James P. Womack

Daniel T. Jones

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <p>We consumers have so many products to choose from today—and they’re higher quality and more affordable than ever. Buying has never been easier. So why is <em>using</em> our purchases so frustrating? Why does getting your car fixed require countless loops of miscommunication, travel, waiting, and defective repairs? Why do stores stocking thousands of items never have that one item <em>you</em> want?</p>
  <p>It’s because companies—wrongly assuming they’ll save time and money—have off-loaded tasks to consumers. They force customers to waste valuable time tracking their own orders and struggling with complicated technology. Result? Consumers are angry, and companies spend more—not less—handling complaints, reworking botched repairs, and replacing customers lost to competitors.</p>
  <p>The solution? <strong>Lean consumption:</strong> streamlining the way you provide goods and services, so customers use them easily. How? View consumption as a process, not an event. For example, home-computer buyers don’t just purchase a laptop—they integrate, maintain, upgrade, and discard it. To make consumption lean, identify steps in your customers’ consumption process where they expend time but get no value. Then revamp your operations to eliminate wasted time.</p>
  <p>Auto dealer GFS does this by prediagnosing vehicle problems by phone and confirming diagnoses when cars arrive. Customers can authorize repair work immediately, avoiding additional phone calls. GFS also schedules arrivals to eliminate queues, and bundles parts and tools into kits delivered to technicians as needed. Customers spend less time waiting; repairs get done faster and more correctly. Car owners <em>and</em> GFS win.</p>
  <p>The Idea in Practice</p>
  <p>To practice lean consumption:</p>
  <h2>Solve Customers’ Consumption Problems Completely.</h2>
  <p>Ensure that all goods and services work, and work <em>together</em>—including those provided by other companies. Identify and eliminate root causes of customers’ problems. <span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>IT service provider Fujitsu provides help-desk services to BMI airline employees. The most common reason for BMI agents’ calls was malfunctioning printers. Agents couldn’t reliably print boarding passes for passengers at check-in. Instead of fixing the repair-delay problem, Fujitsu addressed the root cause—persuading BMI to install better printers that wouldn’t need frequent repairs. The number of printer-related calls dropped 80% within 18 months. BMI’s savings in flight operations far exceeded the new printers’ cost. </p>
  <h2>Provide Exactly What Customers Want…</h2>
  <p>U.K. retailer Tesco replenishes every store continuously, reordering from key suppliers that produce needed items within hours. Tesco also picks up goods directly from suppliers’ shipping docks at precise times, taking them to regional distribution points where fresh products and fast-moving items are cross-docked onto store-bound vehicles. Desired items are in stock 96% of the time—a stunningly high retailing service level.</p>
  <h2>…Where They Want It…</h2>
  <p><span style="idea-in-practice-example"><span style="idea-in-practice-example-header">Example:&nbsp;</span> </span></p>
  <p>Tesco offers numerous store formats to serve every customer need: local convenience stores, midsize stores in town centers, supermarkets in suburbs, Web-based shopping. Flexing its purchasing power, it ensures uniform pricing across all its stores. Consumers get what they want where they want it—without paying more for convenience. </p>
  <h2>…and When They Want It</h2>
  <p>For expensive, important items, such as automobiles, consumers typically plan purchases rather than buy on impulse. Encourage customers to share their plans with you and order in advance. Collaborate with your retailers to presell products at a discount to customers willing to wait for delivery in exchange for desired features and lower prices. Then charge a premium to customers who want a customized product immediately. You’ll predict demand more accurately, thus lowering your production and distribution costs.</p>
 </div>
</article-ideainbrief><p>Over the past 20 years, the real price of most consumer goods has fallen worldwide, even as the variety of goods and the range of sales channels offering them have continued to grow. Meanwhile, product quality—in the sense of durability and number of delivered defects—has steadily improved.</p>

oaUK+Wr6Nmb4bFq09to9Z+qH7+/xsqsyIKKqjry82p4KVcIGYZ1aWeBrQDpsNOqSJmDVcxnLkwJ1XuvxfXr/l5VKoulLLu6AGMu5x7TK+vY=

<p><span class="reprint">Reprint: R0503C<br />
</span></p>
<p>During the past 20 years, the real price of most consumer goods has fallen worldwide, the variety of goods and the range of sales channels offering them have continued to grow, and product quality has steadily improved. So why is consumption often so frustrating? It doesn&#8217;t have to be&#8212;and shouldn&#8217;t be&#8212;the authors say. They argue that it&#8217;s time to apply lean thinking to the processes of consumption&#8212;to give consumers the full value they want from goods and services with the greatest efficiency and the least pain.</p>
<p>Companies may think they save time and money by off-loading work to the consumer but, in fact, the opposite is true. By streamlining their systems for providing goods and services, and by making it easier for customers to buy and use those products and services, a growing number of companies are actually lowering costs while saving everyone time. In the process, these businesses are learning more about their customers, strengthening consumer loyalty, and attracting new customers who are defecting from less user-friendly competitors.</p>
<p>The challenge lies with the retailers, service providers, manufacturers, and suppliers that are not used to looking at total cost from the standpoint of the consumer and even less accustomed to working with customers to optimize the consumption process.</p>
<p>Lean consumption requires a fundamental shift in the way companies think about the relationship between provision and consumption, and the role their customers play in these processes. It also requires consumers to change the nature of their relationships with the companies they patronize.</p>
<p>Lean production has clearly triumphed over similar obstacles in recent years to become the dominant global manufacturing model. Lean consumption, its logical companion, can&#8217;t be far behind.</p>

Lean Consumption

Reprint: R0503C During the past 20 years, the real price of most consumer goods has fallen worldwide, the variety of goods and the range of sales channels offering them have continued to grow, and product quality has steadily improved. So why is consumption often so frustrating? It doesn’t have to be—and shouldn’t be—the authors say. They argue that it’s time to apply lean thinking to the processes of consumption—to give consumers the full value they want from goods and services with the greatest efficiency and the least pain. Companies may think they save time and money by off-loading work to the consumer but, in fact, the opposite is true. By streamlining their systems for providing goods and services, and by making it easier for customers to buy and use those products and services, a growing number of companies are actually lowering costs while saving everyone time. In the process, these businesses are learning more about their customers, strengthening consumer loyalty, and attracting new customers who are defecting from less user-friendly competitors. The challenge lies with the retailers, service providers, manufacturers, and suppliers that are not used to looking at total cost from the standpoint of the consumer and even less accustomed to working with customers to optimize the consumption process. Lean consumption requires a fundamental shift in the way companies think about the relationship between provision and consumption, and the role their customers play in these processes. It also requires consumers to change the nature of their relationships with the companies they patronize. Lean production has clearly triumphed over similar obstacles in recent years to become the dominant global manufacturing model. Lean consumption, its logical companion, can’t be far behind.

Lean Consumption

Summary.

Partner Center