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Contact John Wyzalek editor of IT Performance Improvement.

 

What Are Lean, a Lean and Agile Organization, and Lean and Agile IT?

Tiffany Pham, David K. Pham, and Andrew Pham

We will consider Lean to be a catchphrase that describes a management approach originally invented by Taiichi Ohno and applied at Toyota in Japan after World War II. This catchphrase was eventually popularized by a team of MIT researchers working under the direction of James Womack, founder of Lean Enterprise Institute, Inc. For Womack and Daniel Jones, there are five core principles of Lean, as described in their book Lean Thinking[1]. For them, these principles include:

  1. Value: The main idea here is for providers to maximize customer value of a product or service, as defined by the customers.
  2. Value stream: A value stream is a set of actions needed to bring a product to an organization's customers.
  3. Flow: Flow is the seamless integration of value-added steps in a business process.Lean experts think they achieve flow when people and materials interact seamlessly and effortlessly. Making operations flow is the ultimate goal of Lean. When waste is reduced and the excess inventory is eliminated, you are left with work that effortlessly flows from start to finish.
  4. Pull: A pull organization is one in which the supply chain sends a product through the supply chain because there is a specific demand for that one product pulled by the customers, as opposed to creating all the products first as inventory and "pushing" them out to distributors onto the customers.
  5. Perfection: Perfection is achieved when the organization can create customer value, identify the value streams, make the work flow, and when customers pull the product from the providers' supply chain.

To follow Shigeo Shingo, who used to work with Ochii Ohno, the father of both the Toyota Production System (TPS) and Kanban, we can define seven types of waste[2]:

  1. Defects: Any work product that fails to meet customer requirements is waste.
  2. Extra processing: Any step within a process or team workflow that does not add any value is waste.
  3. Inventory: Raw material, work-in- process, or a finished product that is not directly required to fulfill an order is waste.
  4. Motion: Any movement by any team member that does not add any value to the process or team workflow is waste.
  5. Overproduction: Producing more than is needed at any given time is waste.
  6. Transportation: Any movement of products or materials between process or team workflow steps that is not needed is waste.
  7. Waiting: When a worker within a process or workflow is waiting to carry out a task, his or her time is wasted.

In addition to these seven types of wastes, an eighth type of waste also was added and is known as the "underutilization of employees."

So What Do We Mean by a Lean and Agile Organization and a Lean and Agile IT and IT Roadmap?

By this, we mean any commercial or nonprofit organization that is both Lean and Agile and any IT department that operates as seamlessly and as effortlessly as possible at the lowest cost while bringing the maximum value to its customers or constituents.

More specifically, to be Lean and Agile, both the organization and its IT would need to:

  • Focus more on value streams or enterprise business processes that create value for customers or constituents.
  • Avoid duplication of processes, systems, and activities in general.
  • Trust and believe in employees or team members.
  • Leverage system thinking to see all connected parts, in order to better understand the consequence of a process or decision.
  • Make process activities and steps and everything else visible.
  • Increase customer value by reducing lead time while increasing the overall throughput and quality of the product or service to be delivered.
  • Eliminate anything that does not bring value to the customer or constituent.
  • Work by regular increments and avoid that teams have to multitask.
  • Optimize to perfection (otherwise known as "Kaizen").

Unlike the traditional approach, where there was always an end state that people and companies had to strive to reach, Lean does not have an end state, but seeks, instead, to encourage continuous improvement (or perfection).

In addition to the above principles, a new Lean and Agile organization also should leverage IT as a primary activity, rather than a support activity.

This would mean, among other things, that the value chain should be modified to look like Figure 1, with IT cutting across all the primary activities. In other words, IT is itself a key activity as opposed to an afterthought.

Figure 1. IT as a Primary Activity of the Value Chain

Likewise, a new Lean and Agile organization should deliver products or services incrementally as a result of the close collaboration between everyone within the organization—especially between the business and IT when it comes to software development and delivery.

Ultimately, as you can see, Lean and Agile IT impacts not only IT, but also the business organization as a whole.

Conclusion

This article helps you, the reader, better understand the concept of Lean and, therefore, Agile. This will subsequently help you recognize if your organization is a Lean and Agile organization and, likewise, if your organization's IT or IT roadmap is Lean and Agile.

For an organization to be Lean and Agile, it should:

  • Bring the most value to its customers or constituents.
  • Put emphasis on common enterprise processes over functional processes that are only needed by a department for its own activities.
  • Avoid creating overlapping or redundant activities, processes, and systems.
  • Continuously deliver value by delivering shippable products (which can be software systems) and services in increments.
  • Produce products (which can be software systems) or services of the highest level of quality.
  • Continuously adapt to the external changing environment.
  • Turn IT into one of its primary activities, which also should follow and apply all the Lean principles that we have been discussing with respect to a business organization.




References

1. Womack, J., and D. Jones. 2003. Lean Thinking: Banish Waste and Create Wealth in Your Corporation. New York: Free Press.

2. Shingo, S. 1981. A Study of the Toyota Production System from an Industrial Engineering Viewpoint. Tokyo: Japan Management Association.

Read more IT Performance Improvement

This article is an excerpt from:

Whether you are a CEO, CFO, board member, or an IT executive, From Business Strategy to Information Technology Roadmap: A Practical Guide for Executives and Board Members lays out a practical, how-to approach to identifying business strategies and creating value-driven technology roadmaps in your organization. Unlike many other books on the subject, you will not find theories or grandiose ideas here. This book uses numerous examples, illustrations, and case studies to show you how to solve the real-world problems that business executives and technology leaders face on a day-to-day basis.

About the Authors

Tiffany Pham graduated with a BA in Economics and International Studies, with Distinction, from Yale University and an MBA from Harvard Business School. Prior to Harvard Business School, Tiffany Pham was in M&A Investment Banking on Wall Street and has since worked on strategic initiatives at multibillion dollar media conglomerates. In addition to this, she also serves on the Board of Trustees for Provincetown Film Society, the Board of Directors for No Limits Media, the Board of Advisors for Space on Ryder Farm, and the Business Committee for the New York City Ballet. Tiffany Pham can be contacted at: TiffanyPham@aya.yale.edu.

David Pham, a prolific software creator, is the co-author of the book Business-Driven IT-Wide Agile (Scrum) and Kanban (Lean) Implementation, also by Productivity Press. In addition to this, David Pham is also a Sun-certified Java and Microsoft-certified developer. A technology entrepreneur, he has held top positions with a number of start-ups, first as Chief Technology Officer (CTO) with KTD Media Corporation based in New York and then as President of a Web-based company based in Rhode Island. While not working, David Pham enjoys spending time with his family as well as sharing his ideas with others. To this effect, he was the invited keynote speaker at the DevChatt Conference for software developers in Nashville, Tennessee, in 2011.

Andrew Pham, an IEEE senior member, PMP, and PMI-ACP, is the co-author with David Pham of Business-Driven IT-Wide Agile (Scrum) and Lean (Kanban) Implementation. A seasoned IT professional and executive coach, Andrew Pham has trained hundreds of business and software professionals throughout the world in Agile (Scrum) and Lean (Kanban). Prior to taking on coaching as one of his main activities, Andrew Pham had held several senior positions in IT management, enterprise architecture, system integration, software development, and project management within many organizations of different types and sizes.