What is Lean PD
Lean Product Development is a generic term for applying “Lean Thinking” onto the product and process development context. Lean Thinking was first written down by J. Womack, who interpreted the backgrounds of the success of, amongst others, Toyota. Lean Thinking is more of a cultural aspect than a set of methods and tools. It therefore includes key principles and key behaviors to achieve a state of continuous improvement as a starting point and methods and tools as an effect thereof. Many lean practitioners, at the start, focus at the tools and methods and only later recognize the need and value of the key principles and behaviors. Lean started out as a method to improve efficiency and effectiveness in manufacturing. Although you can apply the same key principles and key behaviors to the context of product development, the methods and tools are harder to translate. Lean Product Development has its own set of methods and tools and its own set of challenges related to implementation.
Lean Product Development starters, practitioners and experts get together at the Lean Product and Process Development Exchange events to share their insights, such that we continue to develop the framework of Lean in Product Development together, containing for example:
- Methods to grow and improve understanding of customer value
- Visual planning methods to achieve reliable and fast time to market
- Set Based Engineering
- Rapid Learning Cycles
- Creation, capturing and reuse of knowledge (“knowledge management”)
- Handle multi project environments while maintaining flow
- Value stream thinking to break silos
Upcoming: LPPDE Europe 2017 Paris France Conference.
True LeanPD (Lean Product Development) should contain a second P
This P for process is an essential element and therefore part of our name: Lean Product and Process Development Exchange Inc.
Why? When implementing lean in product development we should look at it from two angles. The first angle is the one that is mostly considered: we should develop products in a lean way, making the development process more efficient and effective. The second is often forgotten, however it was recognized already by the early experts on lean for product development (in particular Allen Ward): the developed product should be part of a lean system: a lean production process combined with lean distribution, selling and delivery processes. Already at an early stage, the engineers should consider this full system to prevent designing in wastes downstream.
Are “lean innovation” and “lean product development” the same?
Many people indeed use the two terms “lean innovation” and “lean product development” as if they are the same thing. In fact, when you look at how they define the terms, they are the same thing – the use of innovation may be part of the company culture, for example (in my company, for example, people refer to the product development department as “innovation”). However, I did once hear a good distinction between the two:
- Lean product development is used for applying lean onto the classical research & development (R&D) department: the organization where engineers create the knowledge required to develop products and realize product development and related processes.
- Lean innovation is used for applying lean onto the value stream that is required to bring a product from idea to market. This does not only require the R&D department to join in, but as much roles like marketing, market intelligence, purchasing, engineering, etc.
LeanPD is making improvement of product development performance really work
Why leadership and team behaviors are essential to achieve excellence
Many organizations seek to improve performance in a sustainable way. R&D departments are no different. Lean offers a holistic approach to improve: holistic, because it does not only contain methods & tools – it also contains the glue that makes improvement stick: a system of team and leader behaviors that enable them to sustain and even continuously improve their performance. LeanPD implementations should therefore balance the two aspects:
- Implementation of a set of methods and tools mostly specific to the situation: manufacturing for example has SMED (Single Minute Exchange of Die) and TPM (Total Productive Maintenance). Similarly, the toolbox for lean in product development contains for example SBE (Set Based Engineering), rapid learning cycles, chief engineers and visual planning methods.
- Implementation of a set of behaviors that make improvement stick. This set of behaviors is more generic for all lean systems (such as lean manufacturing, lean office, lean healthcare or lean product development). These behaviors are for example daily management using visual boards, adherence to standards, consistently training on standards, kamishibai (checking on the use of standards) and kaizen (improvement by everyone, everywhere, every time).
Why lean product development implementations improve both efficiency as well as effectiveness
When a company wants to innovate, it needs to address both the efficiency as well as the effectiveness of the innovation process: efficiency, because we do not want to spend time and effort on aspects that do not add any value and focus on the value adding part of the work. Effectiveness has to be included too, because we do not want to end up developing the wrong product, whether or not the process thereof is efficient. Effective innovation is creating a product that adds value for both the customer and for the company that sells it. Effective innovation requires true customer understanding to create a valuable product proposition in combination with a clear understanding on how you can earn money with that proposition. Efficient innovation requires a clear understanding on what process steps add to creating that proposition and what steps don’t as well as the ability to remove or minimize those non value adding tasks.
In lean product development implementations, improving effectiveness and efficiency should be clearly balanced: for example, identifying the customer interests for a new product through customer observation improves effectiveness – creating an oobeya [one room with visual project overviews on the wall] improves efficiency through improving communication, knowledge flow, review and reporting.
Implementing lean in product development requires a paradigm shift: learning first
LeanPD = knowledge based development = learning first paradigm
Knowledge plays a central role in innovation and product development. Similarly, when implementing lean in product development, one needs to pay significant attention to knowledge. As this requires a radically different way of approaching especially the front end of product development, the new way of working requires a paradigm shift. Let’s investigate a little more what is happening.
