomers &Specify ValueWho is your customer?A customer is usually the term used to refer to a current or potential buyeror user of the products of an individual or organisation, called the supplier,seller, or vendor.The term customer also includes by extension any entity that uses orexperiences the services of another.Customers are important1. Provide needs and requirements ‐ foundation for any product.2. Define standards — Beyond requirements, customers describe “how well” aproduct should perform. They provide measurable targets.3. Evaluate products — Customers will accept or reject products based on thedegree to which the products meet their expectations.4. Provide feedback — Customers will comment, complain, recommend, orpurchase a product again.• Getting the exact product or service that they require, in the right quantity,at the right time, with perfect quality and at the right price.What is Value for the customer?• A Value ‐ adding activity is one the customer is willing to pay for.• A Value – adding activity is one that changes the form, fit, or functionof a product.What the customer expectsHow the customer perceives the service receivedCustomersatisfactionPersonal needsPast experienceWord of mouth communicationCommunications put out by the service provider• A Value ‐ adding activity is one is done right for the first time without anyrework.• A moment of truth is an occasion where a customer comes intocontact with the service deliverer (person or object) and experiences agood, neutral or bad reaction.Delight Satisfaction Dissatisfaction DisgustArrive – Wait – Serve – DepartFirst impressionState of order/cleanlinessAccess / clearsignsArrival notedHow longActual vsexpectedFair?Really busy?Opening wordsCourtesyFormalityTransaction correct/complete?Expectations met?Customerasked forfeedbackMoments of truthBanks Restaurants Call-CentresHotels AirlinesThis leads the customer to make a judgement about the quality of theorganisation’s products or services and whether they are of value to them Moment of TruthQuestions to considerCustomer ExperienceLook at cinematimes on websiteWebsite easy to navigate?Convenient times? Good range oftimes?Excellent website, surprisingly, it knew myhome cinema, easy to find showing times, film ison at the time I want – it seems to be beingshown on 5 screens tonightDecide FilmGood synopses available? Othercustomers’ reviews?Buy TicketsEasy to use online ordering system?Expensive?Easy to use purchasing system, remembers lotsof my details from the last visit.Unhappy with high booking feeArrive at cinemaAmple parking? Distance from carto cinema? Pleasant surroundings?Feel like you are going to see a film?Get ticketsIs there a queue? Is the machineeasy to operate? Is it working?Ticket machine is broken. Have to queue withpeople who haven’t pre‐booked. Irritated.Buy drinks &popcornGood range of choices available?Popcorn too salty? Can I get the sizeof drink I actually want?Fresh, tasty popcorn, no queue.. good price.‘Small’ drink is most certainly not small & costs£2.50Links to well written synopsis. no customerreviews though. Looked up film at www.imdb.comExcellent parking, really like the movie murals,starry ceiling & Hollywood walk of fame feelsshowbiz Moments of truthPerformance and delighter features• Expectations leading to satisfaction– Easy to use website– Wide range of cinema times, lots ofshowings of the film• Delighters– Opening webpage at my home cinemaand remembering my customer details– Hollywood style entrance• Broken ticket machine –negates the positive websitebooking experience• Not being able to buy a fairlypriced, fairly sized drinkDissatisfactionVoice of the CustomerWhat does thecustomerwant?Reactive data: customer complaints, compliments, feedback, hotline data,product returns and/or warranty claims.• Most (All?) companies believe they need to provide good customerservice– Loyalty repeat business– Recommendations – new businessThe process of gathering, analysing, and integrating customer inputback into the organization’s operations is called the “Voice of theCustomer” (VOC).VOC data is necessary to determine the gap between thecustomer’s requirements and the current levels of the process.This is also about being proactive andconstantly innovative to capture thechanging requirements of thecustomers with time.•Postal/electronic questionnaires•Telephone interviews•Focus groups / forums• face to face interviews•ListeningRating questions:A rating is assigned on the basis of the score’s absolute position within a rangeof possible values.Voice of the Customer ‐ SurveyFor the following statement, check the appropriate box:The workmanship standards provided by the purchaser are :• Satisfactory• Marginally adequate• Poor Rating scales are easy to write, easy to answer, and provide a level ofquantification that is adequate for most purposes. They tend to produce reasonably valid measures.Please rate your level of service satisfaction by using the following rating scale inresponse to the questions below:Likert and other intensity scale formatsThese formats are usually used to measure the strength of an attitude or anopinion.Intensity scales are very easy to construct. They are best used whenrespondents can agree or disagree with a statement. A problem is thatstatements must be worded to present a single side of an argument.To compensate for the natural tendency of people to agree, statements areusually presented using the converse as well, e.g., ‘The customer servicerepresentative was not knowledgeable”.Please check the appropriate box in response to the following statement:‘‘The customer service representative was knowledgeable.’’