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THIS IS LEAN Niklas Modig Stockholm School of Economics @LeanOnMyself   www.facebook.com/niklasmodig   @niklas_modig   @LeanOnMyself  

www.thisislean.com  

What is lean? •  •  •  •  • 

Way of working Philosophy Approach to improvement Approach Systems thinking

•  •  •  • 

Culture Quality system Way of life Method

@LeanOnMyself  

•  •  •  •  •  •  •  • 

Production system Strategy Eliminating waste System for understanding Mind-set Values Management system Tool box

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Fruit

High level of abstraction

Apple

Pear

Whole

@LeanOnMyself  

Piece

Low level of abstraction

Green

Red

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Three central choices

@LeanOnMyself  

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Alison thinks she has cancer

Local  doctor’s   surgery  

Mammography   &  ultrasound  

WaiCng  

Cytology    

Breast  clinic  

WaiCng  

WaiCng  

Breast  clinic  

WaiCng  

42  days   First   contact  

@LeanOnMyself  

Diagnosis  

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Sarah feels a lump in her breast

One  stop  breast  clinic  

First   contact  

Diagnos   Diagnosis  

2h   @LeanOnMyself  

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Any difference?

42  days  24h  =1008h  

2h  

500  $mes   faster   WHY?   @LeanOnMyself  

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Two different views on efficiency

@LeanOnMyself  

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RESOURCE EFFICIENCY à FOCUS: RESOURCE

Local doctor’s Mammography surgery & ultrasound

Waiting

Breast clinic

Waiting

Waiting

Breast clinic

Cytology

Waiting

42 days First contact

Diagnosis

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RESOURCE EFFICIENCY à FOCUS: RESOURCE

Filming the “source”

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FLOW EFFICIENCY à FOCUS: FLOW UNIT

Local doctor’s Mammography surgery & ultrasound

Waiting

Breast clinic

Waiting

Waiting

Breast clinic

Cytology

Waiting

42 days First contact

Diagnosis

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FLOW EFFICIENCY à FOCUS: FLOW UNIT

Filming the “receiver”

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Two different strategies

Resource  efficiency  

Flow  efficiency  

Focus  

Resources  /  funcCons  

Customer  /  unit  

Goal  

High  capacity  uClizaCon  

Fulfil  needs  

OrganizaCon  

Parts  /  ”Islands”  

System  /  ”Ocean”  

Competence  

Specialists  /  “depth”  

MulC-­‐competence  /  “Width”  

@LeanOnMyself  

www.thisislean.com  

What shall we prioritize first? RESOURCE EFFICIENCY

FLOW EFFICIENCY

LONG THROUGH-PUT TIME

SHORT THROUGH-PUT TIME

HIGH CAPACITY UTILIZATION

@LeanOnMyself  

WASTE  

LOW CAPACITY UTILIZATION

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Resource   efficiency  

Flow     efficiency  

@LeanOnMyself  

WHY?  

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Maximize capacity utilization

Maximize capacity utilization

Maximize capacity utilization

Local doctor’s Mammography surgery & ultrasound

Waiting

Maximize capacity utilization

Maximize capacity utilization

Cytology

Breast clinic

Breast clinic

Waiting

Waiting

Waiting

42 days First contact

What happens when “a system” is busy?

Diagnosis

à  A diagnose will take long time à  We have to handle many patients at the same time à  We have to restart the diagnose many times

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THE OPTIMAL PROCESS Resource Flow efficiency efficiency 100% Free utilization capacity

100% Free utilization capacity

100% Free utilization capacity

100% Free utilization capacity

1

2

3

4

What happens when “a system” is busy?

à  Things will take long time à  We have to handle many things at the same time à  We have to restart the value adding process many times

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Different indirect effects Resource  efficiency  

Flow  efficiency  

Focus  

Resources  /  funcCons  

Customer  /  unit  

Goal  

High  capacity  uClizaCon  

Fulfil  needs  

OrganizaCon  

Parts  /  ”Islands”  

System  /  ”Ocean”  

Competence  

Specialists  /  “depth”  

MulC-­‐competence  /  “Width”  

Resource  efficiency  

Flow  efficiency  

Through-­‐put  Cme  

Long  

Short  

Number  of  units  

Many  

Few  

Restarts  

Many  

Few  

@LeanOnMyself  

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Resource efficiency drives ”system waste” Focus   Focus   Goal   Goal   OrganizaCon   OrganizaCon   Competence  

Resource  efficiency   Resource  efficiency   Resources  /  funcCons   Resources  /  funcCons   High  capacity  uClizaCon   High  capacity  uClizaCon   Parts  /  ”Islands”   Parts  /  ”Islands”   Specialists  /  “depth”  

Resource  efficiency  

NegaCve  result   à  UnsaCsfied  customers   à  UnsaCsfied  personnel   à  Waste  

Failure  demand  

Through-­‐put  Cme  

Long  

Forget,  frustraCon,  rework,  search…  

Number  of  units  

Many  

Difficult  to  handle,  Under-­‐capacity...  

