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.
Tuesday 17 March, 2009
8am –- 9.30am
190 Elizabeth Street, Brisbane
Tuesday 24 March, 2009
8am –- 9.30am
488 George Street, Sydney
Tuesday 31 March, 2009
8am –- 9.30am
Cnr Exhibition & Lonsdale
Streets, Melbourne
Tuesday 7 April, 2009
8am –- 9.30am
14 Mill Street, Perth
A light buffet breakfast will be provided *

Published in: Technology, Business
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  • 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.
  • 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.
  • 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?
  • 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.
  • 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.
  • 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…
  • Agile software development was influenced by Lean in the beginning and is now returning to it for more ideas on how to improve
  • .
  • And a whole lot of other things but…
  • 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.
  • Lean Times Require Lean Thinking

    1. 1. Quarterly Technology Briefing “Lean Times Require Lean Thinking” presented in partnership with
    2. 2. Lean Times Require Lean Thinking Jason Yip ThoughtWorks Paul Heaton KM&T Image from http://www.bluefountainmedia.com/blog/?
    3. 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. 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 /
    5. 5. What happened since then?
    6. 6. Toyota and Honda lead in J.D Power quality ratings In 2008, Toyota surpasses GM as the world’s largest auto maker
    7. 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. 8. Who would you rather be?
    9. 9. Is this really relevant to us?
    10. 10. 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
    11. 11. 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..!
    12. 12. Honda New product development Iterative and Incremental development Toyota Scrum Kanban Agile Lean Lean Software Development XP
    13. 13. So, what is Lean?
    14. 14. Just-in-Time (not Just-in-Case) The right material At the right time At the right place In the exact amount
    15. 15. 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
    16. 16. The essence of Lean is engaging everyone in identifying and solving problems
    17. 17. 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
    18. 18. 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
    19. 19. 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
    20. 20. 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
    21. 21. 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
    22. 22. 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
    23. 23. 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
    24. 24. 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
    25. 25. 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
    26. 26. 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
    27. 27. How does this fit with IT?
    28. 28. 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
    29. 29. “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
    30. 30. 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
    31. 31. Non Value Add “unnecessary wastes” Waste to Eliminate! Non Value Add “necessary waste” Waste to Reduce! Value Add Increase!
    32. 32. 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
    33. 33. Mapping the Process… Source – NHS Centre for Innovation
    34. 34. 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
    35. 35. • • • • • • • Drive Cultural Change People Engagement Raise Problems in the moment Cross Functional Team Tracking Problems Regular Disciplined Meetings Responsibilities assigned
    36. 36. 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
    37. 37. 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
    38. 38. Set-based Concurrent Engineering
    39. 39. No problem is a problem
    40. 40. 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
    41. 41. Daily standup meetings
    42. 42. 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
    43. 43. 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
    44. 44. Just-in-Time is a response to the problem of overproduction
    45. 45. Stop The Line is a response to the problem of unnecessary rework due to defects
    46. 46. The essence of Lean is engaging everyone in identifying and solving problems
    47. 47. What type of results are we talking about?
    48. 48. 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
    49. 49. Forrester Research on ThoughtWorks Agile/Lean Category Total defects Critical defects Effort Duration Improvement 63% less 79% less 62% less 69% less
    50. 50. 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
    51. 51. What’s next? • • • • • Start where you are Don’t shy away from your problems Go and see Think And ask for help
    52. 52. 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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