LEAN

March 30, 2012

The recent economic crisis that we find ourselves in has made it crystal clear that organizations have to be willing to change and improve if they hope to prosper and in some cases, survive. Because of the tough economic times we find ourselves in, customers are demanding better quality,delivery, and lower costs like never before. Lean is an Operational Excellence strategy that allows you to change for the better. In fact, the Japanese word Kazan means to change for the better. The true spirit of Lean is to work with a slow and steady purpose instead of quickly and recklessly. Another common definition is that Lean is the persistent pursuit and elimination of waste. Waste is considered to be any activity that is done but provides no real “value” to the product or service. Lean is not only about attacking waste, Lean is also very focused on improving the quality of products and stability of processes.

· History of Lean

It is a common misconception that Lean thinking started in Japan by the founders of Toyota. In 1574, King Henry III watched the vettage arsenal finish gala ships every hour using continuous flow processes. In 1910, Henry Ford moved his operations of his American empire, Ford Motor Company, to Highland Park. Due to the continuous flow of massive parts throughout the factory, it is often referred to as the birthplace of Lean manufacturing. One year later in 1911, Sakichi Toyoda traveled to the U.S. from Japan to study Ford’s revolutionary way to produce the model T. Shortly after this visit, Toyoda began to conceptualize what we now call the Toyota Production System(1).

As the Toyota Production System(TPS) matured and Toyota began to excel as a corporation, the rest of the world began to take notice. In 1975, the TPS was translated to English, enabling for the first time, non-Japanese speaking individuals the opportunity to learn about this operation system.

In 1990, a group of American researchers, led by Dr. James Womack, traveled the world to study the various manufacturing processes in use. They concluded that Toyota was by far the most efficient automotive company in the world. It was at this time that one Dr. Womack’s research assistants actually coined the phrase “Lean Manufacturing.” The term was then released to the world when Dr. Womack’s book “The Machine That Changed the World” was released to the public.

In present day, Lean is also spread to many others areas besides manufacturing environments. In fact Lean can be found in Office environments, where things such as reducing the time it takes to produce customer orders is very common. Another area is in hospitals, in things like reducing errors and the time it takes to find critical supplies. This has added tremendous value. The Military and Postal Service have also been known to utilize their respective forms of Lean processes in their work environment.

· Tools of Lean

The most popular Lean tool used today is 5S. When translated to English from Japanese, 5S stands for sort, straighten, shine, standardize and sustain. The purpose of 5S is to be able to identify abnormalities immediately. Another Lean tool is Value Stream Mapping which helps organizations “see” waste like never before. Another powerful Lean tool is Cellular Manufacturing, where product is past in a balanced manner one piece at time.

The ideal condition for all Lean companies is to receive orders at the start of the process and quickly flow the product through all of the processing steps with no delay. However that is not always the case. In some cases continuous flow is not always possible so that is when the concept of “Pull” is implemented. This basically means that an individual work area will not start production until a downstream process or customer tells it to. Other Lean tools that have been implanted in companies include, Andon Lamps, A3 Thinking, Practical Problem Solving, Error Proofing, 3P, Visual Controls, Supplier Development, Supermarkets, and Water Spiders(2).

· Philosophies of Lean

One of the philosophies of Lean is Kaizen. Kaizen is way of thinking that basically asks a question, “How can we improve something today?” Tha Kaizen mindest is one that never settles for good. Instead it’s always focused on finding a better way, even if it is just a little bit better. Another philosophy is Genchi Genbutsu, which literally means go and see what the problem is at the place where the work is done. In other words, if there is a problem on the production floor, the management team shouldn’t try to solve it from a board room, yet they should go the place where the work is done to see what the issue is with their own eyes(1).

Finally, the idea of learning from your failures is very important. In order to succeed at Lean, or any other improvement process for that matter, an organization must be willing to try and fail from time to time. Since Learning from these failures will be the most powerful teacher of all.

By: Wesley D. Sims

Resources:

1. Gemba Academy – Introduction to Lean Manufacturing

www.gembaacademy.com

2. http://en.wikipedia.org/wiki/Lean_manufacturing

3. http://etd.library.pitt.edu/ETD/available/etd-05282003-114851/unrestricted/Abdullah.pdf

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Lean Six Sigma

March 30, 2012

I was told I was directed to a Lean Six Sigma posting……

Yes, and you were told correctly. We will begin the discussion of what Lean Six Sigma is after we discuss the history and facts of where Lean Six Sigma came from as a methodology. We will find out a little more about Six Sigma, as well as Lean.

What Is Six Sigma?

