LeanThinking.docx

LeanThinking.docx

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LeanThinking

PrinciplesofLeanThinking

MaryPoppendieck

Poppendieck.LLC

Abstract

Inthe1980’s,amassiveparadigmshifthitfactoriesthroughouttheUSandEurope.Massproductionandscientificmanagementtechniquesfromtheearly1900’swerequestionedasJapanesemanufacturingcompaniesdemonstratedthat‘Just-in-Time’wasabetterparadigm.ThewidelyadoptedJapanesemanufacturingconceptscametobeknownas‘leanproduction’.Intime,theabstractionsbehindleanproductionspreadtologistics,andfromtheretothemilitary,toconstruction,andtotheserviceindustry.Asitturnsout,principlesofleanthinkingareuniversalandhavebeenappliedsuccessfullyacrossmanydisciplines.

Leanprincipleshaveprovennotonlytobeuniversal,buttobeuniversallysuccessfulatimprovingresults.Whenappropriatelyapplied,leanthinkingisawell-understoodandwell-testedplatformuponwhichtobuildagilesoftwaredevelopmentpractices.

Introduction

Calladoctorforaroutineappointmentandchancesareitwillbescheduledafewweekslater.ButonelargeHMOinMinnesotaschedulesalmostallpatientswithinadayortwooftheircall,forjustaboutanykindofmedicalservice.Awhileago,thisHMOdecidedtoworkedofftheirschedulebacklogsbyextendingtheirhours,andthenvarytheirhoursslightlyfromweektoweektokeepthebacklogtoaboutaday.True,thedoctorsdon’thavethecomfortingweeks-longlistofscheduledpatients,butinfact,theyseejustasmanypatientsforthesamereasonsastheydidbefore.Thepatientsaremuchhappier,anddoctorsdetectmedicalproblemsfarearlierthantheyusedto.

TheideaofdeliveringpackagesovernightwasnovelwhenFederalExpresswasstartedin1971.In1983,anewcompanycalledLensCrafterschangedthebasisofcompetitionintheeyeglassesindustrybyassemblingprescriptionglassesinanhour.TheconceptofshippingproductsthesamedaytheywereorderedwasabreakthroughconceptwhenLLBeanupgradeditsdistributionsysteminthelate1980’s.SouthwestAirlines,oneofthefewprofitableairlinesthesedays,savesalotofmoneywithitsunorthodoxmethodofassigningseatsaspeoplearriveattheairport.Dellmaintainsprofitabilityinacutthroatmarketbymanufacturingtoorderinlessthanaweek.AnotherAustincompanybuildscustomhomesin30days.

Thecommondenominatorbehindtheseandmanyotherindustry-rattlingsuccessstoriesisleanthinking.Leanthinkinglooksatthevaluechainandasks:

Howcanthingsbestructuredsothattheenterprisedoesnothingbutaddvalue,anddoesthatasrapidlyaspossible?

Alltheintermediatesteps,alltheintermediatetimeandalltheintermediatepeopleareeliminated.Allthat’sleftarethetime,thepeopleandtheactivitiesthataddvalueforthecustomer.

OriginsofLeanThinking

Leanthinkinggotitsnamefroma1990’sbestsellercalledTheMachineThatChangedtheWorld:

TheStoryofLeanProduction1.Thisbookchroniclesthemovementofautomobilemanufacturingfromcraftproductiontomassproductiontoleanproduction.IttellsthestoryofhowHenryFordstandardizedautomobilepartsandassemblytechniques,sothatlowskilledworkersandspecializedmachinescouldmakecheapcarsforthemasses.Thebookgoesontodescribehowmassproductionprovidedcheapercarsthanthecraftproduction,butresultedanexplosionofindirectlabor:

productionplanning,engineering,andmanagement.ThenthebookexplainshowasmallcompanysetitssightssetonmanufacturingcarsforJapan,butitcouldnotaffordtheenormousinvestmentinsinglepurposemachinesthatseemedtoberequired.

1TheMachineThatChangedtheWorld:

TheStoryofLeanProduction,byWomack,JamesP.,DanielT.Jones,andDanielRoos,NewYork:

RawsonandAssociates;1990.

Copyright©2002Poppendieck.LLCPage1

Norcoulditaffordtheinventoryorlargeamountofindirectlaborthatseemednecessaryformassproduction.Soitinventedabetterwaytodothings,usingverylowinventoryandmovingdecision-makingtoproductionworkers.Nowthissmallcompanyhasgrownintoalargecompany,andtheToyotaProductionSystemhasbecomeknownas‘leanproduction’.

