- Avoiding stress and excessive cost towards delivery date of projects; caused by pushing forward problems.
- Addressing the invisible area of informal decisions, made by highly skilled and driven employees with best intentions. Pushed into shortcuts that are dictated by deadlines.
- This is not new, but increasing pressure makes controls vulnerable, because they are informal.
- Lean Basic Controls will reduce problems within the design process by simple rules rather than more bureaucracy.
- Stage Gates will be transformed from filters into verifications. Following Deming’s 14 Points: Cease dependence on inspection … (point 3).
In the my previous article Lean Basic Controls: Business Case , we described three areas of control loops in a descriptive way.
This time we will try to plunge in the detail and analyze why it works. The purpose is to explain how project management could improve. Existing controls are typically Stage Gates that generate series of corrections to the project, thus using the gates indeed as inspection stages. We will propose to start using these gates as control stages instead and using the short loops (now still invisible and informal) as our basis for control. This is a way to avoid unnecessary corrections and costs at later stages; while at the same time reducing frustrations in daily work.
1 Current condition
We expand the third example of the January Newsletter: it is about a single decision in a project. Of course, real projects have many parallel stories, with a similar structure each.
The contract for an industrial building has been secured and the project team is established. It is commonly known that the lead time for ordering roofbeams is a critical issue. Based upon the theory of constraints, the project team starts with the basic design phase and sets estimates for major parameters.
The team lead for roof construction is pushed by the project manager to work with estimates and is promised that, unlike other projects, the estimates will not be exceeded. Because of earlier experience the team lead first refuses to do so, since the status of parameters will remain “estimate”; why not make them “final” if urgency is high? After a short discussion, however, in which the team lead is reminded of the companies pride in “can do” mentality, the team lead gives in with reluctance.
At the first formal Stage Gate meeting (“Basic Design”), two weeks later, it is decided to order the roofbeams according to the agreed estimates. In the meeting, the team lead expresses his concerns that the margins are minimal and that any change from now will make new calculations necessary. Even more, expensive changes to the ordered material will result. Direct after the meeting he is
cornered by the project manager that this was not appreciated at all, since the client was present in the meeting. Apparently, the client has been told that flexibility is the strength of the company, and that the estimates were internally necessary to obtain the fast start that makes the deadline possible.
Two weeks later (and four weeks after the roof department received the estimates) one of the architects walks into the office of the team lead. He explains a design wish, coming from the client’s latest detail, to have a minor extra load on some of the beams and is trying in a friendly way to use the maximum of margins left. The conversation becomes heated when it appears that the client has already been promised this possibility, the team lead demands a meeting with the project manager and the architect first. The outcome is, that the team lead is forced to verify the possibility of a stronger roofbeam and to find out if extra costs will be charged. The team lead walks out with frustration because the project manager proposes to take lower margins, and even suggested that present margins are conservative. The team lead explained the regulatory requirements, but felt bad about being put under pressure this way. This feeling gets worse when he is asked to explain the extra costs again to the CFO later the same week. After that, the changes are communicated to the supplier and the extra costs are agreed. The client does not agree to pay for these however. Although formally the project manager is responsible, the opinions in the project blame the inflexibility of the roof department.
|JIDOKA, the undervalued and oldest lean tool “Stop the line” when any defect is seen by any worker. Western Management could for a long time not grasp this lean management instruction at Toyota. Of course, defects should be taken serious but stop total production? That cannot be efficient?
Yet, this was meant indeed; and maybe some stops will happen. But the impact is huge, giving priority and visibility to zero defect production, the line will rarely be stopped.
What if we would apply this to project management work? Never compromise in the early stages? But … this may affect the schedule? You will see that eventually this will reduce the frequency of repairs and schedule delays later in the project.
The subject remains silent until three months later in the final Stage Gate (“Ready for Realization”). The team lead is surprised to be confronted with a change in the beam supports. It is explained as purely esthetic change, but it will have an impact upon the forces on the tips of the beams. Normally this could have been absorbed by the margins of the construction. This time, because of engineering “on the edge”, the support area of the beams has to be re-calculated. It is a relief for the team lead that the change improved the support instead of being more critical. The other outcome would have been dramatic for the project. Therefore, we illustrate this with lucky clover four as anti-bomb.