The objective of Six Sigma Quality is to reduce process output variation so that on a long-term basis, which is the customer’s aggregate experience with our process over time, this will result in no more than 3.4 defect Parts per Million (PPM) opportunities (or 3.4 defects per million opportunities – DPMO). For a process with only one specification limit (upper or lower), this results in six process standard deviations between the mean of the process and the customer’s specification limit (3).

Six Sigma focuses on continuous process improvement to reduce variation in existing processes. Engineers within a company have standards to follow when analyzing current process improvements. As standard, Six Sigma breaks down into five measurements which helps identify questions that need to be answered in order to improve overall production.

1. Define opportunity

2. Measure performance

3. Analyze opportunity

4. Improve performance

5. Control performance

History of Six Sigma, please………

The history of the term Six Sigma was phrased by an engineer named Bill Smith at Motorola. Motorola has a federally registered trademark for the term Six Sigma. However, a German mathematician and scientist named Carl Frederick Gauss started Six Sigma’s routes. Carl Frederick Gauss discovered a complicated equation that reveals eight degrees of separate from the Earth to planet Ceres. Gauss’s method involved determining a conic section in space, given one focus (the sun); the conic’s intersection with three given lines, and given the time it takes the planet to traverse the arcs determined by these lines. This problem leads to an equation of the eighth degree, of which one solution, the Earth’s orbit, is known. The solution sought is then separated from the remaining physical conditions (1). Even though Carl Frederick Gauss created the equation of separated degrees, he did not have mathematical formula to create a method of measuring those degrees in a user-friendly form.

What is Lean Manufacturing?

Lean manufacturing is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for (4).

Essentially, Lean is centered on preserving value through less work. Lean manufacturing is a management philosophy derived mostly from the Toyota, a well-known auto manufacturer (4). Toyota developed Lean by cutting seven different wastes from its overall production, which improved overall satisfaction to customers. The seven waste cut were:

1. Transportation

2. Inventory

3. Motion

4. Waiting

5. Over-processing

6. Over-production

7. Defects

Similar to Six Sigma, Lean focuses on continuous process improvement by eliminating waste in an existing process. As standard, Lean breaks down into five measurements which helps identify questions that need to be answered in order to improve overall production. Those measurements are:

1. Analyze opportunity

2. Plan improvement

3. Focus improvement

4. Deliver performance

5. Improve performance

What is Lean Six Sigma?

Lean Six Sigma is a synergized managerial concept of Lean and Six Sigma that results in the elimination of the seven kinds of wastes (classified as Defects, Overproduction, Transportation, Waiting, Inventory, Motion, and over Processing) and provision of goods and service at a rate of 3.4 defects per million opportunities (2).

With the combination of both Lean and Six Sigma, an overall concept is established to delete waste and defects. By combining Lean and Six Sigma, production engineers are able to take the positive aspects from each, and implement a faster more efficient solution. In sum, Lean Six Sigma does not only cut cost but it improves effectiveness to each process developed for an overall product or service. Lean Six Sigma

1. http://en.wikipedia.org/wiki/Carl_Friedrich_Gauss

2.http://en.wikipedia.org/wiki/Lean_Six_Sigma

3.http://www.isixsigma.com/new-to-six-sigma/statistical-six-sigma-definition/

4. http://en.wikipedia.org/wiki/Lean_manufacturing

Chase Wright

Just In Time

March 29, 2012

Just-in-Time (JIT) is a method that reduces the company’s cost and improves workflow by scheduling materials to arrive at a work station or facility, just in time for use. JIT basically focuses on the performance of a company’s activities and its immediate need or demand. (1) In the article, A Review Of The Adoption Of Just-In-Time Method And Its Effect On Efficiency, the authors state that there are four major points that revolve around JIT: 1) The elimination of activities that do not add value to a product or service; 2) a commitment to a high level of quality; 3) a commitment to continuous improvement in the efficiency of an activity; 4) and an emphasis on simplification and increased visibility to identify activities that do not add value. (1, p26)

The Just-in-Time method, also called the JIP philosophy, evolved from the Japanese motor industry in the 1940’s. While the American manufactures were producing and storing as much inventory as possible; the Japanese, most notable Toyota’s Taichi Ohno, begin creating systems that could compete with the American automotive industry without dealing with the cost of long productions. (2) Taichi Ohno created a system called the Toyota Production System (TPS) which eliminated waste in the automobile industry while minimize stock. The two main components of TPS were just-in-time and autonomotion. “Autonomation is the practice of determining the optimal way to perform a given task and then making this the ‘best practice’ standard method.”(3) By 1965, with the implementation of TPS, Toyota begin to see a decrease in their production time and cost; and in the 1980’s the American care manufactures, who had not yet changed their procedures, suddenly realized that they had fallen behind the Japanese in the automotive industry.

