Customer Value: Applying the First Principle of Lean

Wood, Nigel
March 2004
Management Services;Mar2004, Vol. 48 Issue 3, p14
Academic Journal
This article discusses the specification of customer value in supply chains. As customer value refers to everything done by suppliers that the customer is prepared to pay for, chains must seek to maximise value to the customer by planning what they do around the customer. A model has been developed by which it is possible to identify the factors which customers look for when they make purchasing decisions. These are basic, performance and delighter. The basic factor is something the customer expects to be present as a matter of course. If it is not, the customer will be dissatisfied or disgusted. Similarly, the absence of a performance factor is likely to result in disgust. However, full implementation can result in delight. They are already present and result in neutral responses from the customer. A delighter factor is something the customer just does not expect and will cause increasing delight if present. Examples include complimentary flowers and chocolates for hotel guests and free insurance and servicing for a car. Meanwhile, reliability, flexibility and cost effectiveness are also key issues among consumers. Ultimately, these will be achieved by applying flow and pull techniques.


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