LEAN MANAGEMENT IN SERVICE INDUSTRY

TechnologiesAn Indian outsource provider of software services

Rohit Bebarta 09BS 000 1940Peeyush Kumar 09BS 000 8715

It is the story of a large IT services organization that adopted Lean as a source of competitive advantage to sustain its low-cost, high-quality strategy while growing rapidly.

ABOUT WIPRO

IndustryIT servicesIT consulting

Founded 1945

Founder(s) M. H. Premji

Headquarters Bangalore,

Key peopleAzim Premji (Chairman)Girish Paranjpe (joint CEO)Suresh Vaswani (joint CEO)

Services

Application Development and MaintenanceBPOProduct Engineering SolutionsTechnology Infrastructure ServicesConsulting

840 active customers 100,000-employee mark

WHY LEAN

When the members of Wipro’s senior executive team decided to implement Lean in 2004, they realized that the quality models used before, such as CMMI and Six Sigma, were very good for meeting software specifications but were less well suited for delivering business solutions.

It is the story of a large IT services organization that adopted Lean as a source of competitive advantage to sustain its low-cost, high-quality strategy while growing rapidly.

4 PRINCIPLES OF THE TOYOTA PRODUCTION SYSTEM DEFINED BY HBS

Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.

Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.

Rule 3: The pathway for every product and service must be simple and direct.

Rule 4: Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

IMPLEMENTING…

Implementation of lean should be slow and controlled.

"They didn't come out with big banners and say, 'OK, today your work is lean work, and yesterday it wasn't.' They started with a small group and recruited other people from there. It was a very controlled experimentation."

PHASE ZERO: EXPERIMENTING WITH LEAN.

The implementation of Lean began with the creation of the Lean productivity office (PO).

The PO’s mission was to:

1) incubate the Lean concepts; 2) Transcript Lean tools and practices such as Just-In- Time (JIT), Visual Control Board, Value Stream Mapping (VSM) automation, and leveling into the IT

3) select a few pilot projectsfor experimentation and help the project managers implementing them; and

4) Measure the tools’ impact on performance. Only projects that could demonstrate more than 10% performance increases on prespecified metrics (schedule, effort, or quality), were labeled as

Lean.

PHASE 1: MAINSTREAMING LEAN

The staff in the PO grew gradually from 10 in 2005 to 25 today. This Lean center of excellence (CoE) is responsible for:

1) leading the deployment of Toyota’s Lean practices in IT services

2) Championing productivity, cost containment, and delivery excellence;

3) Guiding project teams through the entire course of Lean deployment

4) providing statistical evidence of benefits accumulated. During mainstreaming, the PO mandated the implementation of Lean toolsacross more than 1,000 large and midsize projects involving greater than 100 man month (MM)

of effort and tracked their performance.

PHASE 2: GATHERING LEAN MOMENTUM.The PO team started selecting larger and more complex

projects for Lean intervention, meaning projects involving more than 200

MM. The statistic measurements showed that in spite of the increase in

size and complexity of the projects, Lean continued to deliver sustained

performance improvements. During this phase, the PO dedicated

additional effort to:

1) marketing Lean via deliberate evangelization campaigns supported

through newsletters

2) forming communities of practice

3) creating contextual and customized Lean workshops to address specific

business needs

4) creating customized training modules to cover the entire organization.

PHASE 3: TAKING STOCK.As the Lean intervention gained momentum and touched a large

number of projects, the focus of the PO turned to cross-utilizing Lean and Six Sigma

and

integrating the combined approach with other established methodologies such as

Agile, the

Wipro Quality Management System, and other practices. The goal was to move

away from

silo productivity improvements to an integrated portfolio of improvement

tools and correlate them through a unified improvement process as part of project

execution.

The solution was the development and implementation of an excellence index (EI)

model consisting of a customized tool kit for various project types. The PO selected

and documented the tools based on experiential data and ranked them using

weightings based on the impact seen in past projects

PHASE 4: MEASURING IMPROVEMENT

The PO employed the EI model to validate the coverage

and rigor of implementing Lean. It introduced and started

tracking two metrics across the entire organization:

planned EI and actual EI. While doing so, it continued to:

1)guide project teams in selection of suitable tools

(planned EI);

2)provide assistance in deployment;

3)ensure depth and rigor with frequent tenet usage

reviews (actual EI).

FACTS :

Thanks to the pioneering success of Toyota, the concept of a "lean" operating system has been implemented in countless manufacturing companies and even adapted for industries as diverse as insurance and healthcare

Not all lean manufacturing ideas translate from factory floor to office cubicle.

EFFECTS OF LEAN

A lean operating system alters the way a company learns through changes in problem solving, coordination through connections, and pathways and standardization.

Successful lean operations at Wipro involved a small rollout, reducing hierarchies, continuous improvement, sharing mistakes, and specialized tools.

The use of lean principles affected the workflow at Wipro

The concept of "kaizen," or continuous improvement, for example, resulted in a more iterative approach to software development projects versus a sequential, "waterfall" method in which each step of the process is completed in turn by a separate worker.

By sharing mistakes across the process, the customer and project team members benefit individually and collectively from increased opportunities to learn from their errors; the project also moves along more quickly because bugs are discovered in the system earlier in the development process.

More time, coupled with a better understanding of the different moving parts of a project, creates feelings of empowerment in workers who haven't traditionally taken part in innovation.

TOOLS USEDThe DSM (design structure matrix)

Defines connections and pathways for a project's workflow and suggests an order of tasks

The SCE (system complexity estimator),

Ranks a software module based on its complexity and compares its actual architecture with its ideal (simplest) architecture in order to learn where a team might need more or fewer skilled members.

Value Stream Mapping (VSM)

To identify and decrease wasted time and effort throughout the software development process.

Orthogonal Arrays

IMPROVING FROM THE BOTTOM UP

Goal of lean

Is to open up the work process and abolish the usual hierarchies. Inertia that many employees experience when faced with yet another new initiative

"One of the main ideas behind lean is to take parts of a task that don't require human intervention and give them to machines so that humans can focus on the important issues

Getting involved in much bigger-picture issues than they ever had before

Ex:"In the case of value stream mapping, every member of the team was able to get a sense of the overall picture of what they were doing and spot problems they wouldn't have been able to see before."

THANK YOU

"These companies are intellectual environments. People are very interested in taking conceptual ideas and figuring out how to put them into practice”