(c) 2001, C.C. Pace Systems , Six Sigma & Agile Page 1 Lean, Six Sigma & Agile: Putting It All...

(c) 2001, C.C. Pace Systemswww.ccpace.com Lean, Six Sigma & Agile

Lean, Six Sigma & Agile:

Putting It All Together

September 14, 2006


About Me

Arlen BankstonDirector, Lean-Agile Consulting

Six Sigma Black Belt

Certified ScrumMaster Trainer and Agile Methodology Coach

20 Lean and Agile projects implemented over past five years


Agenda Topics

I. Lean & Six Sigma in 10 MinutesII. The Case for CombinationIII. CC Pace’s ExperienceIV. Discussion


About You

Let’s take a moment to introduce ourselves:

What’s your name, company and job role?

How familiar are you with Lean, Six Sigma, and/or Agile?

What do you hope to learn from this discussion?


Some Common Questions…

Have you ever wondered…Am I choosing the “right” projects?

Will they result in improvements my customers will feel?

Do they fix the most critical issues in my business processes?

Are they oriented towards the long term?

Are they sub-optimizing locally, rather than improving globally?

Why do so many of my projects lack clear focus and objectives?

Why are IT projects so disconnected from the business processes they’re intended to support?

Who is my “customer?”

Is what my “customer” asks for all that I need to know?

How could a Lean Six Sigma effort with clearly defined objectives still fail during implementation?


I. Lean & Six Sigma in 10 Minutes


Process Improvement Origins

Why Were Lean and Six Sigma Developed?

Japanese developed many “Lean” techniques based on work by Henry Ford, Dr. W. Edwards Deming & others to compete with U.S. Auto manufacturers

Six Sigma was developed by Motorola to raise the standard of “Quality” to meet competitive pressures


Basic Concepts of Lean

Core Concepts:1. Value: What the customer is willing to pay for.

2. Value Stream: Actions that add value to a product or process.

3. Flow: The continuous movement of product, favoring single-piece flow and work cells versus production lines.

4. Pull: Replacing only material that is used and eliminating excessive inventory.

5. Continuous Improvement: A relentless elimination of waste on a never-ending basis.


4) Involve and empower employees

Lean Continuous Improvement Cycle

Continuously improve in the pursuit of perfection

1) Specify value in the eyes of the customer

2) Identify the value stream and eliminate waste

5) Continuously improve in the pursuit of perfection

3) Make value flow at the “pull” of the customer


Basic Concepts of Six Sigma

Six Sigma Is:1. A scientific method

2. A disciplined approach (DMAIC)

3. A management philosophy

4. Focused on breakthrough improvements

5. Reliant on data and correlation: Y=f (X1, X2, X3…Xn)

6. Sophisticated analytically, requiring complex training

7. Driven by executive level support

Core Concepts:1. Critical to quality (CTQ): What the customer wants

2. Defect: Failing to deliver what the customer wants

3. Process capability: What your process can deliver vs. customer CTQ

4. Variation: Process stability & consistency over time


Basic Concepts of Six Sigma (continued)

A 5 step approach founded on asking the right questions:1. Define: What is important to the customer?

What are their targets and acceptable limitations; anything else is considered defective

2. Measure: What is the frequency of defects? How many defects?

Capability: How is the process performing for the customers?

Entitlement: How good can the existing process be?

Gage R&R: How good is the data? Is it reliable?

3. Analyze: Why, when and where do the defects occur?Data driven analysis to prove what the root causes are

4. Improve: How can we fix the process/critical defects?How can root causes can be addressed?

5. Control: How can we ensure the process remains fixed?Develop controls to ensure process improvement is sustained


Lean or Six Sigma?

Lean Six Sigma

Which is better? Answer: Who Cares?

Convergence:

Commonality of both methodologies:Focus on the customerDrive toward understanding exactly what the customer wantsImprove processes by eliminating/reducing things that prevent the process from delivering exactly what the customer wantsRequire continuous effort to ensure improvements are sustained

Program Six Sigma Lean Thinking

Theory Reduce variation Remove waste

Application Guidelines

1. Define2. Measure3. Analyze4. Improve5. Control

1. Identify value2. Identify value stream3. Flow4. Pull5. Perfection

Focus Problem focused Flow focused

Assumptions A problem exists, figures and numbers are valued.System output improves if variation in all processes is reduced.