• Strongly disagree• Disagree• Neutral• Agree• Strongly agreeVoice of the Customer ‐ SurveyOpen‐ended questions: These are questions that allow the respondents to frametheir own response without any restrictions placed on the response.Voice of the Customer ‐ SurveyA CTQ attribute reflects what the customers of your process cite as absolutely essentialto success. This helps clarify what constitutes a defect in the process.Yes/No questions: they have only few uses. Ideal for dichotomousvariables, such as defective or not defective.Ranking questions: The ranking format is used to rank options according tosome criterion, e.g., importance.Ranking formats are difficult to answer and very prone to errors that caninvalidate all the responses.They should be avoided whenever possible in favor of more powerful formatsand formats less prone to error, such as rating.When used, the number of ranking categories should not exceed five.Voice of the Customer ‐ Survey 12345678910DETRACTORSPASSIVEPROMOTERS HeaddimensionsHeartdimensionsPriceQualityEaseof useunderstands listensshares customer’sprinciplesMeasuring the effectiveness of a serviceHow likely is it that youwould recommendcompany X to a friend orcolleague?Net promoter score (NPS): Percentage of promoters – percentage of detractorsShould bepositive!Voice of the Customer ‐ SurveyAdvantages•Up‐to‐date feedback: It is always useful to acquire insight into how yourcustomers are currently reacting to all aspects of your business.•Benchmark results: You can administer the same survey every so often tocustomers to gain continued insight into your customers. This allows to comparedata over time and benchmark survey data across previous years to determine ifany changes need to be made.•Show that you care: Customers like to be asked for their feedback. It gives thecustomer the perception that your company values them, is committed tokeeping them as a long‐term customer and bases business decisions on theirfeedback.Customer Satisfaction SurveysVoice of the CustomerDisadvantages•Too many surveys: Sending surveys too often can irritate customers, despiteyour reputation for providing excellent products or services.•Privacy Issues: Customers today are hesitant in giving out information thatmay lead to more junk email and unwanted calls.Customer Satisfaction SurveysVoice of the CustomerWaste Activities1. Motion: Operators making movements that are straining or unnecessary,such as looking for parts, tools, documents, etc.https://www.youtube.com/watch?v=dVFtAEDlnRAErgonomic workstation designWasted human motion is related to workplace ergonomics*.Poor ergonomics has perhaps the biggestimpact on safety.Ergonomic injuries comprise more than50% of all workplace injuries.The most important ergonomic risk factorsare posture, force, and repetition.*an applied science concerned with designing andarranging things people use so that the people andthings interact most efficiently and safely.Poor ergonomic design negatively affectsproductivity and quality as well as safety.Productivity suffers when there is unnecessarywalking, reaching, or twisting.Quality suffers when the worker has to strain toprocess or check the work piece because ofreaching, twisting, or poor environmentalconditions.7 Wastes (muda)2. Waiting/Delay: Operators standing idle as machines process a part, equipmentfails, needed parts fail to arrive, etc.It also occurs when there is excessive work‐in‐process (WIP) because of largebatch production, equipment problemsdownstream, or defects requiring rework.In services, customers waiting in queues for service, for delivery,for response…Delays increase lead time —that is, the time between the customer placing and receivinghis or her order—a critical measure in the Lean system.7 Wastes (muda)3. Transportation: Moving parts and products unnecessarily, such as from aprocessing step to a warehouse to a subsequent processing step when thesecond step instead could be located immediately adjacent to the first step.Spaghetti diagramtool for identifying distance covered during thecarrying out of a process or task.7 Wastes (muda)A diagram of the path taken by a product as ittravels through the steps along a value stream.Possible causes:• Inefficient workplace layout• Overly large equipment• Production in batches“prevention not detection ”“quality at source”Defect costs tend to escalate the longerthey remain undetected.7 Wastes (muda)4. Defects: Waste related to making and having to fix defective products.It comprises all material, time, and energy involved in making andrepairing defects.Defects cause internal (Inspection, rework, scrap) and external (warranties,repairs, field service, lost custom) failure processes.5. Over‐processing: Performing unnecessary or incorrect processing, typicallyfrom poor tool or machine design. “Using a hammer to crack a peanut”.In services, overprocessing can have the form of duplication, having to re‐enterdata, repeat details on forms, answer the same queries multiple times….http://www.reliableplant.com/Read/29255/applying-lean-principlesI recently had cause to visit a state government office to conduct somebusiness. Prior to my visit, I decided to do some legwork to see what I wasin for and to ensure that I was prepared for the visit. The website wassimple enough, and I had no problems discovering what I was looking forin preparation. So, I spent 15 to 20 minutes reviewing the website thinking(very incorrectly) that I might save myself some time if I prepared.At this point, I was almost three hours into this process and had accomplished absolutely nothing. Ithen was directed to a set of computers along with my “classmates” to fill out an onlinequestionnaire. Care to venture a guess as to what was mostly on the questionnaire? Well, if youguessed that it was the same set of information that was on the website, told to the woman at thefirst desk, filled out on the paperwork, given to the man teaching the class and then covered by himonce again, you would be absolutely correct.