Tony Orzechowski Director, R&D Quality Engineering Abbott Diagnostics Guiding Principles for Implementing  Lean Product De...
Conclusion : Our Deployment is based upon Several Key  Guiding Principles  that Help Assure Consistent Sustainable Results...
Guiding Principle #1.  All Projects should be driven by a to fulfill the Strategic Business Objectives <ul><li>Being drive...
Why Focus on Lean Product Development?   Improved R&D speed drives higher revenues and margins resulting in Improved compa...
Guiding Principle # 2.   Controlling Project Demand and Queues through Project Portfolio Management  is a Key to Successfu...
Guiding Principle # 2.   Controlling Project Demand and Queues through Project Portfolio Management is a Key to Successful...
Guiding Principle # 2.  Controlling Project Demand and Queues through Project Portfolio Management is a Key to Successfull...
Clear Consistent Definitions of Benefit, Effort  and Risk  for Fast Accurate  Project Selection  and Authorization
Guiding Principle # 3.  Adding Activation Energy Helps to Drive Successful Projects and Change <ul><li>Activation Energy  ...
Guiding Principle # 4.   Keep Project Structures as Simple and Flexible as Possible <ul><li>Key Themes  for a Lean Product...
One Project’s Example:  How was a Lean R&D Process achieved … <ul><li>Cross-training </li></ul><ul><li>Protocols now allow...
When Structure is needed …   There is a Basic Process to Reduce Lead Time Constrained Resources and Time  these causes ? I...
Guiding Principle # 5.  Overseeing Long-term Management of Competency of Key Resources is a key to Building Flexibility to...
Lean Product Development Principles Key Drivers of Fast Flow <ul><li>Basic Queuing Theory:  Little’s Law*  applies to  any...
Lean Product Development Principles Key Drivers of Fast Flow are Capacity and Demand Example: We do not  cross-train  to c...
Guiding Principle # 6.  Developing, Assessing and Validating Financial Impact isn’t Easy, but it is Essential for Sustaini...
Guiding Principle # 7.   Ensuring clearly defined Project Transfers back into the Design Factory is Essential for Long-ter...
Guiding Principle # 8.   Continuing to Monitor Reproducibility is an Important Action to Maintaining or Improving Sustaina...
Conclusion : Our Deployment is based upon Several Key  Guiding Principles  that Help Assure Consistent Sustainable Results...
Thank you !
Upcoming SlideShare
Loading in …5
×

