• Bogdan Deris

The 3 inhibitors of performance within your organisation


What does it mean to be Lean organisation?

From Operating System (OS) point of view it means that:

  • Processes are properly designed;

  • The right amount of resources is deployed at the right moment in time;

  • The working layout enables high employee performance and optimal running processes.

It might sound simple to implement and yet, in most organisations processes are poorly designed which leads to customer and employee dissatisfaction. Resources are inefficiently utilised leading to employees being idle, or burned out, and on top of that the working layout is adding additional complexity or it is preventing proper resource management.



So, what is causing all of this?

There are three main inhibitors of performance that need to be addressed to significantly improve process, resource allocation and layout:

  1. Waste

  2. Rigidity (also called inflexibility)

  3. Variability

Waste

Waste is probably the most know inefficiency of Lean methodology. It can simply be defined as something that does not add value or something for which neither external nor internal customers are willing to pay.

This means that:

  • Activities which are not performed in an optimal way are, or contain, waste;

  • Activities which do not lead to a valuable process output are waste; 

  • Activities that are performed in order to fix a defect are waste as well.

There are 8 types of waste in Lean methodology. They can be remembered by using the acronym TIM-WOODS:

• Transportation (transportation/ movement of items which can lead to extra costs or longer processing times);

• Inventory (storage of goods, paper based archiving or even inefficient usage of data storage);

• Movement (movements/ motion that employees, or customers, could avoid while getting tasks done faster and better);

• Waiting (employees being idle or customers losing time because of slow systems, shortage of personnel, etc);

• Over-production (producing items to soon or in a larger quantity than needed);

• Over-Processing (using more resources than needed in order to get the job done);

• Defects (items that don’t meet customer expectations and need to be fixed or replaced, including the correspondent processes);

• Skills (over and underutilisation of talent and skills. It is also called Intellectual waste but be aware that this will totally mess up the acronym).

Probably the most difficult part for any organisation which tries to adopt a Lean culture is teaching employees how to see waste, identify the root causes and empower shop floor to eliminate it.

Rigidity (also called inflexibility)

Rigidity can be defined as the inability of an organisation to adapt to its customers expectations and it is divided into 4 categories:

• Product mix (customers require an additional product in combination with a purchased one and the organisation is unable to provide it – e.g. flight ticket with no hotel transportation option);

• Product features (the required product exists in the portfolio but a specific feature is missing – e.g. hotel booking with no late check-out option);

• Service delivery (the service, or product, is delivered faster or slower than customers expect);

• Demand (the inability to match resources with customer demand leads to idle, or overworked, employees).

Variability

Variability happens when customers expect a level of standardisation which the organisation is unable to provide. For example, a customers of a fast-food chain expects the same quality of burger every time everywhere. Or, it might be that customers desire a certain service to be delivered within 24 hours, no exceptions, and so on.

There are 3 types of variability that can lead to quality and time fluctuations:

• Process variability appears when there is a lack of process standardisation due to the absence of simple to follow operating procedures. Each employee ends up performing a certain process in his, or hers, own way and even adjust the process each time.

• Individual variability can be observed when there are differences in performance between employees within same seniority group (e.g. high performer VS low performer) when executing a comparable process or task.

• Skill variability can be observed when employees of different seniority levels (e.g. senior VS junior) execute a comparable process or task.

The existence of high individual and skill variability can have multiple root causes such as: ineffective training processes, poor recruitment of employees, staff turnover, process variability and so on.

Depending on the industry or area, there are certain limits which can be considered normal when you quantify rigidity and variability. You will always have some level of variability and rigidity but organisations should be aware of their existence and reflect on how this is impacting their customers and financials.


Best of luck!


#performanceinhibitors #waste #rigidity #variability

 

©2018 by Bogdan Deris