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(c) 2001, C.C. Pace Systemswww.ccpace.com Lean, Six Sigma & Agile Page 1
Lean, Six Sigma & Agile:
Putting It All Together
September 14, 2006
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(c) 2001, C.C. Pace Systemswww.ccpace.com Lean, Six Sigma & Agile Page 2
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
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Agenda Topics
I. Lean & Six Sigma in 10 MinutesII. The Case for CombinationIII. CC Pace’s ExperienceIV. Discussion
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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?
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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?
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I. Lean & Six Sigma in 10 Minutes
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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
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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.
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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
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Basic Concepts of Six Sigma
Six Sigma Is:1. A scientific method2. A disciplined approach (DMAIC)3. A management philosophy 4. Focused on breakthrough improvements5. Reliant on data and correlation: Y=f (X1, X2, X3…Xn)6. Sophisticated analytically, requiring complex training7. Driven by executive level support
Core Concepts:1. Critical to quality (CTQ): What the customer wants2. Defect: Failing to deliver what the customer wants3. Process capability: What your process can deliver vs.
customer CTQ4. Variation: Process stability & consistency over time
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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
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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
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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.
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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
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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.
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II. The Case for Combination
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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 ManagementDriven by Lean goals and metricsMinimized Work in Process (WIP)
Lean Staffing & SchedulingDedicated, cross-functional teamsAlignment by platform and value stream
Lean Human Performance ManagementRewards based on business resultsSupport for generalizing specialist career paths
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Process Management Maturity Curve
No process measurement or control
Some breakthrough improvement
s
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
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
Time
Mat
urit
y
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IT and the Lean Rate of Change
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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.
Drives
Enab
les
Supports
Enab
les
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Agile’s Contributions
Agile execution of process improvements yields:Direct, continuously updated linkage to the Voice/Heart/Soul of the CustomerAbility to handle change beyond initial process analysesMinimized risk by accelerating time-to-value through iterative development and incremental deliveryClose coordination between Business and ITFocus and refinement of recommended improvements at the implementation levelAn ideal platform for innovation and new product introductionSupport for whole-of-life product maintenance and continuing development
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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
Valu
eFe
edba
ck
Agile Projects support true IT alignment with value streams; Lean IT Organizations support Agile Projects.
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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
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Why Combine Lean Six Sigma & Agile?
Together, Lean Six Sigma and Agile:Support incremental improvements with a process designed around iterative deliveryTighten feedback loops in process management and improvement effortsAccurately measure value generation and strongly link to strategic operationsAlign project portfolios with true, grounded business needsImprove execution speed of process improvement initiatives
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How Might a Combined Approach Work?
Most simply:Lean Six Sigma projects provide initial definition and analysis of process areas
Tackle large, complex process issuesProvide grounded business cases and clear focusProvide metrics to define success
Agile projects are spawned in the “Improve” phaseUtilize output from LSS projects to form Product BacklogMembers from LSS team are involved in executionAdjustments 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…
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Tricky Issues
Implementation can face many challenges:Process perspective in IT organizationsRoles and responsibilities of Lean/Six Sigma and Agile champions and performersBalance of analysis and executionMeaningful metrics for project valueHuman performance management rewarding proper behaviorAll of the standard Lean Six Sigma & Agile barriers…
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III. CC Pace’s Experience
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CC Pace’s Experience
Lean Project Portfolio Management AnalysisLean Staffing & Scheduling AnalysisLean New Customer Acquisition Analysis & ImprovementLean Six Sigma Access Control Risk Management AnalysisLean-Agile Maturity AssessmentsLean Six Sigma Marketing and Production Services AnalysisLean Six Sigma Enterprise Process Mapping
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IV. Discussion
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Contact Information
Arlen [email protected]
PHONE: 703 / 631.6600
WEB: http://www.ccpace.com
MAIL: 4100 Monument Corner Dr., Suite 400Fairfax, VA 22030