BUSINESS DEVELOPMENT RENEWABLES DEVELOPMENT PROGRAMME WORKSHOP 3 WHAT ALL SUCCESSFUL TEAMS ELIMINATE WASTE
THIS WORKSHOP IS ON THE SUBJECT OF WASTE MANAGEMENT. IT IS NOT ABOUT TIDYING UP THE YARD IN ANTICIPATION OF A VISIT FROM SOME ‘TREE-HUGGING’ INSPECTOR, AND THIS WORKSHOP IS NOT ABOUT FINDING THE MOST EFFICIENT CARDBOARD BALER ON THE MARKET
John Britton, Director of Renewables Network Ltd highlights details of the 3rd workshop in the Renewables Development Programme.
This workshop on the subject of Waste Management is not about tidying up the yard in anticipation of a visit from some ‘tree-hugging’ inspector, and this workshop is not about finding the most efficient cardboard baler on the market (even though this would be a very useful investment).
This workshop is about taking ownership of the principles of customer orientation and operational efficiency.
The text book of Lean Management tells us that everything that adds cost, but does not add value is WASTE. So, we must begin our workshop with an appreciation of value.
THE SPECIFICATION OF VALUE BELONGS TO THE CUSTOMER
A good example is a copper top Duracell alkaline battery. For years this product was valued above all others because the customer was given exactly what was needed.
QUALITY - Duracell lasted 6 times longer than a zinc carbon in continuous use
COST - Duracell cost only 2½ times more than a zinc carbon
AVAILABILITY - Duracell was available on more shelves than any other brand
Money was invested in maintaining the differential performance and on maintaining maximum distribution. Spending money elsewhere would have been a waste.
For the customer the value of every product or service is the right balance of Quality, Cost and Availability.
The customer will happily spend the asking price if the price represents value. The fact that a price is 40% uplift on cost means nothing to the customer, but think how many products or services are priced in this insensitive way.
For this product the customer would buy instantly at a price of 65. He would be comfortable to purchase up to a price of 80. Above that the decision to buy would get progressively less comfortable. At a price of 90 he would really want to see some other incentive to buy added to the offer and, above
that price his commitment would rapidly disappear.
A company that has a clear understanding of its customers’ specification of value has a chance to be successful in the market, but this is only the first step.
WASTEFUL DESIGN
Insensitivity to the opinion of the customer can apply just as wastefully to product design as it can to pricing.
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