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

Jason Yip
ThoughtWorks

Paul Heaton
KM&T

Image from http://www.bluefountainmedia.com/blog/?
steep recession in
that year, the Toyota Motor Company ran out of cash, which was
“As the Japanese economy entered a

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
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
/
What happened since then?
Toyota and Honda lead in J.D Power
quality ratings

In 2008, Toyota surpasses
GM as the world’s largest
auto maker
“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
Who would you rather be?
Is this really relevant to us?
Lean Times Require Lean Thinking
Toyota success with the Prius
• Developed within 18
months.

• A typical competitor will
take 4 years

• Toyota used 150
engineers during
development.

• A typical competitor will
use 600 engineers.

Note: this includes designing
the Plant to produce it!!
Source - National Center for Manufacturing Sciences report
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..!
Honda

New product development

Iterative and
Incremental
development

Toyota

Scrum
Kanban
Agile
Lean
Lean Software Development

XP
So, what is Lean?
Just-in-Time (not Just-in-Case)

The right material
At the right time
At the right place
In the exact amount
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
The essence of Lean is engaging
everyone in identifying and solving
problems
Waste
Un-Evenness

workload that is
not balanced

Activities that do not
add value

Overburden

work that creates burden for the
team members or processes
Picture Source – Toyota Motor Company Australia
8 WASTES
In LEAN 8 types of waste have been identified
These classifications have been adopted globally - for any process.
They apply equally to any process.

Not using
People
Resource

Waiting
Overproduction
Transport or
Conveyance

Motion

Stock &
Materials

Overprocessing
Rework

All of these 8 can be either
“Necessary Waste” or
“Un-necessary Waste”
Depending on circumstance
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.

Waiting

Examples:
 Waiting for patient records
 Waiting for medical staff
 Waiting for test results
Overproduction
Overproduction is where an excess of processes, or services are being created,
without there being any real requirement for them.

Overproduction

Examples:
 Sending the same letter to the
patient more than once
 Re-writing notes or forms because
of their illegibility
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.

Transport
or
Conveyance

Examples:
 Moving patients unnecessarily
from ward-to-ward
 Moving documents/patient records
from one department to another
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.

Overprocessing

Examples:
 Producing documents/charts/notes
which are never to be seen or used
 Performing more tests then are
necessary for a patient
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.

Examples:

Rework

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

Stock

Examples:
 Too many drugs at ward
 Uncontrolled material ordering
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.

Motion

Example:
 Poor work area design, causing
unnecessary:
• Walking
• Bending
• Stretching
Resource
Resource 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:

Resource

• Not Listening
• Not Asking
• Not Empowering
• Not doing anything with generated /
suggested ideas
How does this fit with IT?
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
“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
Software development waste
1. Extra features (overproduction)
2. Delays (waiting)
3. Hand-offs (source of delays and defects, loss
of information)
4. Re-learning
5. Partially done work (obsolescence, not JIT)
6. Task switching (reduces throughput)
7. Defects (unnecessary rework)
8. Unused employee creativity
Non Value Add
“unnecessary wastes”
Waste to Eliminate!
Non Value Add
“necessary waste”
Waste to Reduce!
Value Add
Increase!
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
Mapping the Process…

Source – NHS Centre for Innovation
1

36 process steps
Who thinks that of the 36 steps:
2
3
4
5
6

10

7

8

9

100% -12
75% was added value activity?
11
13
14
15
16

17

18

19

75% - 50% was added value activity?
20
21
22
23
24
25

26

27

28

50% - 25% was added value activity?
29
30
31
32
33
34
Less than 25% was added value?

35

36

7 value add
29 process steps were non-value add or waste
•
•
•
•
•
•
•

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

Flow
Wast
e

Valu
e

nt
eent
m
em
ovve
rro
Imp
Imp

aree
ccar
n tt
tieen
ti
aa
op
to p
t

ncee
eenc
ii
perr
xxpe
& ee
&

ous t
tinu en
n
Co ovem
r
mp
I

P – Plan
D – Do
C – Check
A - Act
Hospital Result…
ISSUE

ACTIVITY

RESULT

Renal patients
taking
FIFTEEN
days to get
through
process

Process Map
Team Work
Waste ID
Problem Solving
Project Mgt
Committed Leader

Waste reduction
allowed
sustainable
reduction to
EIGHT days
Lean Times Require Lean Thinking
Lean Times Require Lean Thinking
Lean Times Require Lean Thinking
Lean Times Require Lean Thinking
Set-based Concurrent Engineering
No problem is a problem
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
Daily standup meetings
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
Technique
Pairing
Test Driven
Development