The readings for this summary proves that when a manufacturing company implements the JIT philosophy, it wills increases the efficiency of operation, improve quality, increase customer satisfaction, and improve management workers relations which could help the company gain a competitive advantage. (4, p.78) It is also true that JIT can be equally successful if used in the private sector. Although many believe that methods used to increase efficiency and productivity in the manufacturing industry should be different from those used in the private sector; the authors of the article, Benchmarking JIT, prove otherwise.The example of how a hospital, that was previously using 35% of their budget on supplies and inventory, had decided to us the JIT in regards to their ordering procedures saw a 90% reductions in about 18 months proves this point. (4, p. 76) The authors state that benefits of JIT, such as increased organizational efficiency and effectiveness, improve communications internally within an organization, while fostering organizational disciple are improvements that are need in any industry; and using the JIT philosophy would work.(4)

For any industry, in order for JIT to be successful it will take time. Since JIT is often called a philosophy (because of the numerous amount of changes required for implementation) and not a production method, the organization that implements JIT will have to make the decision that they must undergo corporate changes. Since change of any kind for an entire organization is often a slow process, the full implementation of JIT will not happen overnight. It is stated in the article, Benchmarking JIT, that a successful implementation of JIT only happens when the organization’s strategic philosophy changes. Because of the number of things that could possible change when using JIT, from operational and production procedures to customer relations and employee management, leadership is force to realize that not only the company’s methods must change, but the way in which the company operates and how it makes decisions will be affected as well. (3)

By Cheryl Johnson

1) Younies H, Barhem B, Hsu C. Review of the adoption of just-in-time method and its effect on efficiency. Public Administration and Management: An Interactive Journal, 2007 (1), 25 – 27, 35.

2) Petersen, Peter. The misplaced origin of just-in-time production methods. Management Decision; 2002; 40, 1/2; ABI/INFORM Global, pg. 82-84

3) Hopp W, Spearman M. To Pull or Not to Pull: What Is the Question?

Manufacturing & Service Operations Management; Spring 2004; 6, 2; ABI/INFORM Global

pg. 133

4) Yasin M, Wafa M, Small, M. Benchmarking JIT: An analysis of JIT implementations in the manufacturing service and public sectors. Benchmarking; 2004; 11, 1; ABI/INFORM Global; p. 74-78.

Kaizen

March 29, 2012

Foundation of Kaizen

According to Six Sigma, Kaizen is a Japanese term that means continuous improvement, taken from the words “Kai” means continuous and “zen” means improvement. Masaaki Imai published a book in 1986 titled, The key to Japan’s Competitive Success, received a lot of attention from management experts around the world about a term called Kaizen which was used in Japan’s management philosophy. Mr. Imai defined it as the process of gradual and incremental improvement in a pursuit of perfection of business activities. (Smadi) Kaizen stresses on small and continuous improvements to the existing process without a need for major investment cost. Everyone in the organization is involved in the effort and the improvement process with the objective of improving productivity and reducing defects. The goal is to get all of the workers focused on suggesting small improvements that over time lead to big improvements in productivity, quality, safety, waste reduction and leadership. In the book, How To Do Kaizen: A New Path to Innovation by Bunji Tozawa and Norman Bodek, they provide a story about a company that used Kaizen strategies to get the employees to implement 96 ideas per person. The book also heavily discussed and stressed the important success factor was that supervision is critical. They stated that supervision is not only critical but supervisors must listen, praise, and thank employees for their efforts. In a basic concept this is getting people involved in the process of reengineering and improving the adoption rate of change in an organization. Senior management at Dana Corporation viewed the task of asking their employees, “what do you think?” as a very unusual idea in comparison to the American industry. What Dana Corp. found out was that instead of looking for the big idea that would save money, they ended up with lots of small ideas and created an atmosphere of creative thinking. (Bodek, p44)

Practical Use

There are three essential elements to Kaizen. First, the employee who comes up with the idea must be involved in the implementation of the idea. Second, the solution should be defined in a simple way. Ideally it should be only 75 words and include the problem, the solution, and the benefit. Third, share the idea within the company. (Bodek) The automotive manufacture Honda states in its’ company philosophy that respect for the individual is the foundation of their company’s principles. This type of Kaizen thought is also in Toyota’s theme which states that every Toyota team member is empowered with the ability to improve their work environment. These types of statements fuel a Kaizen culture in their organization that embraces change and constant improvement to remain competitive in their industry. In my organization, the concept of draw, see, think and plan, do, check, act is a Kaizen tool used to help with idea creation. A person should visualize or dream of an idea followed by evaluating reality versus the dream. Think of a way to compromise in the middle and create a plan to accomplish the idea. The concept of do it, check it, adjust and act again is the Kaizen way of continuous improvement. There are also several other tools that are used to include visual management or simply put, making problems visible. Another example is the concept of putting quality first and improving performance in a three dimensional view of quality, cost, and delivery.

