Lean Enterprise Product Development
Simulation and Short Course - a summary
Presented By
Hugh McManus and Eric Rebentisch
LAI and Metis Design
Top Level Learning Objectives
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Educate engineering leadership and change agents on
principles of Lean product development (PD) and its
role in the Lean enterprise
Provide training and hands-on skill development
opportunities for PD value stream mapping and related
improvement techniques
Illustrate and demonstrate, through hands-on learning,
best practices of organizational design for lean PD
Introduce concepts of organization, coordination and
integration across the lean PD enterprise
Provide training and hands-on skill development
opportunities in the defining, managing, and facilitating
PD improvement events
Relate learning to ongoing improvement efforts at Host
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 2
What is Different about PD?
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Culture is generally not process-oriented
Information is flowing instead of material
Uncertainties are inevitable
• Product is generally incompletely defined
• Process(es) not totally predictable
Interdependencies are common
• Process steps depend on each other for completion
• Complex products with high performance requirements often
can’t avoid coupled functions and forms
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Enterprise relationships are more complex
• PD organizations form a PD enterprise
• PD serves the overall enterprise
Course teaches lean with these differences accommodated
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 3
Top Level Content Outline
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Basic principles of Lean applied to PD
Product Development Value Stream Mapping (PDVSM)
Organization design for Lean PD
Role of Lean PD in the Lean Enterprise
Transformations - Local: Identifying, prioritizing,
planning and executing lean improvement events
• Host example for illustration and discussion
Transformations - Global: Transformation of PD
enterprises, and the role of PD in the greater Lean
Enterprise
• Host example for illustration and discussion
Most of this uses the Lean Enterprise Product Development
(LEPD) Simulation as a teaching tool and practice field
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 4
Lean Enterprise Product
Development (LEPD) Simulation
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A simulation of a complex
aerospace product
development enterprise
Builds on the success and
lessons learned of the Lean
Enterprise Value simulation
Philosophy draws heavily on
LAI research and content and
cases based on LAI member
experience
Created and distributed
by Hugh McManus
(hmcmanus@alum.mit.edu)
and Eric Rebentisch
(erebenti@mit.edu)
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 5
LEPD Architecture
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Participates take roles as program management and
engineering group members
Programs, issued by a facilitator, create paper “jobs” that must
be processed by the engineers
Jobs follow a Design-Analyze-Integrate-Verify process
Variable process
times (hourglasses)
Reviews (dice)
Multiple rework
loops
Process is
complex and not
initially visible
Includes complete
financial system
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 6
Day One: Basic Lean for
Product Development: PDVSM
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Lectures cover:
• Basic lean concepts
• Application to PD
• Basic VSM techniques applied
to PD
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Simulation exercises:
• Familiarization with simulation
• Basic local lean - 5S,
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standardized processes, etc.
Value Stream Map of current
state
Data collection and analysis
Data-driven improvement
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 7
Basic Value Stream Map
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Inventories, decision points, rework loops
Job
Release
Log in
NO
Major
FAIL
YES
Design
Review
FAIL
PASS
Analysis
x2
Systems
Decomp
PASS
Review
Major
NO
YES
Systems
Integration
Review
PASS
FAIL
PASS
Verification
NO
Review
Major
FAIL
YES
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 8
Adding Data - seeing issues
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Basic inventory, touch time, and rework %
data clarify critical (burst) issues
Job
14 pt/rd
Release
Log in
NO
Major
33%
33% FAIL
YES
Design
Review
50%
REWORK
FAIL
3 jobs
35 sec
PASS
PASS
Analysis
x2
Review
1 job 70 sec
Major
YES
Systems
Decomp
20 sec
TOO SLOW
NO
Systems
Integration
1 job
40 sec
PASS
FAIL
REWORK
http://lean.mit.edu
50%
33% of
Minor fail
Review
0
PASS
Verification
NO
Review
Major
FAIL
40 sec10% of Major FailYES
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 9
Analyzing Data
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Straightforward (but not simple!) analyses allow datadriven improvements:
• Capacity of tasks in complex flows
• Return on Invested Capitol (ROIC) or cost-per-unit (CPU)
• Cost benefit for various improvement ideas enabled by lean calculator
• Prioritization to maximize benefit for cost, meet quantitative targets
Capacity in the
Presence of
Rework ?!
