What is lean project management?
This is the application of lean manufacturing principles regarding project management. The primary goal of lean project management is maximizing value while minimizing losses. Lean means delivering more value while eliminating waste.
2. Objectives Of Lean Project Management
The main objectives of lean project management are:
- Cost reduction, including labor;
- Reduction in the timing of the creation of products;
- Reduction of production and storage space;
- Guarantee of product delivery to the customer;
- Maximum quality at a certain cost or minimum cost at a certain quality.
3. Principles Of Lean Project Management
Suppose your company has been facing various problems for an extended period and does not receive sufficient income for the efforts. In that case, it is worth thinking about introducing lean project management to the enterprise.
Lean project management at the enterprise is capable of not only changing the situation, slightly correcting it, but completely changing the way that exists in the company. And it’s not that you and your employees worked poorly. Simply introducing lean project management in an enterprise will allow you to spend less time on manufacturing, reduce rejects, and increase productivity.
Even though the practical implementation of the principles of lean management requires serious efforts from the enterprise, they are quite simple. There are five of them, and they can be formulated as follows:
The basic tenet of lean project management is to create value. Value is defined as all the actions that the consumer is willing to pay for. An activity that creates value must meet the following three criteria: First, the action is needed by the consumer. Second – this action changes the form/function of the product/service, thereby bringing it closer to the final state. And the last – the action should be performed without defects on the first try. If one of the requirements is not fulfilled, it is considered that the action does not create value.
This principle allows you to identify what is valuable in the selected product for the end-user. Often at the enterprise, extra efforts are made that do not affect the product’s value. They need to be determined to achieve the desired result from the implemented system.
Determining what forms the value of a product from a consumer perspective is crucial. A variety of actions can be performed at the enterprise, and not all of them are important to the consumer. Only when the company knows exactly what the final consumer needs is, is it able to establish which of the processes allow him to provide his values and which ones do not.
The next principle of lean project management is to eliminate losses. Lean project management makes it possible to determine losses during the production of a product and eliminate them. Identifying what actions the production chain necessarily needs and then eliminating the loss is critical. To do this, you should describe all the actions taken at the enterprise, which is the delivery of the product to the final consumer.
To optimize work and identify losses, it is necessary to describe each action from the moment of receipt of the order until the delivery of the product to the consumer. Thanks to this, it is possible to establish what help it is possible to improve production processes.
Any action that does not create value is a loss. It is customary to distinguish eight types of losses which are overproduction, excess stocks, defects, valueless activities, expectation, excessive movement, transportation, and unused potential of employees.
If we look at a typical process, we can find that all actions not aimed at creating value take up 50% – 90% of the production cycle.
A Continuous Flow Of Process/Product
There is also the principle of a continuous flow of the process/product movement and information from the start to the end of work. The purpose of any process is to organize the continuous movement of the flow of products or information from beginning to end. The difficulties that prevent the creation of flow are as follows:
- Moore or flux inhomogeneity. All efforts should be focused on controlling the flow; if heterogeneity is detected, measures must be applied.
- Overloaded stream. This is the case when the process goes beyond its capabilities. The specialists working with the process must be aware of its scope. Going beyond the scope of the process will also entail losses.
The principle of “pulling” is characterized by an accurate idea of the required volumes of products, leading to replenishment. The “pulling” system is characterized by a small lot size and a low level of incomplete production and inventory indicators. The “pulling” system forms a management style that is characterized by the presence of alerts and signaling systems, as well as the presence of a developed communication system.
The ultimate goal of any process is perfect efficiency. Lean project management sees the solution to this problem in creating an invisible and flawless production stream without losses.
Rebuild Actions In The Production Chain So That They Turn Into A Holistic Workflow.
The production process should be arranged so that any losses (downtime, expectations, etc.) between operations are eliminated. This may require new technologies or process redesigns. It is important to remember that any process should include only those actions that add value to the final product but do not increase its value.
Act-On The Basis Of Consumer Interests.
The company should produce only that product and in such a volume that is necessary for the final consumer. This avoids unnecessary actions, unnecessary losses, and costs.
Strive To Improve, Constantly Reducing Unnecessary Actions
It is necessary to apply and implement a lean manufacturing system more than once. The maximum effect will be only if the search for losses and their elimination is carried out regularly and systematically.
