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1 Lean Management Principles for Information Technology Gerhard J. Plenert CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Croup, an Informs business

2 Contents Preface Acknowledgments Introduction xv xvii xix Why Information Technology (IT)? SECTION I a Book on Lean Chapter 1 Why Look at IT? What Is the Problem? 3 So What Does Lean Bring to the Table? 6 What Does an IT System Look Like? 8 IT Issues to Avoid 15 A New Directive for IT Organizations 19 Summary 20 Chapter 2 IT Background 21 The Twenty-First Century Enterprise 22 The IT Evolution 25 The Enterprise Role of IT 30 The Twenty-First Century Enterprise and IT 32 Case Study: Wipro 38 Summary 38 Chapter 3 Are We "Doing the Right Things"? 43 A3 Problem Analysis 44 The A3 Steps 45 "Team Members" Box 46 "Approval Information/Signatures" Box 48 "Clarify and Validate the Problem" Box 49 "Perform a Purpose Expansion on the Problem" Box 51 "Break Down the Problem/Identify Performance Gaps" Box 53 vii

3 viii Contents "Set Improvement Targets" Box 55 "Determine Root Cause" Box 57 "Develop Improvement Task List" Box 59 "Execute Improvement Tasks" Box 61 "Confirm Results" Box 63 "Standardize Successful Processes" Box 63 Using the 9-Step A3 Tool 64 What Loop Am I In? 66 Case Study: Wipro (Continued) 67 Summary 69 Chapter 4 The Art of Managing Change 71 A Discussion of Change 72 Models for Change 74 Innoveering 76 How Do We Manage Change? 79 The People 80 Key Point 1: The Circle 82 Key Point 2: Goal Setting 83 Key Point 3: Leadership 85 Key Point 4: Values and Ethics 85 Key Point 5: Add Value to Society as an Enterprise 88 Key Point 6: Continuous Learning 89 Key Point 7: Innovation and Change Creation 90 Key Point 8: Measuring/Rewarding 92 Key Point 9: Stakeholders 94 Successful Change Management 95 Some Models for Change 96 Model I: Quality Functional Deployment (QFD) 100 Model II: Total Quality Management (TQM) 102 The TQM Process 102 Systematic Problem Solving (SPS) at AT&T 106 The Good News about TQM 107 Model III: Process Reengineering (PR) 108 Model IV: ISO 9000 Model V: Change Acceleration Process (CAP) Model VI: Kotter 113 Model VII: USAF 8-Step 113 Ill Ill

4 Contents ix Understanding Change 115 IT Pitfalls 118 Case Study: Wipro (Continued) 119 Summary 119 SECTION II Bringing Lean into Information Technology (IT) Chapter 5 How Can Lean Help IT? 123 Leaning IT 124 Measurable Benefits of Applying Lean to IT 128 How IT Is Changing 133 Case Study: Wipro (Continued) 139 Some Final Thoughts 139 Chapter 6 What Is Lean? 141 Defining Lean 142 The Key Principles of Lean 147 Define "Value" from the Customer's Perspective 148 Define the Process by Looking at and Analyzing All the Pieces of the SIPOC 148 Remove Obstacles (Bottlenecks) That Disrupt the Value Flow 150 Drive Product and Service Flow at the "Pull" of the Customer 150 Empower Employees in the Change Process through Teaming 151 Build a Strategic Plan 151 Lean Tools 151 Acceptance Tools 154 Acceptance Tool #1 Breakthrough Thinking/ Concept Management/Purpose Expansion 154 Acceptance Tool #2 Team Effectiveness Surveys 161 Goals and Objectives 161 Roles and Responsibilities 162 Enthusiasm and Motivation 162

