What is “value” in LEAN?
Trying to better understand the seemingly obvious
LEAN is about value. But what exactly is value? A popular definition goes along the lines that value is “what the customer is willing to pay for”. While this definition may seem easy to understand, it can raise more questions than it resolves.
In this inquisitive post, I look at the concept of value from different perspectives (to attempt) to arrive at a crisp answer on what exactly value means within a LEAN context.
Defining value
Like all good LEAN approaches, we need to start with a baseline or standard. So let’s start with some definitions. A colloquial definition of value was presented at the start — what the customer is willing to pay for. Let’s progress now to the dictionary definition of value, which as per Merriam-Webster, is a noun that represents a “fair return or equivalent in goods, services, or money for something exchanged”.
In a LEAN context, and as per the LEAN Lexicon, value is the “inherent worth of a product as judged by the customer and reflected in its selling price and market demand”. The iSixSigma dictionary cuts to the chase and defines value as the “exchange for which the customer pays”.