Kaizen and Business Process Engineering

Kaizen techniques and management principles are useful tools for business process engineering. Organizations that want to create an environment and a company culture of change and reducing waste can use Kaizen philosophies. Process reengineering requires employees to question why and how is a process done. The quick and easy steps of having the employee implement the idea, keep it simple, and share is an easy process of using Kaizen to redesign a business process.

By: Andre Swain

Work Cited:

“Kaizen done better.” Industrial Engineer May 2010: 15. General OneFile. Web. 28 Mar. 2012.

Smadi, Sami Al. “Kaizen strategy and the drive for competitiveness: challenges and opportunities.” Competitiveness Review 19.3 (2009): 203+

Bodek, Norman. “Quick And Easy Kaizen.” IIE Solutions 34.7 (2002): 43. Academic Search Premier. Web. 28 Mar. 2012.

No matter how a company’s processes are defined, whether they are strategic, tactical, project specific or part of a project
methodology, every company looks for ways to improve its processes. When management asks, “How can we make our company better?” The answer almost always lies in improving its processes.

Process improvement in any organization is important because when done correctly, it can result in increased product quality, improved customer satisfaction, lower costs or increased revenue. In short, continuous process improvement to a business is like the “fuel” required in an automobile: Without fuel an automobile won’t travel very far. Likewise, without process improvement, a company won’t go very far either. But even more importantly to recognize, is that fuel has to be repeatedly added to an engine. It is not a “once and done” scenario. Process improvement is ongoing, ever seeking better results.

One approach to continuous process improvement is to adopt a Capability Maturity Modeling Integration (CMMI) strategy. Simply defined, CMMI is a “process improvement approach that helps
organizations improve processes in order to improve their overall organizational performance.”

Introduced in 2002, CMMI was developed by the Software Engineering Institute at Carnegie Mellon University, in conjunction with individuals from both government and private industry.

(Now, before I go further into an explanation of CMMI, please understand that CMMI is body of knowledge is vast! There is way too much material, definitions, and intricacies to cover in a single blog post. Quite frankly, to mention every detail would overwhelm the reader. There is plenty of CMMI material on the Web where one can learn more specifically about CMMI and how an organization can adopt a CMMI approach. The purpose of this post is to introduce the concept. Paint with a broad brush, give an overview. You get the idea.)

CMMI enables organizations to integrate Capability Maturity Models (CMM)—the precursors to CMMI. CMMs deal with process improvement in specific areas such as software and systems development, and acquisition processes. CMMI combines these previously separate CMMs together and allows integration across an enterprise. The result is that organizations now have the ability to integrate processes involving people, systems, software, etc.

Currently, there are three CMMI models in the areas of:
1. Development – processes, best practices related to software and system development
2. Services – processes, best practices related to service and product delivery during an entire product lifecycle.
3. Acquisition – covers the processes of procuring products/services from suppliers during complex projects and efforts.

Each CMMI model contains numerous process areas (too numerous to tally here). But it is important to note that common to each of the three models are sixteen core process areas:

Causal Analysis and Resolution
Configuration Management
Integrated Project Management
Measurement and Analysis
Organizational Process Definition
Organization Process Focus
Organizational Performance Management
Organizational Process Performance
Organizational Training
Project Monitoring and Control
Project Planning
Process and Product Quality Assurance
Quantitative Project Management
Requirements Management
Risk Management

These process areas are fundamental to every process improvement activity, no matter which CMMI model is chosen—Development, Services or Acquisition.

Drilling down even further into CMMI definition, there are two representations of measuring process improvement within each of the three CMMI models. These representations are called “staged” and “continuous.” Now we’re getting to where the “rubber meets the road.”

In a staged CMMI model, there is a defined path of improvement for each organizational process. This defined path is represented by five maturity levels. Each maturity level (1-5) improves the process improvement of the previous level. Maturity levels can be visually represented by stair steps or a pyramid with sections that fit one on top of the other. The maturity levels are defined as follows:

1. Initial – process is poorly defined, unpredictable and reactive in nature. 2. Managed – processes perhaps defined for a specific project and are often reactive
3. Defined – processes defined for an organization and are proactively managed 4. Quantitatively Managed – organizational processes are measured and controlled 5. Optimized – the focus of an optimized process is continuous improvement

In a continuous CMMI model, process improvement is more specific to a process area, rather than across an organization. Since its focus is on a particular process area, it can be represented using “swim lanes” or a bar chart. A Continuous representation is defined by capability levels (rather than maturity levels in staged) 0-5 as follows: 1. 0 –process is not performed or partially performed
2. 1 – process is performed but is unstable and uncontrolled 3. 2 – process is planned for and managed
4. 3 – process is defined as an organizational standard practice 5. 4 – process is measured and controlled
6. 5 – process is performed and continuously improved

Capability Maturity Modeling Integration is a broad subject with many levels of details, definitions, twists and turns. It cannot be completely understood without intense study and experience.
Nonetheless, implementing a CMMI in an organization can improve processes and help organizations prosper.