It is very important to use lean management technology. Production will remain thrifty only through continuous improvement, reduction of unnecessary efforts and costs.
As a result of applying all the basic principles, it will be possible to achieve a significant reduction in costs. The result of the implementation will:
• Offer the consumer the product he needs;
• Reduce the cost of the product if necessary;
• Increase sales through a satisfied customer.
These principles must be relied upon when implementing a lean management system, and this applies to any field of activity, from design and project management to production and financial management. To increase labor productivity, find and reduce losses, optimize production, etc.
4. Benefits Of Lean Project Management
It is always good to remind ourselves why lean management is beneficial. Some of the major benefits are discussed as under
One of the main advantages of lean management is greater visibility. This is greater visibility in all work progresses, both short and long-term plans and project status.
As the saying goes, knowledge is power. If the team can access knowledge, the risks and resources can be managed effectively. Team members empowered with knowledge can make better decisions that may help the firm.
If we have more options, our goals are likely to be achieved. This includes delivering products that are of high value to customers and businesses.
Suppose there is a greater knowledge of the product development system, the capability to make better decisions, and spending less time on previous projects. In that case, we are likely to finish the next project more quickly.
It is indeed true that if a firm is making a lot of money, it is in a better position to acquire more staff, more equipment, and other things that can aid in performing jobs accordingly. This will, in the long run, benefit an organization.
Time is money. In a real sense, if we waste time, we are wasting money. If we are not selling any products, there is no profit being made. More importantly, meeting the customer’s needs faster is very profitable. This is because more products will be sold out hence making profits.
5. Challenges Associated With Lean Project Management
The problems of lean project management are more related to its implementation. They are as follows;
Organizational problems arise when the process of improving production efficiency is poorly or improperly organized. The reason for the poor organization of this process is often the routine of tasks performed – company employees carry out their activities in a functional mode, performing repetitive tasks following their job descriptions. The introduction of lean production, as well as the application of its methods and tools, is an activity to develop a company. Such work is most effectively carried out in the form of a separate project from the main activity since it is a new type (method) of activity for the organization. Project work differs from the routine work of company employees, and therefore its organization may carry some difficulties for the company’s management and its personnel. To avoid problems of this kind, company management needs to determine the methodology for managing this process and organize it effectively before implementing lean production.
Domestic problems are usually associated with the resistance to change characteristics of most people. Employees are most often against making any changes to their work, as they are used to doing routine work and do not want to make additional efforts or are afraid of redistributing responsibility, duties, and authority. The introduction of lean production requires not just a series of actions, but a transformation of the organization’s corporate culture, support for the implementation process by all employees, and, therefore, changes in their behavior and thinking. Domestic political problems should be prevented at the initial stage of the project to introduce lean production at the enterprise because change management is much easier to implement in the early stages of resistance. Company management must analyze the risks involved and take preventive measures.
Value problems in the implementation of lean manufacturing carry the greatest risks. A value problem arises when the moral values and culture of a company do not correspond to the concept of lean manufacturing and its philosophy. To successfully implement lean manufacturing, the company, its management, and its employees must support continuous improvement and aim to create value for customers. Successful implementation of lean manufacturing should be based on an understanding of the core values of lean and philosophy.
6. Implementation Of Lean Project Management
When implementing lean project management, the question inevitably arises of the appropriateness of certain actions or material costs. To not be excruciatingly painful to waste money and resources, it is worth using time-tested project management techniques – for example, lean principles, which allowed Toyota to become a leader in the global market.
The concept of thrift, which has become widespread in many modern companies, implies the organization of work based on minimizing unnecessary actions and expenses. You can familiarize yourself with modern lean management techniques and master the practical skills of their application at all stages of the project management life cycle: from initiation to completion.
What Should Be Prepared Before Starting To Implement Lean Project Management?
At a minimum, the fact that the creation of a constantly working and effective system of updating the company and improving the quality of staff’s work instead of scattered attempts to “patch up” here and there is a difficult task that will require the creation of new posts and even whole structures in parallel with the abolition of existing ones, investments, and perseverance.
