Revision as of 14:20, 25 February 2018

Abstract

This article will investigate projects and how they are managed using Lean Project Management tools. Firstly, it will be described what a project and project management is according to the Project Management Institute. Then the origin of Lean and Lean Project Management will be investigated, including a definition of Muda and the five principles of Lean. The seven types of Muda and the Lean principles, serves as the overall philosophy in Lean Project Management and is used to understand what the customer consider as value and how to remove every process that do not add value from the customers perspective. The objective with Lean Project Management is to create the most value to the customer using a minimal amount of resources^[1].

To support the Project Manager in achieving these goals, three different tools will be introduced. The first step in a Lean project is to determine what the customer sees as value, but as project are often complex and performed over a long period of time, the customers need and perception of value might change throughout the project. To ensure the end product meets the customers’ expectations, the PDCA cycle works in iterations, with minor deliveries to the customer throughout the project, in this way it will be visible early in the project if there is a mismatch between the customers and projects team perception of value^[2].

To manage the tasks all these minor deliveries consists of, Kanban will be introduced, it is a tool to manage work tasks and minimize the work in progress.

Projects consist of many different activities, that can be either tangible or non-tangible, it can, therefore, be challenging for a Project Manager to predict the outcome of these activates before they are completed and the deadline is reached. To monitor the progress and outcome during a process, Six Sigma can be applied. By using Six Sigma it is possible to detect process variance, which will make the Project Manager aware of abnormalities in a process, which calls for action. (six sigma source) Lastly, the challenges and considerations of implementing Lean in an organization will be discussed.

Project

A project is characterised by being temporary effort performed with the objective of developing a unique product, service or result. A project is completed or terminated once the objectives of the project have been reached or abolished if e.g. there is no longer a need for the project or it is determined that the project objectives cannot be achieved ^[3].

All projects are unique, even if the outcome of two projects is identical, the circumstances, project team and stakeholders of the projects will vary, causing the two projects to face different challenges and uncertainties.

Project Management

A project consists of multiple activities and actions that have to be performed to achieve the project objective. Project management applies knowledge, skills, tools and techniques to successfully manage all the activities in a project. The Project’s Managers is in charge of managing the project team and project activities, to ensure the project is successful and satisfy the project stakeholders^[4]. .

The project managers responsibility includes:

• Determining which processes has to be executed to meet project objectives
• Select suitable approach to meet project requirements
• Maintain necessary communication with project team and stakeholders
• Ensure the project fulfil stakeholders need and expectations
• Manage project budget, scope, risk, resources, deadlines and quality.

^[5].

Lean Project Management background

Lean origins from the Japanese car manufacturer Toyota and was brought to America in the 80’s. Originally, Lean is a manufacturing philosophy but has since its arrival in America also been applied to service and project management, to perform continuous improvement ^[6].

Lean project management is a business philosophy, that applies the principles from Lean Manufacturing to project management. The objective is to identify customer value and reduce waste in all business processes, leading to greater customer satisfaction and increased revenue ^[7].

Muda

Muda is a Japanese word meaning uselessness and removing it is one of the key aspects of the Lean philosophy. Muda is any activity in a process that is not necessary to perform to deliver the end result or does not create additional value to the customer.

Both Lean Manufacturing and Lean project management aims to reduce seven types of waste called Muda in Lean contexts^[8] .

- Over production

- Transport

- Waiting

- Over-processing

- Inventory

- Motion

- Defects^[9]

Removing all Muda is a utopia, as creation of a product or service will include processes within one or more of the seven types of Muda.

To decide, which processes that can be removed and which are necessary, the Lean philosophy splits Muda into two categories:

Types of Muda

Muda Type l:

Muda Type l processes are non-value adding, but necessary to deliver a finished product or service, but do not directly deliver more value to the end customer. E.g. quality control in the pharmaceutical industry, it does not improve the benefit of the medicine for the end-user, but is simply a safety and regulatory demand. Muda-Type l is difficult to eliminate.

Muda Type ll:

Muda Type ll are non-value adding and non-necessary processes, once detected these processes shall be eliminated. A Muda Type ll process can e.g. be intermediate storage of a product. ^[10]

Principles of Lean Thinking

To implement Lean in an organisation, James P. Womack and Daniel T. Jones defined five core principles, that has to be followed to have a Lean organisation. Making the organisation capable of delivering what is needed, on time, with minimal use of materials, equipment, labour and space ^[11].

1. Specify value in the eyes of the customer

To successfully create value for the customer, it first has to be determined what the customer sees as value. Value is the part of the project which the customer is willing to pay for. The focus of a project is to increase the value to the customer and remove the parts of the project that do not create value from the customers perspective. ^[12]

2. Identify the value stream for each product

A value stream map includes all the processes that are necessary to fulfil the project requirements, both value and non-value adding. Once all the processes have been mapped, the value stream map is analysed to identify which processes are creating value and which are non-value adding and thereby associated with waste '^[13]

Based on the findings a new value stream map is created, were the non-value adding and non-necessary process steps have been removed. The new value map is an expression of how the process should be performed. ^[14]

3. Make value flow by eliminating waste

Now that is has been determined what creates value for the customer and a value stream map of how the process should be executed has been developed. The next step is to create a continuous flow by eliminating Muda’s, by dividing all process steps in the value stream map into the following three categories.