5 x Contents Trust and Openness 162 Leadership and Direction 162 Information and Communication 162 Acceptance Tool #3 Change Readiness Surveys 163 Acceptance Tool #4 Myers-Briggs 164 Acceptance Tool #5 JoHari Window 171 Technical Tools 1?5 Technical Tool #1 7 Wastes 176 Overproduction 176 Waiting 177 Unnecessary Transportation 177 Overprocessing 178 Excess Inventory 178 Unnecessary Movement by Employees 178 Production of Defective Parts 179 Underused Employee Abilities or Creativity 179 Technical Tool #2 Value Stream Mapping (Current State/Ideal State/Future State) 180 Mapping the Process 181 Preparation 182 Mapping Process 182 Ideal State Value Stream Map/Future State Value Stream Map 187 Develop an Action Item List of Improvement Opportunities 188 Classify the Action Item List 188 Select Improvement Events Based on the Highest Priority Areas of Improvement 191 Technical Tool #3 SIPOC (Supplier/Input/Process/ Output/Customer) 191 Technical Tool #4 SWOT (Strengths/Weaknesses/ Opportunities/Threats) 192 Technical Tool #5 VOC (Voice of the Customer) 193 Technical Tool #6 Systems Flowchart/Information Flow Diagrams 194 Technical Tool #7-Gemba Walk (Go and See Analysis) 195 Technical Tool #8~B-SMART Targets 197 Technical Tool #9 JIT (Just-In-Time)/Kanban/Cells...198

6 Contents xi Technical Tool #10 Spaghetti Chart 199 Technical Tool #11 Lean Events/RIE (Rapid Improvement Events)/Kaizen Events 200 Technical Tool #12 Improvement Project 201 Technical Tool #13 Just-Do-It 202 Technical Tool #14 5S 202 Sort 203 Set in Order (Straighten) 207 Shine 210 Standardize 211 Sustain 212 A Sixth "S" Safety 212 Technical Tool #15 Poka-Yoke 214 Technical Tool #16 Six Sigma/DMAIC 215 Technical Tool #17 TPM (Total Product Maintenance) 220 Technical Tool #18 Standard Work 221 Technical Tool #19 5 Whys 222 Technical Tool #20 Brainstorming 223 Technical Tool #21 Fishbone Charts 224 Technical Tool #22 Pareto Charts 225 Technical Tool #23 Affinity Diagrams 226 Technical Tool #24 Control Charts 227 Technical Tool #25 PICK (Possible, Implement, Challenge, Kill) Chart/Impact/Effort Matrix 230 Technical Tool #26 Theory of Constraints (TOC)/ Bottleneck Analysis 233 Management Philosophy 233 Operating Principles 234 Technical Tool #27 Project Charter 236 Sustainment 237 Comparison of Methods 238 Some Success Stories 238 Case Study: Wipro (Continued) 241 Summary 241 Appendix 6-A 244 The JoHari Window Assessment Test 244 Directions 244 Interpretation 245

7 xii Contents JoHari Window Test 247 Chapter 7 Are We Working We Creating More Problems? on the Correct Problem? Or Are A Quick Review of A3 Problem Analysis 250 The A3 Steps 250 The Two Case Examples 251 Case#l 253 Project Charter 254 Facilitator Activities 256 Event Pre- Work 258 Event Execution 259 Contents of the A3 267 Post-Event Activities 267 Case #2 270 Project Charter 271 Facilitator Activities 274 RIE Event Pre-Work 275 Event Execution 276 Post-Event Activities 281 Using the 9-Step A3 Tool 282 Summary 283 Chapter 8 The Lean IT Event The RIE The Role of the Facilitator 287 Lean Training 287 Lean Tools 289 How the Lean Process Works 289 Acceptance Stage 289 Technical Stage 290 Sustainment Stage 291 Case Study: Wipro (Continued), 291 Summary 292 Chapter 9 Meaningful Metrics The Role and Purpose of Measures

8 Contents xiii The Role and Purpose of Control Systems 297 An Industrial Example Managing Your Supply- Chain Using Event Management 298 Defining the Measurement System 304 What Is the Best Measure for Your Organization? 306 Measurement Reporting Tools 307 Summary 308 SECTION III Lean Information Technology (IT) on into the Future Chapter 10 IT Maturity 313 Evaluating Your World-Class Status 314 IT Best Practices 325 Summary 328 Chapter 11 Wrap-Up 329 Bibliography 333 Index 337 About the Author 343

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