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.