Lean and Six Sigma—A Continuous Improvement Framework

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Lean and Six Sigma—A Continuous Improvement Framework

  1. 1. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA I. Improving Project Management A. Many organizations exist to plan and execute projects. B. They want to improve project performance. C. Independently, many organizations are looking to Lean, Six Sigma, and/or Theory of Constraints for improvement guidance. D. We’ll explore these methods and how they can be used as a framework to improve project performance. II. Sometimes (gasp!) project execution doesn’t match project plans A. Conclusion 1: “The plan was bad. Let’s do better next time!” 1. Assumption 1: The plan was incomplete. If only we’d done a more complete, more detailed plan we could have anticipated the emergent behavior and kept the project on track. B. Conclusion 2: “Planning is a waste of time. Let’s not do it at all.” 1. Assumption 2: Projects are inherently chaotic and, therefore, unplannable. We must be quick and agile enough to react to whatever happens during execution. III. Project Plans and Execution A. Projects often don’t execute as they are planned. And some fail to meet baseline committed schedule, cost, and content. B. Why? How do we deal with this conflict? Page 1
  2. 2. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA IV. Lean A. Improvement approach initially focused on factory operations. B. Origin in the Toyota Production System. C. Fundamental principles: 1. Elimination of waste (non-value added work) and focus on the customer 2. Look to the workers for solutions. 3. Continuous improvement: kaizen 4. Often includes concepts like Just In Time, kanbans, andon signals, visual controls, mistake proofing. V. Six Sigma A. Improvement approach focused on minimizing variation of key variables. B. An outgrowth of Deming, Shewhart, Statistical Process Control, Design of Experiments, Quality Function Deployment C. Fundamental principles/approach: 1. Define what’s important to customer 2. Measure process performance 3. Analyze to find causes of defects & variation 4. Improve the system, remove causes 5. Control the process to sustain gains. VI. Theory of Constraints A. Improvement approach based on focusing improvement efforts on process constraints and bottlenecks. B. At any one time a system has one, or at most a few, critical constraints. C. TOC includes a logical analysis/problem solving process and generic solutions. D. Key generic solution for us is Critical Chain Project Management (CCPM), also called TOC Project Management. Page 2
  3. 3. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA VII. An Airplane Strategy A. If you were an early aircraft pioneer, which would you want: 1. An airplane with more stable characteristics? 2. An airplane with less stable characteristics? VIII. The Wright Brothers A. The Wright’s were bicycle mechanics. Bike’s are unstable without rider input. B. The Wright Flyer required pilot input to be stable. 1. It could fly circles (literally) around the competition but was difficult to fly www.centennialofflight.gov/media/photo/congress/display/8congress.htm IX. A Challenging Paradox A. What if we want both? Page 3
  4. 4. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA X. Technology answers the paradox A. Computer technology allows inherently unstable and controllable aircraft. XI. How does this relate to project management? A. An inherently stable project will perform to plan, but may be unwieldy and difficult to change if new opportunities or problems come up. B. An inherently unstable project can change at the drop of a hat, but can turn into a giant uncontrollable hairball of change on change and rework. C. We need both: a project plan detailed enough to set direction and an execution mode flexible enough to handle variation and emergent opportunities. XII. Chaos, variation, and projects A. Donald J. Wheeler’s variation taxonomy: Page 4
  5. 5. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA XIII. Improvement Origins A. Lean, Six Sigma and TOC all started in factories and expanded from there. B. Factory planning can be different than project planning. 1. Factories often have linear, sequential paths, Projects often have multiple, parallel paths. 2. In a factory network all tasks may be on the critical path, in a project only some tasks are on the critical path 3. Factories often have little task time variation, Projects can have large task time variation. XIV. Applying the improvement methods A. Intent: Focus Lean improvements where they’ll do the most good. 1. In a factory, an improvement anywhere on the critical path is seen as good. 2. What if the critical path changes? 3. Historical data (duration, variation) can be used to highlight where to Page 5