“Themass-producerusesnarrowlyskilledprofessionalstodesignproductsmakebyunskilledorsemiskilledworkerstendingexpensive,single-purposemachines.Thesechurnoutstandardizedproductsathighvolume.Becausethemachinerycostssomuchandissointolerantofdisruption,themass-produceraddsmanybuffers–extrasupplies,extraworkers,andextraspace

–toassuresmoothproduction….Theresult:

Thecustomergetslowercostsbutattheexpenseofvarietyandbymeansofworkmethodsthatmostemployeesfindboringanddispiriting.”2

Thinkofthecentralizedeyeglasseslaboratory.RememberthatSearsusedtotaketwoorthreeweekstofillordersfromitsonce-popularcatalog.Recallthelongdistributionchannelthatusedtobestandardinthecomputermarket.Thinkdinosaurs.Centralizedequipment,hugedistributioncentersandlengthydistributionchannelswerecreatedtorealizeeconomiesofscale.Theyarethesideeffectsofmass-production,passedontootherindustries.Whatpeopletendtooverlookisthatmass-productioncreatesatremendousamountofworkthatdoesnotdirectlyaddvalue.Shippingeyeglassestoafactoryforonehourofprocessingaddsmorehandlingtimebyfarthantheprocessingtimetomaketheglasses.Addingretaildistributiontothecutthroatpersonalcomputerindustrymeansthatamanufacturerneedssixweekstorespondtochangingtechnology,insteadofsixdays.Sears’practiceofbuildinganinventoryofmailorderstofillmeantkeepingtrackofstacksoforders,nottomentionrespondingtoinnumerableorderstatusqueriesandconstantorderchanges.

“Theleanproducer,bycontrast,combinestheadvantagesofcraftandmassproduction,whileavoidingthehighcostoftheformerandtherigidityofthelater…Leanproductionis‘lean’becauseituseslessofeverythingcomparedwithmassproduction–halfthehumaneffortinthefactory,halfthemanufacturingspace,halftheinvestmentintools,halftheengineeringhourstodevelopanewproductinhalfthetime.Also,itrequireskeepingfarlessthanhalftheinventoryonsite,resultsinmanyfewerdefects,and

2Womack（1990）p13.

producesagreaterandevergrowingvarietyofproducts.”3

Whileonatourofalargecustomer,MichaelDellsawtechnicianscustomizingnewDellcomputerswiththeircompany’s‘standard’hardwareandsoftware.“Doyouthinkyouguyscoulddothisforme?

”hishostasked.Withoutmissingabeat,Dellreplied,“Absolutely,we’dlovetodothat.”4Withinacoupleofweeks,Dellwasshippingcomputerswithfactory-installed,customer-specifichardwareandsoftware.Whattookthecustomeranhourcouldbedoneinthefactoryinminutes,andfurthermore,computerscouldbeshippeddirectlytoend-usersratherthanmakingastopinthecorporateITdepartment.Thisshorteningofthevaluechainistheessenceofleanthinking.

Companiesthatre-thinkthevaluechainandfindwaystoprovidewhattheircustomersvaluewithsignificantlyfewerresourcesthantheircompetitorscandevelopanunassailablecompetitiveadvantage.Sometimescompetitorsaresimplynotabletodeliverthenewvalueproposition.（ManyhavetiredtocopyDell;fewhavesucceeded.）Sometimescompetitorsdonotcareto

copyanewconcept.（SouthwestAirlineshasnotchangedtheindustry’sapproachtoseatassignments.）Sometimestheindustryfollowstheleader,butittakestime.（Almostalldirectmerchandiseisshippedwithinadayortwoofreceivinganorderthesedays,buttheSearscataloghasbeendiscontinued.）

LeanThinkinginSoftwareDevelopment

eBayisacompanywhichprettymuchinvented‘lean’tradingbyeliminatingalltheunnecessarystepsinthetradingvaluechain.Inthemid1990’s,basiceBaysoftwarecapabilitiesweredevelopedbyrespondingdailytocustomerrequestsforimprovements.5

Customerswouldsendane-mailtoPierreOmidyarwithasuggestionandhewouldimplementtheideaonthesitethatnight.ThemostpopularfeaturesofeBay,thosewhichcreatethehighestcompetitiveadvantage,werecreatedinthismanner.

DigitalRiverinventedthesoftwaredownloadmarketinthemid1990’sbyfocusingon‘lean’softwaredelivery.TodayDigitalRiverroutinelydesignsanddeploys

3Womack（1990）p13.

4DirectfromDell,byMichaelDellwithCatherineFredman,HarperBusiness,1999,p159

5Q&AwitheBay'sPierreOmidyar,BusinessWeekOnline,December3,2001.

Copyright©2002Poppendieck.LLCPage2

sophisticatedwebsitesforcorporatecustomersinamatterofaweeks,bytyingthecorporation’slegacydatabasestostandardfrontendcomponentscustomizedwitha‘lookandfeel’specifictoeachcustomer.

Inthemid1990’s,Microsoftimplementedcorporate-widefinancial,purchasingandhumanresourcepackageslinkedtodatawarehouseswhichcanbeaccessedviawebfront-ends.Eachwasimplementedby“ahandfulofseasonedITandfunctionalexperts…（whogot）thejobdoneinthetimeittakesa…committeetodecideonitsgoals.”6

Ineachoftheseexamples,thefocusofsoftwaredevelopmentwasonrapidresponsetoanidentifiedneed.Mechanismswereputinplacetodramaticallyshortenthetimefromproblemrecognitiontosoftwaresolution.Youmightcallit‘Just-in-Time’softwaredevelopment.

Thequestionis–whyisn’tallsoftwaredevelopedquickly?

Theansweris–rapiddevelopmentmustbeconsideredimportantbeforeitbecomesareality.Oncespeedbecomesavalue,aparadigmshifthastotakeplace,changingsoftwaredevelopmentpracticesfromthemassproductionparadigmtoleanthinking.

Ifyourcompanywritesreamsofrequirements