Restarts  

Many  

Quality  problems,  no  system  responsib…    

@LeanOnMyself  

www.thisislean.com  

Three sources of inefficiency Secondary need Secondary need Long throughput time Secondary need

Secondary need

Over-focus on resource efficiency Many restarts

@LeanOnMyself  

Secondary need

Secondary need

Secondary need

Secondary need

Secondary need

Secondary need

Many flow units

Secondary need

Secondary need

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The efficiency paradox By NOT focusing on maximizing capacity utilization, MORE capacity will be available

Total     capacity   (100%)    

Superfluous  work   (Secondary  need)  

Value-­‐added     work   (Primary  need)  

@LeanOnMyself  

Value-­‐added     work   (Primary  need)  

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The efficiency matrix

@LeanOnMyself  

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Resource  efficiency   Low   High  

The efficiency matrix

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

Strategy  to  increase  resource  efficiency  

Resource  efficiency   Low   High  

The efficiency matrix

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

Resource  efficiency   Low   High  

The efficiency matrix

Strategy  to  increase  flow  efficiency  

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

Resource  efficiency   Low   High  

This is lean = an operations strategy

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

Resource   efficiency  

Flow   efficiency  

@LeanOnMyself  

www.thisislean.com  

Resource  efficiency   Low   High  

How to do the “how”?

Current   state  

How?  

Future   state  

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

?   @LeanOnMyself  

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Just-in-time and Jidoka Perfect understanding of: •  The process / the system •  + / •  Progress

@LeanOnMyself  

89:30   5  

SCORE  

1  

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Welcome to Stockholm School of Economics!

@LeanOnMyself  

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How  can  we  develop  operaCons  where  everyone  “sees”   everything  and  has  perfect  progress  control  all  the  Cme?  

ONE  CLICK  AWAY  à  ONE  LOOK  AWAY     @LeanOnMyself  

www.thisislean.com  

@LeanOnMyself  

Resource   efficiency  

Monitor  the     outcome  from     “my  island”  

Flow   efficiency  

Monitor  the     progress  of  the     system  

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Resource  efficiency   Low   High  

When is an organisation lean?

Low  

High   Flow  efficiency  

@LeanOnMyself  

www.thisislean.com  

+

time 1 @LeanOnMyself  

2 www.thisislean.com  

+ How?

time 1 @LeanOnMyself  

2 www.thisislean.com  

PROACTION

0

ACTION

1

@LeanOnMyself  

2

3

REACTION

4

5

6

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

0

2

3

4

5

6

1. SET

@LeanOnMyself  

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

0

1

1. SET

@LeanOnMyself  

2

2

3

4

3

4

5

5

6

2. TEST

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

0

2

1

2

3

4

3

4

5

5

6

2. TEST

1. SET

3. EVALUATE

A

B

DEVIATION

DEVIATION

@LeanOnMyself  

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

2

3

4

+

5

DEVIATION

X 0

1

2

3

4

5

6

2. TEST

1. SET

3. EVALUATE

X

NORMAL OUTCOME

X DEVIATION

A

B

DEVIATION

DEVIATION

@LeanOnMyself  

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

2

3

4

+

5

DEVIATION WHY?

X 0

1

2

3

4

5

6

2. TEST

1. SET

3. EVALUATE 4. ANALYZE

A

B

DEVIATION WHY?

DEVIATION WHY?

@LeanOnMyself  

X

NORMAL OUTCOME

X DEVIATION

-

WHY?

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

2

3

4

+

5

X 0

1

2

3

4

5

6

2. TEST

1. SET

3. EVALUATE 4. ANALYZE 5. LEARN

A

B

DEVIATION WHY? AHA!

DEVIATION WHY? AHA!

@LeanOnMyself  

X

DEVIATION WHY? AHA! NORMAL OUTCOME

X DEVIATION

-

WHY? AHA!

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

2

3

4

+

5

X 0

1

2

3

4

5

6

2. TEST

1. SET

3. EVALUATE 4. ANALYZE 5. LEARN 6. IMPROVE

A

B

DEVIATION WHY? AHA!

DEVIATION WHY? AHA!

X

DEVIATION WHY? AHA! NORMAL OUTCOME

X DEVIATION

-

WHY? AHA!

CHANGE

@LeanOnMyself  

www.thisislean.com  

PROACTION

ACTION

REACTION

NORMAL FLOW 1

2

3

4

+

5

X 0

1

2

3

4

5

6

2. TEST

1. SET

3. EVALUATE 4. ANALYZE 5. LEARN 6. IMPROVE

A

B

DEVIATION WHY? AHA!

DEVIATION WHY? AHA!

X

DEVIATION WHY? AHA! NORMAL OUTCOME

X DEVIATION

-

WHY? AHA!

CHANGE

@LeanOnMyself  

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THE LEARNING LOOP

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The learning Dynamiskt organisation mål (kontinuerlig förbättring)

Flödeseffektivitet Flow   efficiency   (%)

A  Dynamiskt dynamic  mål state   “con$nuous   evolu$on”   (utvecklas hela tiden)

Utgångspunkt Current   state  

Tid Time  

@LeanOnMyself  

Utgångspunkt Current   state  

www.thisislean.com  

@LeanOnMyself  

Resource   efficiency  

Monitor  the     outcome  from     “my  island”  

ReacCve   execuCon  

Flow   efficiency  

Monitor  the     progress  of  the     system  

ProacCve     learning  

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THANK YOU!

@LeanOnMyself  

www.thisislean.com