This is Lean: Resolving the Efficiency Paradox

by Niklas Modig

Flow efficiency is not about increasing the speed of value-adding activities. It is about maximizing the density of the value transfer and eliminating non-value-adding activities.

In principle, it is impossible to eliminate variation, and it has been shown to have a very negative effect on processes and flow efficiency.

Another problem with focusing too closely on resource efficiency is that it risks creating multiple problems and extra work, which can sometimes represent a large proportion of an organization’s total work. Consequently, even if a particular resource has high resource efficiency, the work that “keeps the resource busy” is not really adding value. We call this the efficiency paradox.