James Womack already taught us with his “Womack cycle” that we should focus on sustaining the cycle of defining customer value, identifying the steps to value, create flow, allow for pull and continuously improve. Centrally in there is defining the so-called value stream. In innovation, there are two essential value streams: the product value stream that brings the product from idea to market (i.e. the development projects) and the knowledge value stream, the organization’s ability to create, capture and reuse knowledge.
These two value streams are clearly connected: knowledge is the enabler of bringing an idea to market. Once created, this knowledge needs to be captured in the knowledge value stream. In a next project, the existing knowledge is pulled from the knowledge value stream to be reused in next product. Experts in the area of LeanPD believe that excellent performance in the knowledge value stream can speed up the product value stream by 30% to 50%.
The paradigm shift that is needed sits especially in the first part of the product development process. It is referred to as “Learning First” and it means that to start with the critical knowledge gaps are identified. The team starts to fill these knowledge gaps by creating knowledge: technology, but also insights on consumer interaction, key risks in the proposition and business case. Only when the critical knowledge gaps are closed, Michael Kennedy refers to this moment as “success assured”, the product is detailed and tested.
This is a paradigm shift, as most organizations are used to as quick as possible define the requirements, choose a concept, detail and test it, fail often, iterate and learn from that. In Learning First, the order is changed. Detailed requirements and full concept testing is later in the process with much lower risk, whereas testing and experimenting to close knowledge gaps is pulled to the very front. Therefore we refer to Learning First as “test then design” where traditional development is “design then test”.
The quest to achieve innovation excellence
Innovation is investing in new ideas, and that comes with a risk as new ideas always require knowledge gaps to be filled and it is never certain if this will be successful. Many companies have something like “achieving innovation excellence” in their mission; but what is excellent innovation? Innovation with no risk at all equals no innovation.
The leanPD answer to this question makes more sense: innovation excellence is achieved when the company is able to discern quickly those ideas that can be successful from those that won’t, without spending loads of money.
There are two important aspects to this:
1. The company should be able to create, capture and reuse knowledge effectively and efficiently: it should have a knowledge value stream that is continuously improved
2. The company should put as much as possible learning in the early phase of projects. At this point, when playing it smart, the company can maximize learning while costs are still low, such that the most promising ideas will surface easily.
How to identify waste in the product development process
Why is the popular “value is anything the customer will pay for” not sufficient in product development?
Lean experts will tell you that, when you want to be lean, it is important to remove waste. Waste is anything the customer is not willing to pay for. For example; when you manufacture paperclips, the value creation is in the cutting, bending, packing of the paperclips, where waste is in moving paperclips from one production step to the other and defects.
When you look at a product development process one could apply the same definition: “waste is anything the customer is not willing to pay for”, and you will easily identify the easy waste sources: poor meetings, delayed decisions, searching for those samples. However, working in that manner, you also easily end up in a grey zone. For example: what customer wants to pay for work on idea that never made it to market? Not one. But what if the working on that idea led to knowledge that is later on used for a product that did make it to market? Would you label the work on the first idea still as waste?
Allen Ward and Durward Sobek did solve this in an elegant way. The fuel of product development is knowledge. When there is knowledge, value can be created for the customer. What if we would define waste in product development as “everything that does not create usable knowledge?” That would allow for exploration and ideation. That would allow for substantiation of ideas and early learning. That would allow, in short, to give knowledge the central place in the product development organization that it deserves.
The two value streams of product development
Improving product development requires creating flow in both of them
In lean implementation in factories or transactional offices, typically, one value stream is considered: the flow from incoming material to shipped product. Starting from that value stream, the non-value adding steps are eliminated or reduced to create more flow.
In lean implementations in product development, however, there are two value streams to consider: the flow from idea to developed product and the flow of creating, capturing and reusing knowledge: the knowledge value stream.
Obviously, focus on the flow from idea to developed product will make your innovation process more streamlined. Focus on the knowledge value stream will enable the knowledge that is created to flow from one project to the other and thus preventing knowledge to be created for a second or even third time using valuable hours that cannot be spent on increasing the innovation content. Experts on LeanPD typically indicate gain in product development time of 30% to 50% when focus is put on increasing flow in the knowledge value stream.
Why many LeanPD implementations start with visual planning methods
When you would retrieve all conference agendas of previous LPPDE conferences, you would see a common denominator: visual planning methods. The reason is that many leanPD practitioners choose to first experiment with forms of visual planning for their development projects.
Planning of complex development projects is tedious and hard. Many project managers spend a significant part of their time on creating, updating and tracking their planning and maintaining a high level overview of the key tasks proves to be often hard, especially for those not directly involved, such as managers that want to review project logic.
Using visual methods is a low threshold way to for example make small steps to improve the high level overview, or to improve visibility of slipping tasks. When the first step is successful, also the next steps are relatively small. In such a way, the project team can continuously improve their project planning process without taking a lot of risk.
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