Traditional Versus Lean Project Management Techniques Information Technology Essay

Project management is a structured approach towards managing projects. It is defined as “The application of knowledge skills, tools and the techniques to project activities in order to meet stakeholder’s needs and expectations from a project” (Burke, 2003). “The project management team is responsible for finding methods of meeting the control budgets and schedule rather than justifications for not meeting them” (Ballard and Howell, 1997). Developing a fully integrated information and control system to plan, instruct, monitor and control large data amounts, quickly and accurately for problem solving and decision making will determine the success of the manager. Projects are temporary production systems. Production is defined as designing and making things. Designing and making something for the first time is done through a project, which is arguably the fundamental form of production system. Three fundamental goals of production systems are (Ballard and Howell, 2003) –

Deliver the product

Maximize value

Minimize waste

Lean Project Management

Performance improvement for competitive advantage is a general characteristic of practitioners in most industries (Porter, 1985). In project management for satisfactory performance the consideration of time, cost and quality is not adequate. Performance is described in terms of attaining value effectively and efficiently where effectiveness is maximising value of output whereas, efficiency refers to minimising or elimination non value-adding items in production.

“Beside a stream, don’t waste water, even in a forest,

don’t waste firewood.” – Chinese Proverb

The systems those are structured to deliver the product while maximizing value and minimizing waste, are said to be lean projects (Ballard and Howell, 2003). Lean is the term originally coined in 1990 by Womack, Jones and Roos to describe the Toyota Production System (Reeves, 2007). A production system which was capable of producing more and better vehicles in less time, less space and using fewer labour hours was given the name ‘Lean’. Organizations can reduce project timelines and costs by eliminating waste and focusing on value creation for the customer. The bottom line with lean is: if the action does not provide value to the end customer then it is waste.

“Lean refers to a general way of thinking and specific practices that emphasize less of everything – fewer people, less time, lower costs” (Reeves, 2007). Lean project management has been constructed by drawing together two approaches: management of projects and lean production. For project management performance improvement, the management of project focuses on meeting customer needs effectively while lean production aims at meeting customer needs efficiently utilised in lean project management. The justification of lean production with management of project is done at the methodological level (Horman and Kenley).

Lean Project Management Methodology

Management of Projects Methodology

Lean Production Methodology

Figure 1: Generation of Lean Project Management Methodology

Fig. 1: Generation of Lean Project Management Methodology

Lean product development helps improve a company’s competitive advantage. Its application in the automobile industry has brought significance performance improvement. But this does not mean that lean production is applicable to only automobile industry. Many non manufacturing companies like the one those are involved in product development, transportation, accounting, hospital, sales, administration, vehicle repair and many others are making use of the lean principles. There are five traditional lean principles that are applicable outside the automobile industry (Womack and Jones, 2003) –

value to the customer

value stream to provide the product or service that the customer values

seamless flow of the product or service

pull mode- provide the customer with the product or service in a timely fashion

perfection for continuous improvement

Traditional versus Lean Project Management Techniques

Lean project management differs from traditional project management in the goals it pursues, the structure of its phases, the relationship between phases and the participants in each phase.

The traditional production methodology manages conversion of an input to an output. Lean production is managing the production process by converting input to output, by minimising the input flow waste and maximising the value of the output efficiently. Thus the lean production methodology has flow management and management of value in addition to the input, conversion and output of the conventional project management technique.

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The traditional approach focuses on efficiency rather than value, whereas in lean production the focus is on minimising waste (efficiency) and maximising value of output (effectiveness).

Under lean production with the introduction of the notion of value, effectiveness is expanded. In the traditional approach, value is not given much importance. Customer’s requirements are compromised which extends barely further than market requirements and lowering costs. Lean production emphasises on maximising the value of output by satisfying the customer’s specific requirements.

The change in the production management from conventional to lean production management is because:

Inappropriate control mechanisms and performance improvement efforts are used in conventional methodology.

Poorly understood and addressed quality under traditional method.

These show poor efficiency and effectiveness in the production process which roots from inadequate understanding of the production process. The change in production method from traditional to lean was to add to the existing approach and make it more appropriate for contemporary and complex production systems.

