In many ways, project management is a recent craft; but one that has learned a lot from the world of old manufacturing processes. And project managers are constantly finding ways to implement the knowledge and experiences of 20th-century manufacturing to contemporary project management. With that in mind - lean project methodology is a great example!
Taking a few pages out of the book of lean manufacturing, we’ll have a look at what lean project management is in the first place. Following that, we’ll also see the benefits of lean project management in the modern project-oriented workplace.
About Lean Project Management
So, you must be wondering - what is lean project management at all? This is a logical process used in manufacturing, that can be boiled down to two simple goals: minimizing waste while maximizing value. Indeed, using this methodology properly - in concert with modern project management software - ensures that there will be no waste to be found in your projects.
At the same time, you can increase your profit margins while also achieving greater customer satisfaction! And you need only have a look at major companies like Motorola and Toyota to see the greatest lean project management examples. So, what kind of issues do managers face, that can be solved using this method? And, conversely, what are the basic principles of this project methodology?
Origins of Lean Management
In order to understand the lean project management principles, one must first understand the origins of this project management methodology. With that in mind, we venture all the way back to 1973.
Many first-world countries are shocked by the sky-rocketing oil prices; which were the result of a political dispute between Arab countries and Israel. At this time, many manufacturing companies dependant on petroleum (and all of them were, to some degree) report significant losses; many of them being forced to shutter their doors.
One of the countries particularly vulnerable to the rising oil prices was Japan; thus, a huge number of their companies faced significant issues due to the sudden inflation of these expenses. However, there was one company that proved to be a significant exception - Toyota. And this wasn’t a random fluke either.
The early-70s success of Toyota could happen because of the long-standing principles of this company; the principles we recognize as lean management today.
Since the end of WWII, the founders of Toyota led the company in accordance with the set of guidelines they dubbed the Toyota Production System. And this is basically the holy book of lean management.
These principles put the Toyota employees on a never-ending journey of improvement and inefficiency reduction in their work process. Thus, they were able to reduce the costs and lead-time in their manufacturing process, while also improving product quality and the satisfaction of their customers.
And thus, through the automobile industry, lean management was introduced into the western world of manufacturing theories. The waste elimination that Toyota managed was so undeniable, that it managed to lure all industries towards a lean management way of thinking; something that goes against pure mass production.
Principles of Lean Thinking
As the principles of lean thinking were slowly brought to the Western World, they also left the confines of pure manufacturing. By the middle of the 90s, the lean methodology would be applied to corporate management as well. A new set of best practices, tools, and management principles came into existence; that managed to improve the operational quality in corporate environments that weren’t necessarily based on retail-oriented manufacturing.
In order for a project to be considered Lean, it must use the absolute minimum in terms of space, labor, equipment, and materials, in order to produce the best possible results. Below, we’ll explore the core principles of this philosophy.
1. Specified Value
The most important lean principle is value specification. In other words, each service or product must have a defined and clear value; one that depends on its capability to satisfy a customer at the adequate price and at the right time - both of which are defined by the customer. Yes, the value is in the eyes of the customer. And extracting the best possible price for the value of the product is what this principle focuses on.
2. Identifying Product Value Streams
So, what is a value stream? In terms of lean management, this is the sum of every action that is currently needed to bring a product to market; from the state of raw materials to the finished product, or from a concept to the launch. The first practical thing that lean project management does is to make a map of the value stream, analyzing the worth of each step in the current process. Then, the manager proceeds to spot waste creation and produces a future-state map; one that depicts what the process should look like. After that, a plan for improvement is generated, enabling the transition from the existing plan to the one depicted in the future state.
3. Increasing Value Flow Via Waste Elimination
Once you have produced the value stream map and defined the value of the product, the following step includes the insurance of a continuous flow; one that has no interruptions, reworks, scraps or backflows. Having no waste and no stoppages is the most important credo here. While analyzing value streams, all work can generally be categorized into three types:
- Value-Added Work - these actions are deemed essential to the service or product. This is the category that brings the most customer value.
- Value-Enabling Work - this part of the flow represents actions that may be cut in the future, but cannot be eliminated in the given moment. Essentially, these are actions that are required to make the process run in its current state. Culture, environment, and technology dictate these activities.
