Lean Kanban India 2017 | How to explain Kanban | Janice Lindeen Reed

LKU@leankanban.com leankanban.com Copyright Lean Kanban Inc.
Certified Training
How to explain KANBAN
Janice Linden-Reed ▪ Lean Kanban, Inc
Lean Kanban India 2017

My history
1991:
WATERFALL
2006:
SCRUM
2008:
KANBAN

Explaining Scrum
vs Waterfall
More flexible
More collaborative
More sustainable
More predictable
No interruptions
It solved many of the frustrations with
traditional project management

How Kanban
was explained
to me
Helps with too much work in
progress
Okay to make needed changes
Okay to stay semi-Scrum

CONSIDER:
WHO IS YOUR AUDIENCE?
WHAT IS THE PROBLEM THEY ARE TRYING TO SOLVE?
When explaining Kanban

What are they
afraid of?
Fear, anxiety, and dread

“KANBAN VS [SCRUM]”
(There can be only one)

Kanban vs [Scrum]
WHAT FEAR IS THIS ADDRESSING?
The effort of a new change initiative
Tired of new change initiatives, especially Agile
Love existing process…don’t want to alter it
Want to understand in context of their current method
PROBLEMS WITH THIS EXPLANATION
Kanban is not prescriptive!
Not a process
Kanban is incredibly flexible
Kanban is easily used in combination with a process like Scrum
or waterfall

Kanban vs [Scrum]
A better explanation…
Kanban starts with what you do now. Small changes happen over time
Kanban can be used in combination with [Scrum]
Kanban will provide more options to better manage work, even during a
sprint, so that iterations are completed more successfully

“KANBAN HAS ITS PLACE”
Its limited role in the context of an existing process

KANBAN for
Portfolio
KANBAN for
Operations
NOT for new
development!

“Kanban has
its place”
“In SAFe, Team Kanban is
applied in concert with the
cadence and synchronization
requirements of the Agile
Release Train (ART). This
provides for alignment;
dependency management;
and fast, integration-based
learning cycles, which
provide the objective
evidence needed to advance
the larger Solution.”

“Your Kanban will be slow unless
you Scrum the Kanban.”
- Jeff Sutherland (July 10, 2017)

“Kanban has its place”
WHAT FEARS IS THIS ADDRESSING?
Afraid to alter existing process
Kanban is lacking in various benefits so must be supplemented
Kanban can be included…over here where it won’t disrupt things
Implies Kanban has untrue limitations
Often is a incomplete or inaccurate explanation of Kanban
Kanban used to fix shortcomings in existing process

“KANBAN, THE RECIPE”
Define it by listing its parts

“KANBAN, THE PRESCRIPTION”

Kanban, the recipe or prescription…
WHAT FEAR IS THIS ADDRESSING?
They want simple and prescribed, not complicated and customized
Skeptical or busy, not willing to listen very long
CONFUSING. Doesn’t communicate what Kanban is.
No benefit message
Not in context
Implies all “ingredients” are required immediately

“KANBAN = TOYOTA”

Kanban in manufacturing
Kanban is a sign, flag, or signal within the production process to trigger
the production and supply of product as part of Just in Time in Lean
manufacturing. Kanban or Kamban is the main method by which pull
production is realized within JIT, the Kanban being the signal from one
process to a preceding process to produce more components.
Reference: http://www.beyondlean.com/kanban.html

Kanban for physical inventory concerns (manufacturing)
Don’t have stacks of inventory that we may never use and that costs
money to store.
Don’t build more product than our customers consume.

Kanban limitations – from manufacturing
The general operating characteristics required [for a kanban system] can
be summarized as the
repetitive manufacturing of discrete units in large volumes which can be
held relatively steady over a period of time.
It is stated that kanban is difficult or impossible to use when there are
large, unpredictable fluctuations in demand.

