Have you experienced waste and inefficiencies when managing or participating on projects? If you have, you may have also wondered how to trim that project waste.

So, what’s the quickest way to shorten project duration, reduce quality defects and boost productivity levels? Go lean, says Lawrence Leach, PMP.

The founder of the Advanced Projects Institute, Boise, Idaho, USA, and the author of Lean Project Management: Eight Principles For Success [Booksurge Publishing, 2006], Mr. Leach has spent more than 30 years streamlining projects for both private and government entities. Taking a page from lean manufacturing – a strategy that eliminates waste and evens out workflow in production chains – lean project management helps projects run smoother by coordinating the human resources involved.

He says that many organizations start projects without considering whether they can actually complete them. With lean management, companies look at how they assign tasks, if they’re being clear about the priority of the tasks, and if they have everything they need to get the project done.

Lean Basics

For project managers looking to take the lean approach, Mr. Leach says the process begins by checking for the basics. Before talking lean at all, companies need to have a work breakdown structure that details each task and who’s doing it.

Teams also need a schedule that identifies all human and physical resources necessary for each task and when handoffs between groups should occur.

Lean project management emphasizes the importance of focusing schedules on hand-offs from one resource to another, rather than on dates for individual tasks. Mr. Leach adds that companies that focus on task dates create because people who finish the task early don’t pass it on.

After there’s a reasonable schedule, you can begin trimming waste, Mr. Leach says. Look at each worker contributing to the project and create a list of prioritized tasks that each person needs to accomplish.

And since many projects involve multiple workers contributing to different parts of the project at different times, Mr. Leach recommends using a computerized system to record the start and completion date of each task and to automatically generate a daily updated list of priorities.

Lean Managers

Once each worker knows what he or she is supposed to be doing, it’s up to management to clear out all other distractions, giving workers the focus they need to get the project completed on time. Convincing management to change their behavior, from multi-tasking on several projects to attacking one project at a time, will make lean project management successful, Mr. Leach notes.

“Sometimes managers argue that if workers have five tasks, they can be more efficient, but that’s a false efficiency,” Mr. Leach says. “Every time people move from one task to another, it causes errors and delays.”

Lean project management can be effective because it helps tighten up on those production delays by focusing workers on how they can most effectively contribute to completing a single project. When implemented correctly, Mr. Leach says that the lean method increases productivity on average 100 percent, reduces project duration an average of 30 percent, and reduces quality defects an average of 50 percent.

Despite the strategy’s dramatic results, Mr. Leach warns lean managers to expect flack from critics both inside and outside the organization who argue that focusing on one project at a time significantly slows the production chain. “About 10 percent to 30 percent of your workforce is only going to go along with it because they have no other choice,” he warns. “Part of being a successful lean manager is knowing how to deal with that.”

To quell the voice of dissent, Mr. Leach advises lean managers to focus on generating and promoting positive short-term results. The crowd will soon follow.

Thankfully, lean managers won’t have to wait long to get impressive results. Mr. Leach says to expect to see progress within a few months, sometimes weeks, of implementation.

I have seen the huge benefits that lean manufacturing brought to the factory floor, at my company. We are in the process of translating the lean management principles into the transactional and office space, including project management. I am excited to apply those principles and generate the benefits.

So, what do you think? Do you see the value in applying lean principles for project management?

 

Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

Caterpillar prides itself on being the biggest, the best, the most ethical and even the coolest – the CAT cap has become an emblem of urban chic. However in 2005, Caterpillar realized that its factories would win few awards for efficiency and productivity. So Caterpillar launched a major effort – the Caterpillar Production System (CPS) – to raise its manufacturing game.

CPS is the common Order-to-Delivery process that was implemented enterprise-wide to achieve people, quality, velocity and cost goals. Primarily based on the Toyota Production System (TPS) philosophy, CPS embraced lean manufacturing concepts such as reducing waste, Poka Yoke, standard work, visual factory, continuous improvement, quick change over, pull among others. CPS was not only implemented in the factory operations but also in other functions such as product design, purchasing, supply chain and quality.

CPS implementation created a remarkable transformation for Caterpillar. By 2008, Caterpillar had capitalized on the economic boom that started in 2004. Sales and revenues topped $51 billion, exceeding the 2010 goal of $50 billion much ahead of schedule. Profit per share was also at a record of $5.66. However, the real test was the downturn of 2009-2010. Caterpillar had a “trough” plan and emerged stronger after the recession through continued implementation of CPS. Sales and Revenues were $42.59 billion, an increase of 31% from 2009 and profit per share was $4.15, up from $1.43 in 2009.

Caterpillar Production System (CPS) fuels Caterpillar’s operations management strategy. The key operations processes of the firm, powered by CPS include:

• Product Design: One of the factors for Caterpillar’s dominance over its rivals include the strength in product design. There is constant innovation in this area to ensure that customer needs and environmental needs are fully satisfied. A
• Demand Management: The Demand Management process delivers integrated and synchronized value chain supply-and-demand plans that maximize service levels and profit throughout the band of demand. It delivers one consensus, an unbiased forecast and supply plan that prepares for the inherent forecast variation, and enables proactive actions to be taken in place of reactive actions.
• Quality Management: The Quality Management process enables facilities to proactively control quality. It delivers defect-free products and services to customers and internal process partners.
• Process Planning: Process Planning specifies the procedures, bill of material and resources needed to transform product design into products.
• Supply Chain / Materials Management (including Outsourcing and Procurement): The Supply Chain / Materials Management process ensures consistent delivery of the right part, to the right place, at the right time, at the right quantity, at the right cost, at the right quality every single time.
• Lean systems: Caterpillar’s lean systems drive the execution of CPS processes on the production floor — including all processes involved in production from receiving raw materials at the facility to delivering the finished product to the customer.
• Capability Building / Training: Capability Building relentlessly pursues bringing CAT’s workplace values to life and delivers on the methodology, principles and tools of CPS. As an enabling process of CPS, Capability Building provides the necessary skills development, learning opportunities and coaching for the employees of Team Caterpillar.

The implementation of the Caterpillar Production System (CPS) has created a remarkable transformation in the way Caterpillar manages its operations and conducts business. It has also helped improve it’s project management techniques, resulting is higher success rates of its projects. Have you had a similar system implemented in your company. Do you think a system like CPS will work for non-manufacturing organizations?