- Value –Added Work: Processes essential for creating value to the customer, the goal is to maximise the processes that fall into this category.

- Value- Enabling Work: In this category is the processes that are not directly creating value to the customer, but at the given time are necessary to perform the value-adding processes. These processes have the potential of being eliminated at a later point in time, the focus should be to minimize the Value- Enabling Work.

- Non-Value-Added Work: Non- Value Adding processes can generally be eliminated instantly as they do not create any value and are not necessary to perform value-adding processes. The processes in this category fall into one of the seven Mudas. ^[15]

4. Let the customer pull the flow

By delivering value upon customer request, it is possible to avoid delivering value before the customer needs it, which is combined with waste in terms of inventory and a risk that the delivered value is obsolete once the customer actually needs the delivery. To avoid this, the value shall only be delivered when the customer needs it, by implementing a Kanban system, this also enables an organisation to implement Just in Time system. ^[16]

5. Continuously improve the in pursuit for perfection

Lean is a philosophy that strives to support continuous improvement in an organization. It is therefore keen that processes constantly are reviewed to determine the actual value of this process. Creating a perfect process is a utopia, but it is possible to contently move towards a state of perfection. ^[17]

Lean Project Management tools

Lean consist of both a mindset and a wide range of tools and techniques, that together makes up the Lean philosophy. The following part will describe three of the many available Lean tools.

Deming Cycle

The Deming Cycle is an iterative model for performing continuous improvement, when staring a new improvement project, developing a new service/ product, when implanting changes etc.

The model is split into four phases: (put in figure)

• Plan, by recognising and determining the problem to solve.

• Do, develop a solution to the problem

• Check, the effect of the solution, test the solution and improve it.

• Act, once a suitable solution has been found and implements it. If the solution did not work as intended, the cycle is performed again.

^[18]

Kanban

In Lean Manufacturing, Kanban is used as an inventory control system. The word Kanban is Japanese and can be translated to ‘signboard’. In recent years, Kanban has moved into project management and software development. Here it is used to visually display the status of working tasks and to limit the work in progress and is often used in combination with PDCA cycle. When using Kanban, work tasks are not pushed to the team members, instead, the members pull’s a task when it is needed. This ensures that the team is not overburdened with work tasks and instead can focus on completing one work task at the time (depended on the defined maximum work in progress) ^[19] . Hence Kanban origins from Manufacturing, fitting the model to software and project management has been necessary. David Anderson has worked on tailoring Kanban to suit knowledge work and have defined five elements for a successful Kanban implementation.

1. Visualise the workflow 2. Limit the work in progress 3. Manage flow 4. Make Kanban strategy explicit 5. Implement feedback loops

^[20]

It is not required in the Kanban methodology to use a Kanban board, but it is widely used and a simple way to visualise the workflow, manage the flow and see the amount of work in progress assigned to each team member. An example of Kanban board can be seen on the picture beneath. A Kanban board can both be a physical board or represented using a software tool.

Six Sigma

Six Sigma has two meanings, it both refers to Six Sigma, a statistical model and Six Sigma – the improvement process (^[21] This section will cover both meanings, starting with Six Sigma the statistical model.

Six Sigma – The statistical model

Six Sigma is used as a universal performance metric across organisations, it measures the statistical variability in a data set, by calculating the standard deviation. Standard deviation is also expressed by the Greek letter σ, named Sigma. Standard deviation is an expression for how close data points in a data set is clustered. If the data points are far from the mean value it is an expression for high variation in the dataset. High variation in a process, will cause that there are only a few standard deviations between the mean value and the Control Limits. If a data point lays beyond the control limits, the output of the process will not live up to the specifications. To reach Six Sigma, there has to be six standard deviations or sigma’s, between the mean value and the upper control limit and lower control limit, respectively. When there is Six Sigma’s between the mean and the, it is highly unlikely that the output of the process will not live up to the specifications. Only 0,00034% of the outputs will not live up to the specifications^[22] .

Six Sigma – The improvement process

Today, there is a big focus on the processes both in business and manufacturing environments. All activities within these organisations is considered a process and is thereby a target for a potential process improvement. When focusing on the process in Six Sigma, 13 principles should be kept in mind.

1. The mindset shall be to prevent mistakes and continues improvement.

2. Process improvement shall be a focus throughout the process, from project start to project delivery.

3. To achieve process improvement, it is essential to have a disciplined and structured approach.

4. Processes have not only external but also internal customers, such as project managers and gatekeepers.

5. The customer's expectation and perception of quality is what drives the process

6. All businesses consist of processes

7. Everybody in a business manages a process

8. Everybody is at the same time both a customer (internal or external) and a supplier.

9. All processes have both an input and an output.

10. Processes have resources and controls

11. Process characteristics affect the output

12. Processes are not limited by organisational departments or boundaries.

13. Processes are often not depending on organisational structures.

^[23]

Concept

In all processes, there is something to be measured on, called the voice, it is used to control and perform continues improvement of the process. To control a manufacturing process, the voice of the process can be e.g. temperature or material purity.

