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How companies define customer value in LeanPD? (Guest Blog)

laa-blog-steve-young

During my career, I have often been confronted with a range of issues which almost seem insurmountable to my teams. By asking this one question, “what is your core technology and is it fully understood”? the scale of the issues can be reduced significantly. This article will discuss this in detail and aims to show the significant benefits of understanding the core. I will use an actual example to allow you to draw comparisons to your business.

 

So “what is your core technology and where is the customer value?

Let’s talk through an example. I have a product, it has a nice user interface, loads of I/O, a really nice enclosure, it has lots of diagnostic functions, a service interface whilst it accurately measures the customer’s process temperature.

Internally my team sees this a different way. We have a knowledge black hole, legacy documentation issues, knowledge gurus and lots of support issues. My team is in a spin and don’t know where to start, everything is important isn’t it.

Looking through the customer’s eyes where would they like the majority of their money to be spent or let’s put it another way if we gave them a discount for everything they didn’t really need what would the product look like?

In this example, this company was trying to do and know everything about their product, rather than focusing on the core “temperature measurement”. When a customer spends money, in the majority of cases especially in industrial products it is spent on the core function. The secondary functions may have value, but if the primary does not meet the need, the secondary will never retain future sales.

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So “is the core function and customer value fully understood?

Generally, the answer to this question is yes, followed by the statement go and see the design authority. Diving deeper and asking for the definition and ranges that make the core work, the answer quickly shifts to not really.

The consequence of not fully defining the core is significant. Firstly, minor changes can have catastrophic consequences, fault finding can take an eternity, knowledge capture expands to levels beyond useful and new product development struggles to accelerate.

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So “how can we get out of this situation?

In Lean product development, Function mapping is one of the methods used for understanding your core technologies and your secondary functions.

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Figure 1: Example of “Function Map” for safely keeping temperature constant in machine

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Interestingly, some functional maps of products can show missing primary functions, especially when companies have forgotten about their core.However, this is only half the picture. Once you have defined the core and what items are involved in delivering it, the range at which these items still maintain function still needs to be defined.

However, this is only half the picture. Once you have defined the core and what items are involved in delivering it, the range at which these items still maintain function still needs to be defined.

One method of defining the core is a quality list. Originally from the shipbuilding industry, the quality list helps people define the “critical to quality” items within the function and the workable ranges at which the items maintain function. Trade-off curves, knowledge A3’s, QFD’s are all LEAN PD methods of achieving this goal.

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Fig02 - Quality list

Figure 2: Example of the “Quality list” exert

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So what?

By focusing on these activities for 1 to 2 days it is possible to get immediate benefits:

  1. If it’s not core and it’s not a CTQ (critical to quality), then purchasing can apply general cost down without significant risk.
  2. By maintaining the core function, the level of bugs and issues drop in priority
  3. Designing a new product knowing how to deliver a core can significantly reduce time to market
  4. Compliance can focus their submission around the core
  5. Knowledge black holes are less significant
  6. Knowledge capture is more focused and is unlikely to grow beyond useful
  7. Core product knowledge can be easily distributed.

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So “what is your core technology and is it fully understood, do you understand the customer value?

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Stephen Young

LEAN product development and engineering are part of my DNA. Over the past 20+ years, I have gained a wealth of insight into how engineering departments tick. From large medical to small cutting edge companies, I have seen the good, bad and ugly when looking at practices employed in the product development process. My love of engineering, which stems from my electro-mechanical design roles, has kept me enthused by the changing face of engineering. The problems I solve now are no longer technical, but have their focus on the application of LEAN within a technical world.

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