Professional Documents
Culture Documents
Niklas Modig
Stockholm School of Economics
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@niklas_modig
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What is lean?
Way of working Production system
Philosophy Strategy
Approach to improvement Eliminating waste
Approach System for understanding
Systems thinking Mind-set
Culture Values
Quality system Management system
Way of life Tool box
Method
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Fruit
High level
of abstraction
Pear Apple
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Three central choices
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Alison thinks she has cancer
42
days
First
Diagnosis
contact
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Sarah feels a lump in her breast
First
Diagnos
Diagnosis
contact
2h
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Any difference?
500
$mes
faster
WHY?
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Two different views on efficiency
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RESOURCE EFFICIENCY FOCUS: RESOURCE
42 days
First Diagnosis
contact
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RESOURCE EFFICIENCY FOCUS: RESOURCE
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FLOW EFFICIENCY FOCUS: FLOW UNIT
42 days
First Diagnosis
contact
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FLOW EFFICIENCY FOCUS: FLOW UNIT
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Two different strategies
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What shall we prioritize first?
RESOURCE EFFICIENCY FLOW EFFICIENCY
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Resource
eciency
Flow
eciency
WHY?
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Maximize Maximize Maximize Maximize Maximize
capacity capacity capacity capacity capacity
utilization utilization utilization utilization utilization
42 days
First What happens when a system is busy? Diagnosis
contact A diagnose will take long time
We have to handle many patients at the same time
We have to restart the diagnose many times
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THE OPTIMAL PROCESS
Resource
Flow efficiency
efficiency
100%
Free 100%
Free 100%
Free 100%
Free
utilization
capacity utilization
capacity utilization
capacity utilization
capacity
1 2 3 4
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Different indirect effects
Resource
eciency
Flow
eciency
Focus
Resources
/
funcCons
Customer
/
unit
Goal
High
capacity
uClizaCon
Full
needs
OrganizaCon
Parts
/
Islands
System
/
Ocean
Competence
Specialists
/
depth
MulC-competence
/
Width
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Resource efficiency drives system waste
NegaCve
result
Resource
eciency
Resource
eciency
Focus
Resources
/
funcCons
Focus
Resources
/
funcCons
Goal
High
capacity
uClizaCon
UnsaCsed
customers
Goal
High
capacity
uClizaCon
UnsaCsed
personnel
OrganizaCon
Parts
/
Islands
OrganizaCon
Parts
/
Islands
Waste
Competence
Specialists
/
depth
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Three sources of inefficiency
Secondary
need
Secondary
need
Long Secondary Secondary
throughput need need
time
Secondary
Secondary need
need Secondary
need
Over-focus on
resource
Secondary
need efficiency
Secondary
Many need
Many
restarts flow units
Secondary
need Secondary
Secondary
need
need
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The efficiency paradox
By NOT focusing on maximizing capacity utilization, MORE capacity will be available
Superuous
work
Total
(Secondary
need)
capacity
(100%)
Value-added
Value-added
work
work
(Primary
need)
(Primary
need)
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The efficiency matrix
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The efficiency matrix
High
Resource
eciency
Low
Low
High
Flow
eciency
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The efficiency matrix
High
Low
High
Flow
eciency
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The efficiency matrix
High
Resource
eciency
Low
Low
High
Flow
eciency
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This is lean = an operations strategy
High
Resource
eciency
Low
Low
High
Flow
eciency
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Resource
eciency
Flow
eciency
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How to do the how?
High
Resource
eciency
Low
Low
High
Flow
eciency
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?
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Just-in-time and Jidoka
Perfect understanding of:
The process / the system 89:30
+ / - 5
SCORE
1
Progress
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Welcome to
Stockholm School of Economics!
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How
can
we
develop
operaCons
where
everyone
sees
everything
and
has
perfect
progress
control
all
the
Cme?
Monitor
the
Flow
progress
of
the
eciency
system
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When is an organisation lean?
High
Resource
eciency
Low
Low
High
Flow
eciency
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+
time
1 2
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+
How?
time
1 2
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PROACTION ACTION REACTION
0 1 2 3 4 5 6
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5
0 6
1. SET
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5
0 1 2 3 4 5 6
1. SET 2. TEST
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5
0 1 2 3 4 5 6
A B
DEVIATION DEVIATION
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5 + DEVIATION
0 1 2 3 4 5 6 X NORMAL OUTCOME
-
A B
DEVIATION DEVIATION
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5 + DEVIATION
WHY?
0 1 2 3 4 5 6 X NORMAL OUTCOME
- WHY?
A B
DEVIATION DEVIATION
WHY? WHY?
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5 + DEVIATION
WHY?
AHA!
X
0 1 2 3 4 5 6 X NORMAL OUTCOME
-
5. LEARN WHY?
AHA!
A B
DEVIATION DEVIATION
WHY? WHY?
AHA! AHA!
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5 + DEVIATION
WHY?
AHA!
X
0 1 2 3 4 5 6 X NORMAL OUTCOME
-
5. LEARN WHY?
6. IMPROVE AHA!
A B
DEVIATION DEVIATION
WHY? WHY?
AHA! AHA!
CHANGE
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PROACTION ACTION REACTION
NORMAL FLOW
1 2 3 4 5 + DEVIATION
WHY?
AHA!
X
0 1 2 3 4 5 6 X NORMAL OUTCOME
-
5. LEARN WHY?
6. IMPROVE AHA!
A B
DEVIATION DEVIATION
WHY? WHY?
AHA! AHA!
CHANGE
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THE
LEARNING
LOOP
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The learning Dynamiskt
organisation
ml
(kontinuerlig frbttring)
Flow
eciency
Fldeseffektivitet
(%)
A
Dynamiskt
dynamic
ml
state
con$nuous
evolu$on
(utvecklas hela tiden)
Utgngspunkt
Current
state
Time
Tid
Utgngspunkt
Current
state
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Monitor
the
Resource
outcome
from
ReacCve
eciency
my
island
execuCon
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THANK YOU!
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