Difficult economic time demands a new way of conducting business. Taiichi Ohno, considered the father of Toyota Production System, created a lean manufacturing framework, which was based on the idea of preserving (or increasing) value with less work. Anything that doesn't increase value in the eye of the customer must be considered waste, or "Muda", and every effort should be made to eliminate that waste. In this webinar, we're going to explore deadly lean wastes and Nigel Thurlow will walk us through the "Leaner Model" of managing change to ensure momentum is maintained towards a successful organization transformation.

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Copyright 2017-2018. Toyota Connected. Confidential -- Distribution prohibited without permission.
Understand Waste &
Responding to Change
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What Agility Means
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Deliver Faster Higher Quality Lower Cost
Reduce Complexity Faster Decisions Stay Ahead

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The 8 Deadly Wastes
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Lean vs Agile
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Lean allows us to optimize delivery by eliminating
non value added aspects of the work, removing
constraints, dependencies, and bottlenecks.
Agility comes from delivering incremental value by
shortening the PDCA cycles, and involving actual
customer feedback in the process.
Systems
Thinking
Value Added
Work
Refine
Process
Eliminate
Waste
Optimize
Flow
$
You can be Lean but not Agile, and you can be Agile but not Lean!

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Customer 1st
Anything that the
customer is not willing
to pay for is waste!
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Biggest Challenge for Change
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I give
instructions!
I relay those
instructions!
I supervise
instructions!
I do the
work!
Value is created here!

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Mapping Value and Waste
• Value Added Processing: Adds value to the product or service.
• Customer cares or is willing to pay for it.
• It physically changes the product or service by being processed.
• Done right the first time - no rework.
• Type I Muda: Non-value-added tasks which seem to be essential.
Business conditions need to be changed to eliminate this type of
waste.
• Type II Muda: Non-value-added tasks which can be eliminated
immediately.
• Present Capacity = Work + Waste —Ohno
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Compliance Intent vs Process
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Principles or Intent Process or Approach

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T
)
Concept
pres.
Lisa
assigns
resources
Graphics
design
Sound
design
Dev
Integr. &
deploy
1m
4h
6m
8
Game backlog
1w 6m 6m
15
Design-ready games
12
Production-ready games
1m 3w 3m
(1m+2m)
3w
Sam
2h 1d
3.5 m value added time
25 m cycle time
= 14%
Process
cycle
efficiency
Estimate
2 m cycle time = 12x faster
Preliminary result
3-4 m cycle time = 6-8x faster
Games out of date
⇒ Missed market windows
⇒ Demotivated teams
⇒ Overhead costs
2d
Source: Henrik Kniberg !9
w2w1 w4w3 w6w5 w8w7
Value Stream Mapping

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New Enhancement Budget Request
9 Hours Value Added Work
19.5 Hours of Non Value Added Work
53 Days Cycle Time
0.7% Process Efficiency
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Value or Non Value Add Work?
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Value or Non Value Add Work?
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Fast Food 8 Wastes Example
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8 Deadly Sins of Waste
Make too much food
Pickles have to be removed from food
Transfer food from the kitchen
Wasted motion from reworking finished food
Extra food stits in inventory
Customers are waiting for fixed order Customer doesn’t want pickles!
Could be improving the kitchen
1 Over-Production
6 Wasted Motion 5 Over-Processing
3 Excess Inventory
2 Transportation
7 Waiting Time 4 Defects
8 Wasted Potential

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Mottainai - Regret of Waste
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Understanding Where Time Goes
Cycle Time: The time taken to complete a step in the
process.
Takt Time: How much time you have for each item to be
processed. (production time / customer demand = max time per item)
Waiting Time: The time spent between each step of the
process when no work is being done.
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Lead Time: The total time taken to deliver the service or request
throughout the whole process. Cycle Time + Waiting Time

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Learn to See Waste
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Cycle Time: 90 seconds
Waiting Time: 90 minutes Process Cycle Efficiency: 1.64%
Lead Time: 91.5 minutes

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Mapping Your Value Stream
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Cycle Time Cycle Time Cycle Time Cycle Time
Queue Time
Product Lead Time
Dept 1 Dept 2 Dept 3 Dept 4
Customer Lead Time

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Calculating Your Efficiency
Industry average is +/- 14% — Toyota Plants run at 96%!
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Individual Process Cycle Efficiency = (Value-added Time / Cycle Time)
Overall Cycle Efficiency = (Value-added Time / (Lead Time + Queuing Time))
Product Process Cycle Efficiency = (Value-added Time / Lead Time)

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Mapping Your Value Stream
Direction of Flow
Name of Process
Details
VA/NVA
Name of Process
Details
VA/NVA
Name of Process
Details
VA/NVA
Name of Process
Details
VA/NVA
Waiting Time
Name of Process
Details
VA/NVA
Yes
No
Name of Process
Details
VA/NVA
Value Add Time nn
Non Value Add Time nn
Waiting Time nn
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Start Here!
Linear Contextualization - Allows us to consider changes to the process as part of mapping the process!

