Differences between traditional PM versus Lean PM

October 11th 2010

Arunima Soni Thakur

for

Lean and Six SigmaLean and Six SigmaLean and Six SigmaLean and Six Sigma for Project for Project for Project for Project

ManagementManagementManagementManagement

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A Set of Tools: Lean is like a toolbox full of tools and techniques. You select the right technique or method to improve what needs improving.

Lean Enterprise Institute

A Philosophy: A philosophy of production that emphasizes the minimization of the amount of all resources used in the various activities of the enterprise.

APICS

A System: Lean is A System where a company can achieve reduced costs, couple with continuous improvement and customer satisfaction which used a standardized 5-step approach.

Lean Thinking

Lean is Lean is ……

A Philosophy focused on business process improvements to:

� Increase profitability and competitiveness� Increase Customer Satisfaction� Reduce/Eliminate Defects (rework and mistakes), Waste

Six Sigma is Six Sigma is ……

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Precision + AccuracySpeed

σ Variation reduction

σ Process Control

σ Cause & Effect Analysis

Waste Elimination

Flow

Bottleneck Removal

Lean & Six Sigma: A powerful marriageLean & Six Sigma: A powerful marriage

+

Work Concentration

Pull

Continuous Improvement

σ Statistical Process Control

σ Design of Experiments

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Lean Six Sigma Project transactions

A suite of business solutions that have higher level of predictability; and lowered waste; as the foundation of their project management methodology

It is a management system which:

– Pursues optimum streamlining

– Thoroughly eliminates waste

– Builds quality into the process; with lowered variation

– Recognizes the principle of cost reduction

– Embraces time-based and mass customization competition

…….throughout the entire project lifecycle.

Bottom line: Lean Six Sigma Projects are streamlined with higher predictability and lower variationsBottom line: Lean Six Sigma Projects are streamlined with higher predictability and lower variations

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What Lean Six sigma Projects are Not

Lean six sigma projects are not:

n A “bolt-on” technique…but more a way of life

n A cure all…but rather a better system

n A “Final Destination”…but more of a journey

n A new project management “software”/“program”…but a new way of thinking

n A new marketing concept…but rather the outcome of 50 years of effort by several generations of practitioners

n A manufacturing only solution…but rather a total business solution

n Easy to implement…but requires hard work, creative thinking and persistence.,

Lean Six Sigma Project Management is a process of identifying what adds value to the project from end state perspective and then eliminating non-value-added steps, as well as variability.

Lean Six Sigma Project Management is a process of identifying what adds value to the project from end state perspective and then eliminating non-value-added steps, as well as variability.

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n Rigor and Discipline

n Success depends on executive endorsement, and sponsors from leadership

n Follows timelines, and has set budget and resources

n common sense, communication and work flow based

n Planning, time-tabling, quantity and price estimation, resource allocation and scheduling are very important functions in both approaches

What’s SimilarWhat’s Similar What’s DifferentWhat’s Different

n Centralized decision making using PMO-and Office concept versus empowerment and in-process project team controls

n Rigidity versus Iteration based quality checks

n Linear lifecycle requiring completion of previous stage – planning, analyzing, and designing Versus data and feedback based measured success at each step, that is very iterative

n Project approval for start only after a preliminary lean six sigma measurement analysis shows significant financial gains and “desired end state” cost benefits

n Focus on realizing benefits not going-live

n Pull rather than push approach

Comparing & Contrasting Lean Six Sigma versus

Traditional Project Management Approaches

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Traditional Project Management

•Developing - this means putting the plan together, knowing all the

details about what the project is and will be

•Identifying - this is where you identify the tasks and goals involved and

how they will be achieved

•Quantifying - learning how much of which resource will be needed

•Determining - this is when you figure out the budget for the project and

the timelines involved.