Guiding Principles for Implementing Lean Product Development

2,324 views

Published on

Published in: Education, Business, Technology
  • Be the first to comment

Guiding Principles for Implementing Lean Product Development

  1. 1. Tony Orzechowski Director, R&D Quality Engineering Abbott Diagnostics Guiding Principles for Implementing Lean Product Development
  2. 2. Conclusion : Our Deployment is based upon Several Key Guiding Principles that Help Assure Consistent Sustainable Results <ul><ul><li>Maintain Connection to Strategic Business Objectives </li></ul></ul><ul><ul><li>Establish and Maintain Project Portfolio Management (Manage Demand and Capacity – 10 Projects Half Done are Zero $’s) </li></ul></ul><ul><ul><li>Add Activation Energy to Help Drive Projects and Change (All good ideas evolve into hard work on someone’s part) </li></ul></ul><ul><ul><li>Manage Improvement Projects with Flexible Structure </li></ul></ul><ul><ul><li>Oversee Long-term Management of Competency Development for Key People </li></ul></ul><ul><ul><li>Develop, Assess and Validate Financial Impact </li></ul></ul><ul><ul><li>Ensure Clearly Defined Project Transfers back into the Design Factory*, and </li></ul></ul><ul><ul><li>Monitor Reproducibility of the Results over a 1 to 2 year period … Help adjust process when needed. </li></ul></ul>* Design Factory – Reinertsen – “Managing the Design Factory”
  3. 3. Guiding Principle #1. All Projects should be driven by a to fulfill the Strategic Business Objectives <ul><li>Being driven by the Strategic Business Objectives projects will maintain more consistent organization and leadership engagement </li></ul><ul><li>The emphasis on how we prioritize (weight) our portfolio changes over the years may change, but in doing so we maintain consistency on what is most important </li></ul><ul><ul><li>Evolving Business Drivers emphasize focus on Quality, Timeliness, or Revenue / Cost </li></ul></ul><ul><li>Management oversight authorizes project selections and rebalancing in order to assure on-going alignment with evolving business objectives </li></ul><ul><li>Measures of project success against projections are reported to validate the value being delivered by the overall program </li></ul>
  4. 4. Why Focus on Lean Product Development? Improved R&D speed drives higher revenues and margins resulting in Improved company Cash Flow <ul><li>Complication </li></ul><ul><li>Achieve this with the Same Internal R&D $ </li></ul>Improve the Fast Flexible Flow of Key R&D Processes How will this be done ? Increase Value to Abbott Shareholder (Increase Cash Flow / Margin Growth) What is the required outcome for the company ? Drive Growth by Accelerating Delivery of New Products What is to be achieved ? Increase Capacity of the R&D Process
  5. 5. Guiding Principle # 2. Controlling Project Demand and Queues through Project Portfolio Management is a Key to Successfully Completing Projects <ul><li>Selecting and Authorizing the right projects , with the right resources , at the right time . </li></ul><ul><ul><ul><li>All projects are traceable to Strategic Business Objectives </li></ul></ul></ul><ul><ul><ul><li>Demand Management (managing management) – Maintain the discipline to start less and finish more </li></ul></ul></ul><ul><ul><ul><ul><li>Project prioritization based on Benefit / Effort / Risk assessment (scorecard is used to define weighted benefit based upon current strategic business objectives) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Non-discretionary projects (… and we all have these …) are accounted for </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ability to Start Less to maintain a Fast Flexible Continuous Improvement Process is Vital … learning how to say NO or Not Now, but Later (postponement). </li></ul></ul></ul></ul><ul><li>“ Stop Starting Stuff … Start Finishing Stuff !” – Reinertsen 2006 </li></ul>
  6. 6. Guiding Principle # 2. Controlling Project Demand and Queues through Project Portfolio Management is a Key to Successfully Completing Projects <ul><li>Resource Management </li></ul><ul><ul><li>Managing Capacity (Utilization of Key Skilled Resources), </li></ul></ul><ul><ul><li>Managing Long-term Competencies Flexibility to flow competent resources to project bottlenecks </li></ul></ul><ul><li>Portfolio Diversification (Gaming Strategy - How to place your bets) </li></ul><ul><ul><li>Managing the % Layout of “ Game Changers ” ( monster projects with massive payback ) vs. sure-thing quick-wins with small incremental paybacks </li></ul></ul><ul><li>Idea Generation Developing a project pipeline – Both Top-Down and Bottom-up </li></ul>
