Book Notes from 'This Is Lean' By Niklas Modig
This is Lean!
- Develop our definition of
lean at the 'fruit level'
- How Toyota has implemented
TPS within the car dealer operations in Japan
- Lean is an operations
strategy that prioritizes flow efficiency over resource efficiency.
- The Lean Operations Strategy
- We see lean as an operations strategy,
as it concerns how an organization produces value.
- What matters is that the
strategy involves
- Moving towards the upper
right of the matrix
- Aiming for that star
- Lean operations strategy
involves moving the organization to the right in the matrix by increasing
flow efficiency.
- In the choice between flow
efficiency and resource efficiency, the first priority is clearly to
focus on flow efficiency.
- Taiichi Ohno - 'all we are
doing is looking at the time line from the moment the customer gives us
an order to the point when we collect the cash'
- By focusing on flow
efficiency, an organization can also reduce a lot of superfluous work and
waste.
- A lean operations strategy
involves focusing on flow efficiency before resource efficiency
- It is hopefully clear that
what prevents organizations from reaching the perfect state is variation
- It is vital in a lean
operations strategy to eliminate, reduce and manage variation.
- Away from the Wild West
- Three problems with
different definitions of lean
- Lean is defined at
different levels of abstraction
- Lean is seen as a means to
an end
- Lean is everything that is
good - everything good is lean
- We have dealt with those
problems (above) - by defining lean as an operations strategy
- The definition is at the
'fruit level' - high level of abstraction. Increasing the level of
abstraction helps make lean applicable in different environments -
- Everything can be linked
to a goal.
- The definition focuses on
the goal of flow efficiency - it is important to understand why Toyota
and other organizations that focus on flow efficiency do what they do
- The definition is
non-trivial and makes it possible to define what lean is and what lean
is not.
- It is important to emphasize
that the means Toyota has used to increase flow efficiency many not me
applicable in every environment.
- By defining lean as an
operations strategy, we aim to show that lean is a strategic choice for
all organizations.
- 'what value do we want to
create, and how should we compete?'
Realizing a Lean
Operations Strategy
- Lean is an operations
strategy - a strategy to achieve an
objective.
- Prioritize high flow
efficiency over resource efficiency.
- How does an organization
become lean?
- The naïve foreigner
- Toyota Story --
- "Can you tell me how
you implement them in your service business? For example, how have you
adopted the tools and methods for your sales and service
processes?"
- "Yet another foreigner
who does not understand anything."
- "you have asked a
question that shows you do not understand what TPS is all about"
- "they completely
missed what they do not see. Our Philosophy"
- "why we use the tools
and methods that we do."
- "our values and
principles guide us in everything that we do"
- Summarized thoughts into
values - those values defined how we should always be towards our tree.
- The most important value
was to always focus on the customer.
- Those values show us how we
should always be - they became the core of our culture.
- Values is the top circle -
principles is under values.
- What decisions did we make
today that aligned with our values
- What decisions did we NOT
make today
- What can we learn from
this to ensure that the tree will be even more beautiful tomorrow.
- By asking these questions
every day - principles start to develop regarding how we make decisions.
- The principles guided us in
terms of how and what we should prioritize in our business.
- The principles developed
due to our attention's always being on our values.
- Under one of the circles
for principles - wrote : 'just in time"
- Just in time - is all
about creating flow.
- Under the other circle for
principles - wrote : 'Jidoka'
- The other side of the same
coin
- Jidoka - somewhat abstract
principle
- "What underlying
conditions must exist in order for a soccer team to score a lot of
goals"
- Good playing tactics -
great kicks
- Strength and speed
- Teamwork and passing
ability
- You answered how I
thought you would.
- You focus too much on the
conditions that need to exist to create a good flow.
- All the players from all
positions on the field must always be able to
- See the field, the ball,
the goal
- See all the players on
the field
- See the score
- See how much playing
time is left
- Hear the whistle
- Hear their team members
and the crowd
- Be aware of everything
that is happening all the time.
- Based on this clear
picture they can make decisions about how, together they can score a
goal.
- We all sit in different
places and we do different things at different times, independently of
each other.
- Just in time - is about
creating flow, while Jidoka is about creating a visible and clear
picture so that anything that happens to hinder, or disturbs the flow
can be identified immediately.
- Drew more circles under
the principle circles - methods.
- With time we started to
identify how we should carry out different tasks
- Tried to identify,
standardize and spread the best way of doing different tasks.
- Methods were our best way
of looking after our tree every day
- The intention of Jidoka
is to create a transparent organization so that everyone can see
everything all the time.
- Everyone can see
everything that is going on with our company in one look
- When something goes wrong
- someone blows the whistle-everyone stops, we find the root cause of
the problem, we improve and we continue.
- Visual planning is a
method that helped realize Jidoka
- It is important that you
really understand why we visualize.
- It is impossible to
control the whole organization.
- It is possible to
standardize and visualize everything we do.
- Final layer of circles
under methods
- Tools and Activities -
how methods are realized.
- Means for realizing a lean
operations strategy
- How does an organization
adapt the lean tools and methods for a sales and service processes?
- See lean as an operations
strategy - as a strategy with which to achieve a goal.
- Four different groups
- Values define how an
organization should behave.
- Principles define how an
organization should think.
- Methods define what an
organization should do.
- Tools define what an
organization should have.
- Levels of abstraction
- Values are the highest
level of abstraction.
- Tools are the lowest.
- It is important to
understand that all organizations have values, principles and methods and
tools
- The question is - what do
they consist of, how explicit they are, how widely accepted they are in
the organization.
- How different means realize a
lean strategy
- Eliminate, reduce, and
manage variation - primarily in order to increase flow efficiency.
- Values as means: reducing
variation in how employees are
- Values define how an
organization should behave
- Toyota codified five core
values in the 'Toyota Way' - two of these - Respect & Teamwork are
clear conditions for the creation of an efficient flow.
- Respect is about doing
everything to be able to understand each other.
- Teamwork is about
stimulating personal and professional development, sharing
opportunities for development, and maximizing individual and group
achievement.
- Respect and teamwork are
prerequisites for achieving high flow efficiency since everyone is
dependent on each other and has to work together.
- Principles as means:
reducing variation in how employees think
- Principles define how
people in an organization should think in order to increase flow
efficiency.
- Just in time means creating
an efficient flow through the whole organization.
- Jidoka means creating an
aware organization, which prevents, identifies and eliminates everything
that inhibits, disrupts, or slows down flow.
- In order to realize a lean
operations strategy, it is not important how the flow is improved,
simply that it is improved.
- Methods as means: reducing
variation in what employees do
- Methods define what an
organization should do in order to improve flow efficiency. -
- Common method that is often
seen as part of lean is the 5s
- Sorting
- Structuring
- Shining
- Standardizing.
- Sustaining
- 5s - is about having the
right thing in the right place