This is the latest content of our Technology Briefing from march 09.

1. Quarterly Technology Briefing “Lean Times Require Lean Thinking” presented in partnership with

2. Lean Times Require Lean Thinking Jason Yip ThoughtWorks Paul Heaton KM&T Image from http://www.bluefountainmedia.com/blog/?p=38

3. “ As the Japanese economy entered a steep recession in that year, the Toyota Motor Company ran out of cash , which was tied up in inventory for products customers no longer wanted. The company fell under the control of bankers who chopped the company in two, creating separate firms to divide the marketing and sale functions from the product development and production functions. (These firms were only recombined in 1982 to create the current Toyota Motor Corporation.) Founding president Kiichiro Toyoda (new president Akio Toyoda’s grandfather) was driven out in the process . The pursuit of what became the Toyota Production System , along with the product development, supplier management, and customer support systems, was the creative response to this crisis .” James Womack, Respect Science Especially in a Crisis, http://www.manufacturingnews.com/news/09/0309/womack.html

5. What happened since then?

6. In 2008, Toyota surpasses GM as the world’s largest auto maker Toyota and Honda lead in J.D Power quality ratings

7. “ Our recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern ” General Motors SEC filing, 2009

8. Who would you rather be?

9. Is this really relevant to us?

13. Agile Toyota Honda New product development Scrum XP Lean Lean Software Development Iterative and Incremental development Kanban

14. So, what is Lean?

17. The essence of Lean is engaging everyone in identifying and solving problems

18. Activities that do not add value workload that is not balanced work that creates burden for the team members or processes Picture Source – Toyota Motor Company Australia Waste Un-Evenness Overburden

19. 8 WASTES Over- production Waiting Transport or Conveyance Rework Motion Stock & Materials Over- processing In LEAN 8 types of waste have been identified These classifications have been adopted globally - for any process. They apply equally to any process . All of these 8 can be either “ Necessary Waste” or “ Un-necessary Waste” Depending on circumstance Not using People Resource

28. How does this fit with IT?

29. Understanding of problem space Understanding of solution space Focus Business as Usual +++ (specification as input) +++ (focus on task efficiency) Cycle time + cost reduction Typical projects + (iterative specification) ++ (control what needs to be learned) Earlier ROI New Product Development ? (specification as output) ? (focus on learning efficiency) Acquire and exploit knowledge faster than competitors

30. “ Put yourself in the position of the customer and ask if you would pay less for the product or be less satisfied with it if a given step and its necessary time were left out.” Mike Rother and John Shook, Learning to See

32. Non Value Add “ unnecessary wastes” Waste to Eliminate ! Non Value Add “ necessary waste” Waste to Reduce ! Value Add Increase!

33. RENAL patients going through a Hospital Process Pictures provided courtesy of Agility Healthcare Solutions What is added value to the Customer Look at End to End Value Chain

34. Mapping the Process… Source – NHS Centre for Innovation

35. 36 process steps 7 value add 29 process steps were non-value add or waste Who thinks that of the 36 steps: 100% - 75% was added value activity? 75% - 50% was added value activity? 50% - 25% was added value activity? Less than 25% was added value? 1 2 3 4 5 6 7 8 9 28 29 30 31 32 33 34 35 36 19 20 21 22 23 24 25 26 27 10 11 12 13 14 15 16 17 18

37. Continuous Improvement P – Plan D – Do C – Check A - Act Improvement to patient care & experience Value Waste Flow Perfection

43. Set-based Concurrent Engineering

44. No problem is a problem

46. Daily standup meetings

48. Technique Time to detect problem Pairing Seconds Test Driven Development Seconds to minutes Co-location Seconds to minutes Continuous Integration ~20 minutes to a couple hours User Stories A couple days Timeboxed development 1 – 4 weeks Small releases 1 – 3 months

49. Just-in-Time is a response to the problem of overproduction

50. Stop The Line is a response to the problem of unnecessary rework due to defects

51. The essence of Lean is engaging everyone in identifying and solving problems

52. What type of results are we talking about?

53. McKinsey on Lean IT “ In our experience, applying the principles of lean manufacturing to [application development and maintenance] can increase productivity by 20 to 40 percent while improving the quality and speed of execution .” N. Kindler, V. Krishnakanthan, R. Tinaikar, “Applying lean to application development and maintenance”, McKinsey on IT, Spring 2007

54. Forrester Research on ThoughtWorks Agile/Lean Category Improvement Total defects 63% less Critical defects 79% less Effort 62% less Duration 69% less

58. For Further Information please contact: ThoughtWorks – Jason Yip Email [email_address] Web www.thoughtworks.com.au KM&T – Paul Heaton mail [email_address] Web www.kmandt.com.au