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Book Notes from 'This is Lean' by Niklas Modig

  • Story of Alison and Sarah both being diagnosed with cancer -
    • From finding the lump to diagnoses - difference of 500x faster for Sarah
  • This is lean is a book about a new form of efficiency - 'flow efficiency'
    • Flow efficiency focuses on the amount of time it takes from identifying a need to satisfying a need.
  • Flow efficiency, how its created, and why various decisions improve or worsen flow efficiency.
  • How and why organizations are actually wasting resources when they think they are being efficient.
  • Lean is one of the worlds most widespread management concepts, definitions of the concept are incredibly inconsistent.

 

From resource focus to customer focus

  • Resource efficiency and flow efficiency.
  • Resource efficiency
    • Most traditional and most common
    • Focuses on efficiently using the resources that add value within an organization.
  • Flow efficiency
    • Focuses on the unit that is processed in the organization.
  • There are important differences between resource and flow efficiency.

 

Resource Efficiency

  • The traditional form of efficiency
    • Involves utilizing resources as much as possible.
  • Industrial development has been built around increasing the utilization of resources.
  • Basic principle in industrial development is to divide an incoming job into smaller tasks - which are carried out by different individuals.
  • Most common way of looking at efficiency.
  • Continues to dominate the way in which organizations in different industries are organized, controller and managed.
  • Resource efficiency focuses on the resources an organization needs in order to produce a product or deliver a service.
  • Resource efficiency is a measurement of how much a resource is utilized in relation to a specific time period.
  • From an economic perspective - it makes sense to strive for the most efficient possible use of resources.
  • Opportunity cost is the loss from not utilizing resources to the fullest.

 

Flow Efficiency

  • Creating an organization that is organized around a specific need requires all staff to work together.
  • We define flow efficiency as a new form of efficiency
  • Flow efficiency focuses on 'the unit' processed in an organization.
  • The form of efficiency the focus is on the unit as it flows through the organization  - the flow unit
  • Flow efficiency is a measurement of how much a flow unit is processed during a specific time period.
  • The time period is defined from the time a need is identified to the time it was satisfied.
  • Important - the time during which the flow unit receives value.
    • Is the unit receiving value or standing still

 

What route to take?

  • Which is best? Resource or Flow Efficiency
  • Understand how processes work -
  • Flow efficiency is created through processes -
    • A process is a collection of activities that, together, create a path for and fulfil the need of a flow unit

 

Processes are central to flow efficiency

  • Flow efficiency is created through an organizations processes
  • All organizations have processes.
  • Value to the unit 'value add' - no value 'non-value-add'
  • Flow efficiency is about deleting all the non-value-add.

 

Processes are defined from the flow unit's perspective.

  • Process must be defined from the units perspective.
  • Defining the process from the flow unit's perspective is important.

 

Posted on Tuesday, August 23, 2016 7:11 AM Agile | Back to top


Comments on this post: This is Lean - Resource & Flow Efficiencies

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We really need to make sure that we will only be using the top quality of approaches. - Mark Zokle
Left by Martin on Aug 31, 2016 10:40 PM

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