Book review - This is LEAN

How to get a simple insight in a few hours that explains the difference between traditional western and LEAN definition of efficiency? Niklas Modig and Pär Åhlström have achieved this in their excellent book: "This is Lean".

With a comparison of looking at efficiency in a Healthcare environment, they show us the difference between maximizing resource efficiency and "flow". Their example very clearly shows the impact of our currently most common form of maximising resource efficiency: making sure the people or machines are busy all the time.

In effect this leads to long waiting times for the patient. Maybe more disturbingly so, the organization will focus on the goal of keeping busy in itself. This creates more work that adds no value to the customer at all.

Flow of course maximises the customer value and minimizes the waiting times, the is the LEAN vision on process efficiency. It is especially refreshing to see how the authors visualise the discrepancy between these two visions on efficiency. They refer to this as the "efficiency paradox" and rightly so.

A high degree of flow will require, depending on the amount of variation in the processes, a high availability of ready-to-go "idle" resources. Take the healthcare example: when a patient comes in the team of nurses, analytic equipment, doctors who diagnose and treat, need to be ready to go. If the variation of the process is high, say in an emergency room with very different cases coming in, then ensuring the patient is served in the fastest possible way will require an "over capacity" of resources.

Simplified this means that the decision whether a business strategically focusses on cost (high resource efficiency) or on customer value (high flow efficiency) defines the outcome. There's a twist to this of course: if you are not aligned at every step of ensuring customer value in all that you do, are you really being cost efficient?

The efficiency paradox and matrix set us up for what can be called the second part of the book. In this section we read how LEAN is not a tool box to be thrown at parts of an organisation. How we cannot define how "LEAN" the organization is. It shows us from real life interviews and cases that LEAN truly needs to be a way of thinking throughout the entire organization. The description, or lecture, given by Nishida-san (a senior manager at Toyota) very concisely gives an insight into how customer value infuses the entire company and leads to continuous improvement and ultimately: lowest cost!

Are we catching the big fish only, or are we truly learning to fish... We highly recommend this book to get a clear insight in LEAN and flow efficiency versus resource efficiency.

"This is LEAN" can be found at amazon.co.uk. More information can be found on the website of the authors.