May 6 and 7, 2010

Second Generation Lean Product Development

Applying the principles of flow | Don Reinertsen

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Why Consider Lean Product Development?

Lean methods have been used for over 50 years in production processes, producing huge economic benefits. They are based on principles that are transferable to product development. In fact, these methods are the only practical way to simultaneously achieve large improvements in the speed, quality, and cost of product development. However, using lean methods in product development requires some insight. To succeed we must have a clear idea of which management practices obstruct flow, and how to remove these obstructions. Without this insight we will dilute our energy in lengthy process mapping exercises, and ultimately lose momentum. This workshop focuses on proven leverage points. It concentrates on specific practical methods that have helped participants achieve as much as a 90 percent reduction in cycle time. It uses a unique economic approach to identify which methods will provide the fastest payback and teaches you the science behind the methods. This seminar is fundamentally different from other workshops in its intense focus on quantification and economic justification. It provides practical methods rather than general philosophical principles.


I. Introduction
Most companies applying lean methods in product development fail to appreciate the critical differences between repetitive manufacturing processes and non-repetitive development processes. Such differences mean that waste is found in very different places. Until this is recognized, companies will only attack easily visible, but superficial forms of waste.

This section will cover:

• An overview of how lean techniques improve product development speed, quality, and cost
  
• An understanding of the critical differences between product development and manufacturing
  
• An explanation of importance of Design-in-Process Inventory
  

II. Establishing an Economic Framework

Every product development process has multiple economic goals. To balance these goals we must express them in the same unit of measure. This method allows us to quantify the Cost of Delay and to use it to determine the economic cost of queues in our process.

This section will cover:

• How to quantify the Cost of Delay
  
• How to use information to improve decision-making
  

III. Managing Queues

Many developers can't quantify the value of excess capacity in their development processes. Consequently, they overload their processes and wonder why they are always late. Development processes need excess capacity to function in the presence of variability. Queueing theory gives us insights on how to balance the cost of queues against the cost of excess capacity.

This section will cover:

• How queues affect economic performance
  
• How variability and over-utilization cause queues
  
• How to measure and manage queues
  
• The 10 most important product development queues
  

IV. Exploiting Variability

Variability is a greatly misunderstood concept in product development. Paradoxically, you cannot add value in product development without adding variability, but you can add variability without adding value. A product must be changed to add value, and this change creates uncertainty.

This section will cover:

• How to distinguish between good and bad variability
  
• How to eliminate unnecessary variability
  
• How to reduce the economic consequences of necessary variability
  

V. Reducing Batch Size

In manufacturing, batch size reduction is the key factor that creates order of magnitude reductions in cycle time. In product development, only 3 percent of companies have formal efforts to reduce development process batch size.

This section will cover:

• The importance of small batch size and how to achieve it
  
• The ten most common batch size problems in product development
  

VI. Applying WIP Contraints

Most product development processes neither measure nor control WIP. Yet, excessive WIP leads to long cycle time and slow feedback loops. Effective WIP management requires knowing when WIP is excessive, and having tools to correct this problem.

This section will cover:

• The science and economics of WIP contraints
  
• Nine practical ways to react to WIP explosions
  

VII. Controlling Flow I: Congestion & Cadence

Processes with variability, such as product development, are prone to congestion. Both traffic systems and telecommunication systems provide valuable insights on congestion avoidance and congestion control. Today's development processes underutilize cadence.

This section will cover:

• What causes congestion and how we can prevent it
  
• How a regular cadence improves performance
  
• Examples of cadence applied to product development
  

VIII. Controlling Flow II: Synchronization & Sequencing


Synchronization reduces the formation of queues. When queues form we can reduce their cost by sequencing work correctly. The First-in First-out methods of manufacturing are poorly suited to this challenge. Fortunately, product developers can exploit more advanced approaches that are used in computer operating systems.

This section will cover:

• How synchronization reduces queues
  
• Economically-based methods for sequencing work
  
• A network-based approach for managing flow
  

IX. Accelerating Feedback

Slow feedback loops cause enormous waste in product development. Yet, many developers do not measure feedback speed or try to improve it. Well-structured feedback loops actually create spectacular opportunities to smooth flow, increase efficiency, and improve quality.

This section will cover:

• Why fast feedback is critical
  
• How feedback reduces variability and improves flow
  
• Metrics for managing flow-based product development
  

X. Decentralizing Control

Some product developers see highly centralized control as the only way to improve performance; others argue for complete decentralization. We will examine the lessons that can be learned from military approaches that balance centralization and decentralization.

This section will cover:

• The advantages and disadvantages of decentralized control
  
• How to preserve alignment without sacrificing initiative
  

XI. Finding Waste

Because product development processes add value in different ways than manufacturing processes, waste is found in different places. Typically, waste shows up in predictable places in development processes.

This section will cover:

• Ten common areas of product development waste
  

XII. Implementation

The final section will review factors that are likely to lead to successful implementation. Course participants will begin designing a plan for implementation.

This section will cover:

• How to initiate pilot programs and scale them up
  
• A group exercise to identify immediate next steps
  

Participants

This program is designed for managers who currently play a role in product development. It will be particularly useful to companies that are reaching the point of diminishing returns using conventional approaches to product development and lean product development. It is preferred that participants have a basic understanding of lean techniques and at least 5 years of experience in product development. Attendees should bring a calculator, since the course will involve some light calculations. The techniques covered are general methods of analysis rather than industry specific rules. Just the way physics applies to both large objects and small ones, the methods used in this course can be applied in a wide variety of industries.


Price: DKK 11,000.00 excl. VAT.
Time and Place: May 6 and 7, 2010, 8:30-16:30, Copenhagen.
Registration: Phone +45 7026 2118 or email.