Waste removal will improve business performanceMany small improvements are better than system analysis.

Primary effect Uniform process output Reduced flow time

Secondary effects

Less waste.Fast throughput.Less inventory.Fluctuation – performance measures for managers.Improved quality.

Less variation.Uniform output.Less inventory.New accounting system.Flow – performance measure for managers.Improved quality


Agile Basics - Key Principles

Key Agile principles are:

Focus on customer value – Employ business-driven prioritization of features.

Iterative & Incremental Delivery –Create a flow of value to customers by “chunking” feature delivery into small increments.

Intense Collaboration – Face-to-face communication via collocation, etc; diversified roles on integrated teams.

Self Organization – Team members self-organize to fulfill a shared project vision.

Continuous Improvement – Teams reflect, learn and adapt to change; work informs the plan.

What is Customer What is Customer Value?Value?

The right product, for the The right product, for the right price, at the right right price, at the right timetime..

““The right product”The right product” is the is the product with exactly the product with exactly the features that the customer features that the customer wants. wants.

““The right price”The right price” is the is the price that customer believes price that customer believes is a fair deal.is a fair deal.

““The right time”The right time” is when is when the customer wants it. the customer wants it.

What is Customer What is Customer Value?Value?

The right product, for the The right product, for the right price, at the right right price, at the right timetime..

““The right product”The right product” is the is the product with exactly the product with exactly the features that the customer features that the customer wants. wants.

““The right price”The right price” is the is the price that customer believes price that customer believes is a fair deal.is a fair deal.

““The right time”The right time” is when is when the customer wants it. the customer wants it.


Agile: A Lean Execution Engine

Agile methods can be interpreted as a Lean approach to IT project management and execution.Lean Principle / Practice Agile Principle / Practice

KaizenContinuous improvement

Iteration Planning SessionsProcess & Project Reflections

KanbanInformation radiation and project transparency

Product backlogsIteration backlogs Daily StandupsBurndown chartsProject and quality sliders Automated test dashboards

Setup reductionAdaptability to rapid change

Automated buildsContinuous integrationTest-driven developmentAutomated testing

Takt timeDelivery based on customer demand

Iterative development cyclesIncremental development

Work cellsCo-located resources for a given task

Cross-functional teamsCollaborative team environmentsGeneralizing specialist rolesPair Programming


Lean Execution via Agile: The Mechanics

Agile practices include:

Release Planning (1)(creates Product backlog)

Iteration Planning (2)(creates Iteration backlog)

Daily Standup

Fixed-length iterations and small releases

Feature Review (3)

Process Reflection (4)

Identify top-priority Identify top-priority items and deliver items and deliver them early and them early and

often.often.


II. The Case for Combination


Why CC Pace Combined Lean & Agile

There are many common barriers to Agile adoption across an enterprise:

Large, complex projects Many projects in flight

Multiple projects per performerRigid functional roles

Rewards based on legacy process complianceLack of IT and business alignment

Lean concepts offered proven solutions to these issues:

Lean Project Portfolio Management

Driven by Lean goals and metrics

Minimized Work in Process (WIP)

Lean Staffing & Scheduling

Dedicated, cross-functional teams

Alignment by platform and value stream

Lean Human Performance Management

Rewards based on business results

Support for generalizing specialist career paths


Process Management Maturity Curve

No process measurement or control

No process measurement or control

Some breakthrough improvement

s

Some breakthrough improvement

s

Many incremental

improvements

Many incremental

improvements

Pilot Program• Identify & map

core value streams and processes

• Select diverse portfolio of pilot projects

• Launch LSS pilots

• Measure & adapt LSS structure appropriately

• Integrate LSS into organizational fabric

Pilot Program• Identify & map

core value streams and processes

• Select diverse portfolio of pilot projects

• Launch LSS pilots

• Measure & adapt LSS structure appropriately

• Integrate LSS into organizational fabric

Lean Six Sigma Projects

• Focus on major value streams

• Address root causes of process problems

• Refine LSS metrics and support structures

• Generate value!

