Wednesday, 01 February 2017 07:50

Project Management in a Lean Manufacturing Environment

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While many scholars have focused on studying LEAN and applying lean thinking and concepts on traditional project management...

(e.g. Basit Aziz 2012), very little is written about how project management is already being conducted in a lean environment. After all, lean manufacturing was never a 'project management free' environment. I personally joined a manufacturing company within the automotive industry 2,5 years ago and started running various improvement projects within their ongoing Lean Transformation program. As a result I have experienced first hand the differences between 'traditional project management' and 'project management in a lean environment'. It is clear that project management is an integral part of lean transformation; without a project management approach there is even no lean transformation or continuous improvement possible. I experienced myself that for various reasons (a.o. stringent time requirements and a clear project derivation process) a different ('leaner') project management style is applied simplifying many of the traditional project management processes and increasing overall project effectiveness.

The History Of “Lean Project Management”

Ever since the success story of Toyota and the Toyota Production System (TPS) became commonly known to the world, “lean” has become increasingly popular. In the past decades, many companies in different industries have adopted (part of) the TPS concepts and have been able to experience first hand the benefits of applying lean principles and thinking in their organization, not in the last place by increasing value through increased productivity and waste reduction (Liker 2004).

Since then different project management scholars have also studied lean principles in a quest to improve project management practices by adopting aspects from the lean philosophy, yet with mixed results. Studies that focused on project management within the construction industry show clear application potential for lean concepts within project management AND consequently showed the benefits of applying lean in the form of improvements in value generation for clients and less waste in the process (Ballard and Howell, 2003), while other studies have more difficulty showing direct application potential and benefits (Aziz 2012). The term ‘lean project management’ was even born, yet till date no commonly accepted definition of this term could be found (Coster & Van Wijk, 2015, Basit Aziz, 2012).

One immediate observation here is that when one views project management as the production system of a company, as is the case with construction, the application of lean principles is more obvious. After all, such project based production systems include manufacturing (related) processes such as assembly and material supply, which can obviously benefit from lean manufacturing concepts.

With many other kinds of projects such as a software delivery project, an improvement project of an existing process, or an integration of a new business into a service organization, the applicability of lean concepts becomes less obvious and its potential benefits less clear.

Interestingly enough, most, if not all, studies so far always took the approach to study lean concepts and thinking and then try to apply these concepts to traditional project management. Surprisingly little to no research is focused on how project management is already being conducted within a lean environment.

After all, lean production was never a ‘project management free’ environment. On the contrary, projects in different size and shapes form an integral part of any (successful) lean production system. The A3 method, for example, is essentially a project management method and the Small Group Activity (SGA) improvement teams are essentially project teams (Liker 2004).

I have personally managed various improvement projects the past 2,5 years with a global (tier 1 and 2) manufacturer of automotive parts, following their lean methodology and believe there are clear takeaways that could be applied in general to project management.

Case Study: Project Management Within Lean Manufacturing

The company in question is actively driving a lean transformation program inspired by TPS. A crucial element of this program is that a fixed number of improvement cycles take place every year (2 – 4 per year, depending on the ‘lean maturity’ of the manufacturing location). Each cycle has a fixed start and end date during which a certain amount of improvement projects take place. The topics for the projects are decided at the start of each cycle, following a structured derivation process based on the latest business requirements, resulting already in quantified target conditions for the projects. An often-used method of such a derivation process is the use of a KPI-tree.

Representation of all departments and management layers are present during this kick-off, and will continue to meet monthly during fixed ‘lean transformation days’ until the closure of the cycle. Project progress and status will be discussed in each of these sessions. The program is further characterized by making use of global standard templates, such as a standard layout for weekly presentation boards and -last but not least - a standard process to hand over the project outcome from the project organization to the line organization in a proper and structured way that includes a joint evaluation period of affected KPI’s.

Project management and execution in such a setting implies a different approach and carries various advantages compared to traditional project management:

1. Clear and Simplified Scope Management

As mentioned, project targets are set immediately during the kick-off of the new cycle – already setting clear boundaries to the project scope. The improvement cycle further more poses a strict time constraint, which is acknowledged by all involved, which creates a clear incentive to keep the scope small. One can even say that scope is adjusted to the available time, since the main goal is to implement an improvement within the available time. “Slice the elephant” is an often-heard remark in this context, and there is strong focus and support to stick to the project objective to enable a timely completion of the project. In case of doubts during any project phase, e.g. on which direction to take or to include a certain deliverable to the project, the main question asked is always: “will this contribute to reaching our target condition?”. If the answer is “no”, it will not be added to the project scope.

