Tweet

Lean Operations Systems

Written by: Dr. Fathi El-Nadi

Article Overview: Thanks to the pioneering success of Toyota, the concept of a "lean" operating system has been implemented in countless manufacturing companies and even adapted for industries as diverse as insurance and healthcare.

Lean Operations Systems

With its focus on standardization, quality improvement, cost reduction, and efficiency, lean's influence (and various interpretations of its tenets) continues to grow. In their working paper "Lean Principles and Software Production: Evidence from Indian Software Services," HBS doctoral student Bradley Staats and professor David Upton examine what happens when Wipro Technologies, an Indian outsource provider of software services, launches its own lean initiative.
"In terms of operations and improvements, the service industries in general are a long way behind manufacturing," Upton says. "The motivation for this work was to gain some well-grounded research on how improvements can be brought to services through some of these lean concepts."
Not all lean manufacturing ideas translate from factory floor to office cubicle. For example, tools such as the andon cord, a rope that manufacturing workers pull when they encounter a problem on the line, are not directly replicable in software as there is no line to stop.
"What we hope to do," Upton says, "is to distill the relevant aspects of lean manufacturing so that managers can see how these tools were applied successfully in a service environment similar to their own."
Unfortunately, lean's prevalence has led to some misconceptions.
"Some people think lean means 'not fat,' as in laying people off," Upton says, noting that in their paper they propose that the difference in a lean operating system comes from how it alters the way a company learns through changes in problem solving, coordination, and standardization.
They also draw on a framework of 4 principles of the Toyota Production System defined by HBS professor Kent Bowen and Steven Spear (HBS DBA '99):
Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.
Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.
Rule 3: The pathway for every product and service must be simple and direct.
Rule 4: Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.
Wipro gains efficiency
In the paper, Staats and Upton describe how Wipro first launched its lean initiative in 2004 with a core team of managers. The small group visited lean manufacturing companies and discussed the concept's basic principles before each manager adopted a project in order to implement this new approach to software services. Of the projects, 8 out of 10 showed greater than 10 percent improvement in efficiency.
"Some people think lean means 'not fat,' as in laying people off." —David Upton
With those results in hand, the core team decided to roll out the approach across the firm. By the end of 2006, Wipro had 603 lean projects completed or in the works (the company typically had 1,100 projects under way at any one time).
"One of the important lessons we've seen on the ground is how Wipro approached the launch of this lean initiative," Staats says. "They didn't come out with big banners and say, 'OK, today your work is lean work, and yesterday it wasn't.' They started with a small group and recruited other people from there. It was a very controlled experimentation."
In their research, Staats and Upton document how the use of lean principles affected the workflow at Wipro. The concept of "kaizen," or continuous improvement, for example, resulted in a more iterative approach to software development projects versus a sequential, "waterfall" method in which each step of the process is completed in turn by a separate worker.
By sharing mistakes across the process, the customer and project team members benefit individually and collectively from increased opportunities to learn from their errors; the project also moves along more quickly because bugs are discovered in the system earlier in the development process.
Wipro also uses tools specific to the software development process based on lean principles. The DSM (design structure matrix), for example, defines connections and pathways for a project's workflow and suggests an order of tasks. A complementary tool, the SCE (system complexity estimator), ranks a software module based on its complexity and compares its actual architecture with its ideal (simplest) architecture in order to learn where a team might need more or fewer skilled members. The company also employs the more familiar lean technique of value stream mapping (VSM) to identify and decrease wasted time and effort throughout the software development process.
Improving from the bottom up
While most organizations struggle with implementing a new system, fighting the general inertia that many employees experience when faced with yet another new initiative, the goal of lean is to open up the work process and abolish the usual hierarchies. According to Staats, this seems to have happened at Wipro.
"It was interesting to talk to some of the less senior team members, because they were getting involved in much bigger-picture issues than they ever had before," he says. "In the case of value stream mapping, every member of the team was able to get a sense of the overall picture of what they were doing and spot problems they wouldn't have been able to see before."
"It's about unlocking the power of thousands of software engineers."—Bradley Staats
Staats suggests that the use of lean principles at Wipro could have qualities of a "Trojan Horse initiative." From the outside, lean accomplishes the short-term goal of productivity (getting inside the city's gates), but it could also lead to more radical, innovative change (the sacking of Troy).
"One of the main ideas behind lean is to take parts of a task that don't require human intervention and give them to machines so that humans can focus on the important issues," Staats explains. "The same is true in software, where you have the added benefit of being able to give some of your work to a computer, which can process it more reliably and quickly than a human."
More time, coupled with a better understanding of the different moving parts of a project, creates feelings of empowerment in workers who haven't traditionally taken part in innovation.
"It's about unlocking the power of thousands of software engineers and encouraging innovation up and down the organization," Staats says. "You can impact productivity while also changing the problem-solving capabilities of the organization."
Ideas into action
Wipro is typical amongst Indian firms in its thirst for knowledge, Upton adds.
"These companies are intellectual environments. People are very interested in taking conceptual ideas and figuring out how to put them into practice. There's not the same division between the 'real world' and university research that you often encounter in the United States."

