A presentation by Daniel T Jones from The Lean Enterprise Academy at the 1st European Lean IT Summit held in Paris, France in October 2011. www.lean-it-summit.com

1. Copyright © Institut Lean France 2011
Scoping LeanIT:
asking the right questions
Daniel T Jones

2. Scoping LeanIT:
asking the right questions
Daniel T Jones

3. Introduction
Why is this Lean IT Summit important?
Time to move from value streams to value creation
systems
Time to integrate functions into lean management
What is the problem we are trying to solve?
Not just to improve the efficiency of IT
But to harness IT to enable value creation
Lean is the practice of using the scientific method to
solve business problems in order to create value
www.leanuk.org

4. The Toyota Example
Toyota created a unique synthesis
of three improvement streams: -
Process thinking – organising the flow of work
Learning – by doing and reflecting
Quality – using the scientific approach
Out of this came many new tools and techniques
The lean principles for designing value streams
And a different way of managing and leading
www.leanuk.org

5. Toyota Management System
Toyota Business System
Product
Concept
TDS
Design Sales, After sales
and CRM
TMSS
Engineering Marketing Design
TMS
Production
Concept Marketing
Concept
Production Production
Design TPS
TMS (Toyota Management System)
TDS (Toyota Development System)
Total TPS (Total Toyota Production System)
Total TPS TMSS (Toyota Marketing & Sales System)
© Takashi Tanaka QV-System

6. Toyota Management Tools
© Takashi Tanaka QV-System

7. Oobeya Management Levels
Visualization
Hierarchy—3 levels only
Decisions Executive Escalate two
(Main) Board
decision-ready
Targets issues per
Metrics meeting cycle
Policy
Visualization of GEMBA (Work place)
© Takashi Tanaka QV-System

8. The Tasks of Management
To determine what is important
How to focus everyone on the vital few?
To deploy the right improvements
How to close the performance gaps?
To create stability, flow and synchronisation
How to unblock obstacles to flow?
To create the next generation of managers
How to solve problems and collaborate?
To prepare to meet future challenges
How to do new things?
www.leanuk.org

9. Deciding what’s Important
• Analyse the strategic objectives – to understand the
significance of focusing on quality > time > cost
• See the organisation as a collection of value streams
– the deep causes of variation > overburden > waste
• Translate objectives > performance gaps > physical
targets > impact on sales, cash, cost and capex
www.leanuk.org

10. Focusing on the Vital Few
Reducing Hospital Acquired Infections
Seeing emergency patients within 4 hours
Seeing elective patients within 18 weeks
Reducing length
of stay
Reducing costs
www.leanuk.org

11. Streamlining Hospital Flows
PATHOLOGY THERAPIES
EMERGENCY MAU
HOME
DEPARTMENT MEDICAL HOME
SAU WARDS
NURSING D
HOME I NURSING
S HOME
IMAGING
C
H
SURGUCAL A
OPERATING WARDS R
ROOM
G
GP E REHAB
OTHER UNIT
WARDS
CLINIC
CLINIC
CLINIC
CLINIC
PHARMACY SUPPLIES
www.leanuk.org

12. Selecting the right Problems
• Agree which gaps and targets are most important
• Dialogue down the organisation to translate gaps
into actions – using catch-ball strategy deployment
• Give project and value stream managers the end-to-
end responsibility to gain agreement to act, to agree
the resources and review progress to deliver results
• Then to deselect the less important
www.leanuk.org

13. The Construction Story
• Joined the Rethinking Construction Task Force
• Our diagnosis - incomplete design - fragmented
skills - rework everywhere - over budget, late and
lots of snags
• Joint design process, partnerships with
constructors, synchronise make and assembly
• Construction of Terminal 5 on time and on
budget
• Team went on to do St Pancras and the Olympic
Venues – best prepared so far
www.leanuk.org

14. 97 weeks
45 weeks
Auto UK
China 3
14 Italy
2.4 weeks UK
USA
5
3 28
10 weeks
USA Spain
Japan
6
12
USA Germany
7.6 weeks
Spain 15
14 Plants 9 countries 3
30 weeks
152 Steps 28
Spain
20-97 weeks Mexico USA
12
$600,000 Inventory cost 6
Brazil
USA
11
30 weeks 6 13 weeks
15 weeks
www.leanuk.org

15. FARM The Grocery Value Stream
WARE-
FORECASTS
HOUSE
SHIP
INGRE-
DIENTS
MANUF- MANUF RETAIL SUPER
ACTURE NDC RDC STORE
HIGH
STREET
WHOLE-
PACK- CONV.
AGING
SALE
STORE
CASH &
MATE- CARRY
RIALS
CATE-
RING
INFORMATION FLOWS
MINE
PHYSICAL FLOWS
www.leanuk.org

16. 6% SKUs = 30% SKUs =
50% Volume Batch Logic 1% Volume
• Multi-product production means
batching - long lead times - lots of stock
long supply chains – slow to respond
• Separate the few high volume SKUs
make them every week or every day
• Plus capacity to make the tail quickly
• Let inventories rather than production take
the strain – to cover variation in demand
• Only schedule what varies
fixed plans for what does not
www.leanuk.org

17. Just the Start
• The web is shifting power to consumers –
now informed, empowered and impatient
• Consumers must now become an integral
part of the supply stream
• Households are mini-businesses – full of
complex processes that need to be managed
• What we do is to help them to create value in
their lives and to manage their consumption
• Consumers will in future manage their own
data and share it with chosen providers
www.leanuk.org

18. Value Stream Lessons
• Command and control systems are expensive and
inflexible
• Point optimisation leads to sub-optimal solutions
• System driven variability and amplification is the
biggest cause of waste
• Scheduling everything the same way delays
everything
• Created demand reflects poorly understood demand
and a poorly designed process
• Bid low and make money on the changes costs more
and causes lots of rework
www.leanuk.org

19. Transformation Design
• Rolling out staff driven training programmes
from HQ rarely delivers sustained results
• Lean is not just a tool box for eliminating
waste – but the capabilities to respond and
solve problems that are learnt by doing
• Lean is a line management responsibility
• Begin proof of concept experiments quickly,
evaluate and then share practices
• Focus efforts only on what delivers results
www.leanuk.org

20. A3 Action Plan
www.leanuk.org

21. Oobeya: ”Big Project Room”
Objective Expected Output Metrics
Expected Output
Weight Targ
Good
et
•Project Background
•Project Objective Cost
1 2 3 - 12
•Technical Spec Targ
Good
•Project Organization et
Capital
1 2 3 - 12
Action Board
Today
Projector
for Virtual
Design
Review or
meeting Decomposition Area
Issue Board: Panel
Issue Board
Potential Real Finish Record
2-issues New
per week Design concept
R&D Engineering Drawing
delay
Main Board Production
Line A
Improve
Supplier
select Supplier
select
Supplier
Marketing select
© Takashi Tanaka QV-System

22. Improving Management Effectiveness
Focus on the vital few and deselect
To free up unnecessary effort and cost
Visual, frequent, stand up project reviews
To keep on track and resolve issues fast
Create stability and Gemba management
To eliminate fire-fighting and emails
Develop the next generation of managers
By mentoring A3s and Gemba learning
Prepare to meet future challenges
Designing lean solutions for the web era
www.leanuk.org

23. Scoping LeanIT:
asking the right questions
Daniel T Jones

24. Copyright © Institut Lean France 2011
www.lean-it-summit.com