  6. 6. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA improve. 4. What if the targets aren’t on the critical path? B. Intent: Use Six Sigma to find root causes. 1. Six Sigma mines data for information 2. What if we don’t have enough of the right data? XV. Critical Chain and Variation A. CCPM accepts that variation exists B. Aggressive task duration estimates help promote “relay runner mode.” C. Buffers provide variation flex and damp out disruptions. D. “Remaining duration” status gives us most accurate current estimate to complete E. Buffer management focuses attention on most important tasks and resources during execution XVI. A Synergistic solution A. Apply a combination of Lean, Six Sigma, and TOC (Critical Chain Project Management) 1. Critical Chain is most critical sequence of tasks. a) Apply Lean and/or Six Sigma to CC tasks. 2. Multi-project Critical Chain plan is based on the most heavily loaded resource (Drum). a) Apply Lean and/or Six Sigma to improve the Drum resource’s processes. 3. Plan shows which tasks are expected to be long and/or expensive. a) Apply Lean and/or Six Sigma to them. 4. Buffer incursion data shows which tasks have greatest variation and/or longest durations. a) Apply Lean and/or Six Sigma to biggest “buffer busters.” Page 6
  7. 7. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA XVII. The solution in action A. Warner Robins Air Logistics Center uses CCPM, Lean and Six Sigma on Maintenance, Repair and Overhaul (MRO) of US Air Force aircraft. B. Warner Robins implemented Lean and Six Sigma on C-5 Galaxy starting in 2001. C. Results from 2001 to 2005: 1. Due Date performance went from 25% in 2002 to 100% in 2004 and 2005. 2. Airplanes on base went from 16 to 12. 3. Cycle time went from approx 360d to 240d. 4. Won a Shingo Gold Prize for Lean excellence in 2005. XVIII. But variation still happened A. Aircraft maintenance is carefully planned and scheduled, taking limited resources, facilities, and tools into account. B. But, MRO of aging airplanes in heavy use is filled with variation. 1. An airplane may have more wrong with it than expected. Anything found must be fixed. 2. Planned work varied between 40000 and 50000 hours, with an additional 10000 in unplanned work. C. Both the organization and the customer wanted faster turn around of airplanes. XIX. Warner Robins added CCPM A. In December 2004 adopted Critical Chain to address issues of variation that Lean had not dealt with satisfactorily B. First airplane “went live” April, 2005. By October, 2005 WIP went from 12 to 7 airplanes, cycle time from 240 days to 160 days. C-5s At WR-ALC 14 Number on base 12 10 8 6 4 2 0 De 5 05 Fe 6 M 6 Ap 6 Au 05 Se 5 O 5 05 M 05 M 06 Ju 5 6 No 5 0 0 -0 0 0 0 -0 -0 -0 v- l- n- n- b- g- p- c- r- r- ar ay ay ct Ju Ap Ja Page 7
  8. 8. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA XX. Warner Robins results A. CCPM/Lean/Six Sigma approach implemented on other products 1. C-130 planned reductions greater than C-5’s 2. C-17 throughput/dock expected to double B. Putting 5 aircraft back in service generated an additional $50million/year. C. Each C-5 back in service freed up 2 C-17s Replacement cost for 10 C-17s estimated at over $2billion D. WR expects to free up 11dock spaces, leading to additional $248 million by 2009 XXI. Focusing Lean and Six sigma activities A. CCPM buffer incursion data showed chronic problem areas. 1. Lean improvement events rapidly improved chronic problem areas, further increasing overall benefit. 2. Previous Lean events hadn’t necessarily been at points of maximum leverage. B. The better things got the better they got—a “virtuous circle” of improvement. Quality increased; cycle time decreased C. Adding CCPM revitalized Lean and Six Sigma efforts at Warner Robins. XXII. Summary and conclusion A. Lean, Six Sigma, and Theory of Constraints can all individually help improve project execution performance. B. Continuous, incremental improvement can take a long time to improve a system C. Critical Chain Project Management (Theory of Constraints) can focus Lean and Six Sigma improvement efforts where they can have the highest impact. D. Using Lean, Six Sigma and TOC together has been demonstrated to significantly increase project performance. XXIII. References A. Warner Robins Air Logistics Center Page 8
  9. 9. Lean and Six Sigma—A Continuous Improvement Framework Applying Lean, Six Sigma, and the Theory of Constraints to Improve Project Management Performance By Patrick J. Wilson, Steven C. Holt The Boeing Company, Seattle, WA, USA 1. Best, W. (2006, September) Aircraft Maintenance, Repair & Overhaul Operations, Warner Robins Air Logistics Center. Realization Customer Conference, Chicago, IL, USA 2. Percell, K. (2006, November) How We Used TOC and Won the Edelman Prize Theory of Constraints International Certification Organization Annual Conference, Miami, FL, USA. 3. Srinivasan, M., Best, W., & Chandrasekaran, S. (2007, January) Warner Robins Air Logistics Center Streamlines Aircraft Repair and Overhaul. Interfaces, 37(1). 7-21. B. Variation 1. Anderson, D.J. (2004) Agile Management for Software Engineering Upper Saddle River, NJ, Prentice Hall. 2. Wheeler, D.J. & Chambers, D.S (1992) Understanding Statistical Process Control, 2nd Ed. Knoxville, TN, SPC Press. Page 9

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