Lean Product Development

Thinking Lean is usually associated with manufacturing processes. Many people lose sight of how to apply lean concepts outside the manufacturing plant floor. Articles and case studies are readily available to assist someone starting their lean journey in manufacturing. Not so much is available for those in office environments, accounting departments, engineering teams or in service industries like health care.

While this blog post is geared toward lean product development (concept, design, engineering, production readiness), it applies to lean thinking in many venues. It may provide some insight on how to approach your lean journey.

How would you feel if you reduced your product design cycle by 50%. Kudos all around! How would you react if you were tasked by your boss to deliver your next design project to the market in half the time. How would you approach this challenge? These are the results that design teams are achieving through lean product development. Read on to discover how you can apply these tools in your facility.

In applying lean to the product development process, there are six key issues to explore; focus, clarity, alignment, ideation, WIFM and strategy. We’ll briefly explore each.

Focus

Lean thinking demands we develop our skill in identifying and eliminating waste. We focus our effort on the value stream – the things that provide value for our customer. In office environments, waste manifests itself in several forms. The two most common are distractions and lack of coordination.

Distractions come in the form of interruptions. People requiring assistance, problems that arise, email and spam, letters and correspondence. Each of these place demands on our time – and the result is time, our most precious resource, is wasted. Consistently, in time studies, 60-70% of our day is spent on activities that do not add value to the customer in the product development process. We’re too busy fighting fires.

Lack of coordination translates directly to rework. Priorities change, steps are missed, specifications change, the customer requirements shift. Typically meetings are twice as long as they need to be and have the wrong people at the table. Several people in a typical meeting room do not contribute to the discussion and distract others by texting away on their blackberries. The people who should be in the room are too busy to show up and do not send updates or designates. Meetings don’t start on time and consistently run overtime.

In fact, the first step in improving lead time for product development is waste elimination through time management and communication. Meeting rules, email rules, 5S for the office cubicle, standup coordination meetings and dedicated time for project work are a good place to start.

Clarity

The workplace is a social experience. Many people love to tell stories and debate trivial or low priority points or tasks. Some people spend more time figuring out how not to do something than it would take to just get it done.

Communication in all forms should be clear, concise and to the point. Verification that the intended message was received and understood is essential. The social media site Twitter is a lesson in showing us how to be concise. Summarize your message in just a few lines, and link me to more information if I need it. Tell your story in the subject line of your email – then I don’t even have to open it! When we get good at shortening our message, we don’t have to use the kids acronym language to convey our message. We just become more thoughtful and concise – we think about the customer, the reader, and how they will interpret our message.

Developing lean communication skills should become a priority for your team – and like any skill it must be learned and developed through practice. Develop a safe feedback method to identify and correct team member undesired behaviour and provide tools for your team to measure progress as they improve.

Alignment

In many organizations the structure of the design team itself leads to inefficiencies. Most designers have several bosses and many projects underway simultaneously. While most of us believe we are good multi-taskers, in reality few of us are. We struggle to move each project forward at the same time and all projects are delayed as a result. Traditional design houses are organized by function. This creates its own problems with islands of expertise – similar to departments in manufacturing. Ideally, the organization should be re-arranged by value stream (work flow through cells). In practice, a matrix organization typically develops and this creates its own unique challenges.

Utilize visual management tools focussed on project deliverables to align your team. Toyota’s Oobeya (the big project room) is a great model for this. While many companies do not have the resources to create this type of focussed room, the tools of this model can be readily applied. Use the lean moto “borrow with pride” or “steal shamelessly”. Where you see a good idea that will make you more effective – use it!

Oobeya starts with a model, a visual representation of what we are building to ground the team, focus on the customer and facilitate Quick Problem Solving (QPS). Out of the model flows a graphic representation of the project objectives with links to the corporate strategy or larger project plan. From the objectives, the expected outcomes are displayed and reported along with any urgent issues. From the expected outcomes, the team develops metrics to measure performance and report progress using a Red/Green stoplight approach. Quality, cost and project timing are all included so the team gets a full picture of project status. Next to the metrics, a project schedule defines deliverables by department. This is broken down on a decomposition board to schedule items requiring urgent attention more closely. Issues are clearly posted, whether they are potential or real and the resolution is displayed for communication of lessons learned. From the issues board, an escalated items area is dedicated to issues that require involvement from outside the team, typically decisions by management. The room reads like a storyboard and tells the story at a glance of how the project is progressing as well as how the team is identifying and dealing with issues.

