Too busy chopping wood to sharpen the axe

1st December 2011
Simon Baker

The prevailing management (and financial) mindset in companies today is focused on efficiency, productivity, and costs. The primary concern is to maximize all assets and capabilities so that nothing sits idle. What this really means is keeping people working at 100% utilization.

If the demand is there it makes sense to maximize production. But is the demand truly known?

With specification-driven development there’s usually the expectation that all features are required. What if all the features being built won’t be released for a while? That’s just accumulating inventory. What if a proportion of those features will never be used by users? That would be a waste of money and resources.

Not all demand is the same. Not everything is a feature. Demand that adds cost but no value is best removed. What are the different types of work being done and what is their demand?

Balancing capacity with demand means that some assets are kept idle; sometimes people will find themselves with some time on their hands. In manufacturing idle costs are accepted in exchange for the reduction in inventory and storage costs, and the consequent reduction in losses from having to discount over-produced stock.

Idle time provides slack and should be put to good use. Everybody with time on their hands has a responsibility to ensure the cost of slack is recovered through improvements to the value stream (including improvements to the way of working and removing waste) that reduce the cost of production and increase quality.

No comments

Leave a Reply

Your email address will not be published. Required fields are marked *