Implementing a Lean Front-End  How Do You Measure Success?

Learn how front-end process optimization contributes to establishing a customer-centric value stream, and use the following KPIs to measure the success of your company's lean front-end initiative and its impact on overall business performance.


* Frequent proposal, bill of material (BOM) and order entry errors necessitate time-consuming rework and multiple handoffs, resulting in delayed customer response, lengthy quote-to-order cycles and lost business opportunities.

* Routinely high selling, administration and engineering costs erode gross profit margins and contribute to reduced marketplace competitiveness.

* Sales channel inaccuracies, inconsistency and confusion resulting from outdated printed catalogs and misunderstanding of customer requirements lead to reduced sales effectiveness and lost business opportunities.

Applying strategic lean thinking and implementing an effective lean front-end technology solution can help streamline the entire range of opportunity-to-order processes and enable companies to realize measurable process improvements and results.

Taking a Strategic Approach to Front-end Process Optimization

Only companies that succeed in maximizing speed, accuracy and efficiency can succeed in satisfying customers, reducing costs and enhancing margins. Achieving these goals demands a well-planned and intelligently implemented lean front-end strategy, driven by the specific business model and workflow pain points, as well as strategic corporate objectives related to return on investment and bottom-line benefits.

The first step should be a careful process mapping of the front-end portion of the value stream. This mapping helps a manufacturer understand how each existing process step contributes to or detracts from the overall value stream. This analysis serves to identify the source of bottlenecks, waste and delays and helps companies determine how inefficient processes can be improved to eliminate waste and add more value. Typical front-end processes to be mapped include all of the business processes required to convert a customer inquiry into an order. The front-end processes to be analyzed include quote and order management, product selection and configuration, application engineering, BOM generation, sales reporting and analytics, and channel and customer management.

The next step is to evaluate how your current systems support the current value stream. In the front-end process, manufacturers only deal with information flow in the form of paper and electronic documents, including customer specifications, requests for quotes (RFQs)/requests for proposals (RFPs), quotes, proposal packages, drawings and purchase orders. Thus, understanding how your information systems support the value stream is critical, since the limitations of the current systems often cause substantial waste such as duplicative data-entry and redundant work steps. This is different from back-end lean optimization, where the material flow is crucial. Before there is an order, there is no material flow, but only information flow.

Once the current processes and systems are understood, then the manufacturer can design the optimal future state value stream and the systems that will optimally support the optimized processes. This requires an understanding of how new information technologies, such as Web-based software for online collaboration and information sharing, can help to eliminate wasteful process steps and mistake-proof the process.

Without considering new information technology, the potential improvements are limited. An example of this is the airline check-in process. Without considering technology, a check-in agent would always be required and potential improvements would be limited to that check-in agent's skills and training. By introducing technology, airlines now provide self check-in terminals that eliminate the need for a check-in agent and provide faster, more accurate customer service. Today, self-service check-in can be completed in about 15 seconds, while the old process involved lengthy queues and at least one- to two-minute interactions with the agent for every passenger.

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