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Quarterly Technology Briefing “Lean Times Require Lean Thinking” presented in partnership with

Lean Times Require Lean Thinking

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The Toyota Way, also known as Lean, was born from hardship and survival. It is an approach that does not rely on the accidental fortunate circumstance of being in a positive business climate. The system that propelled Toyota to the top of the global automotive industry is designed to succeed in both good times and bad. Lean thinking fundamentally changes the engagement model between IT and the business, challenging traditional relationships with staff,customers and partners. This session, presented by a partnership between ThoughtWorks and KM&T, explains the Lean approach to challenges, continuous improvement, productivity, and quality, and how these principles can help you deliver high-value,high-quality software solutions to reduce operational costs, increase profitability, and survive. With presenters bringing deep expertise from Toyota, Lean and Agile principles, learn how to: -Identify and eliminate non-value adding work and cost (i.e., waste) -Build quality into processes to remove unnecessary rework -Apply Just-in-Time (JIT) principles to software delivery -Build processes that optimise use of resources and productivity for the entire end-to-end value stream -Engage everyone to continuously improve your team and practices -Understand the differences between repetitive processes, product development and software development Join us to discover how to do more with less. » » » » » » BRISBANE Tuesday 17 March, 2009 8am –- 9.30am Hilton 190 Elizabeth Street, Brisbane SYDNEY Tuesday 24 March, 2009 8am –- 9.30am Hilton 488 George Street, Sydney MELBOURNE Tuesday 31 March, 2009 8am –- 9.30am Marriott Cnr Exhibition & Lonsdale Streets, Melbourne PERTH Tuesday 7 April, 2009 8am –- 9.30am Hilton 14 Mill Street, Perth A light buffet breakfast will be provided * *

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Page 1: Lean Times Require Lean Thinking

Quarterly Technology Briefing

“Lean Times Require Lean Thinking”

presented in partnership with

Page 2: Lean Times Require Lean Thinking

Lean Times Require Lean Thinking

Jason Yip

ThoughtWorks

Paul Heaton

KM&T

Image from http://www.bluefountainmedia.com/blog/?p=38

Page 3: Lean Times Require Lean Thinking

“As the Japanese economy entered a steep recession in

that year, the Toyota Motor Company ran out of cash, which was tied up in inventory for products customers no longer wanted. The company fell under the control of bankers who chopped the company in two, creating separate firms to divide the marketing and sale functions from the product development and production functions. (These firms were only recombined in 1982 to create the current Toyota Motor Corporation.)

Founding president Kiichiro Toyoda (new president Akio

Toyoda’s grandfather) was driven out in the process. The pursuit of what became the Toyota Production System, along with the product development, supplier management, and customer support systems, was the

creative response to this crisis.”

James Womack, Respect Science Especially in a Crisis, http://www.manufacturingnews.com/news/09/0309/womack.html

Page 4: Lean Times Require Lean Thinking

Lean was born from hardship and survival

• Free up scarce cash• Reduce costs while

enhancing quality• And very little time to

do this

http://www.flickr.com/photos/jtcatbagan/2420624616/

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What happened since then?

Page 6: Lean Times Require Lean Thinking

In 2008, Toyota surpasses GM as the world’s largest auto maker

Toyota and Honda lead in J.D Power quality ratings

Page 7: Lean Times Require Lean Thinking

“Our recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern”

General Motors SEC filing, 2009

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Who would you rather be?

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Is this really relevant to us?

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Toyota success with the Prius• Developed within 18

months.

• Toyota used 150 engineers during development.

• A typical competitor will take 4 years

• A typical competitor will use 600 engineers.

Source - National Center for Manufacturing Sciences report

Note: this includes designingthe Plant to produce it!!

Page 12: Lean Times Require Lean Thinking

What message do I want to give?

• Lean Thinking is now becoming a recognised world wide business model in multiple sectors.

• It is not just all about Toyota Cars..!

Page 13: Lean Times Require Lean Thinking

Agile

Toyota

Honda New product development

Scrum

XP

Lean

Lean Software Development

Iterative and Incrementaldevelopment

Kanban

Page 14: Lean Times Require Lean Thinking

So, what is Lean?

