This is lean!

A book review of This is lean!

‘If lean is everything that is good, and everything good is lean, what is then the alternative?’ Niklas Modig and Pär Åhlström ask this timely question in their book This is lean. The authors go on to suggest what lean is, and what it is not. But, at Amazon.com there are more than 7000 books on lean, why should you read this one?

At first sight, I thought This is lean was just another introductory book to what the Toyota Production System is all about. It sure looks like one, with its 168 short pages, richly illustrated with simple and colorful sketches by Helen Bågeryd. It is in fact an easy-read… and a delightful one. This is lean is lean itself. Modig and Åhlström are able to re-conceputalise the diluted term ‘lean’, and make it new and fresh again. I’ve read many books on lean, but this is admittedly one of the few that I truly enjoyed, and will turn back to later.

In this short review of the book, I do not intend to summarise all its content: for that purpose, I suggest you get hold of it yourself. Instead, let’s take a look at the the ‘efficiency matrix’—a key contribution of the book.

The efficiency matrix: Flow efficiency vs. Resource efficiency

The Efficiency Matrix (Modig and Åhlström, 2012, p. 98)

The efficiency matrix says that operations can be optimised along two axes: flow efficiency or resource efficiency. Flow efficiency is a measure for how fast and undisturbed a customer demand is fulfilled. Resource efficiency is a measure for the extent the resources that a company possesses are utilised in the processes. To score high on these two different objectives rest on partially competing premises; high resource efficiency benefit from high inventories and long throughput times, whereas the opposite is true for flow efficiency. How to resolve this ‘efficiency paradox’, is exactly what Niklas and Pär want to get at.

The efficiency matrix suggest that a company can have four different states of efficiency; ‘wasteland’, ‘efficient ocean’, efficient islands’ and the ‘perfect state’. Reaching the perfect state, a.k.a. lean, is not easy, and not even strategically right for all companies. Variation is lean’s biggest enemy. As variation increases, the company is forced to choose between optimising either flow or resource efficiency. For example, if the company chooses to build inventory, resource efficiency will be improved on the expenses of flow efficiency. Seeking the perfect state—lean—is a strategic choice that is not right for all companies, always.

As Niklas and Pär so excellently show, lean is not everything that is good, and not everything that is good is lean. The book is available at Amazon.com for an unbeatable price of only $13. I highly recommend it.

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