Lean Product Development

Lean product development encompasses numerous inter-related techniques. The first technique is supplier involvement. Instead of being involved for detailed design specification, suppliers are involved from the beginning of a new product. Since it is the responsibility of the suppliers to develop complete modules for the product, often without detailed specifications, black box engineering is used.

Second technique is simultaneous engineering which means performing different activities parallely in the development effort. Parallel development helps reduce time.

Another technique is the use of cross-functional teams which consists of members from different functional areas in the company, to facilitate the development of products that are easy to manufacture and assemble. This technique aims at integrating rather than coordinating all the functional aspects in the product from the beginning. When individuals work together to develop a new product, the physical proximity that arises results in the team being integrated.

To improve communication, create stronger commitment towards the project and bringing focus for cross-functional problem solving, one should use the heavyweight team structure where the project manager has direct access to and is responsible for the work of all those involved. Instead of detailed specifications because of visions and objectives the whole project is straegically managed.

Even though a company implements these techniques, it does not achieve lean product development in a simple way, for successful lean product development the company has to approach these interrelated techniques as a whole.

Techniques other than Lean Product Development

Lean is a continuous process improvement technique that can be used to evaluate, analyze and improve how a company delivers values to its customers. However this is only one of the several approaches, some other techniques are six sigma and theory of constraints (TOC). Lean focuses on the flow of value to a company’s customers whereas six sigma focuses on individual problems, which shows the company’s ability to satisfy the customer’s needs and TOC focuses on the constraints and how to minimize those to improve the volume of throughput within a system. Another technique is lean six sigma – which combines the analytical tools of six sigma with the speed and customer value focus of lean to optimize the improvement process. For companies undertaking continuous improvement initiative, it is important for them to first determine the goal, and then apply the appropriate method to achieve the goal.

Lean Project Delivery System

Theoretical and practical investigations led to the emergence of the Lean Project Delivery System emerged in 2000. It is in the process of on-going development through experimentation. The job of the project delivery system is not only fulfilling the customer needs, but also help the customer decide their needs. It is necessary to understand the customer’s purpose and constraints, exposure of customer to alternative means for accomplishing their purposes and help them understand the end results of their desires.

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The lean project delivery system model consists of four phases: Project Definiton, Lean Design, Lean Supply and Lean Assembly. The four phases are a set of interconnecting triads, where some downstream activity takes place from the subsequent phase in each triad.

Alteration & Decommissioning

Commissioning

Fabrication & Logistics

Product Design

Design Concepts

Purposes

Detailed Engineering

Design Criteria

Operation & Maintenance

Installation

Process Design

Use

Lean Assembly

Lean Supply

Project Definition

Lean Design

Work Structuring

Production Control

Learning Loops

Fig. 2: Lean Project Delivery System.

Project Definition

Project definition is the first phase in project delivery system which consists of determining the purposes (customer and stakeholder purposes and values), design criteria for translating those purposes for both product and process, and design concepts against which purposes and criteria can be tested and developed. The movement through these three need not follow any specific sequence, although the logical starting point seems to be the purpose.

To reveal to stakeholders the consequences of their needs and different value generation possibilities, the cycle through these three modules is necessary. The involvement of stakeholders is a must for the best outcome from the project definition phase. Typical stakeholders can be the client (holds the contract), users of the facility, governing agencies, designers, installers, operators, fabricators, etc. The Lean Design phase should be launched only after bringing the three modules of project definition into alignment. (Project Definition Process: Appendix 1)

Lean Design

The alignment of values, concepts and criteria is the gate between Project Definition and Lean Design. At the functional systems level, developing and aligning product and process design can lead towards Lean Design. If at all the search for value reveals opportunities that are consistent with customer and stakeholder constraints, the project may go back to Project Definition stage. In order to allow more time for developing and exploring alternatives, the decisions are deferred systematically until the last responsible moment. This differentiates the Lean Design from the traditional practice of selecting options and executing design tasks as soon as possible causing rework and disruption because of conflicts in decisions made by specialists.