In project management voice of the process can be cycle time for a task, on-time completion percentage, budget variance, customer satisfaction etc.

Need

Depended on the type of process voice to be measured, it is necessary to develop a suitable method for measuring the process variance.

Two pertinent business questions that require answer

Once an appropriate method for measuring process variance has been determined it possible to develop a metric that describes the performance of a process and if there has been a process improvement. Being able to determine a process improvement is crucial in the Lean methodology, as it is based on scientific methods. To verify changing an of a process has led to improvement, it is essential it is possible to measure and prove their improvements ^[24]

Challenges and considerations when implementing Lean Project Management

Lean Project Management is not only a set of different tools that can be implemented, it is a philosophy that has to be present in the entire if the implementation of Lean shall be successful. Lean is a philosophy and not a tool, therefore has to be present throughout the organisation. An organisation does not become Lean by, implementing tools such as Six Sigma, Kanban, PDCA cycle along with the many other Lean tools, the tools shall be seen as coherent whole ^[25]. When implementing Lean, the organisation shall also be aware that Lean is not a stage that can be reached, but an ongoing journey of continues improvement. Implementing the tools partly, to perform continues improvement in e.g. R&D, will most likely not be successful, as the continues improvement in R&D will be held back by the other departments in the organisation. Rarely, departments are totally autonomous from the rest of an organisation, it is therefore important Lean is implemented in the whole organisation.

It is therefore important when implementing Lean, that management takes the necessary precautions. This includes training the whole staff in the Lean philosophy and the tools that follow. A lot of the improvements that are suggested and implemented in a Lean organisation, comes from the people directly involved in the processes. For a successful Lean implementation, it is therefore crucial, that all workers are aware of the Lean philosophy and feel that their colloquies and managers listen and respect their improvement suggestions.

One of the main focus’ of Lean Project Management, is to determine what value is to the customer and maximise it. To ensure that the project team, do not stick with their perception of what creates value to the customer, the project team shall have an open mind towards, what actually creates value to the customer. If the project team successfully detect what creates value for the customer, it will lower the risk of over-engineering solutions, without creating additional value to the customer.

Implementing Six Sigma in an organisation comes with some challenges. It is not sufficient to just monitor the variance in the processes to increase the quality, there shall also be a clear strategy for who and how the organisation acts when abnormalities in a process are detected. Else, the organisation will not be able to perform the continuous improvement^[26]. Six Sigma is a rather complex methodology, as with the Lean philosophy it is therefore important, that the employees receive the necessary training and support from management to have a successful implementation.

When using Kanban and PDCA cycle in an organisation, commitment is also one of the primary factors of success. If not all phases of the PDCA cycle is carried out properly, there will not be the necessary learning from each process. Having and administrating a Kanban board, it is associated with some administrative work. It is therefore important, that one person is put in charge of administrating the board and creating new Kanban cards. Also, there should be clear rules of how the Kanban board is used.

The Lean tools and techniques can bring a lot of benefits to project management, but it is important that the organisation understand the philosophy before implementing it and are aware that it is a continuous process of small improvements.

References

1. ↑ Moujib, A, Lean Project Management (2007):
2. ↑ Connie N. Johnson, The benefits of PDCA(2002)
3. ↑ Project Management Institute, Project Management: A guide to the Project Management Body of Knowledge, (2013): 1.2
4. ↑ Project Management Institute, Project Management: A guide to the Project Management Body of Knowledge, (2013): 3.0
5. ↑ Project Management Institute, Project Management: A guide to the Project Management Body of Knowledge, (2013): 3.0
6. ↑ Moujib, A, Lean Project Management (2007):
7. ↑ Moujib, A, Lean Project Management (2007):
8. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 16
9. ↑ James P. Womack,Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 16
10. ↑ Natalie Sayer & Bruce Williams, Lean For Dummies 2nd Edition (2012)
11. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 16
12. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 16
13. ↑ James P. Womack,Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 19
14. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 20
15. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 21
16. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 22
17. ↑ James P. Womack, Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (1996): p. 24
18. ↑ Connie N. Johnson, The benefits of PDCA(2002): p. 1
19. ↑ Osama Al-Baik & James Miller, The Kanban approach, between agility and leanness: a systematic review (2014):
20. ↑ Osama Al-Baik & James Miller, The kanban approach, between agility and leanness: a systematic review (2014):
21. ↑ Jack Welch, Six Sigma: Continuous improvement for business (2003):
22. ↑ Jack Welch, Six Sigma: Continuous improvement for business (2003):
23. ↑ Jack Welch: What is Six Sigma? (2003):
24. ↑ Jack Welch: What is Six Sigma? (2003):
25. ↑ Christer Karlsson & Pär Åhlström: The difficult path to lean product development (1996):
26. ↑ Young Hoon Kwak & Frank T. Anbari: Benefits, obstacles and future of Six Sigma approach (2006):