Better Faster Cheaper


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Using Lean to Create Faster Better Cheaper Projects

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  • Better Faster Cheaper

    1. 1. Nancy W. Northrup ib LEAN, LLC Owner and Principal (862) 812-2014 NJ PMI Chapter International Project Management Day November 5, 2009 Faster! Better! Cheaper! Presentation at PMI NJ IPM Day 11/05/09
    2. 2. Table of Contents <ul><li>Introduction </li></ul><ul><li>Defining Six Sigma LEAN </li></ul><ul><li>Alignment to the PMBOK </li></ul><ul><li>Project Example </li></ul><ul><li>5 S Process </li></ul><ul><li>Wrap Up </li></ul>
    3. 3. Increasing Demands on the Project Manager <ul><li>Fast </li></ul><ul><ul><li>Good </li></ul></ul><ul><li>Cheap </li></ul><ul><li>FASTER </li></ul><ul><li>CHEAPER </li></ul><ul><li>Better </li></ul>“ Pick two” becomes “ I want it all”
    4. 4. Relationship to Management Disciplines Project Management General Management Area Knowledge The Lean Enterprise Customer Service Finance Information Systems Legal Communications Human Resources EH&S Real Estate Auditing Credit and Controls Security Purchasing Marketing Sales Business Development Research Quality Control
    5. 5. The History of Lean Thinking <ul><li>Waste triggers root cause analysis </li></ul><ul><ul><li>Determines opportunities for improvement </li></ul></ul><ul><ul><ul><li>Process redesign for improved flow </li></ul></ul></ul><ul><ul><ul><li>Load balanced work groups </li></ul></ul></ul><ul><ul><ul><li>End to end performance management </li></ul></ul></ul>Standard Work VOC/VOP Quality Cost Alignment Taguchi & Deming Lean Manufacturing <ul><li>Global Supply chain </li></ul><ul><li>Control/Ownership </li></ul><ul><li>Henry Ford - River Rouge Plant 1915 </li></ul><ul><li>Cars for income levels - </li></ul><ul><li>Paying by installments </li></ul><ul><li>Collect Requirements </li></ul><ul><li>Collect historical defect data </li></ul><ul><li>Alfred Sloan - GM Variation 1926 </li></ul><ul><li>Resource constraints WWII </li></ul><ul><li>Focus on productivity </li></ul><ul><li>Noise isolation </li></ul><ul><li>Process Robustness 1950 </li></ul><ul><li>Toyota Operating System </li></ul><ul><li>USA buy-in to teachings of Deming </li></ul><ul><li>Customer Metrics </li></ul><ul><li>Process Control Metrics </li></ul><ul><li>Functional Metrics </li></ul><ul><li>Predictive ability (SPC) </li></ul><ul><li>Scorecards </li></ul>1915 1980+ Lean transformation requires changes to tools, standards, and procedures
    6. 6. 7 Lean Wastes plus 1 <ul><li>Defects </li></ul><ul><li>Over Production </li></ul><ul><li>Transport </li></ul><ul><li>Waiting </li></ul><ul><li>Inventory </li></ul><ul><li>Motion </li></ul><ul><li>Processing </li></ul><ul><li>Waste of Employee Brainpower </li></ul>D O T W I M P
    7. 7. The 5 Lean Principles – Managing Change <ul><li>Specify value in the eyes of the customer </li></ul><ul><ul><li>Voice of the customer survey </li></ul></ul><ul><ul><li>Cross-Functional extended team to define needs </li></ul></ul><ul><li>Make the processes flow </li></ul><ul><ul><li>Perform 5S </li></ul></ul><ul><li>Identify all the steps along the process chain </li></ul><ul><ul><li>Enable process re-design </li></ul></ul><ul><ul><li>End-to-end process design (cross-functional) </li></ul></ul><ul><li>Make only what is pulled by the customer </li></ul><ul><ul><li>Reporting </li></ul></ul><ul><li>Strive for perfection by continually removing waste </li></ul><ul><ul><li>End to end performance management </li></ul></ul><ul><li>Empower the employees </li></ul><ul><ul><li>- The business owns the process and the data and the project </li></ul></ul>PMBOK <ul><li>Scope, </li></ul><ul><li>Requirements </li></ul><ul><li>Management </li></ul>2. Integration, Risk, Communication Management 3. Time, Cost, Procurement, HR Management 4. Requirements Management 5. Quality, Time, Risk Management