Page 15: Lean Times Require Lean Thinking

Just-in-Time (not Just-in-Case)

The right material

At the right time

At the right place

In the exact amount

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Stop The Line

“stop and fix problems as they occur rather than pushing them down the line to be resolved later”

Jeffrey Liker and David Meier, Toyota Way Fieldbook

Page 17: Lean Times Require Lean Thinking

The essence of Lean is engaging everyone in identifying and solving

problems

Page 18: Lean Times Require Lean Thinking

Waste

Un-Evenness

Overburden

Activities that do not add value

workload that is not balanced

work that creates burden for the team members or processes

Picture Source – Toyota Motor Company Australia

Page 19: Lean Times Require Lean Thinking

8 WASTES

Over-production

Waiting

Transport or Conveyance

Rework

Motion

Stock &Materials

Over- processing

In LEAN 8 types of waste have been identified These classifications have been adopted globally - for any process.They apply equally to any process.

All of these 8 can be either

“Necessary Waste” or “Un-necessary Waste”

Depending on circumstance

Not usingPeopleResource

Page 20: Lean Times Require Lean Thinking

Waiting

Waiting

Waiting is where people or materials are not being utilised because they are waiting for another person or process to complete before work can resume.

Examples:

Waiting for patient records

Waiting for medical staff

Waiting for test results

Page 21: Lean Times Require Lean Thinking

Overproduction

Overproduction is where an excess of processes, or services are being created, without there being any real requirement for them.

Examples:

Sending the same letter to the patient more than once

Re-writing notes or forms because of their illegibility

Over-production

Page 22: Lean Times Require Lean Thinking

Transport or Conveyance

Unnecessary transportation of patients, stock, patient records and equipment which is not reaching its end goal, adds no value. Too much transportation should be avoided and is often the result of departments spaced far apart, or resources not being closely linked.

Examples:

Moving patients unnecessarily from ward-to-ward

Moving documents/patient records from one department to another

Transport or

Conveyance

Page 23: Lean Times Require Lean Thinking

Over-processing

Over-processing is where a process or person works hard, but not necessarily smart, creating a waste which is not always easy to see, and can often be mistaken as part of the process.

Examples:

Producing documents/charts/notes which are never to be seen or used

Performing more tests then are necessary for a patient

Over- processing

Page 24: Lean Times Require Lean Thinking

Rework

Rework is where a process or procedure is not completed correctly the first time and therefore needs to be re-done, or adjusted before it is deemed completed.

Rework

Examples:

Producing multiple documents due to incorrect information or errors

Multiple tests or clinic dates for a patient as correct information was not collected or noted upon initial visit or test

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Stock

Stock = Materials in Stores (Medical equipment, Work-In-Process (WIP) & Finished Work)

Excess Stock = Cost (Cash)

Examples:

Too many drugs at ward

Uncontrolled material ordering

Stock

Page 26: Lean Times Require Lean Thinking

Motion

Motion is related to human movement. Good work area layout and process design minimises the amount of movement and saves time & effort when finding or fetching material or documents.

Example:

Poor work area design, causing unnecessary:

• Walking• Bending• Stretching

Motion

Page 27: Lean Times Require Lean Thinking

ResourceResource is the most valuable asset in any business, without it, no business can function or succeed successfully. The trick is to use the resource as they are the local experts.

Examples:

• Not Listening

• Not Asking

• Not Empowering

• Not doing anything with generated / suggested ideas

Resource

Page 28: Lean Times Require Lean Thinking

How does this fit with IT?

Page 29: Lean Times Require Lean Thinking

Understanding of problem space

Understanding of solution space

Focus

Business as Usual

+++

(specification as input)

+++

(focus on task efficiency)

Cycle time + cost reduction

Typical projects

+

(iterative specification)

++

(control what needs to be learned)

Earlier ROI

New Product Development

?

(specification as output)

?

(focus on learning efficiency)

Acquire and exploit knowledge faster than competitors

Page 30: Lean Times Require Lean Thinking

“Put yourself in the position of the customer and ask if you would pay less for the product or be less satisfied with it if a given step and its necessary time were left out.”

Mike Rother and John Shook, Learning to See

Page 31: Lean Times Require Lean Thinking

1. Extra features (overproduction)2. Delays (waiting)3. Hand-offs (source of delays and defects, loss

of information)4. Re-learning5. Partially done work (obsolescence, not JIT)6. Task switching (reduces throughput)7. Defects (unnecessary rework)8. Unused employee creativity

Software development waste

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Non Value Add “unnecessary wastes”Waste to Eliminate!

