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.