How do you define customer value in Lean Six Sigma?

VOC or the voice of customer is the most fundamental aspect of Lean six Sigma. The six Sigma project charter starts from the VOC. VOC can be projected as the value proposition offered to the customer on behalf of the cost they pay. By redefining & redesigning our process to improve the quality standards, we're offering higher value to our costumer. Implementation of JIT, a lean technique ensure a customer recieves their product within the timeline but without creating backlog inventory. Incase of FMCG/Food products, it ensures the freshness of product delivered to customer.

Customer value in the Lean and Six Sigma context is a measure of the extent to which a product or service meets the customer's needs and expectations while minimizing losses and defects. In the automotive industry, this is reflected in Toyota's lean approach, which optimizes processes to deliver high-quality, reliable vehicles with the features customers want while minimizing production waste. Toyota's just-in-time manufacturing, for example, reduces inventory costs and ensures that automobiles are produced in response to actual customer demand, resulting in both cost savings and increased customer satisfaction through the timely delivery of customized vehicles.

In Six sigma we are customer centric ie increase the Quality of the Product and decrease the cost of product we targeted the upskill of process so that in lowest cost we increase the Quality of product and convert the VOC to VOP Implies the control chart ?? work with it An organisation implies across the system lean culture & reduces the waste and work on process improvement and ultimately the reduce the cost as well .

In Lean Six Sigma, customer value is the perceived benefit that a customer gets from using a product or service. It is the primary focus of all improvement efforts. Lean Six Sigma can be used to increase customer value by delivering what the customer values and is willing to pay for, eliminating non-value-adding activities (waste), and continually improving processes to enhance quality and satisfaction. Customer value is the foundation of Lean Six Sigma's focus on customer-centricity and the reduction of defects and variation to ensure the highest level of quality and efficiency in delivering products or services.

Identifying value is done by a combination of factors within the process and the product itself. The tools and methods mentioned in the points below break this down nicely. The six sigma method is based on the VSM and work activity analysis which is very process driven and this goes hand in hand with the VOC method which describes the features and function that the customer is expecting and paying for. Remember that value is being added only when the product is changing. Use the 8 wastes (DOWNTIME/TIMWOODS) to identify waste in the process such as over processing and transport , defects etc.Look at your product spec and see that it matches the feature set even down to the materials and tools you use.Use customer feedback mechanisms also

The prized advantage Lean Six Sigma offers organizations is its customer-centric methodology of delivering value. Voice of the Customer (VOC) is a tool we Lean Six Sigma practitioners use to deliver customer value by discovering their requirements, which can be grouped into two high-level categories: their “spoken needs and their “unspoken” needs. VOC drives the ingenuity an organization needs to deliver value to their customers and remain competitive and relevant in the market. (Voice of the Customer Table (VOCT) & Tools | ASQ, n.d.). References: Voice of the Customer Table (VOCT) & Tools | ASQ. (n.d.). https://asq.org/quality-resources/voice-of-the-customer

To improve Critical to Quality (CTQ), organizations should identify and prioritize critical attributes, set measurable targets, establish processes, monitor performance, and continuously improve processes and systems. By following these steps, organizations can ensure that their products or services meet the needs and expectations of their customers.

Implementing value stream mapping to define customer value can face challenges such as identifying customer requirements, fostering cross-functional collaboration, balancing conflicting objectives, ensuring accurate mapping,shifting organizational mindset.Overcoming these challenges requires gathering reliable customer data, promoting collaboration among teams, aligning objectives, improving data collection, fostering a customer-centric culture, and establishing appropriate measurement frameworks. By these actions, companies can effectively implement value stream mapping to gain a deeper understanding of customer value and align their processes and offerings accordingly, resulting in improved customer satisfaction and competitive advantage.

Value Stream Mapping is best done in a team environment with those closest to the work lead by a skilled facilitator. A current state map (as is) is completed first. The waste or non-value-adding activities in the current state are identified by the team, and a future state map ( to be) is then created. The value stream map is not complete until an action plan to move from the current state to the future state is developed and implemented.

Apart from the mentioned points in the article, to define customer value these steps are also helpful Segmentation: Group customers into segments based on needs and preferences. Critical-to-Quality (CTQ) Identification: Identify aspects essential to customer satisfaction. Quality Function Deployment (QFD): Translate VOC into product requirements. Kano Model Analysis: Categorize customer needs into basic, performance, and delight factors. Cost of Poor Quality (COPQ): Assess the cost of not meeting customer expectations. Key Performance Indicators (KPIs): Measure customer value with KPIs. Benchmarking: Compare performance with industry competitors. Feedback Loop: Continuously gather customer feedback for improvement opportunities.

Customer is the ??King. He only pays for the value which the product or services offers to him. To understand the customers first we need to gather the needs and expectations of customers and translate that into product or service features and accordingly design our offerings For this we can gather VOC i.e voice of customers(using interviews, questionnaire,customers complaints,feedbacks etc) prioritise these gatherings using kano model and affinity diagrams and finally after we can plan for a project to implement such changes in our offerings.