Time to detect problem
Seconds
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
Just-in-Time is a response to the
problem of overproduction
Stop The Line is a response to the
problem of unnecessary rework
due to defects
The essence of Lean is engaging
everyone in identifying and solving
problems
What type of results are we talking
about?
McKinsey on Lean IT
“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
Forrester Research on
ThoughtWorks Agile/Lean
Category
Total defects
Critical defects
Effort
Duration

Improvement
63% less
79% less
62% less
69% less
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
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
For Further Information please contact:
ThoughtWorks – Jason Yip
Email
Web

jcyip@thoughtworks.com
www.thoughtworks.com.au

KM&T – Paul Heaton
mail
pheaton@kmandt.com.au
Web
www.kmandt.com.au

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Lean Times Require Lean Thinking

  • 1. Quarterly Technology Briefing “Lean Times Require Lean Thinking” presented in partnership with
  • 2. Lean Times Require Lean Thinking Jason Yip ThoughtWorks Paul Heaton KM&T Image from http://www.bluefountainmedia.com/blog/?
  • 3. steep recession in that year, the Toyota Motor Company ran out of cash, which was “As the Japanese economy entered a 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
  • 4. 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 /
  • 6. Toyota and Honda lead in J.D Power quality ratings In 2008, Toyota surpasses GM as the world’s largest auto maker
  • 7. “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
  • 8. Who would you rather be?
  • 9. Is this really relevant to us?
  • 11. Toyota success with the Prius • Developed within 18 months. • A typical competitor will take 4 years • Toyota used 150 engineers during development. • A typical competitor will use 600 engineers. Note: this includes designing the Plant to produce it!! Source - National Center for Manufacturing Sciences report
  • 12. 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..!
  • 13. Honda New product development Iterative and Incremental development Toyota Scrum Kanban Agile Lean Lean Software Development XP
  • 14. So, what is Lean?
  • 15. Just-in-Time (not Just-in-Case) The right material At the right time At the right place In the exact amount
  • 16. 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
  • 17. The essence of Lean is engaging everyone in identifying and solving problems
  • 18. Waste Un-Evenness workload that is not balanced Activities that do not add value Overburden work that creates burden for the team members or processes Picture Source – Toyota Motor Company Australia
  • 19. 8 WASTES In LEAN 8 types of waste have been identified These classifications have been adopted globally - for any process. They apply equally to any process. Not using People Resource Waiting Overproduction Transport or Conveyance Motion Stock & Materials Overprocessing Rework All of these 8 can be either “Necessary Waste” or “Un-necessary Waste” Depending on circumstance
  • 20. 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. Waiting Examples:  Waiting for patient records  Waiting for medical staff  Waiting for test results
  • 21. Overproduction Overproduction is where an excess of processes, or services are being created, without there being any real requirement for them. Overproduction Examples:  Sending the same letter to the patient more than once  Re-writing notes or forms because of their illegibility
  • 22. 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. Transport or Conveyance Examples:  Moving patients unnecessarily from ward-to-ward  Moving documents/patient records from one department to another
  • 23. 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. Overprocessing Examples:  Producing documents/charts/notes which are never to be seen or used  Performing more tests then are necessary for a patient
  • 24. 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. Examples: Rework  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
  • 25. Stock Stock = Materials in Stores (Medical equipment, Work-In-Process (WIP) & Finished Work) Excess Stock = Cost (Cash) Stock Examples:  Too many drugs at ward  Uncontrolled material ordering
  • 26. 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. Motion Example:  Poor work area design, causing unnecessary: • Walking • Bending • Stretching
  • 27. Resource Resource 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: Resource • Not Listening • Not Asking • Not Empowering • Not doing anything with generated / suggested ideas
  • 28. How does this fit with IT?
  • 29. 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
  • 30. “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
  • 31. Software development waste 1. Extra features (overproduction) 2. Delays (waiting) 3. Hand-offs (source of delays and defects, loss of information) 4. Re-learning 5. Partially done work (obsolescence, not JIT) 6. Task switching (reduces throughput) 7. Defects (unnecessary rework) 8. Unused employee creativity
  • 32. Non Value Add “unnecessary wastes” Waste to Eliminate! Non Value Add “necessary waste” Waste to Reduce! Value Add Increase!
  • 33. 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
  • 34. Mapping the Process… Source – NHS Centre for Innovation
  • 35. 1 36 process steps Who thinks that of the 36 steps: 2 3 4 5 6 10 7 8 9 100% -12 75% was added value activity? 11 13 14 15 16 17 18 19 75% - 50% was added value activity? 20 21 22 23 24 25 26 27 28 50% - 25% was added value activity? 29 30 31 32 33 34 Less than 25% was added value? 35 36 7 value add 29 process steps were non-value add or waste
  • 36. • • • • • • • Drive Cultural Change People Engagement Raise Problems in the moment Cross Functional Team Tracking Problems Regular Disciplined Meetings Responsibilities assigned
  • 38. Hospital Result… ISSUE ACTIVITY RESULT Renal patients taking FIFTEEN days to get through process Process Map Team Work Waste ID Problem Solving Project Mgt Committed Leader Waste reduction allowed sustainable reduction to EIGHT days
  • 44. No problem is a problem
  • 45. 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
  • 47. 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
  • 48. Technique Pairing Test Driven Development Time to detect problem Seconds 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
  • 49. Just-in-Time is a response to the problem of overproduction
  • 50. Stop The Line is a response to the problem of unnecessary rework due to defects
  • 51. The essence of Lean is engaging everyone in identifying and solving problems
  • 52. What type of results are we talking about?
  • 53. McKinsey on Lean IT “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
  • 54. Forrester Research on ThoughtWorks Agile/Lean Category Total defects Critical defects Effort Duration Improvement 63% less 79% less 62% less 69% less
  • 55. 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
  • 57. What’s next? • • • • • Start where you are Don’t shy away from your problems Go and see Think And ask for help
  • 58. For Further Information please contact: ThoughtWorks – Jason Yip Email Web jcyip@thoughtworks.com www.thoughtworks.com.au KM&T – Paul Heaton mail pheaton@kmandt.com.au Web www.kmandt.com.au