- Non-Value Work - this is the type of action that can generally be eliminated without disrupting the workflow too much and doesn’t depend on the changing of different areas. Basically, the type of work nobody actually needs, representing complete waste. This should be eliminated as soon as possible.
Types of Waste
Generally, we can categorize all of the above-mentioned non-value work into these types:
- Overproduction - Obviously, producing a larger amount of anything than is needed at the given time;
- Waiting - Time spent waiting for parts, supplies, approvals, etc;
- Transportation- Time wasted in the process of transporting finished goods, parts, or materials between different processes;
- Inventory- Keeping a bigger inventory of finished goods, parts yet to be processed, or raw materials, than is needed.
- Defects- Parts of the process that have to be reworked or repaired.
4. The Customer Dictates The Flow
The trick here is not delivering any value before your customer actually wants it. And you definitely must not give your customers more than you initially agreed to, in terms of scope. In actual manufacturing, this is achieved using the so-called Kanban system. Within it, cards are used to herald the need for any particular part or item; which triggers the production, movement, or supply of any particular unit.
5. Constantly Strive To Improve
Finally, the last step entails the constant pursuit of perfection, leading to a long-term transformation of the team into a lean culture mindset. And seeing as true perfection is unattainable, in reality this means constant process improvement. So, in practice, every team member must question the merit and value of each activity in the production process.
Lean Project Management Benefits
The major benefits of lean project management are:
- It gets easier to make impactful changes in projects
- The overall quality of projects improves
- Invaluable tasks can be identified and eliminated easily
- Preempts unnecessary time consumption
- High customer satisfaction
Lean Project Management as a Solution
Let’s face it - time and money are extremely important for everyone in their everyday lives. But when it comes to manufacturing and project management; they become absolutely critical. These are two basic resources that managers have to keep in mind as they work on bringing their project to a successful conclusion. But how do you bring a hazy schedule and a shifty budget in line?
For many people, projects, and companies - lean project management was definitely the answer. A lot of studies, surveys, and conference reports suggest that about half of projects everywhere are over budget and/or behind schedule. Naturally, lean project management isn’t a magic spell that will solve all of this overnight. However, it does provide the structure needed for a disciplined approach, allowing a careful examination of each activity in the overall project lifecycle.
Such a thorough analysis of the production process reveals the holes that need to be plugged in the project and inefficiencies that have to be improved upon. Other traditional project management routines too often allow people to carry on working just like they always have; without nurturing a work culture that promotes constant waste elimination and efficiency growth. And a deep understanding of each step in the process helps to identify any waste or process steps that add no value, but simply exist as unquestioned and accepted parts of the overall process.
Frequently Asked Questions
Q. What is the lean method?
The lean method is the key factor as long as project management is concerned because it ameliorates processes and dwindles the wastage of time and resources. Basically, the lean method improves the odds of project success. With the help of it, project managers can achieve the best possible results with minimal use of available resources.
Q. How do you lean a project?
If you take a look at any given project and one to apply lean management methodology to it - you start by making a clear overview of every step currently found in the process. Then, you individually evaluate these steps in accordance with the lean management principles. Once you've deduced which steps in the process need to be altered, cut, or retained; you can start implementing such changes. After that, you'll be left with a project with no excess steps or resource drains - a truly lean one.
Q. How many lean principles are there?
There are five principles of lean management, each describing how one would go about introducing lean management principles in any project or work environment. While these principles were first intended to be used in manufacturing, they found their way into project management methodology as well.
Q. What is a good example of lean thinking?
Apart from Toyota which we've mentioned above, Intel was one of the first big companies to implement lean management principles in their production process. Seeing as they were always a giant in computer processor manufacturing, they needed to provide the market with a zero-bug product. And lean thinking allowed them to increase the quality of their products while simultaneously reducing time to market from three months to just ten days.
Q. Why do companies implement lean?
Companies all over the world implement lean management systems because these allow them to improve; both in terms of fiscal responsibility and in terms of product quality. Lean thinking gives corporations the opportunity to increase customer satisfaction while also cutting costs.
This kind of project management isn't just good for one specific product; if implemented over a longer period of time, it changes the corporate culture - steering it toward a constant need for improvement and extreme efficiency.
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