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What are the key metrics and indicators for measuring lead time reduction and customer satisfaction?

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If you want to improve your business performance and customer satisfaction, you need to optimize your value stream. Value stream mapping (VSM) is a lean tool that helps you visualize and analyze the flow of materials and information from the customer request to the delivery of the product or service. By identifying and eliminating waste, you can reduce lead time, increase efficiency, and enhance quality. But how do you measure the impact of your VSM efforts? What are the key metrics and indicators that show you are on the right track? In this article, we will explain what lead time reduction and customer satisfaction are, why they matter, and how to monitor them using VSM.

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1 Lead time reduction

Lead time is the total time it takes to complete a process or deliver a product or service to a customer. It includes both value-added and non-value-added activities, such as processing, waiting, moving, inspecting, and reworking. Reducing lead time means eliminating waste and improving flow, which can result in lower costs, higher productivity, and faster response to customer needs. To measure lead time reduction, you can use metrics such as cycle time, takt time, throughput time, and process time. These metrics help you compare the current state and the future state of your value stream and quantify the improvement potential.

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2 Customer satisfaction

Customer satisfaction is the degree to which a customer perceives that their expectations and needs have been met or exceeded by a product or service. It is a key indicator of customer loyalty, retention, and referrals, which can affect your revenue and growth. Customer satisfaction can be influenced by many factors, such as quality, reliability, delivery, price, and service. To measure customer satisfaction, you can use methods such as surveys, feedback forms, ratings, reviews, testimonials, and net promoter score (NPS). These methods help you collect and analyze customer opinions and perceptions and identify areas of improvement.

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3 VSM and lead time reduction

VSM helps you reduce lead time by showing you the current state of your value stream and highlighting the sources of waste and inefficiency. By mapping the value stream, you can see how long each activity takes, how much inventory is accumulated, how many handoffs and delays occur, and how much value is added or lost. Then, you can design a future state that eliminates or minimizes waste and improves flow, using lean principles and tools such as pull systems, kanban, 5S, kaizen, and standard work. By implementing the future state, you can achieve significant lead time reduction and increase your value-added ratio.

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4 VSM and customer satisfaction

VSM helps you improve customer satisfaction by aligning your value stream with your customer requirements and expectations. By mapping the value stream, you can see how well your product or service meets the customer demand, quality, and specifications, and how much variation and defects exist. Then, you can design a future state that enhances customer value and eliminates or reduces errors, rework, and complaints, using lean principles and tools such as voice of the customer, quality function deployment, poka-yoke, and six sigma. By implementing the future state, you can achieve higher customer satisfaction and loyalty.

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Stephen Sikorski

Growing leaders and building better teams / Continuous Improvement / Lean Six Sigma Black Belt
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It's important to address the fact that in many proposed future states the "in" from the supplier is not in tune or somewhat matching with the "out" to the customer. This should be addressed as this often leads to excess inventory which leads to the other seven wastes. It's the removal of these wastes and a move toward having most of your activities be value-add as opposed to non-value-added that allows you to provide both the internal and final customer with the best possible experience.

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5 How to monitor lead time reduction and customer satisfaction

To monitor the progress and results of your VSM efforts, you need to establish baseline measurements and set SMART goals for lead time reduction and customer satisfaction. You also need to track and display the relevant metrics and indicators using visual management tools such as dashboards, charts, graphs, and scorecards. These tools help you communicate and share the data with your team and stakeholders, and identify trends, gaps, and opportunities for improvement. You should also review and update your value stream map regularly, and celebrate and reward your achievements.

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What are the key metrics and indicators for measuring lead time reduction and customer satisfaction?

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1 Lead time reduction

2 Customer satisfaction

3 VSM and lead time reduction

4 VSM and customer satisfaction

5 How to monitor lead time reduction and customer satisfaction

Value Stream Mapping

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