…The next day, I visited the office. I stood in line for almost 30 minutes to finally speak with a womanwho proceeded to tell me the things that I had already read on the website while also asking a seriesof questions that the website had pointed out. She then gave me three pages of paperwork to fillout and directed me to wait “over there” until my name was called.7 Wastes (muda)Let’s review just a minute. What if I had gone online and completed thequestionnaire at that point in time (the first time)? What would that have done?1.I wouldn’t have had to drive (waste of transportation, gas and time).2.I wouldn’t have had to stand in line (waste of waiting).3.I wouldn’t have had to fill out the questionnaire again (waste of processing).4.I wouldn’t have had to listen to the little seminar (waste of a person).5.I wouldn’t have had to fill out the online questionnaire at the office (waste ofprocessing, waste of a person).All of this is on top of the computers and equipment, buildings, overhead, and extrapersonnel standing around.Let’s not forget how I as the customer would have felt about the process.As you apply lean this year, start with your customer in mind and ask this simplequestion before proceeding: How does this process help my customer?6. Inventory: Waste related to the keeping of unnecessary raw materials,parts, and WIP; having more than the minimum stocks necessary for a preciselycontrolled pull system.• Raw material•Work in process• End items7 Wastes (muda)7. Overproduction: Producing ahead/more of what’s actually needed by thenext process or customer (“just in case”).Overproduction means making things that don’t sell.Here are some of the related costs:
Building and maintenance of large warehousesExtra workers and machinesExtra parts and materialsExtra energy, oil, and electricityExtra forklifts, tow trucks, pallets, and skidsExtra interest payments on loans7 Wastes (muda)Overproduction generates and hides other wastes:Motion: Workers are busy making things that nobody ordered.Waiting: Related to large batch sizes.Transportation: Unneeded finished goods must be moved to storage warehouses.Defects: Early detection of defects is more difficult with large batches.Inventory: Overproduction creates unnecessary raw materials, parts, and WIP.If we prevent overproduction we will make major strides toward our goals.Utilising human potential requiresclear communication, culture oftrust and support, interest andinvolvement at the workplace.Underutilisation of people’s skills/ knowledge/ talenthttps://www.youtube.com/watch?v=NJN-lsk_DLUhttps://www.youtube.com/watch?v=dLhWoaTmJY&t=23sTable settingsummary7+1 Wastes (muda)Disconnects which inhibit the flowof knowledge, ideas, and creativity,creating frustration and missedopportunities.Another way to look at waste…Failure DemandThe demand caused by a failure to do something or not do somethingright for the customerWork unnecessarilyloading the systemOverload Longer responsetimesMore failure FAILURE DEMANDIn 2007 a leading UK bank advertised a financial product with a very attractiveinterest rate. Investors were required to complete an application form and existingaccount holders were required to have the investment funds available in theiraccount. A large number of applications for investment followed. The officeprocessing the applications was overwhelmed. Many applicants were still outstandingone month after completing the application form.Many enquiries were made – failure demand. Enquirers were told that the investmentwould be backdated to the application date. After 6 weeks many potential investorshad taken their money out of their accounts. When these applications wereprocessed the transaction could not be completed – failure demand – because thefunds were not available.Letters were then sent out requesting re‐application with sufficient funds – morefailure demand. Many customers had already invested elsewhere.A failure to resource the office adequately or to monitor the flood of applications andadjust resources accordingly led to a huge amount of unnecessary work as well asloss of customers – some probably permanent.A case of Failure DemandNon Value‐Added Activities• Non‐value added activities are described by threeJapanese words: Muda (waste) Activity that consumes resourcewithout adding value• Type 1 – non‐value added activity that is deemednecessary – cannot be eliminated immediately• Type 2 ‐ non‐value added activity that is notnecessary – prime targets for eliminationWasted resources / time / effortMura (unevenness) waste caused by unbalancedworkloadMuri (overdoing) unnecessary overburdening ofor people, equipment or systemsLead timeWasteWasteDegree of variationLow HighLowHighAFTERLEANOperation Trends BEFORELEANThank you
