Lean Project Management
Many companies fully or partially live in a project world, although most of them do not act as project-driven companies. Competition in our industry increasingly makes more important the desire of optimizing what leads to provide our customers better service or product, within the time and cost agreed, and to the extent expected by them. Lean Project Management seeks precisely that goal.
The purpose of this article is to explain how the Lean principles can be applied to make project management more efficient. Lean Project Management guide organizations toward a model of high productivity management at all stages of a project. The procedure used to analyze this issue throughout the article is the following. First, the causes of projects failure are identified, clarifying the room of improvement. Second, the objectives and principles of Lean Project Management are defined. By recommending tools and techniques it is shown how to manage projects in a Lean way. Finally, the benefits of Lean Thinking in Project Management are concluded. A collection of articles and papers will support these ideas.
Contents |
Background
History
Kiichiro Toyoda, Taiichi Ohno, and others at Toyota are the developers of the Toyota Production System (TPS) in the 1930s. This system shifted the focus of the manufacturing systems from individual machines and their utilization, to the flow of the product through the total process. Lean manufacturing is a management philosophy derived mostly from the TPS and Lean principles are derived from the Japanese manufacturing industry. The philosophy has identified as “lean” only in the 1990s and the term was used first by John Krafcit who described the thought process of lean in the book “The Machine That Changed the World”, co-authored by James P. Womack, Daniel T. Jones, and Daniel Roos. Lean implementation is focused on getting the right things to the right place at the right time in the right quality to achieve perfect work flow, while minimizing waste and being flexible.
Current status
Toyota has been the leading lean exemplar in the world and stands as the strongest proof of the power of lean enterprise. This continued success has over the past two decades created an enormous demand for greater knowledge about this management philosophy. Nowadays, there are hundreds of books and articles about lean thinking and there is an increasingly trend to spread the lean principles beyond manufacturing to other sectors (construction, services, logistics, healthcare…). Also lean thinking is beginning to take root among project managers and LPM is the application of Lean manufacturing to Project Management to improve quality and increase efficiency in projects. Firms operating in fast-changing and highly competitive markets in which the quick adjustment to dynamic environments is essential, project managers increasingly work to improve quality, flexibility and customer response time using principles of Lean thinking (2).
According to several studies from the Project Management Institute (PMI) and others that look into the success/failure rates of projects, only 40% of projects met schedule, budget and quality goals. The rest were aborted or completed unsuccessfully. This means that more than one out to three projects fail. Also, there seems to be evident that the longer the project and the team size, the harder is the failure. The studies reveal that the main causes for projects failing are breakdown in communications, a lack of planning and poor quality control. As a consequence, the root cause for project failure can usually be tracked back to a lack of proper Project Management. So, there is a room of improvement in project processes and this is the goal of LPM philosophy.
Principles of LPM
Lean Project Management uses the five main principles from Lean manufacturing into a Project Management context to focus on delivering more value with less waste and reduced time in a project context. They represent essential conditions to achieve both market acceptance and operational excellence (3).
- Principle 1: Specify the value of each project desired by the customer
- Principle 2: Identify the value stream for each project
- Principle 3: Make the project flow continuously without interruptions
- Principle 4: Introduce the customer pull from the project team between all continuous flow steps
- Principle 5: Continuously pursue perfection
LPM takes into account three important statements:
- It is not necessary to finish each task on time to finish a project on time.
- Starting a project sooner does not mean it will finish sooner.
- Adding buffers (protection spaces) reduces project time and cost.
A principle that underlies LPM is that any project worth doing is worth doing fast (2). As a result, Lean Project Management helps projects run smoother and it is the quickest way to shorten project duration, reduce quality defects and boost productivity levels.