Non Value Add “necessary waste” Waste to Reduce!

Value AddIncrease!

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RENAL patients going through a Hospital Process

What is added value to the Customer

Look at End to End Value Chain

Pictures provided courtesy of Agility Healthcare Solutions

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Mapping the Process…

Source – NHS Centre for Innovation

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1 2 3 4 5 6 7 8 9

28 29 30 31 32 33 34 35 36

19 20 21 22 23 24 25 26 27

10 11 12 13 14 15 16 17 18

36 process steps

7 value add

29 process steps were non-value add or waste

Who thinks that of the 36 steps:

100% - 75% was added value activity?

75% - 50% was added value activity?

50% - 25% was added value activity?

Less than 25% was added value?

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• Drive Cultural Change• People Engagement• Raise Problems in the moment • Cross Functional Team• Tracking Problems• Regular Disciplined Meetings• Responsibilities assigned

Page 37: Lean Times Require Lean Thinking

P – PlanD – DoC – CheckA - Act

Improvement

to patient care

& experience

Improvement

to patient care

& experience

Continuous

Improvement

Value

Waste

Flow

Perfection

Page 38: Lean Times Require Lean Thinking

Hospital Result…

ISSUE

Renal patients taking

FIFTEEN days to get

through process

ACTIVITY

Process Map

Team Work

Waste ID

Problem Solving

Project Mgt

Committed Leader

RESULT

Waste reduction allowed

sustainable reduction to EIGHT days

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Set-based Concurrent Engineering

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No problem is a problem

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Authority-focus• “Whose job is this?”• “Not my problem”

Responsibility-focus• “What is the right thing to do?”• “How can I help?”

“Managing to Learn” by John Shook

Page 46: Lean Times Require Lean Thinking

Daily standup meetings

Page 47: Lean Times Require Lean Thinking

Heartbeat retrospectives

• What did we do well, that if we don’t discuss we might forget?

• What did we learn?

• What should we do differently next time?

• What still puzzles us?

http://www.retrospectives.com/pages/RetrospectiveKeyQuestions.html

Page 48: Lean Times Require Lean Thinking

Technique Time to detect problem

Pairing Seconds

Test Driven Development

Seconds to minutes

Co-location Seconds to minutes

Continuous Integration ~20 minutes to a couple hours

User Stories A couple days

Timeboxed development 1 – 4 weeks

Small releases 1 – 3 months

Page 49: Lean Times Require Lean Thinking

Just-in-Time is a response to the problem of overproduction

Page 50: Lean Times Require Lean Thinking

Stop The Line is a response to the problem of unnecessary rework

due to defects

Page 51: Lean Times Require Lean Thinking

The essence of Lean is engaging everyone in identifying and solving

problems

Page 52: Lean Times Require Lean Thinking

What type of results are we talking about?

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“In our experience, applying the principles of lean manufacturing to [application development and maintenance] can increase productivity by 20 to 40 percent while improving the quality and speed of execution.”

N. Kindler, V. Krishnakanthan, R. Tinaikar, “Applying lean to application development and maintenance”, McKinsey on IT, Spring 2007

McKinsey on Lean IT

Page 54: Lean Times Require Lean Thinking

Forrester Research on ThoughtWorks Agile/Lean

Category Improvement

Total defects 63% less

Critical defects 79% less

Effort 62% less

Duration 69% less

Page 55: Lean Times Require Lean Thinking

So…what is required?

• A Clear Customer Focused Vision• Sustained Leadership Commitment • People Engagement / Role Clarity / Skills Developed• Structure Process & Project Management• Change Champions• A Sense of Urgency• Appropriate Activity Monitoring• Appropriate HR Policies

Page 56: Lean Times Require Lean Thinking
Page 57: Lean Times Require Lean Thinking

What’s next?

• Start where you are

• Don’t shy away from your problems

• Go and see

• Think

• And ask for help

Page 58: Lean Times Require Lean Thinking

For Further Information please contact:

ThoughtWorks – Jason Yip

Email [email protected] www.thoughtworks.com.au

KM&T – Paul Heatonmail [email protected] www.kmandt.com.au