FAQ

Lean IT principles: A FAQ for CIOs

Lean principles, traditionally used by manufacturing companies to help improve the production process and provide value to the customer, are now being implemented in more service-oriented domains such as health care, financial services and even IT. In a time when most companies are still doing more with less, Lean thinking allows them to eliminate waste and improve productivity.

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Yet Lean is not just about cost cutting and doing more with less. Learn more about how this continuous improvement methodology allows companies and organizations to create sustainable change that benefits the customer.

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  What are the Lean principles?
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Lean principles are all about the reduction of waste or doing more with less. They focus on adding value for the end customer, whether that customer is internal or external.

The process improvement methodology originated in the manufacturing industry with Ford in 1913. At the automobile manufacturing plant, Ford created the first flow production to improve the assembly line process. "Before Lean, companies like Ford and Toyota would push a set amount of parts onto the shop floor every day in hopes they would all be used," said David Hurwitz, Lean IT expert and vice president at CA Inc. "Now with Lean, companies can pull parts onto the floor only when they need them."

Since then, other major manufacturing companies, like Toyota, have adopted Lean principles to improve the flow of their products throughout all processes.

  What does Lean thinking mean?
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Lean thinking is the process of incorporating Lean principles into an enterprise. Coined as a term by James Womack and Daniel Jones in their 1996 book of the same name, Lean thinking incorporates five basic processes that define a company as Lean. Such companies:

  1. Specify value from the standpoint of the end customer.
  2. Identify and map value streams.
  3. Establish steps so products will flow more smoothly for the customer.
  4. Let customers show pull value from their activities.
  5. Pursue perfection through continuous improvement.

Companies that use Lean principles or Lean thinking do so with the ultimate goals of eliminating waste in processes and procedures, maximizing the value they're delivering to customers and minimizing risk.

  Who is using Lean?
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Lean originated in manufacturing, but it's now applied to various domains, including IT, health care and financial services. Lean is rapidly maturing in today's economy for a number of reasons, including how easy the concept is to grasp. "When you tell someone that you want to implement a methodology to eliminate waste, they usually respond, 'Why wouldn't I do that?'," said Chris Lindstrom, managing partner at Ceptara Corp., a management consulting and training firm that employs Lean and Six Sigma experts and project managers.

Lean is now expanding into the service industries. What these types of companies have in common is that they are all customer oriented and looking for ways to optimize their business processes. IT can become involved in either through projects to support Lean in the business, such as business process management or system integration, or by adopting Lean principles to improve IT services (more on this below).

"All in all, Lean can drive efficiency, but the implementation of Lean should not be primarily motivated by cash savings and personnel reductions," said Alexander Peters, a principal analyst at Forrester Research Inc. "Firms applying it should, rather, target sustainable benefits such as culture change to focus on customer requirements and interactions, focus on prevention rather than firefighting and process changes to improve service quality and reduce customers' hassle."

  How can Lean thinking benefit IT?
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"Lean IT is the application of Lean thinking for IT," Hurwitz said. Lean tools are being used in IT organizations to reduce development times for applications and IT solutions, improve service performance and do more with fewer staff members.

In a recent Forrester research article titled "Applying Lean Thinking to IT," the authors suggested "by making the elimination of waste in all its forms a top priority for their staff, organizations create a culture of continuous improvement and innovation."

One example of how IT organizations are using Lean thinking is with the help desk process. Companies are using value stream mapping to get rid of activities and processes that don't add value, such as repeated duplicate information requests, escalations, duplicate data entry and insufficient resolution. By doing so, the help desk improves response time and customer service.

According to Peters, Lean Thinking principles:

  • Define IT in terms of the services/products it's expected to deliver.
  • Streamline IT capabilities by service/product.
  • Ensure that processes and information flow.
  • Help the business pull value from IT.
  • Monitor and measure IT's delivery for continuous improvement.
  • Check out the full definition of Lean IT.
  What Lean tools are available to CIOs?
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Lean is an umbrella term meaning to eliminate waste, and companies use a number of Lean tools to reach this goal. One of the most popular is Kaizen. This is a Japanese term meaning continuous improvement. Many companies use "Kaizen blitzes" for fast improvements and quick wins. A Kaizen blitz is basically a shorter version of a full-blown Kaizen tool and can demonstrate results in an average of two weeks.

Kaizen is a method for constantly achieving small, incremental changes in processes in order to improve quality and efficiency. The method is broken into three steps -- preparation, execution and learning -- all with the goal of identifying potential problems, throwing away those that don't add value and institutionalizing the improved processes.

Other Lean tools include value stream mapping, Kanban, cellular flow, quality at source, teams and 5S.

Let us know what you think about the story; email editor@searchcio.com


This was first published in July 2009

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