How to manage projects in a Lean way
Based on the principles of LPM, it is explained how to manage a project in a Lean way. Some specific Lean tools and techniques that can be applied to projects are proposed through the project process.Project Management can be highly complex. So the analysis is done in a sequence of steps which need to be completed to accomplish projects. In the "traditional approach" (1) processes are grouped in five development phases:
1. Initiating Process
2. Planning Process
3. Executing Process
4. Closing Process
5. Monitoring and Controlling Processes
The groups overlap, and the last group applies to all of the processes. It is relevant to consider that projects and Project Management processes vary from industry to industry; however, these five steps of the delivery model are more traditional elements and can be applied to all kinds of projects. Even if the company is not directly project related, there is always an overarching goal to benefit the organization by means of projects; typically offering a product, changing a process or solving a problem.
Initiating Process
Many organizations start projects without considering whether they can actually complete them (6). With LPM, the initiation process is key as it will prevent mistakes later. At the first stage, it is analyzed how companies select projects and assign the tasks of the projects, if they are being clear about the priority of the tasks and if they have everything they need to get the project done.
- Evaluation, selection and prioritization of projects
Following Principle 1 and the philosophy of only keeping activities and projects which add value desired by the customer, the first decision before starting any project is prioritize the present portfolio. There is no sense to squander time and resources doing work that the project’s customer is not willing to pay for. Evaluation, selection and prioritization of projects are a required practice to implement Lean thinking, the reason is simple: it is less costly to stop a project before it has been started.
Several methods exist for the selection of projects. The most common are quantitative methods, qualitative methods and hybrids methods, but sometimes more than one method is used. In choosing which projects to fund, the decision maker must have some concrete objectives in mind; in this case the main objective is to maximize value creation for the customer. A common, simple and efficient way that can help to come to a conclusion is the rating of all the projects according to criteria that lead to the main goal of the company. These criteria are previously weighed based on whether more or less provide customer value. Of course this is a simplification of reality and a combination of required internal resources and externalities which affect the project execution should be considered in the analysis. Customers (and in general stakeholders) must clearly define their expectations of the project and at this point, this is a good method to know the goal of the customer and to define the scope of the project.
- Leading People
Some considerations for project leadership have to be considered in the first stage of the project process. Leading all of the people with an interest in the project bring to the project success. First of all, selection of capable Project Manager has a considerable influence on the success of a project (7). This person controls the project value stream, and based on the Principle 3 of LPM is in charge of making the project flow continuous and without interruptions. Related to this, the Project Manager must also ensure smooth handoffs to maintain the flow of work. If the work is extended to deliver Lean projects, the Project Manager will spend more and more time and effort working with other Project Leaders to coordinate and control the cross-project functions. Interruptions occur when there is a task change, especially if the change involves a cross-project function (4). It is important to understand that the focus should be on when hand-offs between groups occurring. Every time an employee moves from one task to another, it causes errors and delays. Moreover, the Project Manager needs to understand and get involved in the Lean philosophy. Taking into account Principle 1, this person is primary responsible to ensure that projects achieve client satisfaction. A project leader able to keep stakeholders actively supporting project success throughout project execution is key.
The next pillar of a good Lean project is the Team since most of the time the project team is newly formed. Team building is complicated as to implement Lean thinking it is necessary people willing to learn new ways of working. The appointment of unsuitable staff will result in a loss of time and money which go against the LPM principles. Nevertheless, once the team is selected it is also crucial to clarify the goal and see if all of the members of the group are more or less in the same direction. One of the best ways to do this is to get them to work on the Project Charter (4) and to develop the project vision providing a goal that they all share in common. In this way, the team members will know in the initiation phase how they are going to work together.
