In the previous post, The balancing act of getting to process efficiency Nirvana, I wrote about the difficulty of balancing resource efficiency and flow efficiency towards processing efficiency Nirvana. I also wrote that variation effects them both.
In this post I will discuss a business strategy that tries to handle this balancing act. This strategy is sprung out of Toyota and Toyota Production System(TPS). This strategy is popularly called Lean.
The True North of the Lean strategy is to set the customer first. In Lean you produce what the customer want when he wants it. Shorten the time from customer demand to product or service delivered is of highest priority.
- Customer first
- On demand, one piece flow
- Zero defects
- 100% value add (no waste)
- Figure 1. True North.
The Lean strategy is therefor to first move towards higher flow efficiency before raising the resource efficiency.
Figure 2. Lean – a strategy on the path towards process efficiency Nirvana
Higher flow efficiency
High flow efficiency is when work flows from process step to process step without any disruption or waiting. Touch-time is at 100% and waiting time is at zero.
Figure 6. Work is flowing without any waiting and people are waiting for work
Moving towards higher flow efficiency often means reducing the amount work waiting in queues as waiting will lower your flow efficiency. Reduce the amount of work in queues means you are lowering the work-in-process. Lowering work-in-process will shorten process lead times from customer demand to delivery.
Lowering the work-in-process will uncover problems in your processes that was previously hidden in the queues. By addressing these previously hidden problems you can rid your processes of wasted effort and raise your flow efficiency. As you rid your process of waste the real resource efficiency will be raised as well.
The less work you have in your process the easier it will be to see the different kind of wastes you have in your processes. You will easier see the difference between value adding work and non value added work. It will be more clear where in the process you have quality problems.You will see what causes variability in your process.
Focusing on flow efficiency can be expensive as this will require people and resource to wait for work to arrive. If your process has low variability this is not a big problem but with high variability it will be much harder to keep your resource efficiency on an acceptable level.
The Lean strategy therefor sets a high focus on controlling process variability. By controlling variability it is possible to raise flow efficiency without lowering resource efficiency.