References:
1. http://en.wikipedia.org/wiki/CMMI
2. http://www.sei.cmu.edu/cmmi/
3. http://www.tutorialspoint.com/cmmi/

Object Management Group

March 29, 2012

The Object Management Group (OMG) is an organization that oversees specifications and standards based upon an open standards framework. It can be described as an interoperability management group. It was started in 1989 to standardize objects in the new class of object oriented languages. It has since evolved to focus more on business process redesign and notation. OMG is a central repository for businesses to address their standardization needs. OMG is a democratic organization where each of its 800 member companies gets an equal vote no matter its size. Any member can submit and comment on industry specification proposals.

OMG’s first standard was for Common Object Request Broker (CORBA), it defined the interfaces (APIs) so applications could communicate over an agreed upon specification. This provided a consistent framework that allowed interoperability between vendor specific implementations.

During the mid 90’s there were six major design notations for laying out object oriented software. The Rational Corporation employed a few of the authors of these notations, they combined these notations into the Unified Method. OMG accepted this primary standard and called it Unified Modeling Language (UML), it is now OMG’s most-used specification. UML is used to design software applications, you can think of it as the blueprint that all software and infrastructure construction is based on. It’s a “blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands. “

OMG oversees a specification called Business Process Modeling Notation (BPMN). This aptly named graphical specification is used for business process modeling; its focus is to bridge the gap between business process design and implementation. BPMN is a common language that application stakeholders can use to understand the system using the same notations. From analyst who focus on the processes, to developers who implement the solution, to business managers who monitor the system.

There’s a new standard OMG is working on called Semantic Information Modeling for Federation (SIMF). SIMF is used to define what words and concepts mean. There is a huge problem about what different people think different words and concepts mean. This is a way for companies and industries to have an agreed upon definition. This concept intrigues me; I have experienced this problem many times in my career. I’ve been in situations before where I’m using the same language and same words as those around me but we’re still not speaking about the same language. Even subtle differences in what a word means can have profound implications when talking about complex systems.

Model Driven Architecture (MDA) is a standard that separates business and application logic from the underlying platform. The idea is basically to abstract business processes to a point where implementation is platform independent and vendor neutral. MDA was created to addresses the complete life cycle design using UML and MetaObject Facility (MOF). Some wish for MDA’s ultimate goal to be for a business analyst to build a MDA model and have the implementation of that model be completely automated. To call this a pipe dream is an understatement. There’s a reason there are many, many vendor solutions, each solution has its strengths and weaknesses that have to be taken into account. Hitting an “Easy Button” to create an end to end solution is absurd. The institutional knowledge an organization’s employees have cannot be automated. Take the concept of baking a cake, the recipe designer (analyst) can put in a process for getting ingredients, assembly and baking. But only a baker (implementation expert) knows if some ingredients should never be mixed together, or in what order. How would a recipe designer take into account the altitude of the oven or the color of a pan or any other site specific variable that would affect the temperature a cake should be baked? How would you adjust for taste, texture and presentation? Without this knowledge how would you troubleshoot a burnt chocolaty mess?

Resources:

http://www.omg.org/watson-podcast/index.htm

http://www.omg.org/mda/faq_mda.htm

http://www.mitchellsoftwareengineering.com/IntroToUML.pdf

http://blog.omg.org/

Buck Huffman

What is Business Process Reengineering?

The best and simple definition for Business Process Reengineering (BPR) was found in the book “Reengineering the Corporation – A Manifesto for Business Revolution” by Michael Hammer and James Champy. It said, “BPR is defined as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed”. In short, the heart of BPR lies in the notion of discontinuous thinking. According to the authors, BPR done right means starting from scratch.

Business Process Reengineering recognizes that an organization’s business processes are usually fragmented into sub processes and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Reengineering maintains that performance optimizing of sub process can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. For that reason, reengineering focuses on re-designing the process as a whole in order to achieve the greatest possible benefits to the organization and their customers.

Hammer and Champy in Reengineering Corporation – A manifesto for Business Revolution, suggest 7 principles.

· Organize around results and outcomes and not tasks

· Have those who use the output of the process perform the process

· Subsume information-process work into the real work that produce the information

· Treat geographically dispersed resources as though they were centralized.