    8. 8. Lean Examples in Corporate Functions <ul><li>Slow, expensive processes </li></ul><ul><ul><li>Prone to poor quality </li></ul></ul><ul><ul><li>Drive up costs </li></ul></ul><ul><ul><li>Drive down customer satisfaction </li></ul></ul><ul><li>Work-in-process (WIP) </li></ul><ul><ul><li>Causes work to wait </li></ul></ul><ul><ul><ul><li>Reports waiting to be addressed </li></ul></ul></ul><ul><ul><ul><li>Sales orders waiting for processing </li></ul></ul></ul><ul><li>Waiting – 80/20 Rule </li></ul><ul><ul><li>80% of the delay caused by 20% of the activities </li></ul></ul><ul><ul><li>Improving 20% of the process steps </li></ul></ul><ul><ul><ul><li>E ffects 80% reduction in cycle time </li></ul></ul></ul><ul><ul><ul><li>Achieve greater than 99% on-time delivery </li></ul></ul></ul><ul><li>Do you….. </li></ul><ul><li>Chase information to complete a task? </li></ul><ul><li>Jump through multiple decision loops? </li></ul><ul><li>Get constantly interrupted when trying to complete a task? </li></ul><ul><li>Get engaged in expediting reports, purchases, materials, etc.? </li></ul><ul><li>Do work in batches to collect a certain number of the same type of work before embarking on the tasks? </li></ul><ul><li>Find work lost in the “white space” between organizational silos? </li></ul><ul><li>Do you experience? </li></ul>
    9. 9. LEAN Waste <ul><li>Process Waste </li></ul><ul><li>Over Production </li></ul><ul><li>Inventory excessive </li></ul><ul><li>Repair / Rejects </li></ul><ul><li>Motion excessive </li></ul><ul><li>Processing excessive </li></ul><ul><li>Transport </li></ul><ul><li>Waiting </li></ul><ul><li>Process failure caused by defective information </li></ul><ul><li>Wrong or sub-optimized decisions caused by defective Information </li></ul><ul><li>Waste of Employee Brainpower </li></ul><ul><li>Project Waste </li></ul><ul><li>Task list too detailed </li></ul><ul><li>Work not prioritized or scoped </li></ul><ul><li>Ineffective controlling / validation </li></ul><ul><li>Tools not handy, communication issues </li></ul><ul><li>Re-explaining, duplication </li></ul><ul><li>Tools / information in transit, not available in centralized repository </li></ul><ul><li>Meeting not starting on time, Waiting for email / v-mail response </li></ul><ul><li>Ineffective measures, Quality issues </li></ul><ul><li>Requirements not confirmed or correctly owned </li></ul><ul><li>Incorrect and/or not optimized resourcing, Integration issues </li></ul>
    10. 10. Greater Demands means Increased Controlling <ul><li>Initiating & knowing </li></ul><ul><li>Understand and define your reason for being </li></ul><ul><ul><li>Planning & Phasing </li></ul></ul><ul><ul><li>Drive a new mindset for Faster, Better, Cheaper </li></ul></ul><ul><li>Executing Concurrently </li></ul><ul><ul><li>Manage cycle time </li></ul></ul><ul><li>Closing, Iterating, Re-Cycling </li></ul><ul><ul><li>Institutionalize learning </li></ul></ul><ul><li>Create a problem statement </li></ul><ul><li>Know your mission & vision </li></ul><ul><li>Define leading / lagging </li></ul><ul><li>indicators </li></ul><ul><li>Phase the project </li></ul><ul><li>Design concurrent efforts </li></ul><ul><li>Learn to use your software </li></ul><ul><li>Time-Box all meetings </li></ul><ul><li>Start and finish on time </li></ul><ul><li>Run concurrent efforts </li></ul><ul><li>Communicate up </li></ul><ul><li>Communicate down </li></ul><ul><li>Communicate across </li></ul><ul><li>Document lessons learned </li></ul><ul><li>Share lessons learned </li></ul><ul><li>Keep in central repository </li></ul><ul><li>Institutionalize </li></ul>Controlling
    11. 11. Problem Statement <ul><li>We are unable to consistently and clearly identify the complete relationship with our business partners which impacts: </li></ul><ul><ul><li>Assessing credit risk management </li></ul></ul><ul><ul><li>Analyzing the full relationship for cross sell & up-sell </li></ul></ul><ul><ul><li>Maximizing value exchange in the relationship </li></ul></ul><ul><ul><li>Understanding the full relationship with a partner and impact on working capital </li></ul></ul><ul><ul><li>Providing consistency in product offerings and services, where appropriate </li></ul></ul>Exxon, Exxon/Mobil Buy/Sell position **Dollars are for demonstration purposes only and bear no resemblance to actual data Calendar Year 2006   2007 Honeywell Organization Purchase Sales Sales $$$ $$$ $$$ CORPORATE $$$     $1,000,000 $$$   AUTOMATION & CONTROL $$$ $3,000,000 $$$ SPECIALTY MATERIALS $5,000,000 $$$ $$$ TRANSPORTATION SYSTEMS $$$     HONEYWELL AEROSPACE SOLUTIONS