Kanban = Toyota
WHAT FEARS IS THIS ADDRESSING?
Fear of a new fad or untested method
Lean manufacturing as a trusted industry focused on efficiency
Kanban in manufacturing is conceptually similar but unrecognizable
The fact that the concept originated at Toyota is irrelevant
Doesn’t acknowledge the unique challenges of knowledge work
The “signal card” gets translated to “card” as in visualization of work items
It is the “signal” that is relevant to creating a pull system

Kanban = Toyota
A better explanation…
The special challenges of knowledge work are worth talking about
 Non-physical inventory
 High variation
 Less emphasis on waste
The underlying concept that was formalized at Toyota was to use a
signal to balance demand and capacity

Kanban for improvement (manufacturing)
The reduction of WIP and visual control makes problems more noticeable.
This supports the saying that in order to eliminate waste, you must find it first.
The tighter coupling between processes
creates a dependence,
which is lacking in many push environments
and forces awareness to problems.

We need a new way to explain Kanban
Simple Benefits
focused
The big
picture
Not defensive
or apologetic
Stands
alone

A NEW APPROACH TO EXPLAINING KANBAN
What do you gain?
What concepts are key to Kanban?

Kanban balances demand and capability
Capability to
Deliver
KANBAN
SYSTEM
Customer
Demand

What happens when demand and capability are out of balance?
Customer
Demand
Capability to
Deliver
KANBAN
SYSTEM
Customer
Demand
Capability to
Deliver
Quality issues,
causing more delay
and dissatisfaction
Lack of predictability
Overworked but
unproductive
workers
Missed deadlines
KANBAN
SYSTEM

How do you handle too much demand, not enough capacity?
Customer
Demand
Capability to
Deliver
KANBAN
SYSTEM
REFUSE THE WORK
REQUESTS?
HIRE MORE PEOPLE?
BETTER TRAINING?

You have more capacity than you think!
Get better service delivery
without reorganizing or hiring more people
Customer
Demand
Capability to
Deliver
KANBAN
SYSTEM

Kanban has techniques to better manage demand & capacity
Customer
Demand
Capability to
DeliverKANBAN
SYSTEM
Improve Capability
Identify and Remove Delay
Bottleneck Handling
Dependency Management
Understanding Variation
Economic Cost Model
Risk Review
Feedback Loops
Liquidity
…
Shape Demand
Cost of Delay
Classes of Service
Board Design
Options Model
Upstream Kanban
Queuing Policy
Decoupled Cadences
Capacity Allocation
…

Customer
Demand
Capability
to DeliverKANBAN
SYSTEM
KEY CONCEPTS
Clear benefits to Kanban
but…
Be prepared to work

Customer
Demand
Capability
to DeliverKANBAN
SYSTEM
5 KEY CONCEPTS
1. Create a Visual Model
2. Optimize Flow
3. Maximize Agility
4. Assure Service Delivery
5. Build a Culture of Respect

Create a Visual Model
A Single Point of Truth
Whatever process you use,
you need a good
shared understanding
of the nature of your work
before you can improve.

A single
point of truth
How many work requests?
What type? Work items /
tickets
What are the steps to
complete the work?
Workflow
How do we handle the work?
How many at once? Policies,
WIP Limits
How fast and predictably are
we delivering? Metrics

A single
point of truth
Identifies
patterns, dynamics,
and interdependencies
of the work
Once you see the patterns, you can
refine this visual model
IMMEDIATE BENEFITS
Visibility, Collaboration, Cooperation,
Consensus

Optimize Flow
Flow is Predictability
Regardless of the people, processes, or skills,
A flawed system
can cause disruption and delay
resulting in poor outcomes

Use your visual model to look for
sources of disruption and
delay
A Pull System with Limits
on Work in Progress
(WIP) will create flow – work does
not pile up or stall the system
Measuretime for work to move
through the system
Measure and
manage flow
A Pull System is an end-to-end Flow System in which an open capacity slot is the “Kanban signal” to move work forward.