Design
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 10
Implementing Change
Participants experience
lean improvements:
• simplified processes
• smoother flows
• increased throughput
• Data from simulation
shows:
• Decreased cycle time for
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450
400
300
250
200
100
50
0
1
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http://lean.mit.edu
2
3
4
Round
300
200
100
Improvements due to
basic lean:
in program cycle time
and throughput
Approx. 30%
improvement in
engineering hours
Table 1
Table 2
Table 3
150
“programs”
Reduced cost/unit
Increased operating profit
(well, less losses…)
• Approx. 2x improvement
COST PER
UNIT
350
Op. Profit
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0
1
2
3
4
Table 1
Table 2
Table 3
-100
PROGRAM
CYCLE TIME
-200
-300
PROFIT
BY TABLE
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 11
Day Two: Designing Lean PD
Organizations and Enterprises
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Lectures cover:
• Best practices and case studies in
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tailored lean PD organizations
Advanced PDVSM methods for
concurrency, iteration
Simulation exercises:
• Specialization to meet various needs
and further increase effectiveness:
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Support center
(simple, predictable work, at
very high throughput)
Design center (more
complex, variable work)
R&D center (maximum
complexity and risk)
Reuse Basis
System Changed
http://lean.mit.edu
Release
Obtain
System H
SRS
Section A
Draft ASpec
Released
Analyze Legacy
Requirements
for Reusability
Get Reuse & Process
Marching Orders
Section B
Analyze & Update Most Recent Requirements
Section C
Draft SRS Outline
Review
SRS
Outline
"Book Boss"
Does First
Pass on All
Sections
QuickTime™ and a
None decompressor
are needed to see this picture.
Sections
Assigned
Assemble Team
WBS Created
NVA
Unofficial
Integrate
Section D
Section E
Work on Software Design Document
Check
Peer
Sections
Learn About
Traceability
Reviews
Section & its
Relation to Other
Copy/ Generate/
Sections
Update
Section F
Requirements
Wordsmith
Identify
& Format
Estimate
Section
Needs
Weaknesses
Section G
Project S: Software
• Integration of specialized
organizations
A-Spec "Rev -"
Obtain System T SRS
Get Info From Other Sections and SRSs
Requirements Development
Get Info About Each Section
Value Stream Map
Month #
1
2
3
4
5
6
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 12
Designing PD Organizations:
Simulation Exercises
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Three different Future State Value
streams created to meet challenges
• Support center - highly parallel VS with
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Job
Release
planned iterations
Design center - simplified, somewhat parallel
VS with emphasis on reducing variation and
large rework loops
R&D center - flexible organization with
emphasis on reducing variation through
additional iterations
Improvements needed to
attain these states again
selected through databased decisions
Implementations
illustrated success of
concepts
http://lean.mit.edu
Job
Release
Log in
Design
Work
Analysis
Review
Verification
INTEGRATED CONCURRENT
SUPPORT ENG. CENTER
TEAM-BASED DESIGN CENTER
Systems
Upfront
work
Systems
Integration
Verification
x2
PASS
Log in
PASS
Review
FAIL
Design
Analysis
Review
FAIL
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 13
Evolution of Product
Development Enterprise
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Final Simulation
Challenge: Integrate
specialized groups to
respond to complex
customer needs
Carrying out challenge
gave participants an
experience in
integrating across
boundaries to maximize
global efficiencies
Success tracked by
output and financial
metrics
Engineering
Groups
Chief
Engineers
Jobs
Programs
Table 1
CE
Info
© 2006 Massachusetts Institute of Technology
Customer
Table 2
CE
© 2006 Massachusetts Institute of Technology
Table 3
CE
© 2006 Massachusetts Institute of Technology
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 14
Lean Enterprise Success
800
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Specialized, highly efficient
processes
Communication and
coordination across the
enterprise
Increased process visibility
Standard work for routine
processes, energy focused
on the exceptions
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PROFIT
BY TABLE
450
400
Table1
Table2
Table3
300
200
100
0
-100
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another ~2x improvement in
program cycle time and
throughput
additional 40% improvement
in engineering hours
significantly higher profit
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250
200
Table1
Table2
Table3
100
35
50
0
1
30
2
3
4
5
6
PROGRAM
CYCLE TIME
20
Legacy
Local Lean