Lean Six Sigma Projects

• Focus on major value streams

• Address root causes of process problems

• Refine LSS metrics and support structures

• Generate value!

Continuous Improvement Culture

• Measurements drive and direct change

• Kaizen events implement changes quickly

• Performers identify and address waste within their own work

• Culture is focused on striving towards -- but never reaching -- perfection

Continuous Improvement Culture

• Measurements drive and direct change

• Kaizen events implement changes quickly

• Performers identify and address waste within their own work

• Culture is focused on striving towards -- but never reaching -- perfection

Time

Matu

rity


IT and the Lean Rate of Change


Lean at Three Levels

Lean EnterpriseBusiness alignment with and optimization of value streams.

Lean IT OrganizationAn IT organization that can support a Lean rate of change.

Lean Project ExecutionProjects that use Agile to adapt to change, focus on customer needs and deliver value incrementally.

Driv

es

En

ab

les

Su

pp

orts

En

ab

les


Agile’s Contributions

Agile execution of process improvements yields:Direct, continuously updated linkage to the Voice/Heart/Soul of the Customer

Ability to handle change beyond initial process analyses

Minimized risk by accelerating time-to-value through iterative development and incremental delivery

Close coordination between Business and IT

Focus and refinement of recommended improvements at the implementation level

An ideal platform for innovation and new product introduction

Support for whole-of-life product maintenance and continuing development


How Agile Supports Lean Alignment

Lean IT Organization

AgileProject

Continuous Improvement...Value Stream

Incremental

Iterative

Adaptive

Value

TrueNeed

Original Goal

Reg

ulat

ory

Cha

nge

Com

petit

ive

Adv

ance

Reo

rgan

izat

ion

Val

ue

Fee

db

ack

Agile Projects support true IT alignment with value streams; Lean IT Organizations support Agile Projects.


Lean Six Sigma’s Contributions

Lean Six Sigma provides a number of advantages to Agile project execution:Directed portfolio design

Select projects based on critical process constraintsAlign projects across functional silos

Grounded project vision and clear focusInitial Product BacklogsInsight into rationale underlying requirements

Stronger business casesQuantitative assessment of feature valuesClear linkage of IT efforts to business benefits

Means to measure successKey metrics identified for a particular processMeasurement and control system in place


Why Combine Lean Six Sigma & Agile?

Together, Lean Six Sigma and Agile:

Support incremental improvements with a process designed around iterative delivery

Tighten feedback loops in process management and improvement efforts

Accurately measure value generation and strongly link to strategic operations

Align project portfolios with true, grounded business needs

Improve execution speed of process improvement initiatives


How Might a Combined Approach Work?

Most simply:Lean Six Sigma projects provide initial definition and analysis of process areas

Tackle large, complex process issues

Provide grounded business cases and clear focus

Provide metrics to define success

Agile projects are spawned in the “Improve” phaseUtilize output from LSS projects to form Product Backlog

Members from LSS team are involved in execution

Adjustments are made as necessary to initial LSS analyses based on exploratory and production data influx

Much richer interactions can be imagined as both techniques are adopted throughout an enterprise…


Tricky Issues

Implementation can face many challenges:

Process perspective in IT organizations

Roles and responsibilities of Lean/Six Sigma and Agile champions and performers

Balance of analysis and execution

Meaningful metrics for project value

Human performance management rewarding proper behavior

All of the standard Lean Six Sigma & Agile barriers…


III. CC Pace’s Experience


CC Pace’s Experience

Lean Project Portfolio Management Analysis

Lean Staffing & Scheduling Analysis

Lean New Customer Acquisition Analysis & Improvement

Lean Six Sigma Access Control Risk Management Analysis

Lean-Agile Maturity Assessments

Lean Six Sigma Marketing and Production Services Analysis

Lean Six Sigma Enterprise Process Mapping


IV. Discussion


Contact Information

Arlen [email protected]

PHONE: 703 / 631.6600

WEB: http://www.ccpace.com

MAIL: 4100 Monument Corner Dr., Suite 400

Fairfax, VA 22030

(c) 2001, C.C. Pace Systems , Six Sigma & Agile Page 1 Lean, Six Sigma & Agile: Putting It All...

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