Lean and Six Sigma for Project Management Differences between traditional PM versus Lean PM October 11th 2010 Arunima Soni Thakur for

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 Philosophy focused on business process improvements to: Increase profitability and competitiveness Increase Customer Satisfaction Reduce/Eliminate Defects (rework and mistakes), Waste

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

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

What 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.

Comparing & Contrasting Lean Six Sigma versus Traditional Project Management Approaches What’s Similar What’s Different 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 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

Process Map to 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

Value Stream Engineering Organizational Change Management Process Map to Lean-Six Sigma Management Define Measure Improve Control 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 Storage Locations 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 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

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

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

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

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 !