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Coaching, Coding and Learning By George Evjen
Book Notes - 'This is Lean' By Niklas Modig

• The Law of the Effect of Variation on processes.
• The third law that helps us - the connection between variation, resources efficiency and throughput time.
• Understanding variation and its impact is central to understanding flow efficiency.
• What is variation?
• There will always be variation in processes
• Divided into three different sources -
• Resources
• Flow units
• External factors
• Regardless of the source of the variation - it affects time.
• Either processing time or arrival time.
• It is impossible to imagine a process without variation
• Although the degrees of variation will differ.
• Relationships between variation, resource efficiency and throughput time.
• Process laws and flow efficiency
• What prevents organizations from having high flow efficiency?
• The laws provide reasons as to why the throughput time in a process increases.
• Little's Law states - throughput time increases when there is an increase in the number of flow units in process and when cycle time increases.
• Law of Bottlenecks states - throughput time increases when there are bottlenecks in the process.
• The Law of the effect of variation states - throughput increases as variation in the process increases.
• Defined flow efficiency as the sum of value adding activities in relation to the throughput time.
• If throughput time increases - flow efficiency will decrease.
• The three laws help us understand that many factors affect flow efficiency
• High resource efficiency - particularly if there is variation in the process - requires flow units waiting to be processed.
• So how can flow efficiency be improved?
• The following activities improve flow efficiency
• Reduce the number of flow units in process
• Work faster - which reduces cycle time.
• Add more resources - increases capacity
• Eliminate, reduce, and manage the different forms of variation in the process.
• What makes these activities particularly difficult is the fact that many aspects of organizations are designed to improve resource efficiency.

• Many organizations are more focused on resource efficiency than on flow efficiency
• The negative effects of focusing too much on resource efficiency.
• The paradox is that a greater focus on utilizing resources efficiency tends to increase the amount of work there is to do.
• The First source of inefficiency - Long Throughput Time
• Experience a range of negative effects
• These negative effects emanate from three sources of efficiency - first one is long throughput time.
• Non-fulfilment of a need can create new types of needs - which in turn create new needs - there is a chain reaction.
• It took so long for her to go through the diagnostic process - various secondary needs developed.
• The point is that the waiting time triggered new types of needs.
• Waiting time closes important windows of opportunity
• Long throughput time generates secondary needs.
• The negative effects of long throughput time, - is a consequence of overly high resource efficiency.
• The second source of inefficiency - Too many flow units
• People ability to handle many things simultaneously.
• The negative effects of handling too many things at once.
• When too many things are being handled at the same time - human limitations cause a number of secondary needs.
• The more customers there are inside the process, the harder it is for each one to feel acknowledged and special - which can create secondary needs.
• Our inability to deal with many things at the same time is the second source of inefficiency that generates problems.
• The need to handle many things at the same time is fueled by a focus on resource efficiency.
• Handling many things at the same time forces and organization to invest in additional resources and develop structures and routines.
• The third source of inefficiency - Too many restarts per flow unit
• Peoples inability to deal with many restarts.
• Starting over on the same task generates mental set-up time.
• We have to re-familiarize ourselves repeatedly with the same information.
• The fewer tasks we have to deal with at the same time - the easier it is to focus.
• The more frequently we have to switch between tasks - the longer the mental set up time becomes in relation to the total time.
• Many handovers generates frustration.
• Restarts are created when different people have to start over on the same task.
• Processes in which each flow unit meets only one resource are possible - but quite rare.
• Many handovers generates defects.
• Many restarts generate secondary needs
• Secondary needs generate superfluous work
• Secondary needs arise as a consequence of the organizations failure to satisfy the primary needs of the customer.
• Secondary needs often generate other secondary needs - a chain reaction.
• What is the root cause of the secondary need?
• Secondary needs are harmful for organizations since they generate what we call superfluous work.
• Work devoted to taking care of secondary needs.
Posted on Sunday, August 28, 2016 11:16 AM Agile | Back to top

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