LEAN – A competitive edge for

Business improvement
Session Plan:
• What is LEAN?
• How does LEAN work?
• Where is LEAN applicable to?
• 5 principles of lean
• Other Principles of LEAN for continuous improvement
• Lean in
• Results of few case studies
• LEAN vs other frameworks
What is lean?
• Following the challenge to rebuild the Japanese Economy after world war II, innovative
methods are explored.

• Japanese automotive Industry developed Lean manufacturing with a lead from Toyota
and utilising the Toyota Production System (TPS) factory.

• The book, “The Machine That Changed the World” written by Womack, Jones, and
Roos introduced the concept of lean thinking to the Western world in 1991.

• Lean philosophy is to maximize customer value by eliminating waste and optimizing

the existing processes in all aspects of a firm’s production activities: human relations,
vendor relations, technology, and the management of materials and inventory.

• Lean means doing more with less effort. Lean Organization understands customer
value and focuses their key processes in meeting customer needs with all muscles
without any fat / waste.
 What is Lean?
Muda
(Waste)

“Lean is a philosophy that shortens the time Mura Muri

line between the customer order and the (Variability) (Overburden)
shipment by eliminating waste.”

- John Shook
Toyota’s first American manager in Japan Muda: Expose & Remove Waste
- Unlock capacity
Mura: Reduce Variability
- Stabilize process, level load
Muri: Control the process
- Standardize & improve

Muda – Re-reviews and rework, Many post delivery defects

Muri – Too many change requests at each stage, change in plans
Mura – inconsistency in design and implementation

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What is Lean?
R&D
R&D

Design
Design
T
I Production Setup
M
C E
Y Production Setup Manufacturing

C
DISTR.
L
Optimized thru LEAN
E
Manufacturing Acceptance & release

T
I
M
DISTR.
E

Acceptance
and release

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How does Lean work?
• Considers an ‘end to end’ value stream that delivers competitive
advantage.
• Seeks fast flexible flow.
• Eliminates/prevents waste (Muda).
• Extends the Toyota Production System (TPS).

• Ex.
– LEAN Manufacturing - TPS
– LEAN Software - Managing the changes with Agile methodologies
scheduling the features and iterations in such a way dependencies
are taken care. Committed features are time boxed.

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Lean- The Toyota Way:
4 Ps and 14 principles:
Problem Solving
Continuous org learning thru Kaizen
(Continuous Improvement & Learning) Go see yourself to understand thoroughly (Genchi Genbutsu)
Make decisions slowly by consensus, thoroughly considering
all options; implement rapidly (Nemawashi)

People and Partners

(Respect Challenge & Grow leaders who live the philosophy
Grow them) Respect, develop and challenge your people and teams
Respect, challenge and help your suppliers

Process
(Eliminate Waste) Create process flow to surface problems
Use pull systems to avoid overproduction
Level out the workload (heijunka)
Stop when there is a quality problem (jidoka)
Philosophy Standardize tasks for continuous improvement
(long term thinking)
Use visual control so no problems are hidden
Use only reliable, thoroughly tested technology

Base management decisions on a long term philosophy

even at the expense of short term financial goals

Lean Thinking involves pervasive cultural transformation beyond simple application of tools for
overall throughput 7
Lean Benefits
Cycle Time
Wait Time
(non value
add) Before
Work Time
(value add) After
Same work
completed in less
Productivity time
Cost Customer satisfaction Cost/Chaos
Defects Profit
Lead time Customer responsiveness
Inventory Capacity
Space Quality
Waste! Cash flow
Cycle time
On time delivery

Relentlessly focus on reducing non-value adding activities

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Lean Benefits

Category % Improvements thru

LEAN
Process Deployment 25-75%

Work force Utilization 15-50%

Space 25-50%
Defects (reduction) 25-90%
Capacity 25-75%
Overall Throughput 15-95%
Delivery time 25-80%