· Link parallel activities instead of integrating their results

· Put decision point where the work is performed, and build control into the process

· Capture information once and at the source

Role of Information Technology

Major advantage of IT in reengineering lies in its disruptive power. IT has the power to break the rules and make people think inductively and give the company a competitive advantage. A great example is Amazon. Amazon turned around the customer’s view of a book store. Another example would be super markets/department stores like Wal-Mart who have used IT to drive their business. The scanners that are used to check out commodities provide huge benefit by making it possible to track sales in real time.

IT provides project management skills and experience, which is a key ingredient in successfully implementing reengineering. In Hammer and Champy’s book (1993) they state that “IT is an integral part of BPR used as an enabler since it permits companies to reengineer Business Process”. Corporations must think inductively about the solution in order to bring in innovative ideas to implement the new process.

In my research I discovered a couple of white papers that explain the role of IT in BPR:

Honey well – David J. Paper, James A. Rodger, and Parag C. Pendharkar did a case study on the successful implementation of BPR in Honeywell, Phoenix Arizona. This study shows one organization’s experiences with radical change for the purpose of uncovering how they achieved success. From their study, 2 out of 10 points stand out…

· Execution of carefully developed change plans separate the high performers from less successful BPR projects.

· Recognizing that dealing with change is difficult and complicated is not enough. This study states how World Class Manufacturing (WCM) programs achieved high performance and fewer product defects. Total Plant™ (Change Management Group) and their Factory-focused program unified business and control information to enable global customer satisfaction.

ING Bank in Nederland, A large Dutch Bank – In this is white paper written by H.A. Reijers on Product Based Design of Business Process Applied within the Financial Services. In the abstract, he defines the reengineering process suits the information intensive products such as bonds, mortgage and loans. This study shows the method of Credit Processing, which is paper intensive and by reengineering could provide substantial savings in cost and flow time.

By: Shyam P. Prabhakar

Citations / References

· Reengineering the Corporation – A manifesto for business revolution – Michael Hammer & James Champy

· http://www.anterron.com/cgi-bin/white_papers/docs/Role_of_IT_in_BPR.pdf: Business Process Reengineering: Role of Information Technology in Implementation of BPR by Nandagopal Ramachandran

· http://en.wikipedia.org/wiki/Business_process_reengineering

· A BPR case study at Honeywell: By David J. Paper, James A. Rodger and Parag C. Pendharkar. http://www.bus.iastate.edu/nilakant/MIS538/Readings/BPR%20Case%20Honeywell.pdf

· Product-Based Design of Business Processes Applied within the Financial Services by H.A. Reijers: http://is.tm.tue.nl/staff/hreijers/H.A.%20Reijers%20Bestanden/pbd%20-%20paper%20-%20reijers%20-%20final.pdf

KANBAN

March 27, 2012

What is Kanban?

Kanban is a new technique for managing a software development process in a highly efficient way. Kanban underpins Toyota’s "just-in-time" (JIT) production system.

A Kanban is a signaling device (usually a physical card in a clear plastic envelope) that instructs the moving or creating of parts in a "pull" production system, invented and developed as part of the Toyota Production System.

"Pull" means that the downstream workers (customers/retailers/users) withdraw or "pull" the parts they need from the upstream (Production system) process.

To prevent overproduction, the upstream doesn’t "push" finished parts to the downstream, but instead it is the downstream that actively "pulls" the parts from the upstream.

Toyota’s six rules of Kanban.

1. Customer (Downstream) processes withdraw items in the precise amounts specified on the Kanban.
2. Supplier (Upstream) produces items in the precise amounts and sequences specified by the Kanban
3. No items are made or moved without a Kanban.
4. A Kanban should accompany each item, every time.
5. Defects and incorrect amounts are never sent to the next downstream process.
6. The number of Kanbans is reduced carefully to lower inventories and to reveal problems.

The store works as a queue of parts, the pallets work as a carrier of parts, and the Kanban cards work as a carrier of customer-need information. They make it a "pull" system, creating a balance between sustaining "continuous flows" (eliminating the waste of waiting) and "ionizing WIP" (eliminating the waste of overproduction). This mechanism of managing the "right" amount of WIP in the flow between buying-in and selling-out is exactly what happens in a supermarket, and doing it well is the key to the profitability of the store.

KANBAN FOR SOFTWARE DEVELOPMENT

Why KANBAN?

Kanban takes an organization’s current development process and provides greater visibility into the status of the work and how it is proceeding. Kanban provides a method to continually adapt in order to smooth out kinks in the arrival of new development work. In this way, it allows the organization to avoid crises and respond more quickly and easily to issues that do arise.

Kanban also gives more precise direction on how to invest development energy into only the most valuable work. The end result is a development pipeline that is predictably and efficiently delivering high value work.

The Kanban Method reduces risk and increases flexibility, resulting in a more resilient development cycle.

