Value Perception

Value, the first principle in Lean Philosophy. It is very important to understand the value perception.Value, which can only be defined by ultimate customer. Value is created by producer. We must understand what values customer is looking for. Before we start understanding the value stream which creates value, it becomes very important to understand the value desired by the customer. Value lies in the eyes of the customer.
I used to travel a lot across countries. Once I started thinking of value perception in case of travel business. Are we getting the right value out of this process? Is it what we are looking for in this process?
Suppose you have to go from small city (without airport) in India to a small city in China. Say from Ludhiana in India to Changchun in China. Let us understand the value Stream (V) for this process and find out the wasted steps from the value stream.

The process steps involved are:

Calling taxi
Loading luggage (4-5 Big Bags)
Move and Reaching Railway station
Unloading Luggage and handling to Railway Platform
Waiting for train at Platform
Boarding Train and Loading Luggage
Move and Reaching Delhi and Unloading luggage
Handling Luggage out of station
Call taxi and loading the luggage
Move to International Airport
Unloading and Handling on trolley to check in counter
Waiting for check in to start
Waiting in a queue for check in
Handling of check in Bags
Getting boarding pass and move for immigration Check
Fill in the form and wait in queue
Immigration clear and move for security check
Waiting for security check
Security check and waiting for Hand baggage
Move to the waiting gate
Waiting for boarding call
Waiting in queue for boarding
Boarding Pass checking and moving for shuttle bus
Boarding in shuttle bus and waiting for getting everybody in
Shuttle bus move towards airplane
Getting out of bus and waiting in queue for boarding on plane
Boarding in plane and storing hand baggage
Waiting for plane take off
Plane take off and fly
Reaching Singapore airport and landing for stop over
Getting out of plane and handling the hand baggage
Waiting at airport for 8 hours
Moving to gate for next flight
Waiting in queue for security check
Security check
Waiting for boarding call
Waiting in queue for boarding
Locating seat and store hand baggage
Plane take off and fly
Plane landing at Shanghai airport
Getting out and move for Immigration clearance
Waiting in queue
Immigration Clearance
Move for Luggage conveyor
Waiting for luggage to come
Handle the luggage on trolley and move out for taxi
Call taxi and unload – load the luggage
Move to domestic airport at Shanghai
Unload and load luggage on trolley
Move for check in
Waiting in queue
Getting Boarding Pass and Baggage handling for check in
Move for security check
Waiting for security check
Security check and waiting for Hand baggage
Move to the waiting gate
Waiting for boarding call
Waiting in queue for boarding
Boarding Pass checking and moving for shuttle bus
Boarding in shuttle bus and waiting for getting everybody in
Shuttle bus move towards airplane
Getting out of bus and waiting in queue for boarding on plane
Boarding in plane and storing hand baggage
Waiting for plane take off
Plane take off and fly
Reaching Changchun airport and landing
Getting out of plane and handling the hand baggage
Move for Luggage conveyor
Waiting for luggage to come
Handle the luggage on trolley and move out for taxi
Call taxi and unload – load the luggage
Move to Hotel
Unload and load luggage on trolley
Hotel check in
Move to room

There are 75 activities in this entire value stream for moving to the destination. What value are you looking for out of this process? The value we are looking for is to reach in minimum possible time, at required time, conveniently and safely. Are we getting this value? The highlighted activities are only value added activities which are just 20% of the total activities. Rest of the activities are just waiting, unnecessary movement and luggage handling or spending time on activities which could be avoided. Are we happy with this value that we are getting out of this process? The actual travel time is 14 hours but the lead time is 48 hours. This lead time could be only 8 hours if we would have direct flight by small airplane form Ludhiana ( India ) to Changchun ( China). There is critical need to rethink value. We need to clearly understand Takt Time and produce goods or services at a rate that reflects customer demand.

Lean: Speedy flow of value exposing all wastes from value stream.

Lean is the way of doing business that identifies and eliminate value stream waste to achieve speed and agility at lower cost. Be it manufacturing or service industry, most of the companies spend 5-10% of the time doing value added work i.e in delivering value as defined by the customer. Lean drives towards simplification of these processes by removing wastes and bringing speed through flow refinement. Lean is about redefining the value stream flow (information and product flow) such that most of the time is spend on value added work to deliver value as desired at right time, right quantity, and at right cost. Lean is speedy flow of value exposing all wastes from value stream.

Lean philosophy:

V²FP²

V – Value

V – Value Stream

F – Flow

P – Pull

P - Perferction

The first V is for value, which can only be defined by ultimate customer. Value is created by producer. We must understand what values customer is looking for. Suppose you have to go from small city (without airport) in India to a small city in China. Say from Ludhiana in India to Changchun in China. Let us understand the value Stream (V) for this process and find out the wasted steps from the value stream. There are 75 activities in this entire value stream for moving to the destination. What value are you looking for out of this process? The value we are looking for is to reach in minimum possible time, at required time, conveniently and safely. Are we getting this value? The only value added activities are just 20% of the total activities. Rest of the activities are just waiting, unnecessary movement and luggage handling or spending time on activities which could be avoided. Are we happy with this value that we are getting out of this process? The actual travel time is 14 hours but the lead time is 48 hours. This lead time could be only 8 hours if we would have direct flight by small airplane form Ludhiana ( India ) to Changchun ( China). There is critical need to rethink value. We need to clearly understand Takt Time and produce goods or services at a rate that reflects customer demand.

So the clear understanding and perception of customer requirement and values is very important. The value streams need to be streamlined and waste steps has to be removed. Then analyze the flow, the next F in Lean philosophy stands for Flow. For speed to the market through the waste ridden value streams, we have to make our product and services flow without any bottlenecks, hurdles and back tracking with good uptime and capability of value stream processes.

It is like the traffic flow and eliminating all these hurdles to the traffic flow, we can probably lead to smooth and fast flow of traffic. This could lead to reaching the destination at right time with least lead time with great confidence level and variation. The road needs to be balanced, capable, have good uptime, clear visual signals and fast on road processes like toll gate clearance etc. Similarly, we need to have balanced lines, smooth straight line flow of material, good process capability, good uptime, proper 5 S and visual management/ standardization for better flow. This leads to fast and on time deliveries. Reach continuous uninterrupted movement of the product or service. Strive towards reduced strategic inventory.

The next P Pull helps customer pull material out of this system as and when required. So Pull and Kanban systems helps delivering right product in right quantity at right time. Control the flow of production by replacing only what has been consumed

The last P is perfection, for sustaining the gains achieved by implementing the lean systems and leads to continuous improvement system