Supply Chain

Applying Lean Manufacturing Concepts to IT

Supply Chain - Applying Lean Manufacturing Concepts to IT

If you took a poll of CIOs asking the question “what are the main responsibilities of an IT organization?” you would see some common themes. “IT keeps things running”, they’d say, and, “IT delivers value through key projects”. While these two areas account for the majority of the resources and spending of most IT organizations, those aren’t the only responsibilities.

In a previous post, I wrote about pursuing competitive advantage through innovation. But I’d like to add a fourth responsibility: Continuous improvement, or “working on the business” versus “running the business”.

The basic idea is to make internal improvements in IT for increased efficiencies, improved productivity and lower costs. All of these concepts can be found within the basic principles of Lean Manufacturing. IT can take a lesson from this approach, but IT often has a hard time of implementing it.

So what are some of the strategies to make those improvements? Below I define some of the key ways to go about this journey and some examples of how they help.
Eliminate waste (“Muda”) and focus on a culture of improvement (“Kaizen”)
Lean approaches from Toyota identify the seven wastes as Transportation, Inventory, Motion, Wait-time, Overproduction, Overprocessing and Defects. Many of those same wastes can apply in an IT context, but the key is to create a culture and processes for systematically finding and eliminating wastes in the IT landscape.

Tracking of trending of key metrics
Metrics in a lean approach include identifying key performance indicators (KPIs) and relentlessly trending them. Trends are simply positive or negative, and negative trends need action plans and owners.

Trends and metrics for most critical aspects of IT are monitored and trended. Everything from service levels at the help desk, infrastructure capacity, performance and up-time are all monitored as well. Key strategic areas also lend themselves to monitoring, such as the adoption rate of newly implemented platform areas for CRMs.

Accountability Boards and Stand up Meetings

Accountability boards track ownership of the action items that accumulate in the continuous improvement process. Stand up meetings, usually daily, are where the status of the operational environment is communicated and evaluated. It is also where progress on action items is tracked. Meetings are very short and highly structured, and attendance (or representation) is mandatory.

For us at Steelcase, daily stand up meetings help us stay on top of production support activities. We use them to monitor the issues that are currently being worked on to make sure they are progressing toward resolution, and we make sure we monitor new issues that have been reported in the last 24 hours. On the project side of the organization, stand up meetings are used in tracking milestones and the team’s development sprints  for projects.

Breakthrough goals
Certain KPIs need breakthrough goals established, which is a 30 percent or more improvement in a KPI. The idea of setting an aggressive goal is to cause people to rethink the approach to the area in general. Incremental improvements of five or 10 percent may not necessarily cause the out-of-the-box thinking required.

Recently, we’ve established breakthrough goals in response times for critical server areas and backup and recovery capabilities. After monitoring trends that showed slowly deteriorating levels of service, we began to focus on these areas for significant improvements.

“Gemba” walks
The Japanese concept of Gemba, or going to the real place where work happens, is useful in the IT organization. In a manufacturing context, this can mean leaders going to the plant floor to see where problems or opportunities for improvement exist. They see where the work occurs for themselves, and they better understand and facilitate those doing the work.

It’s not so different in an IT context; leaders can benefit from hearing directly from the people performing the work. These can occur at any frequency desired, but I’ve done them quarterly as a way to help me stay connected to all parts of the IT organization and to help make sure the teams are getting the help and resources they need.

8 step problem solving
When problems occur, such as missing commitments or sustaining service outages, a structured problem-solving process can be very useful. The 8 step method frequently used in Lean Manufacturing can be used in an IT context as well. The steps take you through clarifying and breaking down the problem, through root cause analysis to developing a solution and putting monitoring practices in place. The 8 step approach is a proven method, but there are others. The real point is to have some kind of a process you trust and will use repeatedly.

I’ve seen the 8-step approach lead to correct actions and permanent improvements. They’ve allowed us to see automation opportunities where the problem can be solved by eliminating human intervention. The key is to take an approach to these steps that truly attempts to solve problems versus laying blame or putting people on the defensive.

These are just a few of the proven concepts in Lean Manufacturing. I think if you diligently applied them in an IT organization, impressive results will follow!

Contributor

Bob Krestakos

Bob Krestakos, VP, CIO & Americas Operations, Steelcase Inc.

Bob Krestakos is chief information officer at Steelcase Inc., the global leader in the office furniture industry. Steelcase delivers a better work experience to its customers by providing products, services and insights into the ways people... More   View all posts

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