The KANBAN Method

The five core principles enable the Kanban Method are:

1. Visualize the Workflow
—Represent the work items and the workflow on a card wall or electronic board.
2. Limit Work-in-Progress (WIP)
—Set agreed upon limits to how many work items are in progress at a time.
3. Measure & Manage Flow
—Track work items to see if they are proceeding at a steady, even pace.
4. Make Process Policies Explicit
—Agree upon and post policies about how work will be handled.
5. Use Models to Evaluate Improvement Opportunities
—-Adapt the process using ideas from Systems Thinking, W. E. Deming, etc

When these 5 conditions are present, a Lean software development method will emerge over time.

Sustaining Kanban

A Kanban system is used in a traditional waterfall development model but with a flow. This project has separate and serial processes which they call "design", "development", "validation" etc., and the Kanban cards move between processes.

Note that this is not a classic waterfall process, where all the requirements are "designed" at one time, "developed", and "validated" at another time, which would cause all the cards to move in a group. Instead, the cards move one by one, like the one-piece-flow of manufacturing.

Agile Kanban

WIP can be limited by defining the size of each area. To make this a pull system, it needs a mechanism allowing the downstream process to somehow signal the upstream process to start working. Making a rule that only the downstream can move the DONE cards to signal the upstream is one option. Having "Iteration Meetings" periodically is another option which synchronizes the teams and the transportation (communication) of the information among the teams.

Conclusion
Kanban systems are used in order to achieve:

1. Better process control — they keep continuous flow while limiting WIP
2. Better process improvement — they make the flow visible.

"Agile Kanban" focuses on #2, while "Sustaining Kanban" focuses on #1.

References:

http://www.infoq.com/articles/hiranabe-lean-agile-kanban
http://www.kanbanblog.com/explained/index.html

Thanks,
Sudheer Amireddy

CMMI

March 27, 2012

What is CMMI?
Capability Maturity Model Integration (CMMI) is a process improvement approach whose goal is to help an organization improve their performance (from Wiki). It provides guidance for improving the organization’s processes and the ability to manage the development, acquisition, and maintenance of products or services.
CMMI was developed by the Carnegie Mellon Software Engineering Institute (SEI). The main sponsors included the Office of the Secretary of Defense (OSD) and the National Defense Industrial Association.

CMMI is different from ISO-9001. It shows the maturity of the process that is being followed by the organization. It goes beyond process documentation. CMMI implementration will be more costly than ISO implemetation

What can CMMI do for us?
There are different answers for different people. For project managers, CMMI can improve their project management capabilities, to deliver quality projects on time and within budget. For salesmen, CMMI can help them to judge an organization’s implementation capacity, thus ensuring their purchase correctly and smoothly. For CEOs, CMMI can enhance the whole organization’s management level.
Overall, CMMI can help us improve the project quality, and decrease the cost of quality and the risks.

CMMI representation
CMMI has two different representation ways: continuous and staged. Different representation way’s level represents a different content. The continuous representation is a way to measure the project capacity of an organization. It is easy to reach a high CMMI level because the organizations can pick up the project by themselves to assess. It merely means that the organization has reached a certain level in the certain project or similar projects capacity.
The staged representation is mainly a measure of the maturity of the organization, that is, the comprehensive strength of the project capacity. CMMI appraiser can pick up any projects or any parts of a project in the organization to assess. Stage representation is difficult to reach a high level. Although the CMMI is represented in different ways, its substance is exactly the same, is a way to two different means of representation.

Maturity levels
There are five maturity levels.
Lv1.Initial. Processes unpredictable.
The lowest possible CMMI level means an organization has some successful projects, depends on the heroism of a few key players, but may not be able to repeat their past successes. There is no predictability in schedule, budget, scope or quality, no formal or very poor planning process. Management and engineering is weak.

Lv2.Managed. Processes characterized for projects and is often reactive.
Project management processes are planned, performed, measured, and controlled: the organization will prepare resources, arrange right persons to right positions and train related staffs when the project starts; measure and control all phases in the project; examine the project and all processes, and all issues in a project are recorded.

Lv3.Defined. Processes characterized for the organization and is proactive.
The processes and its interpretation are not only managed, but also get institutionalized. The organization ensures that individual projects get success.
In reference to CMMI, Level 3 contains the maximum number of process areas that need to be addressed.

Lv4.Quantitatively Managed. Processes measured and controlled.
Digital management. Use statistical tools to manage the projects and processes, data and pictures are from Lv3.
The organization delivers its projects with high quality and stability.

Lv5.Optimizing. Focus on process improvement.
The highest CMMI level provides the highest quality and the lowest risk. The organization analyzes the quantitative data from the projects and applies it to refining the processes for the future. This level represents an introspective approach to quantitative project management, combined with a continuous improvement objective.

