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The Power of Lean Part III: Critical Flow

12/02/2014


Part 1 and Part 2 of this blog series defined Lean and discussed the principle of continuous improvement that is so core to the Lean concept. This instalment explores the equally critical idea of flow.

Lean and flow go hand in hand
While a number of key elements of Lean support the achievement of value delivery and waste reduction (such as pull, standardization, just-in-time, etc.), the idea of flow is particularly interesting and powerful.

In a perfect Lean world, work would continuously and evenly flow from start to end, with delivery of products and services that exactly meet customer value needs at a pace that exactly matches their demand. Why is this a good situation? For starters, customers get exactly the value they want when they want it. At the same time, the process that delivers this value is as near to perfect as can be expected, as only a perfect process can achieve continuous, even flow.

Achieving flow frees up wasted capacity
Achieving flow requires the elimination of waste, as waste disrupts flow. As well, achieving flow requires that capacity be properly balanced across the entire value-delivery process. This is a powerful concept, as the achievement of balanced capacity tends to free up capacity hidden away and lost in processes that have one or more capacity constraints or bottlenecks.

So how does this work? Imagine a simple five-step process. Steps 1, 2, 4 and 5 have capacities equal to ten units of work per hour. Step 3, however, has capacity of only eight units per hour. So what happens at the other four steps? Typically, they slow down to a level equal to the bottleneck. Steps 1 and 2 slow down because there’s no advantage to working faster, meaning Steps 4 and 5 are forced to slow down because Step 3 sets the pace at which they can work. The result is that four out of five steps are working at 80% capacity and the overall process produces, at best, eight units of work per hour.
The solution is to redesign the process so that all steps provide equal capacity. Whether the right answer is eight units per hour or ten units per hour, or something different, the result is better utilization of capacity at all five steps and a positive spike in productivity and throughput.

Given that reality is considerably more complex than a five-step process and that multiple value-delivery processes typically cross through common resources and departments, identifying bottlenecks and balancing capacity is not a trivial exercise. Indeed, looking at work and processes through an industrial engineering lens is not often something that managers and staff are comfortable with. But it is required to ensure that processes are designed for optimum performance.

With many organizations faced with the challenge of doing more with less, the ability to find and use capacity that is currently being wasted can lead to a game-changing result. Yes, completing processes faster and with less stop-and-go disruption is all very positive, but the real prize from the effective application of Lean thinking is often huge gains in capacity and associated significant improvements in productivity.

Stay tuned for the final instalment of this series, where we will look at how you can move forward with Lean to achieve real improvements in your organization.