Adopting just a few of these visual tools in your project area will help align your team and smooth the work flow.

What’s In It For Me (WIFM)

Surprisingly, for people not regularly exposed to design teams and engineering professionals, accountability can be a real problem. As professionals we think we know how to manage our projects effectively and do not react well to feedback on performance. Managers tend to step back and let the team work the black box magic that it takes to create the design. Delays and missed project milestones result.

So how do we instil accountability in an organization? Typically, it starts with clarification of roles and responsibilities. Everyone must understand what they are responsible for in terms of expertise, deliverables and timelines. The players themselves must determine how they are going to approach and deliver their tasks on time. The leader asks questions to assure themselves that the expertise and approach will deliver the desired result. Ease off the questioning and pressure as they “get it” and provide positive feedback as results are delivered. This coaching approach will instil accountability and earned trust in the organization.

Transforming the culture of an organization is a never ending and primary task for the leadership. Re-enforcing desired behaviour through constructive feedback is key. If you have read Leadership and Self Deception (Berrett-Koehler Publishers) you will identify with being “out of the box” when you do this to be effective.

Ideation

Ideation is the process for forming ideas or images. Using lean visual management and story boards in the product development area to generate and capture ideas, solutions and improvements will yield surprising results. The creativity and collaboration possible with visual problem solving continues to amaze me. When used with creative teams, the results are impressive. Get out of the cubicle and get some group think happening.

Approach

So what is the approach to implementing lean product development? Where do I start?

Lean’s PDCA cycle is a great model to follow. Start with an assessment of where you are – how lean are you and what are the wastes. A day in the life of your team member is a great place to start.

Once the status of lean in your group has been established, identify the top wastes to be addressed and provide an introductory orientation/training session for the team. Starting with lean communications is appropriate in most design teams.

As you implement the corrective action ideas, pay close attention to what the team is saying. This will give you clues of where to dig for more wastes. Have the team validate and prioritize your list and you have their commitment to proceed with implementation.

Continue this Plan-Do-Check-Act cycle and you’ll soon be mapping processes, validating data and becoming lean.

Learning as you go is the best way. Lean is a journey, not a destination.


Norm
www.normanbain.com

Innovators and Integrators

I read an interesting blog from Steve Shapiro through a link in his newsletter that I thought I'd share here. What struck me most was the frame of reference as integrators and innovators. It re-enforces and expands the 5-why concept;

“(As innovators,) we are architects of companies and industries. An architect is not a ‘reengineer.’ To illustrate this point, I often ask clients what is the difference between an optimist, a pessimist, a reengineering consultant, and an architect. The optimist looks at a half filled glass of water and sees it as half-full. The pessimist looks at the same glass and sees it as half-empty. The reengineering consultant sees too much glass. Cut off the top. Downsize. An architect looks at the same glass and asks questions such as ‘Who’s thirsty?’ ‘Why water?’ Or ‘Is there another way to satisfy the thirst?’ It is this questioning, challenging and rethinking that differentiates architects from those who rearrange the deck chairs on The Titanic.”

Find solutions everywhere. Embrace open innovation. And think like an architect. Ask the difficult questions. Assess what matters most. And build a core competency around integrating point solutions.

Read the entire blog post here

Norm
www.normanbain.com

Business problems show up as inventory

Have you heard the business axiom "business problems show up as inventory"?

Whether you count inventory as WIP, raw materials or finished goods, the health of your organization is generally apparent in the level of inventory on hand. Many companies recognize this simple truth and adopt a goal to reduce inventories. The senior leadership typically sets a target for a 20% inventory reduction. Most companies typically carry 30-40% more inventory than they need to.

But without effective tools to identify excess inventory and properly manage it, most companies fail to achieve and, more importantly, sustain this inventory reduction goal. The impact of poor sales and operations planning, poor scheduling, engineering changes, material shortages, long lead times and cycle times, batching and large order quantities, overzealous buying and early material receipts are often blamed as causes for excess inventory. Without a structured approach, sustained inventory optimization is difficult to achieve.