    12. 12. Value Stream map for Central Customer Repository Common Repository Driving Common Metadata Incoming Customer Data <ul><li>Diverse Quality </li></ul><ul><li>definitions </li></ul><ul><li>Scrap: incomplete data </li></ul><ul><li>Files not </li></ul><ul><li>on time to </li></ul><ul><li>request (OTTR) </li></ul>Outgoing Reporting Process D&B file <ul><li>CMD Hierarchies </li></ul><ul><li>Industry Reports </li></ul><ul><li>Customer Visit Preparation </li></ul><ul><li>Revenue Reports </li></ul><ul><li>Send errors to originating BG </li></ul><ul><li>Load validated CMD into CCR for reporting </li></ul>DUN & Bradstreet Separation & Cleanse <ul><li>Validate, correct, standardize , enrich with hierarchy </li></ul><ul><li>Apply confidence codes </li></ul><ul><li>ID new CMD for D&B send </li></ul><ul><li>Add established customer and revenue to CCR for reporting </li></ul>NVA NVA VA VA NVA <ul><li>Speed through Standard Work </li></ul><ul><li>Re-work decreases </li></ul><ul><li>Cycle time decreases </li></ul><ul><li>Voice of the Customer </li></ul><ul><li>Predictable Quality </li></ul><ul><li>Continuous Improvement </li></ul>Supply Chain Management is Cost Management
    13. 13. Lean Maturity Pyramid – Data Quality & Completeness Sort, Store, Shine, Standardize, and Sustain 5S Workplace Organization Share Information Share Standards Build Standards into the Workplace Prevent Abnormalities (Error-Proof) Stop Abnormalities (Prevent defects from moving on) Warn About Abnormalities (Build in alarms) Visual Display Visual Control BU CMD Sold-to Transactions feeds begin Governance Council Kickoff Metrics Management Managed State Data Cleansing Effort Define CORE CMD Standards Standardize DUNS# Storage Define Metrics Tracking & Trending 2007 2006/7 2005 2007/8 Mechanize CORE CMD Standards, stage II Mechanize CORE CMD Standards, stage III Enterprise MDM alignment, stage I Enterprise MDM alignment, stage II Enterprise MDM alignment, stage III Mechanize CORE CMD Standards, stage I Assess the maturity level Lean Begins with Information Sharing 6 5 4 3 2 1
    14. 14. Finding Barriers and Enablers <ul><li>Historic PM autonomy - no PMO support </li></ul><ul><li>Accountability for strategic initiatives at the operational level </li></ul><ul><li>Integration of multiple versions of software </li></ul><ul><li>Time zone issues </li></ul><ul><li>Enormity of quality issues </li></ul><ul><li>Complex distributed authority in a global corporation </li></ul><ul><li>Continued growth through mergers and acquisitions </li></ul>Barriers <ul><li>Buy-in of top management </li></ul><ul><li>Engaged middle management </li></ul><ul><li>The economic demands </li></ul><ul><li>Well-executed communication plan </li></ul><ul><li>Inclusive project approach </li></ul><ul><li>Goal-driven program </li></ul><ul><li>Regular progress measurement & reporting </li></ul><ul><li>Distributed decision-making </li></ul><ul><li>Availability of best-practice processes </li></ul><ul><li>Tool support (MS Project, SharePoint) </li></ul><ul><li>Real benefits for front-line workers </li></ul>Enablers