FLOW
is the key to
predictability
FLOW
Flow = predictability. What does your Flow look like?
OPTIMAL FLOW
 Good visibility
 Clear policies
 Low traffic (WIP)
 Low variability
 Risk mitigation

FLOW
Flow = predictability. What does your Flow look like?
POOR FLOW EFFICIENCY
 Task switching
 Dependencies
 Interruptions
 Quality issues
 Poor visibility
 Bottlenecks
 Confusion or disagreement
 Internal and external variability

Optimize Flow
To manage flow is
to anticipate and
manage RISK
Anything that affects service delivery
is a RISK.
A visual model helps explore the
patterns and dynamics of the system

Maximize Agility
Agility can be Just in Time
Your capability changes over time.
Market conditions change often.
Build more flexibility
into your system
and safely adjust plans dynamically.

Maximize Agility
Selecting work to
start?
You’ve got
OPTIONS!

OPTIONS
Selecting work to start? You have options!
PULL FROM A POOL OF OPTIONS
Upstream options are refutable
Options are often discarded or deferred
Upstream is the place to filter
COMMITMENT
Defer commitment for better agility
Kanban uses 4 forms of commitment
Batches = fixed commitment

OPTIONS
Selecting work to start? You have options!
ARE YOUR OPTIONS REALLY OPTIONAL?
The problem with prioritized backlogs
 Priority implies “push”: irrefutable demand
 Less flexible once prioritized
 Planning/Prioritization activity can be
wasteful
 Options expire! Think about cost of delay.

OPTIONS
Selecting work to deliver? You have options!
Maximize Agility
When to start work and
when to deliver it are 2
separate decisions
Separate delivery
scheduling and gain
more flexibility
A visual model helps explore the
patterns and dynamics of the
system

Assure Reliable Service Delivery
Customers are part of
a Kanban System
Be sure you can
Make Promises you can keep
Make service delivery
an ongoing conversation
with feedback loops and re-alignment.

FORECASTING
Is it an agreement or a one-sided mandate?
ARE YOUR FORECASTS A CONVERSATION?
 The customer may accept more or less risk
 Forecasts have confidence levels
 Discuss both start dates and delivery dates
 Customers sometimes can take later delivery
SERVICE LEVEL AGREEMENT
 SLA is informed by current delivery data and
business considerations

ChangeRequests
SLA (customer expectation or fitness criteria) is 60 days
Probabilistic forecasting with Service Level Agreements
22-150 day
spread of variation
85%
on-time
15% late
Due Date
Performance
(DDP)
Predictability
“We are 85%
confident that
we can deliver
change requests
in 60 days or
less”

85% at
10 days
98% at
25 days
ChangeRequests
ProductionDefects
85% at
60 days
98% at
150 days
Probabilistic forecasting
SLA by
Type or Class
“We are 85%
confident that we
can fulfill any
change request in
60 days or less”
“We are 85%
confident that
we can deliver
any defect fix in
10 days or less”

Fixed date?
Consider several
possible scenarios
What is the latest we could
start?
Can they take delivery past
the optimal date?
How much risk can they
tolerate?
impact
When we
need it
Earliest Start
(expensive but
no risk of
missing date)
timeJan
10
Aug
11
Latest viable
Start
(if they can take
later delivery)
Dec
19
Optimal Start
(85% confident
of being on time)
Nov
11

Information Flow
Formalize information
flow
Is each Kanban system
delivering on its promises?
Adjust to stay aligned
Do changes need to
happen to accommodate
current demand?
Is the demand appropriate
for known capability?
Strategy
Review
Risk
Review
Monthly
Service
Delivery
Review
Bi-WeeklyQuarterly
Kanban
Meeting
Daily
Operations
Review
Monthly
Replenishment/
Commitment
Meeting
Weekly
Delivery
Planning
Meeting
Per delivery cadence
change change
change
change
change
change
change change
change
info
info
info
info
info
info
info
info
info
change info

Kanban Litmus Test
1. Have managers changed their behavior?
2. Has the customer interface changed?
3. Has the customer contract changed?
4. Has the service delivery business model changed?
Do you now have a 2-way conversation with customers?
Customer
Demand
Capability
to DeliverKANBAN
SYSTEM