Higher levels are the cornerstone of lower levels, no level can be skipped. The higher maturity level, the higher quality, the lower risk.

By Min Sun

1) SEI Web pages
2) http://www.tutorialspoint.com/cmmi/cmmi-maturity-levels.htm
3) http://www.article-hut.com/article7993_Understanding_CMMI_Levels.html

What is Kaizen?

Kaizen in Japanese means good (zen) change (kai). It is known as the Japanese technique of achieving success through small improvements, steady changes or steps. The methodology of Kaizen includes making small changes to a task or activity and monitoring the results then adjusting properly based on the feedback. At the same time a key aspect of the Kaizen methodology is that it empowers everyone within the organization to suggest or recommend a change. I think this key aspect is of high importance for Kaizen to work within an
organization. In order for managers and executives to be able to implement Kaizen successfully, they have to be able to communicate, listen and encourage to their workers to bring ideas, changes and feedback to them. They have to make everyone be part of the team and feel appreciated for making a difference. The scope of the change or suggested improvement should be small enough to be measured and routinely checked but large enough to notice the value of the change. There is newly method of using Kaizen in which a particular issue is changed during a week’s time, this is known as “kaizen blitz”, and a limited scope is addressed. Kaizen focus on continuous improvement practices can be applied to a professional environment or to your own personal life. In terms of industries using Kaizen, it has been applied to many major industries such as healthcare, construction, life-coaching, banking and even government. Kaizen can be structured individually, in small groups, large working groups within the same department or cross-departmental.
Toyota is the company known for using Kaizen across the entire company. Toyota Production System is built around Kaizen methodology.

Implementation – Best Case: Toyota Production System

There are many books and case studies written about how to implement Kaizen successfully within a company or department but greatest and most factual example of implementing Kaizen is in Toyota.
Toyota Production System is built around the concept that all personnel in the line are empowered and expected to stop their ongoing production in case of any quality issue or abnormality and suggest, along with their supervisor, an improvement to resolve the problem. The main purpose of the implementation of Kaizen at Toyota is for the sole purpose of eliminating waste, could be due to overproduction, excess inventory or defects. The way Toyota was able to implement this innovative concept is to allow for continuous improvement from the people affected by that activity or task so that any employee can grow in a learning experience and be part of improving the state of the company.
The main cycle of Kaizen activity is defined as PDCA, also known as Shewhart cycle.
1. Plan – Establish the objectives and processes necessary to deliver results 2. Do – Implement the plan, execute the process, make the product 3. Check – Evaluate the actual results measured and collected based on “DO” and compare against the expected results. This outcome will provide with the difference and what you need for the next step 4. Act – Ask for corrective actions to be taken on the noticeable differences between actual vs. planned results
More importantly I think the five building blocks and elements of Kaizen is what made Toyota successful at implementing Kaizen. These five building blocks are teamwork, personal discipline, improved morale, quality circles and suggestions for improvement. Without the proper implementation and continuous encouragement of these elements, Kaizen cannot succeed within an organization. In my personal opinion and work experience, the implementation of these five elements can be very difficult as each department or individual has to put their own benefit aside and be genuine about the overall good of the company. This fundamental concept I perceive as the biggest challenge for Kaizen to succeed in today’s society. Individuals are looking for their gratification and personal gain instead of the collaboration and teamwork for the greater outcome of a company or community.
With the implementation of the Kaizen processes, Toyota became the largest car manufacturer in 2007 and was as profitable as all other companies combined.

Using Kaizen in your Personal life

For my own benefit in the execution of this blog, I purchased the book “The Kaizen Way” by Dr. Robert Maurer. In this book, Dr. Maurer uses the concept of Kaizen to walk through and teach the reader about how to improve their life by making small changes in your daily life that can improve your health, behavior, new skills or outlook of life. In the book, the author provides several life scenarios in which he improved the life of people’s health by using the Kaizen concept. In today’s society, everyone wants instant results whether is losing weight or making more money overnight. Dr. Maurer explains how long term results can be achieved through performing small actions, thinking small thoughts and asking small questions. Since I read the book, I have obtained great ideas and knowledge on approaching and resolving daily problems by following the Kaizen steps and techniques outline in the book. I recommend the book to anyone that would like to improve their life. Think small steps and you will succeed.

By: Ruben Martinez-Raposo

http://en.wikipedia.org/wiki/Kaizen
http://en.wikipedia.org/wiki/Toyota_Production_System
“Kaizen – Continuous Improvement”
http://www.thetoyotasystem.com/lean_concepts/kaizen.php
http://www.toyota-forklifts.co.uk/EN/company/Toyota-Production-System/Kaizen/Pages/default.aspx The Kaizen Way: one small step can change your life” by Robert Maurer, Ph. D