Drawing in the Customers and their investment needs, then Suppliers is like the first steps of a Sipoc Map. (Suppliers, Inputs, Processes, Outputs and Customers)
But now we pause to consider our purpose before we map.
Why purpose? Well without it we will collect lots of data and become swamped by it, sucked into the enticing comfort zone of data collection. Alternatively if we understand the process and meet the people that are involved then we can always go back if our purpose changes.
Remind ourselves which investment needs are the most important? Which are your competitors better than you at achieving? What will make your customers buy more at lower cost to you, more repeat business and tell their friends and colleagues to buy? Where can you gain a sustainable competitive advantage?
When you have that purpose, that lens through which to look, it's time to go and look at the processes. Go to where it happens: the coalface, the Gemba. Meet the people, understand what they do, what works well and what doesn't. Remember to look with your customers' investments, that lens as you see.
What would those customers think of this if they saw it?
What if a TV company came to visit, a regulator?
Above all understand it. Collect the data that is relevant , especially who is involved, as well as process times, cycle times, queuing times and whatever else seems relevant to your purpose. Capture it on paper because it is more flexible than a screen. Time to digitze it later if you want to do so.
Make sure if you are a member of a team that at least one of you knows the whole stream from supplier to key investment need. If you piecemeal it you'll miss something! Look and listen for those opportunities to improve.
Listen to this blog at http://audioboo.fm/boos/893637
Saturday, 21 July 2012
Thursday, 12 July 2012
Value Investment Stream
So, lets start with the customers. Take a large piece of paper. A3 is the minimum you should start with, you will always need it bigger than this but that comes with more understanding.
And let’s remember now that understanding is the key here. The Map will help you understand where and how to get better.
On the right hand side place the real end user about a third of the way down the paper. Name them and draw a left hand looking eye, to remind us that we should always be looking at this map from their viewpoint, through the lens of the investments that they make. Just in front of that eye list out the investments that you identified for them in a vertical line, highest importance at the top, lowest at the bottom. If some were negligible then cull that and just add a footnote somewhere near the bottom of the paper in tiny writing.
When you have done that draw another eye to the left of the Investments you have listed, and below them, for the customer further “up” the stream and name them. So for instance that could be the retailer after you have already done the end user for a consumer item. Now list their investments, high to low as before.
Keep moving down and left with your “closer customers” and their investment needs.
If you have another set of customer type add them in back on the right hand side.
In the picture you’ll see I’ve added commercial cleaning companies on the bottom of the map looking at washing powder and the description above has been marked as steps 1 though 4 in red.
Next we'll list out your enterprise's suppliers... on the left hand side, in the next blog.
Saturday, 7 July 2012
In the last piece I introduced the
Value Investment Mapping Process. It explained the concept that the Investment
that a customer makes in you when they purchase is only partially represented
by the money that they pay to buy the features of your product.
Let’s spend a little time talking about customers. Those with a marketing background will already know that the market is made up of a number of different customer types, or segments. This varies greatly by product and industries but customer types that you may need to consider are:
o Original Equipment Manufacturers (OEM)
o Non OEM service companies
o Early adopters
o Corporate buyers
o Their Parents
For each customer you should understand their importance to your business and what is the investment they make in your offering.
Think through who your customers are as well from the point the product leaves you and reaches your end user:
o Retail premises
If you have a complex route to market, each step investing in you will require you to recognise that investment. The wholesaler will want your product to be easy to move around in bulk and break down into smaller units, while the end user will have no interest in that. However you need to bring the wholesaler with you if you want to reach the user.
So, before you start mapping, understand who all of your customers are, what they will invest in you, and what is important.
Next we will think about starting the map, back to front.
Friday, 6 July 2012
If you'd prefer to listen to this then click here for the Audio boo.
Value Steam Mapping (VSM) easily slips into the “map is the deliverable”, instead of being a record of where we are and an aid to where we are off to. In this and the following pieces, lets re-visit the approach.
First of all lets consider the term Value and throw it out. When you start to map the stream that delivers to a customer, you must properly understand what your end product/service means to that customer. To use that term one last time before we replace it, what do they value?
Your customer, in giving you money for your efforts (let’s stick to that rather than considering non-monetary transactions for now), have also invested:
- Time and effort, travel, in finding and buying your product.
- Association with your brand/image/product: an emotional investment. Their friends will know they have bought you.
- Bought into your method of delivering the product to their use.
- Bought into your way of paying for it.
- Accepted your warranty/service support/upgrade policy.
- Purchased directly or indirectly your packaging methods.
These investments of thought, trust, time and emotion are in addition to the money they pay out for the explicit functions of your product.
So what does this mean? It means that the first step in
Value Investment Steam Mapping
(ISM) is to properly understand from your customer’s point of view what they
are about to invest in you. When you understand what they invest in you, and
which investments are the most important to them, you can begin the mapping.
What is the advantage of such an approach? It means that as you consider waste reduction/efficiency improvements you always do it through the lens of that understanding, rather than just cost.
For example, decisions on where and who does a manufacturing step (low cost child labour?) can impact on their moral investment in your brand (“I won’t buy that because of how it’s made”). Mis-read that and however much value you deliver, if you miss the importance of that investment you are mis-designing your business.
In the next item we consider the complexity of multiple customers.