But nevertheless, all calculations have to be updated with the new information, and extra costs for certification are made; the certification company sends a full invoice again.
Eventually the team lead is blamed for exceeding the budget of man-hours on this project. The extra vacancy for his team, as he requested, gets declined. The engineering manager suggests the team lead to follow a lean black belt course, to run his department more efficiently.
What do we observe?
The project manager just wants to avoid anything red in the iceberg, since he must report it to the board. Improvisation and can do are a strength of the company indeed, but in this project all margins are already taken at the start for cost reductions. This would not be a problem when it was a clear approach that was agreed. In this case the amber information is not welcome for open discussion. And as you can expect, information will hide in emails or in heated conversations and it may escalate into later costs and burnout for engineers. Because the amber area is not addressed, the red events are bound to happen again … and again.
|FUZZY CONTROL, SPC based upon judgement
Control charting is another tool (from the Six Sigma toolbox) that identifies an early warning in a process. When a process is within specifications, but a trend is found that indicates a deviation, you should stop the process and remove the cause before the process will run outside specifications. Why stop an acceptable process? Imagine this may cause late deliveries? Yet eventually it is better to remove the cause at once.
Although in a project organization, observations are typically judgmental (fuzzy), we can still apply the approach. The employee involved is very aware of “green zone” (comfort with output), “amber zone” (hope it is OK but no time to verify) or “red zone” (first draft output).
Imagine a help desk employee who can score each conversation in green (customer OK), in amber (hesitant customer) or even red (customer lost). Or a GP who can diagnose a flue for certain (green) or amber (please give a call after three days if not cured) and even red (try this prescription, and come again the day after tomorrow!). Amber information can be generated and used to reduce the red frequency!
|VISUAL MANAGEMENT, a classic
The daily shopfloor meeting at the whiteboard with the full team, will share any issues for the day. All relevant information can be visualized, and the board can be used all day. When the engineering manager would walk into the area, the team lead can show directly the status.
Again, imagine this for a project team. The estimates for the beams will be on the board. As an “amber input” so that the roof beam team is aware of the criticality when a colleague would have questions to them directly. And when the manager comes by, it will be an action item for him. Because Jidoka is violated by project management.
Rootcause removal means in this situation: a corrective conversation with the project manager.
2 Target condition
Now let us try to imagine a new situation for the same story?
The lead engineer for roof construction participates in the first meetings, to allow ordering roof beams early. The estimates are discussed together with the first ideas on the design. Eight of the ten roofbeams will cover the production hall area, and the team agrees that these will be finalized and ordered immediately. The two remaining beams are covering the future office area with an atrium, and will need detail engineering. The team agrees to order these beams with higher margins and by negotiating a later final design date at the supplier who can now reserve production capacity.
Two weeks later in the first formal stage gate (“Basic Design”), the eight roofbeams are communicated as final to the project team. The project manager explains this is a deliberate choice and unusual for the company. The client considers this as very professional and is made aware of the limited margins for changes.
When an architect drops in two weeks later, there is no frustration this time. The design margins are clearly set, and in the meantime the supplier scheduled the production of the ten roof beams; allowing changes in the last two. In a productive meeting, the architect and the roof beam team lead come to an elegant solution, which allows for creativity but at the same time remains within certification standards. Next morning, at the visual management board, the roof team can start working on the last two beams. The team is surprised by the absence of stress and discussions with the project manager. They will do this job in less time than scheduled, and without the stress they are used to.
In the last stage gate (“Ready for Realization”) the project manager expresses his feelings. This project is one of the first within both budget and schedule. He admits that he had concerns at first; similar to the roofbeams, several other items were discussed in much more detail than they were used to and he had feared a slow start of the project. The full day is scheduled for the meeting but the work seems to be ready at lunchtime. The team double checks if it is not too good to be true; but no further issues came up. This will be one of the first Friday afternoons that team leads are starting the weekend with their families.
What did we observe?
The fundamental change was focus upon the process, instead upon output alone. By solving the amber issues within the craftsmanship of the disciplines, none of the issues escalates into the red area of the iceberg (defects, costs and schedule breaks).
The informal information is now shared on the visual management boards, and the teams can deal with the issues locally. The project manager can now focus on real important things, since the exceptions that normally take all time, are prevented. And even more, the final stages of the project are calm, very different of the usual frenzy.