Build a Culture of Respect
Your workers are
professionals
They are not
lazy, unskilled or disorganized.
Fix the pain points
in the system
and help them succeed.
“A bad system will beat a good person every time”
-- W. Edwards Deming

EVOLUTIONARY CHANGE
Humane Evolutionary Change
 Start with what you do now
 Encourage acts of leadership at all
levels
 Stop throwing committed work over
the wall

ADDITIONAL CONSIDERATIONS

KANBAN SYSTEM
The Kanban Method: the guiding principles and practices of successful Kanban
The Kanban system is set up using the Systems Thinking Approach to Introducing Kanban (STATIK)
The Kanban System is
a model of the work,
the workflow, and the
policies.
The Kanban system
can be adjusted to
improve flow or
manage options
MANAGE FLOW
KANBAN METHOD PRINCIPLES
1) Start with what you do now.
2) Agree to pursue evolutionary
change
3) Encourage acts of leadership at
all levels
KANBAN METHOD PRACTICES
1) Visualize the work and workflow
2) Limit Work in Progress (WIP)
3) Measure and manage flow
4) Make process policies explicit
5) Implement feedback loops
6) Improve collaboratively using
models and the scientific method
MARSHAL OPTIONS

STATIK
(Systems Thinking Approach to Introducing Kanban)
1. Understand what makes the service “fit for
purpose”
2. Understand sources of dissatisfaction
regarding current delivery
3. Analyze sources of and nature of demand
4. Analyze current delivery capability
5. Model the service delivery workflow
6. Identify & define classes of service
7. Design the kanban system
8. Socialize design & negotiate implementation
This process
tends to be
iterative
Identify Services. For each service…

Agendas
Know your audience when proposing why
Kanban could be a good thing
SUSTAINABILITY –
“We are overwhelmed and disorganized!”
SERVICE ORIENTATION –
“We want to improve in a coordinated way”
SURVIVABILITY –
“We want to make our business competitive in the
market”

Learn how your work works!
See your work as a unique, detailed
and dynamic flow with patterns,
rules, and interdependencies.

How does Kanban help?
Kanban is a method of organizing and managing work.
It is a way to understand your work and improve its flow for greater success.
Primary benefits that Kanban brings are:
Visibility – See and understand the patterns and dynamics of work
Collaboration and Communication – Get everyone on the same page
Manage the Flow of Work – Reduce sources of disruption and delay, gain greater predictability
Improve business agility – Gain more flexibility to produce the right thing at the right time
Fitness for Purpose – Optimize toward goals based on demand and capability

Kanban balances demand and capability
Customer
Demand
Capability
to Deliver
KANBAN
SYSTEM

RESPECT
AGILITY FLOW
SERVICE
Customer
Demand
Capability to
DeliverKANBAN
SYSTEM
VISUAL MODEL
Visual model of the work, workflow and policies
Kanban Method is the core of the Kanban system

THANK YOU!
Janice Linden-Reed, Lean Kanban, Inc.

APPENDIX

When should we
start the work if it is
due January 10?
impact
When we
need it
85th
percentile
Ideal Start
Here
Commitment point
timeJan
10
Nov
11

We can study
sensitivity to
different start
dates
impact
When we
need it
50th percentile
Later Start
Here
Commitment point
timeJan
10
Nov
25
85th percentile

What is the
latest we could
start?
Can the
customer take
later delivery?

Starting early to be
certain of delivery is
expensive
impact
When we
need it
98th
percentile
Early Start
Commitment point
timeJan
10
Aug
11

Consider several
possible scenarios
What is the latest we could
start?
Can they take delivery past
the optimal date?
How much risk can they
tolerate?
impact
When we
need it
Earliest Start
timeJan
10
Aug
11
Latest
viable
start
Dec
19
Optimal Start
Nov
11

Moving the conversation away from process improvement
and towards management and decision frameworks
conf.leankanban.com edu.leankanban.com
leankanban.com
services.leankanban.com

Lean Kanban India 2017 | How to explain Kanban | Janice Lindeen Reed

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