Many companies have applied ABC categorization of inventory. This time tested approach states that by paying attention to a small percentage of line items in your inventory (20%), you can manage the lion's share (80%) of your inventory value. Most MRP systems are based on this premise.

The next step in achieving inventory reduction (as a focussed initiative unto itself) is to use the IQR methodology. Inventory Quality Ratio (IQR) is a ratio of your high moving items to the total inventory value. This is typically 30-40% in most companies. By further categorizing your inventory into active, excess, slow moving and non-moving inventory, you can improve this quality ratio enormously - typically identifying, achieving and sustaining a 30% reduction in inventory on hand.

While Lean Thinking as a strategy will yield impressive results in WIP and inventory reduction, the results can take from 6 to 18 months to see. Using IQR as a tool for rapid inventory reduction deployment, expect to see step change results in 3-6 months. Contact us for more details.


Norm
www.normanbain.com

Lean Resource Guide

Confused about lean concepts or terminology? Then visit the NBI knowledge center or our management library. Our on-line education and continual learning resource guide!

Norm www.normanbain.com

Lean waste elimination fails to hit the bottom line numbers

Many companies, embracing the concepts of lean thinking, hear the urging to 'Just do it', in the spirit of the leaders and pioneers of the Toyota Production System. They then excitedly delve into the transformation process. They stage a kickoff meeting to share their passion, pick something important and start removing waste quickly to capitalize on that “low hanging fruit”.

The target area becomes a beehive of activity, kaizen events, continuous improvement blitzes, 5S initiatives and production tracking boards. People get engaged in the process improvements and the staff gains some hope that finally the company is listening to what they are saying.

Yet flow through the facility does not consistently improve, the mounds of in process inventory do not reduce, and expediting hot orders remains the norm. No cost savings reach the bottom line, there is no demonstrable service and quality improvement for the customer. The improvements are not sustainable. Processes drift back to the old ways of doing things.

So management reaches the conclusion that lean does not work in this environment. We are “different” and the principals must not apply in this industry. We cannot demonstrate a return on our investment.

This lean offensive with its disappointing result drifts off as another abandoned program.

So why does this happen? Why do the concepts of lean, that seem to be such common sense, not work when we apply them? How can so much information be readily available about this approach to process improvement, yet it is so incredibly difficult to implement with concrete demonstrable results?

Click here to read the rest of this article and explore the answer to this all too common dilemma

Norm
www.normanbain.com

Creating a Sense of Urgency Among Employees

John Ryan of the Center for Creative Leadership posted an article this week on Creating a Sense of Urgency Among Employees.

In it he talks about:

• Don't take your foot off the gas.
• Don't hesitate to share bad news.
• Convey optimism and passion.
• Publicly praise urgent actions.
• Partner with colleagues on strategy.

Great thoughts from a great organization. Read the post here.

I had the pleasure of attending the Center for Creative Leadership LDP program early in my career. It was a great experience - good people, great advice!

Norm
www.normanbain.com

Typical approach to solving problems - Fly Swatting

Lean teaches us to look at problems as treasures. An organization that has no problems cannot improve. In order to learn and grow, we need to take risks, make mistakes, discover problems and solve them. The first step to continuous improvement is finding problems.

So, by changing the environment so that discovering problems is encouraged, we create a no blame and learning organzation. An organization where the people are engaged in improving their processes, eliminating waste and adding value for their customer. An environment where people want to work and contribute to the organizatons success. Companies who embrace this philosophy become the employer of choice and typically see a noticable reduction in turnover.

An end result of a systematic approach to problem solving is continuous improvement, lower cost, quicker response and higher profitability. All the things that businesses strive for!

And now I have another problem. All these people finding problems and working to solve them is akin to swatting flies. Everyone is swatting away, but we are not looking for why the flies are gathering in the first place. We need to ensure we get to the root cause of the problem and solve that, rather than the symptoms (swatting flies).

This requires a formal approach to problem solving (so that we get to the root cause) and a systematic approach to improving our system (the value stream) so that we get results sooner and focus our resources on what is important for system throughput. The more responsive our system is to customer demand, the better we can act and improve profitability.

So a great start to a lean journey is to insist that your leaders find and solve problems, and are looking at the business processes as a value stream. A great measure of success would be system throughput and lead time!

Looking to improve your operation? Start by asking your people what value they add for your customer and what problems they are solving!


Norm
www.normanbain.com