2. Reduced Complexity in Stakeholder Management

The project derivation process involves the key management stakeholders at the factory. Hence the management buy-in is there from the start, implying no need for additional steering committee or sponsor approval of the project. In fact, there is often no need at all for establishing a steering committee for these improvement projects. Moreover, since the projects are derived from the overall business requirements, there is much less need to convince other stakeholders: after all, the same business requirements apply to all of them, and the question “why do we do this project” is immediately answered.

3. Simplified Communication Management

Project updates to the entire management are provided on pre-defined moments during the improvement cycle (known as the lean transformation days). The methodology in place further dictates the used of weekly presentation boards following a pre-defined template, based on which a weekly project update is presented to the key stakeholders of the involved functional area (e.g. logistics or manufacturing). Hence there is no need to establish a communication plan during the project initiation phase. The weekly presentation board furthermore contains a fixed content structure to steer that the right content is being presented.

4. Crystal Clear Closing Processes

The methodology applied in this company includes a well structured, standardized process to both hand over the project outcome to the internal customer (often the line organization) and to monitor and stabilize the new or revised process after go-live. This process (or actually it's a mini system on its own) includes a separate handshake meeting where the project organization reviews together with the line organization any new applicable working standards and where the project organization proves the new solution actually brings the desired benefit based on a previously done validation. Based on this validation the project is officially handed over to the line organization, which is formalized through the actual signing of a handover document.

After this handover the project is not closed yet. The ownership has changed to the former internal customer, and for a pre-defined period (usually a 2-4 weeks) the teams jointly monitor performance of the project outcome. Once the performance is within the pre-defined stability criteria, this last project phase is closed and the project outcome becomes part of daily management.

Conclusion and Key Takeaways

In my experience, applying the lean project management approach as described here hugely increase overall project effectiveness and efficiency. Although this approach is primarily applied within a manufacturing environment, there are several key takeaways that will apply in any business environment.

Have a clear “Why?” from the Start

In this approach the ‘why’ is answered during the project derivation phase and is immediately acknowledged by the management, since projects are derived by the management from the actual business requirements. Having a clear ‘why’ facilitates buy-in and support and can simplify stakeholder management.

Focus and Scope, Scope and Focus

Such an obvious one considering the project management triangle: Time is fixed in this approach, creating a strong focus on defining a realistic project scope AND helping the organization to stick to the scope. Needless to stay that having a realistic scope that everyone commits to will benefit any type of project! When in doubt, answer the question “will this contribute to reaching our project objectives?”.

Using A Clear Hand Over and Closing Process

For me personally the closing phase has always been one of the most challenging phases of project management, and making use of available standards in this regard has hugely improved the time and effort needed during this closing phase.
The methodology applied in this company includes both pre-defined handover conditions and dictates the crystal clear formulation of closing conditions (stability criteria). Project hand over and closing then becomes based on measurable criteria, with no room for arguments or different interpretations.

References
- Aziz, Basit, “Improving Project Management with Lean Thinking?”, INN Division of Project, Innovation and Entrepreneurship (PIE), LIU-IEI-TEK-A—12/01272—SE, Department of Management and Engineering (IEI), Institute of Technology, Linkoping University, Sweden, 2012
- Ballard, Glenn and Howell, Gregory A., “Lean project management”, Building Research and Information, 31(1), 1-15, 2003
- Coster, Coenraad and Van Wijk, Sjoerd, “Lean project management; An exploratory research into lean project management in the Swedish public and private sector”, Master thesis, Umea School of Business and Economics, 2015
- Gabriel, Eric, “The Lean approach to project management”, International Journal of Project Management Vol. 15, No. 4, pp.205-209, 1997
- Harsha N. and Nagabhushan S., “Enhancing Project Management Efficiency using Lean Concepts”, IOSR Journal of Mechanical and Civil Engineering, Volume 8, Issue 4, pp. 20-22, 2013
- Liker, K. Jeffrey, “The Toyota Way; 14 management principles from the world’s greatest manufacturer”, McGraw-Hill 2004.
- Tan, Willy, “Managing Lean Projects: Understanding the Structures of Lean Production”, The International Journal of Construction Management Vol. 11, No.3, pp. 67-78, 2011

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Pieter Den Daas

Sr. Supply Chain Project Leader at Bosch Transmission Technology

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