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Product Flow Efficiency
20Flow Efficiency
Resource
Efficiency
Low High
Low
High
“All we are doing is looking at the time line from
the moment the customer gives us the order to
the point when we collect the cash.
Are we reducing the timeline by reducing the non
value adding waste”
Start
Ultimate
Goal

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How Waste Scales
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VA Type 1
Type 2
VA Type 1
Type 2
Radius = 3 Radius = 4
3.14 x 3
2
=
28
—
3
= 9.5 3.14 x 4
2
=
50
—
3
= 17
Area of a Circle

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Indiana Plant Case Study
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2 Seconds Takt Time Reduction 12000 Extra Cars Per Year!

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Going Deeper Into Value Streams
Cycle Time: The time taken to complete a step in the process. A process
can have many cycle times. e.g. 3 people processing the product.
Waiting Time: The time spent between each step when no work is being done.
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Process Time: The time taken for the product to pass through a
department.
Value Creation Time: The actual time value is created in a cycle.
Processes Contains Cycles, Cycles Contain Value.
Lead Time: The total time taken to deliver the service or request.

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Finding the Value
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Station 1
Station 2
Station 3
Process Time
Cycle
Time
Cycle
Time
Cycle
Time
Value Creating
Time
Waiting
Time
Waiting
Time
This example assumes one person per station and one item being worked on at a time.

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Follow The Product Flow
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Identify
The
Customers
Define
Products &
Services
Identify
Product
Owner
Create
Product
Backlog
Customer 1st
Identify
Needed
Skills
Identify
People
w/Skills
Teams
Self
Organize
Start Here!End Here!
Optimize for Product Flow

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Small Multi Skilled Teams
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Ideal Team
• Small!
• Co-located and working together.
• All the skills to do the work.
• Immediate communication.
• Intense collaboration.
• Cross-functional where every team
member can contribute and help.
Just like the Teams on the Toyota Production Line

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Capable to Help Each Other
• If an operator in a later process is delayed, others
should help set up his or her machine. When the
work area returns to normal, that worker should
get the baton and everyone else should return to
their positions.
• At Toyota we call the Baton Passing System the
Mutual Assistance Campaign. It provides power
to generate more powerful teamwork.
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Page 24-25

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Learning to See - Eyes for Waste
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Some Tips to Deal with Waste
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Hold Bureaucracy Busting
Sessions like Google
Replace an established process
with its Workaround!
Ask “who will miss this?”
Eliminate it if no one!
Create a ‘Cut The Crap’
committee like Richer Sounds
Defintion
DONE
Make simplification part of your
Definition of Done

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Cynefin Framework
The Cynefin Framework
30https://www.youtube.com/watch?v=N7oz366X0-8

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Understanding Complexity
Software
Innovation
New Technologies
DevOps
Helpdesk
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Hadar Ziv Professor of Informatics at UCI - PhD introduced the "Uncertainty Principle in Software Engineering" which later became "Ziv's Law.”
• The law states that software development is an inherently uncertain
process, and hence it can be hard (impossible?) to fully define a
specification upfront.
• During the development process discoveries will be made, and hence it
might be a good idea to update the plan and adapt to what is learnt.
• It is due to this uncertainty that traditional project management
approaches, like the waterfall model, which require a fully specified
sequential plan upfront, do not work well for software development.
ZIV’s Law in Software
The Uncertainty Principle in Software Engineering
!32

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Wicked Problems
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Characteristics of a Wicked Problem
• Difficult to clearly define.
• Many interdependencies and many causes.
• Attempts to address the problem often lead to
unforeseen consequences.
• Frequently not stable.
• Usually no clear solution.
• Socially Complex.
• Rarely is the responsibility of only one stakeholder.
• Solutions involve changing behaviors.
• Can be characterized by chronic policy failure.
Wicked problems often crop up when organizations have to face constant change or unprecedented challenges.

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Go forth and be Lean AND Agile!
Thank You
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Nigel Thurlow - Chief of Agile
linkedin.com/in/nigelthurlow/
www.ToyotaConnected.com