Achieving Execution Excellence with Kanban and Theory of Constraints (TOC)
Studies indicate that only approximately s40% of the projects meet schedule, budget and quality and 60% of a project's effort is spent in rework. Surveys conducted by the Boston Consulting Group show that in complex organizations (20 percent of organizations) managers spend 40 percent of their time writing reports and 60 percent coordinating meetings. According to the Economist Intelligence Unit, about 60 percent, or 3 out of every 5 employees, feel they do not have the right information. Putting the above statistics in perspective, visualizing work to identify bottlenecks and improve flow, enabling access to right information, reducing re-work can go a long way to enhance productivity / throughput leading to excellence on schedule, budget and quality goals.
This case study shares the experience from a large Software Application Maintenance project in the package space in the manufacturing domain. The team faced the twin dilemma of cost of delivery reduction from the organization and customer expectation for increased “back office” ticket throughput.
Kanban and TOC with it’s focus on incremental, evolutionary and people centric approach to visualize workflow, surface bottlenecks, engaging the team to improve flow was a natural choice to enable cycle time / throughput improvements. The constraints and bottlenecks that surfaced from workflow visualization through Kanban boards were addressed by:
• Reducing multi-tasking through WIP limits, planning / prioritization policies, identifying and resolving high WIP patterns through usage of Cumulative Flow Diagrams (CFD) and Root Cause Analysis (RCA)
• Streamlining demand to improve flow
• Elevating constraints through cross skilling, mistake proofing, automation
• Standardization of planning, operating procedures
• Fostering collaboration and learning through mentoring, pairing, knowledge management
• Iterating through Plan -> Do->Check->Act (PDCA) cycles for course corrections, as required
Effective deployment of Kanban / TOC led to 62% reduction in effort per ticket, 83.4 % increase in throughput for back office tickets and 30 – 35% reduction in average cycle time. Cost of delivery was reduced from 36.8% to 25.1%. There were savings of 1.33 mn USD for the customer from the improvements made and sustained.
Lean levers helped derive significant competitive advantage by maximizing program goals, inculcating a culture of continuous improvement leading to high employee engagement through better work-life balance and high customer satisfaction.
Outline/Structure of the Case Study
Introduction to Kanban / TOC - 2 mins
Project context / challenges - 3 mins
Implementation approach - 3 mins
On the ground -"How" of the implementation and Bottlenecks surfaced and resolved - 7 mins
Benefits / Outcomes - 2 minutes
Q&A - 3- 5 minutes
Basic understanding of Kanban and TOC
Relevance - What and how of applying Kanban / TOC
Simplicity and power of work flow visualization
Strategies to improve flow by identifying and resolving bottlenecks in a software project context
Team / business benefits (cycle time reduction / throughput improvement) that could accrue from the implementation
Anybody who is interested in lean,Kanban implementation