Applying Lean principles in Project Management: an introduction
By Alessandra L, consultant at AYES Italy.
Lean Manufacturing is a production method derived from Toyota’s 1930 operating model «The Toyota Way». It was founded on five key principles:
- Understand product’s (or service’s) value for the customer;
- Identify and map the value stream;
- Create lean flow of value by eliminating waste;
- Employ a “pull strategy” (produce only what is asked for by the customer);
- Pursue continuous improvement.
Although this method was born in factories, any type of production or service can benefit from a Lean approach, now widely used in sectors as diverse as finance and healthcare. An important innovation has been the application of Lean Manufacturing principles to Project Management.
The goal of Lean Production is to maximize value while minimizing waste; produce what is necessary, when it is necessary, with the minimum quantity of materials, equipment, resources and space. Lean Project Management pursues the same goal.
The benefits of this innovative project management approach are:
- Reduced lead times (amount of time from the start of a process to its conclusion);
- Decreased costs;
- Improved productivity;
- Higher profit margins;
- Increased product quality;
- Greater customer satisfaction.
Any phase of a project life cycle can be improved using Lean tooling. Minimizing or eliminating waste is the central focus of Lean. The waste concept in Lean stretches far beyond physical waste: Anything the customer would not agree to pay for, and anything that does not add customer value is considered as “waste”. Lean principles and the recognition of waste can help project managers avoid, mitigate, or control situations that might otherwise lead to project failure.
Here are some common project pitfalls that a Lean approach can help avoid:
- Failure to Establish Customer Value: Not understanding what a customer values in a project can lead to project mispricing, wasting both work and resources.
- Failure to Define the Value Stream: Non-value-creating activities may continue to strain the project budget and extend the project schedule.
- Lack of a Communication Plan: An effective communication plan streamlines the information flow between a project’s stakeholders.
Examples of Lean tools that a Project manager can use to improve his/her activities:
Kanban board: A board divided up into sections, each section depicting a work process as well as its resources. The visual representation of tasks makes it easier to track progress. Kanban is a project tool but also a “mindset”: it is about making sure that you as a project manager take the correct decisions, at the right time, focusing on what should be done now; leaving for later items which are not urgent and leaving aside what should we not be done at all. Kanban asks you to pull work when you have capacity rather than push it onto workers and overburden them. It also asks you to think of your project as a sequence of activities through which work flows. Focusing on flow of work to completion becomes a key concept with Kanban. Kanban ensures your process flows smoothly.
Kaizen method or Continuous Improvement: The end goals of Kaizen are improved efficiency and higher quality. The concept encourages an organization to welcome small, easily implemented improvements that, taken together, provide major benefits in the long term. Every project consists of different stages and milestones. The Kaizen philosophy of continuous improvement aims at saving time and resources for each of them. It is also likely that some stage may be completed earlier or in a more economical way than envisioned earlier. This frees resources which can be deployed on other stages of the project.
Value stream mapping: Creating a map and documenting all the process steps that the product goes through helps analyze the current state of a value stream and design improvements that remove waste and create value according to customer demands. A value stream map represents a core business process that adds value to a product. This tool allows to get a top-down overview of the business processes. This way, it is easier to analyze the process or workflow, identifying waste and inefficiencies, for example: delays that hold up the process, restraints that limit the process, excess inventory that ties up resources unproductively, etc.
In a very competitive environment, improving the
classic method of project management is vital. Lean project management will bring many benefits to companies that are open for change.
AYES, with its recognized expertise in innovative project management processes, is the right partner to help improve your operational efficiency. Please contact us for a customized analysis of your organization and processes.