“This is Lean” – An Agile Coach’s Review

Hey there, my fellow Agilists!  I want to share a book that will open your eyes, to get you to really understand Lean and the tradeoffs between process and resource efficiency.  I’m using the generic Lean label of “resource” even though I don’t like using that word when referring to people.

Summary

In a recent presentation by Nigel Thurlow, former head of Agile at Toyota, he recommended this book on Lean.  Some quick history here – Toyota created the Toyota Production System which revolutionized manufacturing and propelled Toyota to the top of the auto manufacturing world.  The Toyota Production System is also known as TPS.  In the Western world TPS is known as Lean.

Connecting the dots – when the former Agile leader of the company that invented a thing tells you this is a good book about that thing, it’s a good bet they know what they are talking about.

Nigel is right – this book will really open your eyes to understanding flow and point out one major practice that you might be doing that is severely restricting that flow.

My Review

The book opens telling the story of two people, both who have a health concern that might be cancer.  Each person seeks to attain a diagnosis of their condition.

The authors brilliantly take each patient through health care systems that are optimized in different ways.  Namely, a system that is optimized for resource efficiency and the other which is optimized for flow efficiency.

Resource Efficiency: This is the type health care system most of us have experienced.  You make an appointment with one doctor, require more tests, so make an appointment to get tests, wait, schedule an appointment with a specialist to review those tests, wait some more and then finally get a diagnoses.  There may even be more steps than this.  Processes optimized in this way may take weeks or months to get a diagnosis.

Processes optimized for Resource Efficiency have a goal of ensuring that valuable resources are seldom to never idle.  When they finish one task they immediately begin the next.  There is little to no down time for the resource.

This goal is realized in the health care example where there is no downtime for a medical professional.  They move from one patient to the next with little time between.  This maximizes the amount of time health care workers are seeing patients.

The key here is that, from the health care customer’s perspective, the vast majority of the overall time from concern to diagnosis is spent waiting.

Flow Efficiency: This is a very different type health care system than most of us have experienced.  You make an appointment and during that appointment you see your primary doctor, do the tests, meet the specialist and receive a diagnosis.  Perhaps even within hours.

Processes optimized for Flow Efficiency have a goal of ensuring that work items are never at rest within the flow.  There is always a resource available to continue to process the item and move it through the system.

This goal is realized in the health care example where there is little waiting time for patients.  There is always the next needed resource available to the patient, whether that be medical professionals, tests or other needs.

The key here is that, from the health care customer’s perspective, the vast majority of the overall time from concern to diagnosis is spent getting care.

Key Learning Points

Key Learning Point #1 – Optimizing for Resource Efficiency Requires Establishing Queues:

In order to have the highest levels of resource utilization requires work to be at rest, and waiting, for a resource to become available.  Work at rest, or work waiting to be consumed, will sit in a queue.

When work is sitting in queues, lead & cycle times increase.  Throughput decreases.

As Lean practitioners, something we strive to uncover and reduce are queues.  Queues represent inventory and all inventory incurs holding costs.  Work at rest increases risk.  Period.

Key Learning Point #2 – Optimizing for Flow Efficiency Increases Slack:

There are methods to calculate the flow efficiency of a given process, or value stream, depending upon your needs.  Using many Lean techniques to uncover and remove waste is common, there are many books on this.

In this context of efficiencies, optimizing for flow will reduce resource utilization.  Resources will be idle, perhaps for long periods of time, in order to improve the flow of the system.  Having valuable resources idle is troubling for many in management.  This is something they will have to consider.  Which is more “valuable” – increased flow (lower cycle times) or maintaining high levels of resource utilization?

One side-effect of reducing resource utilization though is an increase in slack within the system.  This can be beneficial in an unpredictable environment and will reduce delay in the overall system.   (delay increases as utilization rate increases: delay = %busy / %available)

Key Learning Point #3 – The Efficiency Paradox:

Both efficiencies, while each desirable in their own way, cannot simultaneously be achieved.  Increasing efficiency in one necessitates sub-optimizing the other.

The author’s present considerations based on your situation & context.  Choices are necessary of which to pursue as the primary objective.  As this cannot be a decision made without deep understanding of goals and context, there is no “best” balance point.  Each organization and area within the organization must experiment to find what is best for their given situation.

Key Learning Point #4 – Put the Customer’s Perspective First:

There are many benefits of approaching this paradox from the customer’s perspective.  What is most important to satisfying the customer?  This must be balanced with the desires of management but Lean emphasizes a customer-centric approach.

Wrapping up

Flow Efficiency optimization goes against common management practices of making sure everyone is busy all the time.

Lean Thinking

“Follow the baton, not the runners”

Don Reinertsen

I found this book to be a fantastic read to more deeply understand the two differing efficiencies.  Both carry pros and cons.  What I liked best was the usage of the health care patients and explaining how each optimization strategy affects their experience, positively and negatively.

Click the image below to grab a copy of this book today and begin your journey of finding the balance between resource and flow efficiencies which best fits your unique organization.  Let me know, in the comments below, your thoughts on this book!

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