Adapting to Customer Demand
In Lean, we talk a lot about meeting customer demand. Often, the conversation turns to cycle time, takt time, and how to meet demand just-in-time. Yet, there is another factor of customer demand that people often ignore in this process: What does the customer actually want? You may have an established product that is free of defects and delivered on time at low cost, but what if customers’ preferences in terms of the product itself quickly change? Will you be able to adapt? In a recent article, our friends at üttana discussed lessons that Lean Manufacturers can learn from Lean Startups. In the spirit of that topic, we’d like to discuss what Lean Product Development is all about, and what to be on the lookout for in the years ahead.
If Samsung sold the same smart phones every year without changing design or functionality, would they keep selling? Probably not. If Toyota still sold Camry sedans identical to the ones they produced in 1993, would people be interested? They were great cars to be sure, but customers’ tastes change, and so must products. Following the needs of customers and testing ideas are the bread and butter of Lean startups. The pace required for innovation and creative development seems to be reaching new heights all the time, and emerging technology is poised to push this trend forward. If you’re not integrating Lean principles into product development, sales, and marketing, this might be the time start.
The Creative Cycle for Lean Product Development
Most of the popular Lean methods in the manufacturing industry revolve around the production process, but as stated before, that is only one piece of the puzzle for a successful business. Yoshio Ishizaka, the man who brought Toyota’s Lexus brand to the United States, wrote one of the definitive books on how to extend Lean thinking to areas outside of production: The Toyota Way in Sales and Marketing. One key point is that the “pull system” extends outside the organization, with the customer as the ultimate destination of the value stream. But what does a pull signal from a customer look like and how do you respond to it? This is a matter of active engagement. You must constantly seek feedback when developing products. This requires commitment to a creative development process that has the agility to respond and adapt according to feedback, with minimal wasted effort or resources. The Institute of Design at Stanford defines a five-step process for creative development that any business might find useful:
Empathize: Get to know your customer through direct interaction so you can understand their experiences and needs.
Define: Define a problem that your customer is experiencing that your product could solve; or define an unfulfilled need that your product could provide.
Ideate: Explore a wide range of possible product ideas, based on what you have learned about your customer. Get a wide range of insight and input from the team.
Prototype: Select one idea from the previous step and turn it into a working prototype. Remember that this is not a final product. It can be any physical activity or object that the customer can interact with in the real world.
Test: Finally, evaluate your assumptions about the customers’ needs and wants by giving them a chance to interact with your prototype. Use this as a chance to refine your product based on your finding. You can continue development along the current course, or change the idea depending on the results of customer interaction.
Obviously, there is a lot more to this system. The main thing to remember is that it is a continuous cycle, just like PDCA problem solving. Costumers’ needs are always changing. With new production techniques like 3D printing opening up a whole new range of customization and distribution options, it is more important than ever to keep in touch with what your customers really want.