FAILURE DEMAND

High Performance Enterprises distinguish between Value Demand and Failure Demand and work to eliminate Failure Demand.  

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Value Demand is product and service delivery that satisfies customer wants and needs.   Failure Demand is the delivery or production of products and services downstream resulting from defects in the system upstream.  In other words, work that should never been needed. Failure Demand can be the result of a failure to adequately deliver the product or service right the first time or it can be administrative or process work that has to be performed to mitigate an upstream failure(s).  This latter type of Failure Demand often represents as much as 99% of administrative work (Non Value-Added work). 

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Customer Failure Demand

For example, a large proportion of calls to Call Centers are the result of inadequate product or service performance upstream, questions due to inadequate communication or imprecise information and repeat calls to answer the same question or to solve the same problem.

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Administrative/Production Failure Demand

Some symptoms of administrative and process Failure Demand are:

• Rework

• Recalls

• Warranty Work

• Workarounds to complete tasks

• Unbalanced work flow

• Status meetings

• Complicated work processes known only by selected SMEs

• Excessive time to deliver

• Repeated monitoring, inspections and audits

• Repeated inbound and outbound calls for the same issue

• Inquires due to inadequate information/unclear instructions

• Large buffers of time and materials, "just in case"

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