Lean Supply

Lean Supply consists of detailed engineering, fabrication, and delivery. To know what to detail and fabricate, and when to deliver the components, the system requires prerequisite product and process design. Also Lean Supply helps reduce the lead time for information and materials.

Lean Assembly

Lean Assembly begins with the delivery of materials and the relevant information for their installation. When the client has beneficial use of the facility, which typically occurs after commissioning and start-up the assembly completes.

Comparison of Lean and Non-Lean Project Delivery System

Lean

Non-Lean

Focuses on production system

Focuses on transactions and contracts

Transformation, flow and value goals

Transformation goal

Downstream players involved in upstream decisions

Sequential decisions by specialists thrown over the wall

Product and process designed together

Process design begins after product design is complete

Considers all product life cycle stages in design

Not all product life cycle stages are considered

Activities performed at last moment

Activities performed as soon as possible

Systematic efforts to reduce supply-chain lead times

Separate organizations link together through the market and take what the market offers

Incorporates learning into project, firm and supply-chain management

Learning occurs periodically

Stakeholders interests aligned

Stakeholders interests not aligned

Sized buffers located to perform their function of absorbing system variability

Sized buffers located for local optimization

-(Ballard and Howell, 2003)

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The Difficult Path to Lean Product Development

Lean product development is not an easy thing to do. Several factors can hinder attempts to achieve lean product development. The different factors are:

Cross-functional team is a technique that helps an organization in lean product development. They might be having a positive impact on the development effort, but creating cross-functional teams is a difficult task. Even today development is regarded to be a task for the Research and Development department, this shows lack of cross-funtional focus in the organization which ultimately leads to difficulty in creating cross-funtional integration.

Simultaneous engineering is another technique towards lean product development, but working with concurrent activities and thus overlapping phases in the development effort is a very complicated task. It is impsossible for the individual engineers to perform simultaneous activities.

Coordination of the lean product development effort is not an easy task. For coordination, regular meetings with the whole group needs to be held which is a time consuming activity. If the size of the group is large it resulted in longer meetings with repeated discussions and it may also happen that individuals from one department may find it difficult to understand discussions on issues on other department than the one he is from.

Organizations face difficulty in coordinating a visionary-led development project, where visions also create problems. Requesting for detailed design specifications disturb the visionary-led projects.

For any project, the suppliers must be involved from the beginning of he project, which results in difficulties for the suppliers to give detailed estimate of costs demanded by the top management. The desire to have the flexibility of black box engineering and known cost of the detailed estimate approach, obstructs a lean process.

Hindering factors are more easily identified. Other than the hindering factors in the process of implementing lean product development, there are some supporting factors, which helps in the implementation of lean product development (Appendix 2)

Benefits

Despite lean being originated in manufacturing, it is now applied in many other business areas including product development, administration, accounting, project management and many others, because of its generic approach of eliminating waste to create more value for customer. A variety of lean product development techniques when applied to project management can reduce project timelines, increase customer value and reduce costs. Some other benefits of lean project management are, it helps increase the productivity, higher quality products, reduction in order processing errors, etc.

Conclusion

An alternative method to project management is lean project management. The lean approach to project management has worked successfully in potentially difficult and complex areas. The approach contributes to project management performance by focusing on the effectiveness and efficiency of delivering value that is satisfying client needs. Its implementation offers the potential for faster product development with fewer engineering hours, improved manufacturability of products, higher quality products, fewer production start-up problems, and faster time to market.

Lean implementations have also yielded improvements in the value generated for clients, users and producers, and also a reduction in waste, including waiting time for resources, process cycle times, inventories, defects and errors, and accidents. It also led to a high level of commitment and motivation from the team, and to the satisfaction of the client organization. Lean thinking when paired with an appropriate agile development methodology can provide significant benefits to an organization. It has the advantage of reducing risk to the client, with the right balance of quality, performance and value for money.

Lean product development is the beginning of the journey of continuous improvement. Lean techniques are not simply management tools but rather they embody a culture that needs to be enforced from the top leadership down throughout the company. Systematic implementation of lean in all areas of project management will yield benefits that other improvement methods cannot.

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