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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.


The Efficiency Paradox

  • 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

Comments on this post: This is Lean -Variation on Processes

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Now, I understand this feature. There are lots of things to learn from this. - Steven Wyer
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