Toyota is one of the world’s most successful companies with 330,000 staff and a value of $193 Billion. Toyota leaders often say that their steady growth from a small car company to the world’s biggest auto maker is due to the Toyota Production System (TPS). TPS, commonly known as Lean Production, is renowned for its focus on reducing waste to improve customer value.
“All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” Taiichi Ohno, Toyota.
In my experience traditional Information Technology groups have a lot of waste that goes unrecognised because it’s not physical and thus not easily seen.
“The most dangerous kind of waste is the waste we do not recognise” Shigeo Shingo, Toyota
In this article I will show you how to see waste in your IT group so you can reduce it. This is worth doing because every dollar of waste saved is a dollar available for profit or value add.
The cause of waste
In Lean, waste (Muda) is understood to be caused by uneven work flow (Mura) and unreasonable demands (Muri). If we make the work flow smooth and reasonable then waste diminishes. If we reduce waste without making the work flow smoothly the waste comes back.
In traditional IT groups uneven workflow is caused by doing work in big waterfall projects with different stages performed by different specialist groups. This uneven workflow leads to unreasonable demands on people which leads to high stress, waste, delays and defects.
Agile is in many ways a re-invention of Lean thinking in IT. In Agile “our highest priority is to satisfy the customer through early and continuous delivery of valuable software.” When we apply this principle by implementing Scrum and Kanban we smooth our workflow which reduces unreasonable demands and waste.
Agile recognises the importance of making workloads reasonable in the principle that “Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.”
Types of waste
Uneven workflow and unreasonable demands cause several different types of waste. In the language of IT these wastes are:
- Over production of system features,
- Over engineering (over processing),
- Large amounts of work in progress (excess inventory),
- Frequent delays (waiting),
- Excessive handover delays and costs (transport),
- Inefficient work practices (motion) and
- Large amounts of rework to fix defects.
In manufacturing over production is making too many products before they are actually needed. Over production ties up capital in work in progress and excess product, takes up space and increases support costs. This reduces profit and the money available to build other products that customers want.
In IT over production means building and supporting features that are rarely or never used. In a 2002 study, the Standish Group found that in traditional waterfall software projects 64% of typical system features were rarely or never used.
Over production of features occurs often in traditional IT because stakeholders are only given one opportunity to present their system needs every 5 to 10 years. Recognising that this is their only chance, stakeholders specify everything they’ve ever dreamed of with the hope that it will deliver value. IT project teams take the requirements without question on the basis that stakeholders understand what users need.
The principles of Lean Manufacturing require that we make what the customer wants when they want it, pulling only what is ordered through your work flow. We can do this in IT by re-organising our work to deliver small batches of features frequently with cross functional teams that have a short cycle time from feature request to delivery combined with a customer feedback loop to determine if users really want what we delivered or need something else instead. This aligns well with one of the key principles of Agile IT which is that “our highest priority is to satisfy the customer through early and continuous delivery of valuable software”. For guidance on how to implement a customer feedback loop take a look at The Lean Startup.
In subsequent posts I will examine the other wastes and how they translate to IT.