Lean Project Management tools

Abstract

This article will investigate projects and how they are managed using Lean Project Management tools. To understand how project are manged in a Lean way, it is keen to understand the philosophy and principles that Lean Project Management is based on and define the Muda, which Lean Project Management strives to eliminate.

As with Lean manufacturing, Lean Project Management strives to deliver most value to the customer at the lowest possible cost. To achieve this, scientific tools are applied to determine what brings value to the customer and to track the delivered value during the project.

To ensure customer expectation match the delivered product/ service, the development is carried out in iterations, using the Diming cycle. The Diming Cycle share many similarities with Agile Project Management. Both Agile project management and Lean project management, operate with a tool to visualise coming, current and completed working tasks, by use of respectively Kanban and Scrum board. This article will investigate the difference between Agile and Lean project management and if the two are conflicting. Furthermore, it will be reviewed how Six Sigma, used to control processes in manufacturing, can also be beneficial when implemented in project management to track the performance of a project. Lastly, the challenges and considerations that arise when implementing Lean 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 .

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.

Lean Project Management background

Lean origins from the Japanese car manufacture 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.

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.

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.

- Over production

- Transport

- Waiting

- Over-processing

- Inventory

- Motion

- Defects

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(2).

1. Specify value in the eyes of the customer

To successfully create value to the customer, it firstly 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.

2. Identify the value stream for each product

A value stream map includes all the processes that is 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 combined with waste.

Based on the findings a new value stream map is created, were the non-value adding and non-necessary process steps has been removed. The new value map is an expression for how the process should be performed.

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 Mudas, 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 falls into this category.

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

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, value shall only be delivered when the customer needs it, by implementing a Kanban system, this enables an organisation to implement Just in Time system.

5. Continuously improve the in pursuit for perfection

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

Lean Project Management 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 implement it. If the solution did not work as intended, the cycle is performed again.

Six Sigma

Six Sigma has two meanings, it both refers to Six Sigma, a statistical model and Six Sigma – the improvement process (6). 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 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.

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 has both a input and a output. 10. Processes has 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.

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 (ryk muligvis op)

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 a of a process has led to improvement, it is essential it is possible to measure potential improvements.

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 have 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. 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 overburden with work tasks and instead can focus on completing one work task at the time (depended on the defined maximum work in progress). 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 (7)

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 work flow, 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.