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Lean as a differentiator

 It focuses on creating value for the customer

 It is Set of principles, but is flexible enough to allow ‘custom-definition’ of
practices (e.g., by business line, by project type)
 Empowers individuals at the front-line, thereby motivating them
 Incorporates continuous improvement mindset
 Looks at the maximum capacity or entitlement of a process and the lean
journey of continuous improvement is towards achieving this goal
LEAN and Business
• LEAN helps in improving Operating Parameters
– Productivity
• Effort saving
• Cost reduction
– Quality
• Reduction of errors
• Reduction of rework
– Customer focus
• Deliver as per customer needs
• Deliver on time and every time with high quality
– Edge over competition
• Less cost (work load leveling, reduction in ave experience of team etc.)
• High Quality
• Faster delivery as per customer needs
Five Lean Principles

Define value from the 1 2 Map all of the steps – value

customer’s perspective and Specify Value Map the added and non-value added –
express value in terms of a Value Stream that bring a product of service to
specific product the customer

3
5 Establish Flow
Work to
Perfection
The complete elimination The continuous movement of
of waste so all activities products, services and information
create value for the from end to end through the
customer process
4
Implement
Pull
Nothing is done by the upstream process until the
downstream customer signals the need

The tools get you there… the principles keep you there
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7 Service Wastes
• Delay – customers waiting for service.

• Duplication – having to re-enter data, repeat details etc.

• Unnecessary movement - poor ergonomics in the service encounter.

• Unclear communication – having to seek clarification, confusion over use of

product/service.

• Opportunity lost – to retain or win customers.

• Errors – in the transaction, lost/damaged goods.

Ex. Look at the total cycle time from Ticket arrival to closure

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Targets of Waste in Lean IT
Waste Element Examples Business Outcome
Defects  Unauthorized system and application Poor customer service, increased costs.
changes.

 Substandard project execution.

Overproduction (Overprovisioning)  Unnecessary delivery of low-value Business and IT misalignment, Increased costs and
applications and services. overheads: energy, data center space,
maintenance.
Waiting  Slow application response times. Lost revenue, poor customer service, reduced
productivity.
 Manual service escalation procedures.

Non-Value Added Processing  Reporting technology metrics to business Miscommunication.

managers.

Transportation  On-site visits to resolve hardware and Higher capital and operational expenses.
software issues.

 Physical software, security and compliance

audits.
Inventory (Excess)  Server sprawl, underutilized hardware. Increased costs: data center, energy; lost
productivity.
 Multiple repositories to handle risks and
control.

 Benched application development teams.

Motion (Excess)  Fire-fighting repeat problems within the IT Lost productivity.

infrastructure.

Employee Knowledge (Unused)  Failing to capture ideas/innovation. Talent leakage, low job satisfaction, increased
support and maintenance costs.
 Knowledge and experience retention issues.

 Employees spend time on repetitive or

mundane tasks.
Perfection

• The journey of continuous improvement.

• Producing exactly what the customer wants, exactly when,
economically.
• Perfection is an aspiration, anything and everything is able
to be improved.

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Standard Development Life cycle Model

Requirements
Analysis/
Planning Design CUT IT ST AT
definition

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 LEAN – Planning Phase
• Takt Analysis
• Level out the work load
– Detailed work breakdown
– DSM for sequencing
– Resource profiling & work allocation
– Cell formation
• Flow
– Value definition and Value Stream
– NVA Elimination
• PULL
– Fine slicing of work items
– Short cycle iterations
• Use Visual controls so no problems are hidden
– Visual boards for status updates, work instructions, trends and targets

Planning RS Phase

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 LEAN – Design Phases
• DSM
• High value features first
– Short cycle iterations
– Continuous integration
• Delay decisions as late as possible
• Elaborative approach including design patterns
• Standardization e.g. reusable components (KM)

Design

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 LEAN – CUT Phases
• Create process flow to surface problems
– Value definition – Group of features
– Value stream mapping-waste elimination to create smooth flow of
activities
• Standardization (built in quality)
• Concurrent engineering
– High valued features first,
– Short cycle iterations,
– Early feedback &Continuous integration
• Complexity Analysis
• Stop when there is a quality problem:
– Daily code reviews-early feedback.
– Tools usage- coding rules, memory leaks
• Visual Control Charts

Coding Unit Testing

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LEAN –Testing
• SMED
– Standardization of frequently used test setups
• OA
– Optimization of test cases
– Test coverage improvement
• 5S – Work place maintenance
– Test setup cycle reduction
– Standardization of frequently used setups
• Standardize tasks
– Automation – build & test automation

Testing

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