Related Articles
  Start your Visual Thinking Process with Mind Mapping
  Building a Lean Healthcare Value Stream
  Making Lean Part of the Business Strategy
  Lesson #3: Make Your Company a Lean, Mean, Operating Machine
  It takes guts, to start with lean training in a turnaround!

Article Tags: david upton, doctoral student, example tools, indian software, lean concepts, lean manufacturing, lean principles, office cubicle, outsource provider, production evidence, professor david, professor kent, quality improvement, relevant aspects, service environment, software production, software services, staats, toyota production system, wipro technologies



Related Forum Posts
How do you start a retail store? - Hi Everyone, IF I was someone who was interested in opening a retail store to sell tennis equipment next to an existing tennis club per say, what would the steps involve? (e.g. permits, licenses, fees, etc...) And more importantly, how do you get a hold of a local sales rep or distributor of the goods you want to sell? Most manufacturers only have a website for their U.S. Operations, so would I just call/email them for a local sales rep/distributor name and phone number? Would they even give me the information if I'm not an existing retailer? Thanks
CMS - Speaking of Content Management Systems, which one are you going with? I've stubbornly held off going to a CMS, but each time I change something on my pages, such as the Navbar, I have to go back through everyone and cut and paste and it does get time consuming. BUt I like the freedom to alter a single pages layout if I need to to accomodate a certain type of article...
Where I want WSI to be in Dec 31 2007 - Here are my goals for end of 2007 Employees - SEO specialist - admin assistant - sales rep - designer/data entry - copy writer (may be outsourced) Target market (client base) manufacturers 10-50 million in revenue looking for integrated marketing solution ranging from 10k - 30k Systems - crm fully utilized - project management smooth process - sales and marketing to continuously generate leads SALES (My big Goal to focus on ) Last years sales revenue was $220K This year we want to hit $500K - approx 40k per month
5 Entrepreneur's success stories - My local paper's business section profiled 5 successful entrepreneurs in the Jan 6, 2008 issue of the paper. Thought I'd share just a bit of it here. Bill and Heidi Dittmar: Executive Lifestyle Jeff Wassmer: Spectrum Deloise Hawkins, Star Whitaker and Lenzy Hill: Touch of Elegance Stephen Brosius: Advanced Door Systems Pam Watson: Goodrich and Watson Insurers Bill and Heidi Dittmar: Executive Lifestyle founders of a magazine called Executive Lifestyle. Started in 1991. Revenue has grown more than 200% since 2004. 4 full time, 3 part time employees "We started off with $1,000 and a stupid idea." It began as This Month, a guide for tourists, and morphed into Executive Lifestyle. Jeff Wassmer: Spectrum Company specializes in computer network security and intelligence surveillance and reconnaissance. Wassmer was an 11-year Air Force guy, so he had "ins" in order to form this business. Deloise Hawkins, Star Whitaker and Lenzy Hill: Touch of Elegance Founded business in 1994. 12 employees. Their company designs and plans an average of 25 events each month in Hampton Roads and other parts of Virginia. Stephen Brosius: Advanced Door Systems Started company in 1995. 5 full-time employees, plus subcontractors. After having worked as a subcontractor for others in the construction business for 20 years, he decided to start his own business. Pam Watson: Goodrich and Watson Insurers At age 49, she was approached by an insurance colleague to buy out their employer's insurance division. They did so, and became employers themselves., witj 4 full-time people.
Re: Ideas For Business - Hello Lucy, you may consider this list for Ideas for Business: (Top 23 list) Rank Company 1 Google 2 Genentech 3 Wegmans Food Markets 4 Container Store 5 Whole Foods Market 6 Network Appliance 7 S.C. Johnson & Son 8 Boston Consulting Grp. 9 Methodist Hospital Sys. 10 W.L. Gore & Associates 11 Cisco Systems 12 David Weekley Homes 13 Nugget Market 14 Qualcomm 15 American Century Invest. 16 Starbucks Coffee 17 Quicken Loans 18 Station Casinos 19 Alston & Bird 20 QuikTrip 21 Griffin Hospital 22 Valero Energy 23 Vision Service Plan


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Live To Work Or Work To Live?

Basic Operating Question (BOQ) for Empowerment

BUILDING A HIGH PERFORMING TEAM

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.