Achieving Business Agility Through Customer Kanban
Businesses seeking to bring a more complete and flexible perspective of their value stream should explore Customer Kanban.
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Organizations exist to deliver value to the customer and thereby also make profits. Value could be defined as the worth, usefulness or importance of something to the customer. In order to deliver value (outcome, business, brand, other types of value), the organization has to ensure that its entire value stream/delivery pipeline is streamlined and focused on the customer to deliver value.
In the context of business, agility is the ability to adapt and manage change in the marketplace in a cost-effective manner. In this context, an Agile enterprise is an organization that is focused on utilizing the principles of complexity science and the concept of complex adaptive systems (CAS) to achieve successful customer delivery. Thus, the outcome of organizational intelligence accumulated and applied is business agility.
Business agility refers to the ability of a business system to quickly respond to change by adapting its initial systems as per the requirement. Organizational agility is the ability of the organization to rapidly adapt to changes in the marketplace. In order for business agility to be effective, organizational agility needs to be in place.
Business agility can be sustained by ensuring that we adapt the organizational systems to meet the customer demand, adjust to the changing marketplace requirements, manage change cost effectively without compromising on quality, and utilize the existing available people in the organization to ensure a competitive advantage.
In the current era of complexity, organizations are beginning to understand and uncover that they have three kinds of organizational structures — formal structure (hierarchy), informal structure (influence - social networking) and the most important structure — value creation structure (mastery or expert in specific areas). Formal and informal structures are the enablers of the value creation structure and they help in the dissemination of the knowledge that is needed by the agents of the complex adaptive system to manage the changes in the marketplace and the customer demand. Value creation structure ably supported by the formal and informal structures leads to successful outcomes. Value creation structure is focused on work roles and which leads to a Role-Based Organization that is focused on creating maximum value for the customer.
In order to deliver value to the customer, we focus on different methods/frameworks/models/techniques to achieve this goal. One of the Agile methods which we use to deliver value to the customer is Kanban. Kanban and more specifically, Customer Kanban, enables business agility by focusing on the entire value stream from concept to cash. When there is a change in the market requirements and the customer changes need to be acted at the earliest, the organization should demonstrate business agility along with organizational agility to deliver the change to the customer in the shortest possible time. Intense collaboration is needed to identify the best possible options that can help to deliver this change to the customer. Generally, the customer pushes the requests to the supplier thinking he will be able to get more output from the supplier, despite the fact that the supplier capacity is not fully coping with it and even though the supplier workflow is aligned to a complete pull-based mechanism at the system level. This creates perturbations in the entire value stream and the outcomes are not fully optimal.
Hence, what is required to be made understood to the customer is that if you pull value as compared to pushing requests to the supplier, you will have the most optimal outcomes for your business. This apparently ensures that the customer makes optimum utilization of the supplier capacity with optimal outcomes. Obviously, if the new demand is very high and which will continue to be high in the future, the supplier always has the option of expanding capacity based on the requirement and other factors like cost, maintenance and the management of scaled operations.
An optimal system meeting the end to end flow and covering the entire value stream from concept to cash can be achieved through the implementation of Customer Kanban along with Upstream Kanban.
As Customer Kanban focuses on the end-to-end value stream flow, it ensures business agility using the mechanism of minimum options limits and CONWIP.
Thus, organizations which are delivering services/products to the customer and which are focused on improving business agility could improve their effectiveness and success by implementing Customer Kanban along with Upstream Kanban.
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