Steps Of Implementation
- Choosing a leader willing to take responsibility for driving change
- Gaining knowledge about Lean methodology, moreover, as close as possible to the source, not distorted. In the future, this knowledge should become the leader’s new value system, which he will implement integrally and not as point half measures
- Identification of the most critical business segments
- Establishing losses wherever possible and eliminating them
- Creating maps: the current and future status of the reporting facility
- Practical work on the implementation of Lean, which is highly desirable to make visible to all interested parties
- Combining among themselves the results achieved in different directions
Implementing the Lean methodology is the best solution for those who want to succeed in business in the face of fierce competition. The introduction should begin by studying the philosophy of lean manufacturing as such. An important component of this process is an analysis of what Lean manufacturing tools are (lean manufacturing tools). What and how can be achieved with Lean tools and techniques?
To put it very briefly, lean manufacturing tools are the shortest way to:
- Lower costs for product quality
- Managerial process transparency
- Increase customer satisfaction with company products
- Increasing the involvement of company employees in the production process and enhancing their motivation
- Reduce resource loss.
When it becomes clear which of the areas is currently the highest priority for the company but is not well developed, you can begin to select tools to improve this particular segment.
For a successful business organization, it is essential to use a lean manufacturing system. In the name of this system lies the main principle – to organize work in such a way as to eliminate unnecessary labor, time, financial, and other costs. If we talk about what such lean manufacturing is short, then it is a concept of competent management, which allows us to optimize any business process.
The application of the concept allows for achieving several goals. The generalizing goal of implementing lean manufacturing is to fully reduce the cost of all resources used in business without compromising the quality of products, goods, or services.
- Overproduction, when unnecessary products are produced or too many products are produced;
- Stocks when an excess amount of materials necessary for the manufacture of a product enters the production process;
- Excessive processing – efforts that do not affect the final value of the product for the client-consumer;
- Unnecessary movements when moving workers, tools, and equipment, which do not affect product improvement;
- Defects, defective products that are inspected, sorted, disposed of if necessary, or their grades are changed, they are repaired, replaced;
- Expectations – time costs associated with the expectation of employees, materials, equipment, and information;
- Transportation – the movement of parts or materials within a manufacturing organization.
7. Methods and Tools For Implementing Lean Project Management
Below are the common tools used to implement Lean Project Management.
- Mapping the value stream – a created diagram of graphs with the image of basic indicators that allows you to display the relationship of all production flows.
- Pulling in-line production is a detailed diagram of a production organization built on the needs of each subsequent stage.
- Kanban – a system for regulating business processes both within the enterprise and beyond, can reduce losses related to stocks and overproduction.
- Kaizen is a tool for continuous improvement, which consists of continuous quality improvement.
- The 5C system is a competently implemented technology for creating the most effective workplace.
- SMED system – quick equipment changeover.
- TPM or Total Productive Maintenance — General care for your production equipment.
- The JIT system or Just-In-Time (i.e., just in time) is a managerial approach to production organization based on consumer demand. It makes it possible to produce products in the right amount, exactly at the right time.
- Visualization allows you to see the production state and prevent and debug production processes.
- U-shaped cells – an arrangement system of the used production equipment in the form of the letter “U.”
The main methods and tools of lean management are practical elements for achieving the goal.
8. Company Transformation Through Lean Project Management
Unilateral top-down solutions implemented without filters should leave room for discussion and negotiations at each company level in the long run.
This willingness to transform is a strong administrative gesture on management. However, the lack of involvement of employees in work and the lack of necessary solutions make this approach almost impossible.
How to make a company grow? What are its growth mechanisms? An example is large customers who use lean management with strong HR processes. The clear and understandable benefits of the system apply to the dynamics of the entire company.
Monitoring Lean practice in related business in a corporation (banking, financial, insurance, public service, hospitals) increases efficiency, putting a person at the center of the system.
The introduction of lean production, as well as the application of its methods and tools, is an activity to develop a company. Such work is most effectively carried out in the form of a separate project from the main activity since it is a new type (method) of activity for the organization. Project work differs from the routine work of company employees, and therefore its organization may carry some difficulties for the company’s management and its personnel. To avoid problems of this kind, company management needs to determine the methodology for managing this process and organize it effectively before implementing lean production.
Lean project management helps companies quite a lot. Without resorting to serious investments and using mainly their internal reserves, they can achieve tangible growth in labor productivity. But the Lean system is a special approach to production and all its components. It offers not only to increase labor productivity and make production more efficient but also to create favorable conditions for the formation of a corporate culture, where each employee is involved in achieving the success of the company.