{"id":3855,"date":"2014-11-29T11:27:21","date_gmt":"2014-11-29T11:27:21","guid":{"rendered":"http:\/\/www.saasoft.com\/blog\/?p=3855"},"modified":"2014-11-29T11:27:21","modified_gmt":"2014-11-29T11:27:21","slug":"counter-productive","status":"publish","type":"post","link":"https:\/\/hcse.blog\/?p=3855","title":{"rendered":"Counter-Productivity"},"content":{"rendered":"

\"coffee_table_talk_PA_150_wht_6082\"<\/a>The Webex icon bounced up and down on Bob’s task bar signalling that Leslie had just joined the weekly ISP coaching session.<\/p>\n

<Leslie><\/em> Hi Bob. I have been so busy this week that I have not had time to consider a topic to explore.<\/p>\n

<Bob><\/em> No problem Leslie, I have shelf full of topics we have not touched yet.\u00a0 So shall we talk about counter-productivity?<\/p>\n

<Leslie><\/em> Don’t you mean productivity<\/strong> … the fourth dimension of system improvement.<\/p>\n

<Bob><\/em>They are related of course but we will approach the issue of productivity from a different angle. Rather like we did with safety. To improve safety we considered at the causes of un-safety and focussed our efforts there.<\/p>\n

<Leslie><\/em> Ah yes, I see.\u00a0 So to improve productivity we look at the causes of un-productivity … in other words counter-productive beliefs and behaviours that are manifest as system design flaws.<\/p>\n

<Bob><\/em> Exactly. So remind me what the definition of a productivity metric is from your FISH course.<\/p>\n

<Leslie><\/em> Productivity is the ratio of a stream metric and a stage metric<\/strong>.\u00a0 Value-for-Money for example.<\/p>\n

<Bob><\/em> Good.\u00a0 So counter-productivity is also a ratio of a stream and a stage metric.<\/p>\n

<Leslie><\/em> Um, I’m not sure I quite get that. Can you explain a bit more.<\/p>\n

<Bob><\/em> OK. To explore deeper we need to be clear about how each metric relates to our intended outcome.\u00a0 Remember in safety-by-design we count the number and severity of risks and harm because\u00a0 as harm is going up then safety is going down.\u00a0 So harm is an un-safety stream metric.<\/p>\n

<Leslie><\/em> Ah! Yes I see.\u00a0 So if we look at cycle-time, which is a stage metric; as cycle-time increases, the activity falls and productivity falls. So cycle-time is actually a counter-productivity metric.<\/p>\n

<Bob><\/em>Excellent. You are getting the hang of the concept of counter-productivity.<\/p>\n

<Leslie><\/em> And we need to be careful because productivity is a ratio so the numerator and denominator metrics work in opposite ways: increasing the magnitude of the numerator is equivalent to decreasing the magnitude of the denominator – the ratio increases.<\/p>\n

<Bob><\/em> Indeed, there are many hazards with ratios as we have explored before. So let is consider a real and rather useful example.\u00a0 Let us look at Little’s Law from the perspective of counter-productivity. Remind me of the definition of Little’s Law for a single step system.<\/p>\n

<Leslie><\/em> Little’s Law is a mathematically proven law of flow physics which states that the average lead-time is the product of the average work-in-progress and the average cycle-time<\/strong>.<\/p>\n

LT = WIP * CT<\/em><\/strong><\/p>\n

<Bob><\/em> Good and I am pleased to see that you have used cycle-time. We are considering a single stream, single stage, single step system.<\/em><\/p>\n

<Leslie><\/em> Yes, I avoided using the unqualified term ‘activity’. I have learned that lesson the hard way too!<\/p>\n

<Bob><\/em> So how do the terms in Little’s Law relate to streams, stages and systems?<\/p>\n

<Leslie><\/em> Lead-time is a stream metric, cycle-time is a stage metric and work-in-progress is a …. h’mm. What it is? A stream metric or a stage metric?<\/p>\n

<Bob><\/em>Or?<\/p>\n

<Leslie><\/em>A system metric?\u00a0 WIP is a system metric!<\/p>\n

<Bob><\/em> Good. So now re-arrange Little’s Law as a productivity formula.<\/p>\n

<Leslie><\/em> Work-in-Progress equals lead-time divided by cycle-time<\/strong><\/p>\n

WIP = LT \/ CT
\n<\/strong><\/p>\n

<Bob><\/em> So is WIP a productivity or a counter-productivity metric?<\/p>\n

<Leslie> H’mmm …. I will need to work this through logically and step-by-step. I do not trust my intuition on this flow stuff.<\/p>\n

Increasing cycle-time is counter-productive because it implies activity is falling while costs are not.<\/p>\n

But cycle-time is on the bottom of the ratio so it’s effect reverses.<\/p>\n

So if lead-time stays the same and cycle-time increases then because it is on the bottom of the ratio that implies a more productive design. And at the same time work in progress must be falling. Urrgh! This is hurting my head.<\/p>\n

<Bob> Good, keep going … you are nearly there.<\/p>\n

<Leslie><\/em> So a falling WIP is a sign of increasing productivity.<\/p>\n

<Bob><\/em> Good … and that implies?<\/p>\n

<Leslie><\/em> WIP is a counter-productivity system metric<\/strong>!<\/p>\n

<Bob><\/em> Well done. Your logic is flawless.<\/p>\n

<Leslie> <\/em>So that\u00a0 is why we focus on WIP so much!\u00a0 Whatever causes WIP to increase is counter-productive!<\/p>\n

Ahhhh …. that makes complete sense.<\/p>\n

Lo-WIP\u00a0 designs are more productive than Hi-WIP designs.<\/p>\n

<Bob><\/em> Bravo!\u00a0 And translating this into financial metrics … it is because a big queue of waiting work incurs costs. Storage cost, maintenance cost, processing cost and so on. So WIP is a liability. It is not an asset!<\/p>\n

<Leslie> <\/em>But doesn’t that imply treating work-in-progress as an asset on the financial balance sheet is counter-productive?<\/p>\n

<Bob><\/em> It does indeed.<\/p>\n

<Leslie><\/em> Oh dear! That revelation is going to upset a lot of people in the accounting department!<\/p>\n

<Bob><\/em> The painful reality is that\u00a0 the Laws of Flow Physics are completely indifferent to what any of us believe or do not believe.<\/p>\n

<Leslie><\/em> Wow!\u00a0 I like this concept of counter-productivity … it really helps to expose some of our invalid assumptions that invisibly block improvement!<\/p>\n

<Bob><\/em> So here is a question to ponder.\u00a0 Is zero WIP desirable or even possible?<\/p>\n

<Leslie><\/em> H’mmm.\u00a0 I will have to think about that.\u00a0 I know you would not have asked the question for no reason.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Webex icon bounced up and down on Bob’s task bar signalling that Leslie had just joined the weekly ISP coaching session. <Leslie> Hi Bob. I have been so busy this week that I have not had time to consider a topic to explore. <Bob> No problem Leslie, I have shelf full of topics we … <\/p>\n

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