Journey to Lean Continuous Improvement Supported By

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  • 8/3/2019 Journey to Lean Continuous Improvement Supported By

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    Making Leaders Successul Every Day

    Agst 2, 2010

    Y Jey T Lea: CtisIpeet Sppted By Tlsby Aleade Petes, Ph.D.

    Bsiess Pcess Pessials

    http://www.forrester.com/
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    2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Inormation is based on best availableresources. Opinions refect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective companies. Topurchase reprints o this document, please emailclientsupport@orrester.com. For additional inormation, go to www.orrester.com.

    F Bsiess Pcess Pessials

    ExECuTIvE SummArY

    Forrester interviewed the executives responsible or the deployment o the Lean continuous

    improvement initiative at Wipro echnologies, a global supplier o technology services. Te case

    study shows that Lean can become an important dierentiator or I service organizations, striving to

    partner with their business customers and increase the stake in business transormations. Organizations

    embarking on the journey to Lean should ollow Wipros staged approach centered on the deployment

    o a Lean productivity team (or center o expertise) and unied Lean tool kit and perormancemeasurement system. But in addition to these tangible steps, many organizations will need to push aside

    a ew so barriers that risk making Lean eorts stagger or stall: 1) skepticism about what Lean really is;

    2) lack o leadership; and 3) silo culture.

    TABLE oF ConT EnTSBarrir To La

    Wipro Dotrat How To Iplt La

    Ad Oro It Barrir

    Leas Fll Ipleetati At Wip Sppts

    Bsiess EpasiLea At Wip Sppts Bsiess Sltis

    Beyd otsced Stwae Deelpet

    rECommEnDATIonS

    Yor Jory To La I Abot Oroi It

    Barrir

    noTES & rESourCES

    Feste iteiewed Wip Techlgies ad

    10 IT leades eseach spsed by Feste

    Leadeship Bads (FLB) diig bsiess

    ale with pcess ipeet.

    Rlatd Rarh Dot

    What CIos Shld Kw Abt Lea

    octbe 27, 2009

    Diig vale With Pcess Ipeet

    octbe 6, 2009

    Lea: The new Bsiess Techlgy Ipeatie

    Septebe 29, 2009

    Agst 2, 2010

    Y Jey T Lea: Ctis IpeetSppted By TlsWips Case Stdy Shws The Wayby Alxadr Ptr, Ph.D.

    with Caig Le Clai ad Adew magaie

    2

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    mailto:clientsupport@forrester.comhttp://www.forrester.com/http://www.forrester.com/go?docid=55228&src=57286pdfhttp://www.forrester.com/go?docid=54980&src=57286pdfhttp://www.forrester.com/go?docid=55390&src=57286pdfhttp://www.forrester.com/go?docid=55390&src=57286pdfhttp://www.forrester.com/go?docid=54980&src=57286pdfhttp://www.forrester.com/go?docid=55228&src=57286pdfhttp://www.forrester.com/http://www.forrester.com/mailto:clientsupport@forrester.com
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    2010, Feste reseach, Ic. repdcti PhibitedAgst 2, 2010

    Y Jey T Lea: Ctis Ipeet Sppted By Tls

    F Bsiess Pcess Pessials

    2

    BARRIeRs TO LeAn

    Leans dual ocus on increasing business value and eliminating waste made it one o the most

    popular business perormance improvement approaches o the last decade.1 Leans most amous

    case study, the oyota Production System (PS), has been broadly studied and celebrated as

    paradigm change rom Fords mass production to PS mass customization in the automotive

    industry.2 Since its original publication in 1990, Leans continuous improvement process and

    tools have been adopted across dierent industries as diverse as chemicals, nance services and

    healthcare with dierent degrees o success. In particular, the sustainability o the Lean in

    industries with predominantly human-centric activities and/or less mature business processes has

    been a continuing debate. Research supported by examples rom companies o dierent sizes and

    operating in dierent sectors rom global manuacturers to local providers o public services

    has identied a ew common barriers to Lean:3

    Skepticism about what Lean really is. Lean best practices emphasize continuous improvementat all levels o the organization. Yet case studies reveal broad skepticism about how executivesand sta perceive Lean: Sta workers see it as just cutting headcounts and reducing costs.