Notas do Editor

  1. Imagine this situation. A steep recession, the company is out of cash, on the verge of collapse. The president of the company resigns in shame after having to lay-off 1600 people. And this is the context from which you will create the world’s most successful production system.
  2. We are in a similar crisis to what Toyota faced in 1950. We need to free up scarce cash, we need to reduce costs while at the same time enhancing quality (our customers are just as unforgiving of products and services that don’t serve their interests, perhaps even more so), and we have very little time to do this. The point is that this system, this Toyota Way, now also known as Lean was born from an origin of crisis, of hardship and survival and perhaps it has something to teach us about how to face what we see today.
  3. I recently visited Japan on a Lean tour and I was told a story that back in the beginning, there was a joke that if you bought Toyota trucks you would always need to buy 5. One for work while the remaining 4 were in the shop for repairs. Today, most people would not understand the joke at all. Toyota, and their long-time competitor, Honda lead in quality ratings. Beyond quality ratings, in 2008, Toyota surpassed GM as world’s largest auto maker. And what of GM?
  4. GM is now on the verge of collapse. Learned last night that the CEO was just fired. There was a time when GM was invincible. There was a phrase that was used “What’s good for GM is good for the country”. Now, GM’s survival is very much in doubt. Meanwhile, although Toyota is suffering losses, as is most auto makers these days, there really isn’t any question of their survival.
  5. So who would you rather be? Crises tend to be a period where the weaker organisations topple and are weeded out. They also tend to be a period where the survivors become the next generation of leaders. I think we can all agree that we would prefer to be the ones left, the ones that remain and drive the next generation rather than the ones that become an curiosity of history.
  6. The objection always shows up. We don’t build cars, we don’t do manufacturing so this Toyota stuff is not relevant to us. To answer this, we’d like to make a few points…
  7. Agile software development was influenced by Lean in the beginning and is now returning to it for more ideas on how to improve
  8. .
  9. And a whole lot of other things but…
  10. I want you all to take a moment now. Put yourself back into a day at work. Think about the issues you face, especially the most annoying ones. The one that may have just flitted across your consciousness and you immediately suppressed OR perhaps the one you can see clearly but know you can’t do anything about. That’s the one you need to deal with. Now you don’t want to react immediately to this problem. Understand it first. Go and see to truly understand, don’t just trust your instinct. Use what we’ve talked about today to inspire but think about the situation. At some point we cannot rely on borrowed wisdom and we have to think for ourselves. But ask for help. To understand, to think, to implement. I don’t just mean external consultants like us but especially within your own organisations. In the end, we’re all in it together and we have a better chance if we’re all dedicated to clearing all the issues that prevent us from reaching our greatest potential.