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Book Notes from 'This is Lean' by Niklas Modig 


The Art of Being Extremely Inefficient

  • Superfluous work is correctly perceived as adding value; we have to take care of all the receipts whether we like it or not.
  • Yet, the core of superfluous work is that it addresses a need that has arisen due to a failure to satisfy the primary need.
  • The root cause of superfluous work is actually a failure.
  • Receipt example - processing each receipt involved at least four restarts since it is the minimum number of times we had to look at each receipt
  • How much of your time that you spend at work is spent on fulfilling secondary needs? In other words, how much of your total working time is dedicated to superfluous work?
  • But I am really busy so I must be efficient.
    • Are you actually creating real value (meeting a primary need)
    • Or are you fulfilling secondary needs.

 

The Efficient Paradox

  • If flow efficiency suffers - then several secondary needs will be generated.
  • The paradox is that we believe we are utilizing our resources efficiently - but we are actually being inefficient.
  • Much of that utilization comes from superfluous work and non-value adding activities.
  • It may be - that a lot of the work that keeps our organization busy is pure waste.

 

Resolving the Efficient Paradox

  • The efficient paradox means we are wasting resources at the individual, organizational and societal levels.
    • How can we resolve this paradox.
  • At the core of resolving this - is a focus on flow efficiency
  • Eliminate many of the secondary needs that arise as a consequence of low flow efficiency.
  • By focusing on flow efficiency - flow units should flow quickly through an organization
  • Flow efficient organization there is no need for numerous restarts - since there are less flow units.
  • There is a continuous flow and everyone sees and takes responsibility for the whole process.
  • One strategy for resolving the efficient paradox is a concept called 'lean'
    • This involves focusing on flow and creating organizations that are more like an efficient relay race.
    • Lean has been extremely successful in eliminating waste and superfluous work in many industries.

 

Once upon a time.. How Toyota became number one through customer focus.

  • A company that systematically chose to focus on flow efficiency was Toyota.
  • Why Toyota came to focus on flow efficiency - what effect this move had on the evolution of Toyota's production system.
  • The History of Toyota Motor Corporation
    • Two things puzzled the toyota representatives.
      • There was so much stock
      • So many products had to be repaired at the end of production.
    • This make it immediately possible to identify, analyze and eliminate the problem that had arisen.
      • This concept was called 'jidoka'
    • Jidoka - became the core of Sakichi's philosophy and later became one of the two pillars upon which toyota built its production system.
    • This led to the development of just-in-time - the second pillar upon toyota's production system.
      • Creating flow in production by eliminating all inventory and only producing what the customer wants.
  • Focus On Doing the Right Things
    • The importance of 'doing the right things' which meant providing the product that the customer wanted.
    • Toyota learned the importance of really knowing customer needs. Three questions
      • What does the customer want
      • When does the customer want it.
      • What amount does the customer want
    • The first question does with 'what' potential car buyers needed and desired.
    • It also became very important to know when and how many cars to produce.
    • Information answered the questions of what, when and how many the customer wanted.
    • All parts of the production process must define and communicate what, when, and how many units they need.
  • Focus on Doing things Right.
    • 'do things right' by efficiently processing the produced goods to avoid having too much capital tied up in work-in progress
    • Fast information flows in one direction - and fast production flows in the other.
    • Eliminate anything that could inhibit the flow of the process.
    • All forms of inefficiency or waste that did not add value to the product were eliminated to improve flow.
    • Toyota identified seven forms of waste that inhibited the production of flow.
      • Waste of overproduction
      • Waste of time on hand (waiting)
      • Waste in transportation
      • Waste of processing itself
      • Waste of inventory
      • Waste of movement
      • Waste of making defective products.
    • Toyota's focus on doing things right meant that the company avoided the risk of delivering an incorrect or faulty product to the customer.
    • Problems were seen as opportunities for development and improvement.
    • Problems were something positive that should be immediately identified, analyzed, and eliminated
    • A mistake should never reach the customer.
    • The lack of resources forced the company to develop a production system that focused on flow efficiency.
    • Focus on the customers needs.
Posted on Wednesday, August 31, 2016 10:12 AM Agile | Back to top


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