Understanding Value & Muda

by theleanthinker

If there is one thing that a Lean system is designed to achieve, it is to deliver value to the customer. This, it must be said, has to be achieved at an ‘acceptable’ cost so that the organisation delivering the value can satisfy its stakeholders (usually by making a profit, or at least operating within its budgets).

Value is much more than just the physical attributes of a product. These days customers expect the products that they buy to work and work well, they expect them to be reliable and to be made to a certain quality level. A product that exceeds the customers expectations is likely to stimulate the buyer to replace it with another more up-to-date product from the same source, such behaviour is highly desirable in today’s competitive environment.

The core goals then can be summarised as (PQCDSM):

Productivity
Quality
Cost
Delivery
Safety & the environment
Morale

Value is both given and recieved by Customers, Shareholders, Employees and Suppliers.

In designing a lean system we are seeking to focus the maximum effort on delivering customer value as ultimately it is the customer who pays for everything.

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