    Managers and middle managers, busy with day-to-day operations, perceive it as a distraction

    rom real work. And senior executives, instead o getting involved, delegate the responsibility

    or Lean initiatives to consultants and methodology experts, who oen have limited inuence in

    the organization.

    Lack of leadership. When the link between Leans implementation and the organizationsstrategy is weak, the embedding o a continuous improvement process cannot succeed in the

    longer term. Case studies reveal that the goals o many Lean programs are not clear, and the

    basic questions that senior managers should answer upront are not addressed: why Lean is

    implemented; what drives the initiative; what change to the process is expected; and what

    commitments management is prepared to make.

    Silo culture and measures. Perormance management systems based on individual anddepartmental indicators encourage sta and managers to ocus on local optimizations and

    compete internally, rather than collaborate or the benet o customers and the organization.

    Te case studies show that disengagement and attempts to undermine continuous improvement

    are higher in rms, which operate with compartmented structures and measures, than in

    organizations that encourage collaboration and improvement as the means to an end.

    WIPRO DemOnsTRATes HOW TO ImPLemenT LeAn AnD OveRcOme ITs BARRIeRs

    Forrester conducted research to understand how executives implement Lean-style perormance

    improvements around the delivery o I services. In an October 2009 Forrester report, What

    CIOs Should Know About Lean, we discussed how several CIOs approached Lean to streamline

    captive I organizations and eliminate waste; however, those CIOs did not reveal any spectacular

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    2010, Feste reseach, Ic. repdcti Phibited Agst 2, 2010

    Y Jey T Lea: Ctis Ipeet Sppted By Tls

    F Bsiess Pcess Pessials

    3

    oyota-style implementations o Lean.4 But the Wipro echnologies (Wipro) case study presented

    in the next section deals with a ull implementation o Lean. It is the story o a large I services

    organization that adopted Lean as a source o competitive advantage to sustain its low-cost, high-

    quality strategy while growing rapidly.

    La Fll Ipltatio At Wipro spport Bi expaio

    Wipro, a global company headquartered in Bangalore, provides I services to 840 active customers

    in multiple verticals including banking, retail, manuacturing, healthcare, energy, utilities, and

    transportation. In 2009, the I services business crossed the 100,000-employee mark, tripling

    the number o employees rom 2005.5 At that time, Wipro Chairman Azim Premji announced

    that the company was implementing Lean and expected to derive competitive advantage rom it.6

    History shows that Wipro was able to ulll its chairmans expectation. Since 2004, the company

    has continuously developed its own Lean ramework and has applied its continuous improvement

    process and tools into a strategic capability with goals to:

    Dynamicallyreposition its portfolio of services for growth and innovation. Five yearsago Wipro competed as an outsourced provider o technical services, completing about 1,100

    soware projects yearly about 75% o them oshore and 25% at customers locations. Eighty

    percent o these projects were perormed on a time-and-material basis, and 20% were xed-

    price contracts. oday the company perorms more than 4,000 projects. Almost 45% o its

    contracts are xed-price. But more importantly, the company is shiing its service ocus rom

    executing soware projects to a consultative approach aimed to increase the share o system

    integration, business process outsourcing and transormational engagements, a market where

    the availability o Lean insights and capabilities is becoming a critical success actor.7

    Sustain its market position as low-cost, high-quality service supplier. At Wipro, compliancewith quality assurance standards has been critical or its reputation and success. o deend its

    position against other Indian and international service companies competing on low wages,

    Wipro has constantly renovated its delivery processes and trained its sta based on the most

    advanced quality initiatives and control models o the time, such as ISO 9000, CMMI, and

    Six Sigma.8 Since 2004, Wipro has continuously increased the number o Lean engagements

    (see Figure 1). During a recent brieng, Wipro reported that or the I business, 30, 000 out o

    approximately 55,000employees are covered through Lean, and or the BPO business, 4,000 out

    o approximately 26,000 employees are covered through Lean.9

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    2010, Feste reseach, Ic. repdcti PhibitedAgst 2, 2010

    Y Jey T Lea: Ctis Ipeet Sppted By Tls

    F Bsiess Pcess Pessials

    4

    Fir 1 The nbe o Lea Egageets Ctie T Icease At Wip

    Source: Forrester Research, Inc.57286

    Cumulative Lean engagements since inception

    2004-2005

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