    15. 15. The LEAN PMBOK Opportunity Identification <ul><li>Understand business needs </li></ul><ul><li>Conduct strategic interviews </li></ul><ul><li>Analyze current state </li></ul><ul><ul><li>Current stewardship </li></ul></ul><ul><ul><li>Data / Process Complexity </li></ul></ul><ul><ul><li>Volume </li></ul></ul><ul><ul><li>Business Acceptance </li></ul></ul><ul><ul><li>Technical Systems </li></ul></ul>Process definition <ul><li>Share best practices aligned to needs </li></ul><ul><li>Define Core Customer Master Data </li></ul><ul><li>Secure Business alignment with sign-off on Data Dictionary Program </li></ul><ul><li>Create BU specific change management plans </li></ul><ul><li>Identify, define supporting processes, metrics, audit, & reporting </li></ul><ul><li>Create baseline metrics, reporting and auditing </li></ul><ul><li>Create communication plan </li></ul><ul><li>Execute pilot </li></ul>Start-up and Stabilization <ul><li>Finalize To-Be plans </li></ul><ul><li>Complete process definition </li></ul><ul><li>Finalize BU process implementation stages </li></ul><ul><li>Assess pilot results </li></ul><ul><li>Take corrective actions </li></ul><ul><li>Institutionalize methodology </li></ul><ul><li>Monitor visual controls </li></ul><ul><li>On-going To Be process improvement </li></ul><ul><ul><li>Formal operations review </li></ul></ul><ul><ul><li>Formal turnover from project team to process owners </li></ul></ul>Executing Blueprinting <ul><li>Define “As-Is” process (s) </li></ul><ul><li>Develop requirements </li></ul><ul><li>Define To Be Process </li></ul><ul><li>Define gaps in business </li></ul><ul><li>Assess risks </li></ul><ul><li>Define roles </li></ul><ul><li>Secure scope buy-in </li></ul><ul><li>Define pilot effort </li></ul><ul><li>Share lessons learned </li></ul><ul><li>Kickoff Meeting </li></ul><ul><ul><li>Consensus on charter / SIPOC </li></ul></ul><ul><ul><li>Buy-in from Business Leaders </li></ul></ul><ul><ul><li>Create staffing plan </li></ul></ul>U D M O V C Understand Define Model Optimize Validate Control Controlling and Re-Cycling Initiating Planning Closing
    16. 16. Load Balancing: Leverage Business Knowledge <ul><li>Delegate! </li></ul><ul><li>Drive cost to the cost owner </li></ul><ul><li>PM tracks, reviews progress, drives issue resolution </li></ul>Misuse of the PM Project Manager / Data Steward Driving Business Data Ownership Institutionalizes Stewardship SBG N/A N/A SBG N/A N/A I’m tired
    17. 17. 5 S Process SUSTAIN Monitor / Measure Utilize documented standards STANDARDIZE SHINE Take corrective action STORE Create a place for everything SORT Keep only the necessary to perform the task
    18. 18. Sort - Establish goal and standard definitions <ul><li>Goal: Deliver continued improvement in CD2 quality </li></ul><ul><li>Establish Scope and Criteria </li></ul><ul><ul><li>High confidence D&B DUNS# match to Sold-to customer records aligned with sales dollars </li></ul></ul><ul><li>Define ownership - BU owned and managed, CD2 team assisting </li></ul>Store Shine Standardize Sustain Sort
    19. 19. STORE – Establish standard structures <ul><li>Determine required quantities </li></ul><ul><li>Label needed items </li></ul><ul><ul><li>Maintain transaction traceability </li></ul></ul><ul><ul><li>Define D&B DUNS# as key code – system independent & family linkage </li></ul></ul><ul><li>Create a place for everything </li></ul><ul><li>Define scrap and remove from the process </li></ul><ul><li>Enrich CMD records through the D&B process </li></ul><ul><li>Develop shadow boards aligning CMD by family </li></ul>Sort Shine Standardize Sustain Store
    20. 20. Shine – Establish standard procedures <ul><li>Corrective Action - Resolve CMD returned from D&B with a low confidence (LC) or non-match (NM) </li></ul><ul><ul><li>SBG created and owned </li></ul></ul><ul><ul><ul><li>Maintain audit trail – source system & customer number </li></ul></ul></ul><ul><ul><ul><li>Utilize Standard Work process </li></ul></ul></ul><ul><ul><li>Enlist resources </li></ul></ul><ul><ul><ul><li>Identify SBG Data Stewards </li></ul></ul></ul><ul><ul><li>Track & drive results – time box every meetings, no circle backs </li></ul></ul><ul><li>Create standard work </li></ul><ul><ul><li>Provide consistent format </li></ul></ul><ul><ul><li>Conduct Training on documented process </li></ul></ul><ul><ul><ul><li>Provide D&B suggested low confidence match </li></ul></ul></ul><ul><ul><ul><li>Enable mechanized correction </li></ul></ul></ul>Sort Store Standardize Sustain Shine