Global Lean
15
10
5
0
1
http://lean.mit.edu
COST PER
UNIT
300
150
-200
25
Organization design and
enterprise integration
allows:
350
Cost/Pt
Participants experience lean
enterprise:
600
Op Profit
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700
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Equivalent Program
10
11 12
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 15
Day Three: Implementing
Lean PD
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Lectures cover:
• Lean PD Principles and
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Tools
Implementing change at
the local level
Planning and managing
change at the
enterprise level
Host examples and
discussion:
• Host local lean example
• Host enterprise lean
example
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 16
Lean PD System Principles
Reinterpreting the Lean PD system principles from
Toyota:
• Minimize process variation to make inputs and
outputs crossing functional boundaries
predictable
• Coordinate activities across boundaries (visual,
communication, shared understanding, etc.) to
minimize disruptions to flow of work in PD system
• Develop and balance capacity with
stabilized/managed demands
• Embed learning and knowledge sharing
processes in the enterprise PD system for
continuous improvement
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 17
Facilitating Lean Projects
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Facilitating Lean
Change Events
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Project selection
and prioritization
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Project Planning,
Documentation
and Tracking
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Discussion motivated
by presentation of
experience to date
by host
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 18
Planning Lean Enterprise
PD Transformation
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Frameworks for Understanding
the Enterprise Transition to
Lean
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Enterprise Value Stream
Mapping and Analysis (EVSMA)
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LAI Transition to Lean (TTL)
PD TTL
DoD Continuous Process
Improvement (CPI) Framework
Creating multiple data-driven
views of a complex enterprise
From views and future-state
vision, create transformation plan
Discussion motivated by
presentation of experience to
date by host
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 19
Summary
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New LAI Product built to user pull for enterprise-level,
PD-oriented lean transformation education and
training
Incorporates the latest in LAI research and field
experience
• Principles of Lean PD Enterprises
• Organizational design and integration
Includes training and practice in LAI methods:
• PDVSM
• Enterprise transformation
LAI KEE July 17-18 - two day, open enrollment
Available for implementation at your site
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 20
Backup - Nominal Agenda
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 21
Nominal Day One Agenda
8:30
9:00
9:20
10:20
10:30
Introduction
Host Introduction and Leadership Charge
Overview of Lean and Lean PD Principles
Break
Simulation Segment 1
• Familiarization and simple lean tool application
12:00
1:00
2:30
Lunch
PDVSM talk and exercise
Capacity, ROIC, and Change proposals
• Break included
• Interwoven lectures and exercises
4:00
Simulation Segment 2
• Silo improvement
5:00
http://lean.mit.edu
Conclude
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 22
Nominal Day Two Agenda
8:30
8:45
Enterprise challenge
PD Organization Design
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10:00
10:15
Break
PD Enterprise design exercise
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12:00
1:00
Enterprise design
Enterprise planning exercise
Simulation Segment 4
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3:30
3:45
5:00
Includes Advanced PDVSM lecture
Lunch
Simulation Segment 3
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3:30
Lecture and Exercise
Enterprise integration experience
Break
Sim. Outbrief and Lean PD practices discussion
Conclude
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 23
Nominal Day Three Agenda
8:30
10:00
10:15
Lean PD practices lecture and Discussion
Break
Managing Change Projects
• Host team presentation of change project
• Interactive discussion
• Lecture on Facilitation of change processes
12:00
1:00
Lunch
PD VSM in Enterprise processes
• Transition to Lean and Enterprise Value Stream tools
• Host team presentation
2:20
2:30
3:20
3:30
Break
Managing PD Enterprise Transformation
Concluding comments and review
Finish
http://lean.mit.edu
© 2006 Massachusetts Institute of Technology McManus/Rebentisch LEPD Overview 24