  7. 7. Guiding Principle # 2. Controlling Project Demand and Queues through Project Portfolio Management is a Key to Successfully Completing Projects <ul><li>Benefit </li></ul><ul><ul><li>Revenue Growth </li></ul></ul><ul><ul><li>Cost Reduction (including Cost of Delay) </li></ul></ul><ul><ul><li>Strategic Fit </li></ul></ul><ul><ul><li>Quality / Customer Satisfaction </li></ul></ul><ul><ul><li>Compliance </li></ul></ul><ul><li>Effort </li></ul><ul><ul><li>Length of Project </li></ul></ul><ul><ul><li>Resource Impact </li></ul></ul><ul><ul><li>Costs (One-Time and On-going) </li></ul></ul><ul><li>Risk </li></ul><ul><ul><li>Project </li></ul></ul><ul><ul><li>Technical </li></ul></ul><ul><ul><li>Organizational / Cultural </li></ul></ul>Possible (Quick Wins) Implement (Clear Value) Challenge Kill (Low Value)
  8. 8. Clear Consistent Definitions of Benefit, Effort and Risk for Fast Accurate Project Selection and Authorization
  9. 9. Guiding Principle # 3. Adding Activation Energy Helps to Drive Successful Projects and Change <ul><li>Activation Energy – Experienced Resources </li></ul><ul><ul><ul><li>1-2% - Full-time dedicated catalysts with capacity to drive projects </li></ul></ul></ul><ul><ul><ul><li>Used to establish and drive momentum “over the top of the hill” </li></ul></ul></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><ul><li>Collocate and embed organization </li></ul></ul></ul><ul><ul><ul><li>Manage group through measures / rewards on strategic outcomes: </li></ul></ul></ul><ul><ul><ul><ul><li>avoid identifying too strongly with their own work group rather than with the company as a whole. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>avoid looking inwards at what they do and how it is measured / rewarded and look more at the strategic level outcomes. </li></ul></ul></ul></ul><ul><li>Example: Some teams can focus too heavily upon cycle-time reductions as an end outcome rather than improvement to product launch times (lead times). - Ask the question … “Do our products launch sooner now or do we launch more products with the same resources.” </li></ul>
  10. 10. Guiding Principle # 4. Keep Project Structures as Simple and Flexible as Possible <ul><li>Key Themes for a Lean Product Development Project </li></ul><ul><ul><li>Understand the Project Economics </li></ul></ul><ul><ul><li>Focus on the Queues </li></ul></ul><ul><ul><li>Create Flexibility </li></ul></ul><ul><ul><li>Drive Behavior of Fast Learning </li></ul></ul><ul><ul><li>Utilize Real-time Planning </li></ul></ul><ul><ul><li>Understand the Value Stream </li></ul></ul>Always keep it as Simple as Possible – Find the Queues !
  11. 11. One Project’s Example: How was a Lean R&D Process achieved … <ul><li>Cross-training </li></ul><ul><li>Protocols now allow for extra reps </li></ul>Flexibility Reduce the Impact of Variation Actual Improvements Category <ul><li>Further Standardization of Statistical Outputs </li></ul><ul><li>ELN Standardization </li></ul>Standardization Reduce Sources of Variation <ul><li>Clear process ownership of individual protocols </li></ul><ul><li>Clear expectations of functional groups </li></ul>Employee Ownership <ul><li>Daily Stand-up meetings </li></ul><ul><li>Visual Mgmt Board </li></ul><ul><li>Co-location of functional groups </li></ul>Fast Learning and Feedback <ul><li>Small batches with WIP-Caps </li></ul><ul><li>Pull-System </li></ul>Demand Management Stop Starting Stuff, Start Finishing Stuff <ul><li>Better Tools - New Data Management System </li></ul><ul><li>ELN Reduction (Precision: From: 300 To: 2) </li></ul><ul><li>Testing Error Reduction </li></ul><ul><li>Protocol Simplification and Robustness </li></ul><ul><li>Capacity Level Loading thru VSM </li></ul>Improved Capacity Better Tools, Increased Support of Key Resources and Reduction of non-value added activity
  12. 12. When Structure is needed … There is a Basic Process to Reduce Lead Time Constrained Resources and Time these causes ? Identify Solutions and Establish Magnitude of Benefit How will we prevent Key Solutions - Trace Map of Potential Solutions to Causes Balance Benefit against Effort to Prioritize and Select Key Solutions Where is our biggest bang for our dollar ? Benefit / Effort Matrix - Prioritization and Selection of Key Improvements Identify Key Areas of Lost Time What and Where is the Lost Time ? Key Areas of Lost Time - Map the Process - Find the Biggest Queues Lost Time ? Brainstorm Causes and Key Drivers What causes this Key Causes - Trace Map of Causes to Process Waste Identify
