The Goal: a process of Ongoing Improvement

DW: So what did you do?
PH: We started to build, as Eli calls it, the current reality tree. And of course
this time I didn’t make the mistake of making it about our company but I
made it about the customers’ situation: Why is this customer complaining so
heavily about price? After long thought and a lot of discussions with my sales
people, the only thing we could come up with is that he’s thinking this is the
only way that he can decrease the total cost of office supplies; that he can’t
do anything about the tremendous cost of having to stock supplies, and store
them, and the cost of bringing the stuff to the right people in the building.
Well, I know what kind of a mess customers can make out of it. In most
offices where you open drawers, there’s more stock in the office than
anybody can imagine. While at the same time they are screaming for a
specific item which has to be brought to them by taxi in crazy short delivery
times. In Rotterdam we are down to four-hour delivery times! Not even 24,
just four-hour delivery times, which is completely crazy for office supplies. I
mean, we’re not saving lives here.

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So this is what we offered our customers: That we would take over all this
hassle of supplying everybody in the office with the right equipment, the
right articles, at the right time. We offered them cabinets with office supplies
in them. We owned both the cabinets and the contents. The supplies were for
a specific working group. Whatever they took out was considered sold,
whatever was left was still ours. We replenished these cabinets every week.
We made it very easy for them to check on us. And more importantly, we
could give specific data about each department, explaining that certain items
were consumed fast. For instance you might need a new pair of scissors once
in three months, but not every week.