    21. 21. Standardize – Establish identification standards Sort Store Shine Sustain Standardize <ul><li>Create CORE Customer Master Data </li></ul><ul><ul><li>Define elements and attributes </li></ul></ul><ul><ul><li>Obtain consensus across organizational lines </li></ul></ul><ul><li>Define unique identifier </li></ul><ul><ul><li>System independent </li></ul></ul><ul><ul><li>D&B DUNS# </li></ul></ul><ul><li>Install in SBG systems </li></ul><ul><ul><li>SAP FI Credit Master </li></ul></ul><ul><ul><ul><li>Credit Info.No. (KNKK table) </li></ul></ul></ul>
    22. 22. Sustain – Establish business-centric metrics and sustained self-discipline <ul><li>Measure Quality & predictability </li></ul><ul><ul><li>Definition: Percentage Honeywell yearly revenue aligned with D&B DUNS# </li></ul></ul><ul><li>Measure Re-work </li></ul><ul><ul><li>Drives Cost Containment & need for mechanized standards </li></ul></ul><ul><ul><li>Definition: Cost of employee time + opportunity cost </li></ul></ul><ul><li>Measure Scrap & On Time to Request (OTTR) </li></ul><ul><ul><li>Drives Data Completeness </li></ul></ul><ul><ul><li>Definition: Scrap (unusable record) for first pass yield per file </li></ul></ul><ul><ul><ul><li>Example: CMD record with no associated dollars, blank customer name, blank country, unusable record </li></ul></ul></ul>Sort Store Shine Standardize Sustain
    23. 23. What Have We Learned? <ul><li>Initiating & knowing </li></ul><ul><li>Understand and define your reason for being </li></ul><ul><ul><li>Planning & Phasing </li></ul></ul><ul><ul><li>Drive a new mindset for Faster, Better, Cheaper </li></ul></ul><ul><li>Executing Concurrently </li></ul><ul><ul><li>Manage cycle time </li></ul></ul><ul><li>Closing, Iterating, Re-Cycling </li></ul><ul><ul><li>Institutionalize learning </li></ul></ul><ul><li>Create a problem statement </li></ul><ul><li>Know your mission & vision </li></ul><ul><li>Define leading / lagging </li></ul><ul><li>indicators </li></ul><ul><li>Phase the project </li></ul><ul><li>Design concurrent efforts </li></ul><ul><li>Learn to use your software </li></ul><ul><li>Time-Box all meetings </li></ul><ul><li>Start and finish on time </li></ul><ul><li>Run concurrent efforts </li></ul><ul><li>Communicate up </li></ul><ul><li>Communicate down </li></ul><ul><li>Communicate across </li></ul><ul><li>Document lessons learned </li></ul><ul><li>Share lessons learned </li></ul><ul><li>Keep in central repository </li></ul><ul><li>Institutionalize </li></ul>Controlling
    24. 24. Lean Celebration! The Voice of the Customer shows what the customer really wants! LEAN is really valuable! I 5S all documentation! The LEAN PMBOK is great! I create standard work. Now I can recycle all my projects! I run concurrent efforts ! No more waiting for the next iteration, no more excessive requirements inventory! Knowing the 7 wastes keeps me on my toes! The end-to end value chain provides visibility into the process! I know where we need to work and who owns what! I load balance my resources! I push cost to the cost causer and have created the LEAN enterprise! No more waiting ! My projects complete on time! Meetings start on time! Supplies and files arrive on time! Freedom from over-production means only having what is pulled by the customer! No more process failure from defective information. My communication plan is LEAN, pulled by the customer, from a centralized repository ! Institutionalizing Lessons Learned keeps us on the continuous improvement track!
    25. 25. Questions?
    26. 26. ib Lean, LLC, Nancy W. Northrup ib LEAN, LLC, a Continuous Process Improvement company, specializes in the areas of: Master Data Governance Building the Project Office Project Turnarounds Six Sigma Leadership ib LEAN, LLC is currently partnering with Vector International to provide Six Sigma Training and Certification. Training, coaching, mentoring Nancy W. Northrup is an experienced Project Management Professional certified in Six Sigma Black Belt, Six Sigma Lean Black Belt, and trained and certified in DFSS and DMAIC.
    27. 27. Nancy W. Northrup ib LEAN, LLC Owner and Principal (862) 812-2014 Faster! Better! Cheaper! Presentation at PMI NJ IPM Day 11/05/09