{"id":2777,"date":"2010-07-01T04:34:16","date_gmt":"2010-07-01T11:34:16","guid":{"rendered":"https:\/\/staging.opexlearning.com\/resources\/?p=2777"},"modified":"2014-10-18T12:43:49","modified_gmt":"2014-10-18T17:43:49","slug":"lean-consumption-provide-what-is-wanted-where-it-is-wanted","status":"publish","type":"post","link":"https:\/\/staging.opexlearning.com\/resources\/lean-consumption-provide-what-is-wanted-where-it-is-wanted\/2777\/","title":{"rendered":"Lean for Service Organizations: What the Customer Wants"},"content":{"rendered":"<div class=\"a296a24fa2fc69ef5487857f02f111e8\" data-index=\"9\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- Single Post readerboard -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:728px;height:90px\"\r\n     data-ad-client=\"ca-pub-8207522353004717\"\r\n     data-ad-slot=\"1144967431\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>The fourth principle in <a title=\"lean services\" href=\"https:\/\/staging.opexlearning.com\/resources\/lean-services\/\">Lean Consumption<\/a> (or Lean for Service Organizations\u00a0is<sup class='footnote'><a href='#fn-2777-1' id='fnref-2777-1' onclick='return fdfootnote_show(2777)'>1<\/a><\/sup>: <strong>Provide exactly what the customer wants, where it is wanted<\/strong><\/p>\n\n<p>This principle rests on the notion of convenience and price.<\/p>\n<p>Based on experience, we pay a lot for convenience. But, the Lean for Service Operations mindset takes a different route. It is possible to provide price competitive products or services and make them convenient to to obtain. Again, Womack shares a case study from Tesco:<\/p>\n<blockquote><p>For instance, the reason Wal-Mart sells hammers\u00a0more cheaply than the corner hardware\u00a0store isn&#8217;t that the scale of Wal-Mart&#8217;s order reduces\u00a0hammer production costs or that the\u00a0store&#8217;s size significantly reduces its costs. It&#8217;s because\u00a0the scale of Wal-Mart&#8217;s order causes the\u00a0hammer maker to accept a low selling price in\u00a0return for volume, and Wal-Mart passes on this\u00a0savings to its customers.<\/p>\n<p>The opportunity is ripe for large retailers\u00a0using lean logistics techniques to offer a complete\u00a0range of formats with uniform pricing to\u00a0serve every customer need. Tesco is already\u00a0doing this. It has created a full complement of\u00a0formats ranging from local convenience stores\u00a0(Tesco Express), to midsize stores in town centers\u00a0(Tesco Metro), to standard-size supermarkets\u00a0in the suburbs (Tesco Superstore), to hypermarkets\u00a0on the periphery (Tesco Extra), to\u00a0Web-based shopping (Tesco.com). By integrating\u00a0the fulfillment channel behind all these\u00a0formats, Tesco is answering an expanded array\u00a0of consumption needs.<\/p>\n<p>One result of this efficient channel sharing\u00a0is that Tesco seems to be the only grocer making\u00a0money on Web-based grocery shopping\u00a0while continually increasing sales volume. Another,\u00a0more provocative consequence is that all\u00a0of the goods entering this unified fulfillment\u00a0channel benefit from the same purchasing\u00a0power: The tube of toothpaste going to the\u00a0tiny Tesco Express outlet costs Tesco the same\u00a0amount to buy from the supplier as the tube\u00a0going to the vast Tesco Extra store, and the fulfillment\u00a0cost is very nearly the same as well.<\/p>\n<p>This strongly suggests that the age of mass consumption\u00a0retailing, in which the industry\u00a0keeps heading toward ever larger formats, is\u00a0coming to an end. Why drive miles to a big\u00a0box\u009d if the items you want are available nearby\u00a0from a smaller format at the same prices?<\/p><\/blockquote>\n<p>In other words, one an take advantage of the purchasing power that comes with large quantity purchases, but provide those goods and services closer to the customer.<\/p>\n<h2>Groupon: A Case Study<\/h2>\n<p>Groupon is an ecommerce company that aggregates merchandise and sells them to customers in certain locales. By doing this, Groupon is applying the principles of Lean for Service Operations by aggregating quantity purchases (though they don&#8217;t purchase inventory &#8211; they call it collective buying) and making that merchandise available close to the customer. These local deals are a hit, suggesting that the principles of Lean for Service Operations work in practice, not just theory.<\/p>\n<div class='footnotes' id='footnotes-2777'>\n<div class='footnotedivider'><\/div>\n<ol>\n<li id='fn-2777-1'> the principles of Lean for Service Operations are: Solve the customer&#8217;s problem completely by insuring that all the goods and services work, and work together, Don&#8217;t waste the customer&#8217;s time, Provide exactly what the customer wants, Provide what&#8217;s wanted exactly where it&#8217;s wanted, Provide what&#8217;s wanted where it&#8217;s wanted exactly when it&#8217;s wanted, Continually aggregate solutions to reduce the customer&#8217;s time and hassle. <span class='footnotereverse'><a href='#fnref-2777-1'>&#8617;<\/a><\/span><\/li>\n<\/ol>\n<\/div>\n<!--CusAds0-->\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>The fourth principle in Lean Consumption (or Lean for Service Organizations\u00a0is1: Provide exactly what the customer wants, where it is wanted This principle rests on the notion of convenience and price. Based on experience, we pay a lot for convenience. But, the Lean for Service Operations mindset takes a different route. It is possible to [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":9864,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[613],"tags":[322],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lean for Service Organizations: What the Customer Wants<\/title>\n<meta name=\"description\" content=\"Lean for Service Organizations: What the Customer Wants and Where they Want it is a principle to follow for services\" \/>\n<meta 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