  13. 13. Guiding Principle # 5. Overseeing Long-term Management of Competency of Key Resources is a key to Building Flexibility to Meet Future Business Needs <ul><li>Competency Management </li></ul><ul><ul><ul><li>Growth Plans are integrated with Business Objectives based upon Current-state and Projected Future-state capacity requirements </li></ul></ul></ul><ul><ul><ul><li>Skillset cross-training / redundancy built-upon to maintain flexibility </li></ul></ul></ul><ul><li>Example : </li></ul><ul><li>The types and quantity of skillsets necessary to meet business needs are listed and defined. </li></ul><ul><li>We then assess our current state of competency against these future needs, identify gaps, and begin making investments for reducing these gaps in competency / capacity. </li></ul>
  14. 14. Lean Product Development Principles Key Drivers of Fast Flow <ul><li>Basic Queuing Theory: Little’s Law* applies to any process </li></ul>Lean is a set of tools to reduce the “Number of Things in Process” without reducing the completion rate * First proven by Dr. John D.C. Little, MIT, 1961 >90% of Opportunity is here. How to Control the Number of Things in Process? Increase Capacity Manage Demand Reduce Variability Use Control Systems
  15. 15. Lean Product Development Principles Key Drivers of Fast Flow are Capacity and Demand Example: We do not cross-train to create more efficient resources, we do it to deal with bottlenecks . A small change in capacity can have a large change in cycle time.
  16. 16. Guiding Principle # 6. Developing, Assessing and Validating Financial Impact isn’t Easy, but it is Essential for Sustaining Leadership Engagement <ul><li>By establishing the financial impact of these improvement activities we are better able to sustain leadership engagement and drive change </li></ul><ul><li>Key Steps include: </li></ul><ul><ul><li>Understand the economics of the development project (e.g. Optimizing the Cost of Capacity versus the Cost of Delay ) </li></ul></ul><ul><ul><li>Establish a process, with the Finance organization, to Quantify and Certify these results </li></ul></ul><ul><ul><li>Integrate this process with the Portfolio Management Process </li></ul></ul>
  17. 17. Guiding Principle # 7. Ensuring clearly defined Project Transfers back into the Design Factory is Essential for Long-term Sustainability of Improvements <ul><li>Poor project transfer (by the project lead or the process owner) is the primary risk factor to sustaining long-term improvements </li></ul><ul><li>To prevent this key risk factor, we currently: </li></ul><ul><ul><li>Establish a formal transfer of improvements from “project” status to on-going R&D operations (the Design Factory) </li></ul></ul><ul><ul><li>Core team assesses risks associated with sustaining improvements once activation energy and project focus is removed </li></ul></ul><ul><ul><li>Agree to control plans as part of project transfer aimed at mitigating these risks </li></ul></ul><ul><ul><li>Process Owner personally accepts transfer and responsibility to sustain improvements </li></ul></ul>
  18. 18. Guiding Principle # 8. Continuing to Monitor Reproducibility is an Important Action to Maintaining or Improving Sustainability <ul><li>Continue to Monitor Reproducibility of the Results over a 1 to 2 year period … </li></ul><ul><li>Be prepared to help adjust process performance when needed </li></ul>
  19. 19. Conclusion : Our Deployment is based upon Several Key Guiding Principles that Help Assure Consistent Sustainable Results <ul><ul><li>Maintain Connection to Strategic Business Objectives </li></ul></ul><ul><ul><li>Establish and Maintain Project Portfolio Management (Manage Demand and Capacity – 10 Projects Half Done are Zero $’s) </li></ul></ul><ul><ul><li>Add Activation Energy to Help Drive Projects and Change (All good ideas evolve into hard work on someone’s part) </li></ul></ul><ul><ul><li>Manage Improvement Projects with Flexible Structure </li></ul></ul><ul><ul><li>Oversee Long-term Management of Competency Development for Key People </li></ul></ul><ul><ul><li>Develop, Assess and Validate Financial Impact </li></ul></ul><ul><ul><li>Ensure Clearly Defined Project Transfers back into the Design Factory*, and </li></ul></ul><ul><ul><li>Monitor Reproducibility of the Results over a 1 to 2 year period … Help adjust process when needed. </li></ul></ul>* Design Factory – Reinertsen – “Managing the Design Factory”
  20. 20. Thank you !

×