It’s time for manufacturers to get Lean

This month, I’ve invited Jon Terry, Planview’s chief evangelist for Lean-Agile strategy, to share his tips and insights for incorporating Lean tools into manufacturing processes.

A co-founder of LeanKit, Jon joined Planview after the acquisition in December 2017. Jon continues to help enterprises around the globe discover how to increase effectiveness, optimize processes, and deliver value faster with Lean-Agile principles. He is a highly sought-after presenter within the Lean-Agile community and has led Agile transformations for some of the largest organizations in North America, including hospital-giant HCA Healthcare and its subsidiary, HealthTrust Purchasing Group.

For almost two decades, software teams have found success with applying Lean-Agile principles to their processes. In this time, Lean and Agile thinking has transformed the discipline of software development — adding structure, accountability, and agility to every part of the development process, enabling software companies to innovate faster and more efficiently than ever before.

Meanwhile, in the manufacturing space, the demand for agility and speed in product innovation is more urgent than ever. The growing influence of software development is sparking radical change in the way manufacturers do business.

Today, product development workflows in manufacturing far more closely resemble software teams than those of old school research and development teams. It’s time for manufacturers to reevaluate the tools, practices, and principles by which they operate to help organizations embrace change and achieve agility at scale.

Creating space for innovation

Large-scale physical products, such as cars, planes, and spacecraft, have historically taken years to develop. Engineering teams plan and design products based on predictions about the future. Inevitably, by the time a product is released into the market, it no longer reflects the reality of the market — at least, not as well as it could.

These products are also inherently expensive and complex to develop — which is why we seldom see radical innovation in this space. This delay between assessing market needs and developing products to meet them has undermined innovation in manufacturing for decades.

But modern manufacturers have several key resources their predecessors did not. The first is virtually unlimited data. The ability to embed many more sensors into products and harvest the data from those sensors (wirelessly in many cases) provides much more information for informed product decisions. Advanced data solutions are enabling companies to not only ingest, aggregate, and compress real-time data from sensor devices, but also automate the analysis of that data, to provide predictive insights that couldn’t have been possible just a few years ago.

Manufacturers today can base improvement decisions on product telemetry rather than just market research, focus groups, and sales numbers. They can understand how their products are being used on a daily basis — and they can use that data throughout the development process, much like software development teams are able to.

The second factor bringing modern engineering practices closer than ever to software development is that virtual design and additive manufacturing (3D printing) technologies now allow multiple product options to be explored in parallel in ways that were impractical in the past. Lean experts have preached set-based design in manufacturing for decades. Now it’s cheap and easy enough to do all the time, not just for the most critical design decisions.

Hardware engineers can now iterate in much the same way as software engineers.

Finally, the control systems for physical products are now largely software driven and products can be updated with changes to those control systems long after they are initially manufactured. This allows for systems to be improved over time or even for latent capabilities to be included in the initial release but not activated until all the pieces are ready. The analytical data flowing from embedded sensors means products can be built to evolve based on experience in the field.

The way companies, their products, and their customers interact is becoming much more dynamic and complex. Traditional management approaches focused on upfront design, linear scheduling, and change control aren’t well suited to the task.

Manufacturers need a new approach that allows them to tackle their existing inefficiencies while gaining the agility to embrace constant change. This is where Lean comes in.

Tackling process inefficiency

Many manufacturers count cost of delay by the millions per day. That creates a significant amount of pressure to reduce cycle times for new product introduction. For decades, companies focused primarily on the visible, physical aspects of their production processes to shave off lead time and made great strides.

Unfortunately, inefficiencies in product design and engineering can hide in plain sight. Production problems are clearly visible on a plant floor where physical as parts piling up in front of a bottleneck in the manufacturing process or excess inventory in warehouses. But poorly designed workflows, lengthy feedback loops, inefficient handoffs, interdependencies, and other wasteful practices across teams create organizational systems too large and complicated to unravel — but largely invisible to the naked eye. Without a methodical, organization-wide approach to identifying and eliminating waste, companies have been unable to break free from the brokenness of their systems.

Enter Kanban

In an effort to identify and reduce process waste, manufacturers have begun using Kanban to visualize and optimize their design and engineering workflows in a similar way to how they once used it to optimize their production processes.

Briefly, when Kanban is applied to knowledge work, teams use a shared (often digital) board to visualize their workflow and all their work items as they move from “To Do” to “Doing” to “Done.” Kanban enables teams to better understand and actively manage their processes, which is the first step toward uncovering and eliminating waste.

Scaled up to teams-of-teams and across an organization, this has the power to completely transform the way business is done. It adds transparency and clarity where before there might have been confusion and complacency. It creates an environment ripe for innovation. Key benefits this brings include:

An enterprise-focused Kanban tool can help organizations stay aligned and focused on achieving both long- and short-term goals:

• Card connections capabilities allows work to be effectively decomposed and delegated so that everyone can see the information most pertinent to their role.
• Integrations with an ever-growing list of development and engineering tools allow teams to use whichever tool best meets their needs, while providing the entire organization with status information in one place.
• Lean metrics and reports help you measure your workflow to identify opportunities for improvement.
• As your Lean initiative grows, a Kanban tool easily scales to support multiple projects, teams and locations.

Kanban enables agility by aligning efforts across the organization and providing transparency upwards and outwards. This is just one of many Lean tools that can help manufacturers foster innovation and embrace change.

Building innovation into your culture

To truly achieve lasting change, companies must be willing to evolve their culture as well. This starts with leadership. Lean thinking calls for a different kind of leadership — one that champions experimentation, challenges the status quo, and allows the brilliance within their teams to shine.

Embracing Lean thinking might require a different organizational structure – most Lean organizations find greatest success with goal-oriented, self-organizing, cross-functional teams that share the responsibility of infusing UX into everything they do. Breaking down functional silos and encouraging collaboration between people with different perspectives is critical for innovation.

Finally, to become more innovative, we have to create a culture ripe for innovation. We do this by championing learning, aiming to become organizations that systematically experiment, learn, and make data-driven changes for the sake of improvement. The Lean principle of creating knowledge encourages Lean organizations to not only encourage experimentation, but to create a system that allows learnings from experiments to be freely shared, so that organizations continue to propel themselves forward with data.

Learn more about Lean

In the manufacturing space, the demand for agility and speed in product innovation is more urgent than ever. Borrowed from software development, Lean tools like Kanban, set-based design, and iterative development, and new Lean approaches to leadership and culture are helping manufacturers survive and adapt to their new fast-paced, tech-enabled reality.