Process Map to Traditional Project

Management

IDENTIFYING

QUANTIFYING

DEVELOPING

DETERMINING

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Process Map to Lean-Six Sigma

Management

�Identify Key Input, Process and Output Metrics

�Develop OperationalDefinitions

�Develop Data Collection Plan

�Data Collection of Current processes

• Information Flow• Material Flow• Process Cycle

Time• Setup time• Uptime• Batch Size• Value Added

Time• Operators• Inventory/Buffer

�Identify WasteOver ProducingInventoryWaitingMotionTransportationRejects & ReworkProcessing

�Response Time�Build StrategyBuild To OrderAssemble To OrderFinish To OrderEngineer To Order�Identify Issues�Quantify the

Opportunity�Prioritize Root

Causes

�Develop Potential Solutions

�Develop Evaluation Criteria & Select Best Solutions

�Develop ‘To-Be’Process Map(s) and High-Level Implementation Plan

�Break ImplementInto Steps

�Divide Value Stream Map in to segments

� Identify Projects� Assign project owner & team

� 5S Implementation/ Score

�Extended Value Stream Map

�Develop SOP’s, Training Plan & Process Control System

�Implement Process Changes and Controls

� Monitor & Stabilize Process

� Transition Project to Process Owner

� Continuously Improve

�Manage Value Stream

� Become Lean Organization

AnalyzeAnalyze ControlControlImproveImproveMeasureMeasureDefineDefine

�EstablishCompetitive Goals

�Establish SteeringCommittee

�Form CoreImplement Team

�Complete TeamCharter

�Gather Voice ofthe Customer &Voice of the Business

�Map Current State• Customers• Demand Rate• Processes• Suppliers• Storage

Locations• Product Flow• Information Flow

CustomersDemand RateProcessesSuppliersStorage LocationsProduct FlowInformation Flow

Value Stream Mapping

Value Stream Engineering

Lean Assessment

Organizational Change Management

Investigate, evaluate, and measure nine key areas of manufacturing.

• Inventory• The Team Approach• Processes• Maintenance• Layout & Material Handling• Suppliers• Setup• Quality• Production Control & Scheduling

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Seven wastes in Traditional Project

Management

n Waiting: Waiting for decisions from clients, and Centralized decision making using PMO-and Office concept

n Transportation: Hand offs, sign offs Rigidity

n Over Production: Extra Features, Scope expansion

n Excess Inventory: Requirements

n Over Processing: Extra Processing steps

n Defects: Bugs, Wrong steps not caught due to late testing phase

n Excess Motion: Looking for data

Bottom line: Lean Six Sigma Project Management aims at reducing the seven wastes, building data collection and analysis in project steps, empowering team- members to test iteratively and reduce

defects; and pull rather than push

Bottom line: Lean Six Sigma Project Management aims at reducing the seven wastes, building data collection and analysis in project steps, empowering team- members to test iteratively and reduce

defects; and pull rather than push

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Lean Six Sigma Processes must have

Accountable Metrics and Measures

The Lean Six Sigma Scorecard drives visibility and project performance by

– Establishing program and project accountability for metric accuracy and benefits realization

– Mapping metrics to business processes, benefits, and total cost of ownership that are associated with projects

– Measuring benefits through a disciplined, structured approach and consistent measurement framework

– Providing a continuous feedback loop – with management taking corrective action to address issues or concerns as well as leverage areas of success

– Improving program and project performance tracking

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Creating a culture of Continuous Improvement

using Kaizen in Project Managementn Empower those who add value: Stop and correct the misstep rather than wait for testing phase

and waste time at end-of-phase testing

n Simplicity and Value-Stream Mapping driven: Measured effectiveness/ or Qualified Value of each work step

n If there is an Over run of resources, then root cause is analyzed; Run an experiment to investigate the cause; Check the data to validate the cause; Refine and standardize

n Each work segment is represented as a “Kanban Card” and provides visual control; sense of achievement, and clear communication to rest of team

n Tracking and Feedback is emphasized at each step (which creates culture of first-time-right); and used for building process control

n 5S methods sort, standardize, stabilize and control project

n By maximizing flow of information into the project, and Pulling from demand; the Project Manager optimizes inventory and controls overproduction

n Partners from client, end customer, industry share burden of continuous improvement, and collaborate at each step versus end of phase sign off/ project Gate reviews

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In summary

� Lean Six Sigma Projects aim at providing highest value to the customer

� Focus on iterative process of Plan-Do-Check at each step; versus linear flow

� Empower the team to create value at each step

� Measure effectiveness, and Data driven

Thank you ! Arunima Thakur

athakur@innoengg.comPhone 248 275 5786/

248 879 0977(C) Arunima Thakur