Planning Process
This step considers the elaboration of an effective Project Plan which provides all project stakeholders the roadmap for projects. A Project Plan is the primary tool to guide projects to success (4). It provides the project schedule and control to it. Principle 2 will be the focus of the planning step since companies need to have a breakdown structure of their projects that details each task and who are going to do it in order to proceed as LPM states. An additional point of LPM is the need to ensure the flow of all projects. Thus, the value stream for each project is identified in this step as Principle 2 points out. Although a project schedule is an essential part of the Project Plan, it is not the only one, it also provides all that project stakeholders need to facilitate communication between them and succeed on the project (Principle 4). The Project Plan provides a flow of the process to authorize and control work, and to report progress on the project. It provides a project task network with the following targets (4):
- Define project delivery date
- Determine sequence of activities necessary to create all project deliverables
- Estimate project resources
- Enable resource scheduling
- Schedule material delivery
- Determine material order schedules
- Provide the baseline for project performance measurement
All those purposes fit with Lean thinking and support its principles.
After the elaboration of a reasonable schedule, the focus should turn to the reduction of waste. Looking at each worker contribution to the project and creating a list of prioritized tasks that each person needs to accomplish help to make the project flow smoother (Principle 3). Since projects involve multiple employees contributing to the project at different times, it is recommended the use of a scheduling software to build, status and report on the project. By means of a computerized system it is easier to record the start and completion date of each task and automatically generate a daily updated list of priorities.
Executing Process
From a Lean point of view, the execution of projects reveal the Lean principle of Pull to cause projects to flow from start to finish with minimal generation of waste (Principle 4). A comparison with Lean production is clear; hand-offs going through work cell to work cell can be seen as hand-offs in LPM going from one task to another.
LPM uses buffer management as a visual control tool during project execution. Implementing Pull and enhanced flow for projects requires answering three questions (4):
- Which task do I work on next?
Tracking the real-time status is a LPM requirement, in this way it is important to state not only when the tasks start and finish, also the remaining duration for the task in-progress. It is common to update the status whenever a task starts or finish and additionally once a week. Currently, software exist which updates tasks using remaining duration and also prioritizes tasks to be worked on. Tasks causing significant project buffer use should get the highest priority. By doing this, tasks are completed in the minimum possible time and resources are focus on one project task at a time.
- When are you going to be done?
A simple method used by LPM to track schedule performance of a project is called “The Fever Chart”, this tool implements the Lean idea of visual control for projects. This tool follows the principle that the amount of project buffer penetration provides the signal to take action to recover buffer. Projects that are in the green region are going well, projects in the yellow region need the development of plans to recover buffer and projects in the red region require management attention and the implementation of recovery plans in order to finish the project on time. Note that projects with buffer penetration less than 100% may still be on track to complete on time (4). Project Managers are the responsible of monitoring the Project Buffer at the appropriate time intervals for the project, usually daily but at least weekly. They can use also plotted trends of buffer. This process provides a unique anticipatory project management tool with clear decision criteria. Buffer reporting relies on realistic estimates of how many days remain to complete a task giving project managers better insight to the performance of projects.
- How much is going to cost?
When the cost of a project is important, a cost buffer should be used in the same way (using the same graphics as above). In this case, the cost buffer penetration is the percentage of the cost buffer consumed. It has to be considered the cost variation of each of the project cost elements. The purpose is to compare or control the actual cost with the cost of the project because the actual cost is influenced by the schedule. Using the cost buffer is a way of combining conventional project management methods with LPM.
Monitoring and Controlling Processes
Closing Process
Project closure includes closing all of the project facilities, administrative closure, en ensuring all project stakeholders have moved on to their next project or tast. There is no much to say about the closing process from a Lean point of view. At this point, all processes need to be documented. It is important to document each of the previous steps; writing down what has been done ensure repeatability and the chances of doing good things that have been done good before increase or even will be done faster. Emphasizing the concept of continuous improvement, it is easier to find the cause of a mistake that has been documented and consequently action will be taken with greater success. The project should end with the beginning in mind (4), by bringing all stakeholders back together to collect the intellectual property developed during the project because it might help for the next ones.
Discussion
Clarification of the benefits of LPM in current projects.
Typically in the last decade, delivery times have been cut by 50%, productivity increased by 30%, and quality improved by a factor of 10.
