Lean and Six Sigma for Project Management

1. Lean and Six Sigma for Project Management Differences between traditional PM versus Lean PM October 11th 2010 ArunimaSoniThakur for

2. Lean is … Six Sigma is … 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 • A Philosophyfocused on business process improvements to: • Increase profitability and competitiveness • Increase Customer Satisfaction • Reduce/Eliminate Defects (rework and mistakes), Waste

3. Lean & Six Sigma: A powerful marriage Lean + Speed Precision + Accuracy • Variation reduction • Process Control • Cause & Effect Analysis • Work Concentration • Pull • Continuous Improvement • Waste Elimination • Flow • Bottleneck Removal • Statistical Process Control • Design of Experiments

4. 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 variations

5. What Lean Six sigma Projects are Not • Lean six sigma projects are not: • A “bolt-on” technique…but more a way of life • A cure all…but rather a better system • A “Final Destination”…but more of a journey • A new project management “software”/“program”…but a new way of thinking • A new marketing concept…but rather the outcome of 50 years of effort by several generations of practitioners • A manufacturing only solution…but rather a total business solution • 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.

6. Comparing & Contrasting Lean Six Sigma versus Traditional Project Management Approaches What’s Similar What’s Different • Centralized decision making using PMO-and Office concept versus empowerment and in-process project team controls • Rigidity versus Iteration based quality checks • 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 • Project approval for start only after a preliminary lean six sigma measurement analysis shows significant financial gains and “desired end state” cost benefits • Focus on realizing benefits not going-live • Pull rather than push approach • Rigor and Discipline • Success depends on executive endorsement, and sponsors from leadership • Follows timelines, and has set budget and resources • common sense, communication and work flow based • Planning, time-tabling, quantity and price estimation, resource allocation and scheduling are very important functions in both approaches

7. Process Map to Traditional Project Management • 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. DEVELOPING IDENTIFYING QUANTIFYING DETERMINING

8. Measure Control Improve Define Process Map to Lean-Six Sigma Management Analyze • Investigate, evaluate, and measure • nine key areas of manufacturing. • Inventory • The Team Approach • Processes • Maintenance • Layout & Material Handling • Suppliers • Setup • Quality • Production Control & Scheduling • Establish Competitive Goals • Establish Steering Committee • Form Core Implement Team • Complete Team Charter • Gather Voice of the Customer & Voice of the Business • Map Current State • Customers • Demand Rate • Processes • Suppliers • Storage Locations • Product Flow • Information Flow Customers Demand Rate Processes Suppliers Storage Locations Product Flow Information Flow • Identify Key Input, Process and Output Metrics • Develop Operational Definitions • 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 Waste Over Producing Inventory Waiting Motion Transportation Rejects & Rework Processing • Response Time • Build Strategy Build To Order Assemble To Order Finish To Order Engineer 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 Implement Into 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 Lean Assessment Value Stream Mapping Value Stream Engineering Organizational Change Management

9. Seven wastes in Traditional Project Management • Waiting: Waiting for decisions from clients, and Centralized decision making using PMO-and Office concept • Transportation: Hand offs, sign offs Rigidity • Over Production: Extra Features, Scope expansion • Excess Inventory: Requirements • Over Processing: Extra Processing steps • Defects: Bugs, Wrong steps not caught due to late testing phase • 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

10. 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

11. Creating a culture of Continuous Improvement using Kaizen in Project Management • Empower those who add value: Stop and correct the misstep rather than wait for testing phase and waste time at end-of-phase testing • Simplicity and Value-Stream Mapping driven: Measured effectiveness/ or Qualified Value of each work step • 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 • Each work segment is represented as a “Kanban Card” and provides visual control; sense of achievement, and clear communication to rest of team • Tracking and Feedback is emphasized at each step (which creates culture of first-time-right); and used for building process control • 5S methods sort, standardize, stabilize and control project • By maximizing flow of information into the project, and Pulling from demand; the Project Manager optimizes inventory and controls overproduction • 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

12. 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 !