Lean Project Management - A Proven Method for Dramatically Improving Project Performance - Michael G. Wood Program Manager The Boeing Company 281-226-6276 Joe Eggert Sr. Project Manager The Boeing Company 281-380-6686 Project Management Challenge 2009 February 24-25, 2009 Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 2 Discussion Topics • The Problem with Projects • The Program Manager’s Dilemma • Project Management Methods Are Presumed Effective • Planning & Execution Drive Project Performance • When Projects Fail, Everyone Loses • Lean Project Management - A Different Focus • LPM Planning, Execution, and Monitoring & Control • Team Support - Critical To Success • Summary & Conclusions • Q&A Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 3 The Problem with Projects • Industry Data Shows a Majority of Projects Fail to Deliver – “62 percent of IT projects fail.” CNET News, March 21, 2008 • 49 percent suffer budget overruns • 47 percent had higher-than-expected maintenance costs, and • 41 percent failed to deliver the expected business value and ROI • We Are Not Immune and Must Do Better – “Major NASA projects over budget”, USA Today, March 26, 2008 • Two-thirds of NASA’s major new programs are significantly over budget or behind schedule according to the agency’s latest report to Congress. • Myriad of Factors Cited as Contributing to Project Failures Lack of customer/user involvement Unclear project goals Requirements creep Unrealistic time or resource estimates Shortage of skills Poor project planning Poor/ineffective execution Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 4 The Program Manager’s Dilemma: Variation • When a new project arrives or a change occurs to an existing project, managers face a dilemma: The GOAL Successful Projects (cost, content, schedule) Necessary Condition W e m us t… . Meet Threatened (Near Term) Commitments We must…… Pre-requisite Do Whatever It Takes Necessary Condition We must…. Don’t Jeopardize Other (Long Term) Commitments Pre-requisite We must…… Don’t Do Whatever It Takes Conflict • The PM’s response to normal project variation affects: – Team behaviors – Project planning and execution – Performance on both current and future projects Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 5 Current Project Management Methods Are Presumed Effective • How Well Do Current Practices Manage Project Variation? – Project Planning • Assumes unlimited resource/skill availability • Task duration estimates are treated as deterministic once scheduled – Execution • Tasks are started as soon as possible • Focus is on progress status milestones – Monitoring & Control • Project status measured on percent complete Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 6 A Simple Fence Building Project Example A1 AB1 B1 C1 B2 B3 B4 AB3 AB2 A2 B6 B5 (Id. Design Options) (Evaluate & Select) (Dev. Construction Process) (ID Tools, Equip & Supplies) (Buy T,E & S’s) (Construct New Fence) (Cleanup) (Clean holes Of excess Concrete) (Receive Community Assoc. Approval) (Dispose of old fencing) (Remove old pickets) (Remove old posts) Longest String of Dependent Tasks = Critical Path: e.g. 11 weeks Milestone Date 1 Milestone Date 2 Milestone Date 3 Milestone Date 4 Schedule Completion Date 1 2 3 4 5 6 7 8 9 10 11 Critical Path • Legend – Each letter/color combination represents a different resource/skill – The numbers represent the specific number for a task Critical Path = Longest sequence of activities in a network Focus is on achieving status milestone dates diverting team focus on meeting project goals: cost, schedule and content commitments. Resources start as early As possible Resource Conflicts Ignored Task Status focused on the past – % complete 12 Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 7 A Simple Fence Building Project Example 1 2 3 4 5 6 7 8 9 10 11 12 A1 AB1 B1 C1 B2 B3 B4 AB3 B6 B5 AB2 Milestone Date 1 Milestone Date 2 Slipped Due to AB1 Milestone Date 3 Slipped due To AB1 Milestone Date 4 Finished earlier than originally planned Lost Opportunity Resource only starts when Originally scheduled Multi-tasking extends duration by ½ day Delayed start due to customer request A2 Customer discovers error! Extra time req’d to fix. Add Resources - Attempt to recover schedule - Increases project cost Schedule completion date missed; budget exceeded Multi-tasking -Extends Both Tasks -Leads to Errors Missed Missed AB1 Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 8 When Projects Fail, Everyone Loses • Customers – Do not receive the products or services promised within cost and/or schedule – In an attempt to control variability next time, customer’s add more oversight • Contracted Suppliers – Customer relationship and corporate profits negatively impacted – In an attempt to control variability next time, supplier’s add more oversight • Project Managers – Relationship with internal and external customers and team members negatively impacted – In an attempt to control variability next time, PM’s add more detail into their schedules • Team Members – Strained relationships with Program Office personnel – Exhausted from multi-tasking, demoralized and frustrated for having failed – In an attempt to control variability next time, team members add safety margin to their task estimates Actions intended to improve project performance, mask the root cause - project variation Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 9 Lean Project Management - A Different Focus • Every Project’s Goal – Should be to deliver a quality product or service as soon as possible while staying within the customer’s budget. • “Any project worth doing, is worth doing….FAST!” Larry Leach – Until the project is finished the customer does not receive any value. • Projects that complete on time using LPM methods satisfy the other two necessary conditions of cost and content. • Organizations that have adopted lean project management practices show greatly improved performance – The majority go from being 90% late to 90% on-time or early. Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 10 LPM is Based On The Theory of Constraints • The Theory of Constraints is a management philosophy developed by Dr. Eliyohu M. Goldratt which states: – Everything exists as part of some system – Every system has one key constraint holding it back – For projects, task variability is the key constraint • LPM takes a Systems Approach to Project Management – Team Focus on project goal – Relay race model for project planning, execution and monitoring & control Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 11 Lean Project Management - Planning • Right to left – Keep the End In Mind – Work backwards – Identify essential inputs for each task in network – Benefits: • Facilitates identification of the minimum number of essential inputs for each task • Reduces unnecessary schedule detail • Decision Milestones – Include minimum number of milestones in the schedule – Benefits: • Eliminates unnecessary “progress” status milestone meetings • Maintains team focus • Aggressive Task Estimates – Tasks are planned with a 50% probability of completing within the estimated duration. – Benefit: • Preserves ability to complete project sooner Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 12 Lean Project Management – Planning (cont.) • Resolve Resource Contention – Most constrained task/resources are identified (referred to as the Critical Chain) and given top priority – Benefit: • Eliminates task/resource contention within the project • Common Safety Margin Pool – Individual task safety margins are shared and used as needed by the team – Benefits: • Facilitates teamwork • Easy to determine project margin status • Critical Chain Protection – Non-critical chain tasks have individual safety buffers to protect critical chain – Benefits: • Minimizes disruption to critical chain Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 13 Lean Project Management - Execution • Focus is on the Critical Chain – Resources on the critical chain are the “runners” that determine project completion – Non-critical chain tasks and resources are subordinated – Benefits: • Ensures focus is on those tasks and resources that determine project completion • Focuses team on project, not individual task performance • Bad Multi-Tasking is Eliminated – Bad multi-tasking occurs when team members switch between tasks before either completing the task or coming to a natural stopping point. – Execution rules are established to focus resources – Benefits: • Team members are less stressed and more productive • Resources complete their tasks quicker, accelerating entire project • Uncovers previously “hidden” capacity within the team Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 14 Lean Project Management – Execution (Cont.) • “Full Kit” Review – Conducted to insure all of the essential inputs are available and of proper quality before starting major section of project – Benefits: • Reduces rework • Tasks Start as Late as Possible – Tasks do not start until all of the required information is available – Benefits: • Frees up resources for other projects • Prevents rework due to incomplete or incorrect preliminary inputs • Reduces chaos in the system caused by having more resources working concurrently than needed • Reduces costs • “Get Ready (to run)” Notifications – Resources receive advance notification to get ready to execute their tasks – Benefits: • Optimizes use of the organizations resources • Ensures tasks are started on time Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 15 Traditional vs. Lean Project Management Comparison A1 AB1 B1 C1 B2 B3 B4 AB2 A2 B6 B5 “Get Ready” Notifications Buffer Buffer 2 5 Weeks 1 3 4 6 7 8 10 11 12 9 AB3 A1 AB1 B1 C1 B2 B3 B4 AB3 AB2 A2 B6 B5 1 2 3 4 5 6 7 8 9 10 11 Critical Path = Longest sequence of activities in a network Resources start as early As possible Resource Conflicts Ignored Lean PM Schedule View Traditional Critical Path Schedule View Critical Chain = Longest set of dependent activities, with explicit consideration of resource availability This “buffer” is needed to protect the project for normal task variation. Pooled Safety Margin Critical Chain is Primary Focus No Resource Conflicts 12 Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 16 Lean Project Management – Monitoring & Control • Forward Focus Status Reporting – Between team meetings, team members provide the following task status: 1. Task is complete 2. Task has not started 3. Task is in work. For tasks in work, answers to the following questions are provided: a) What is the work remaining? b) How much time is needed to complete the remaining work? c) What could hold you up? – Benefits: • More effective weekly team meetings • Team maintains forward focus to identify potential risks to their work plans • Lean Team Meetings – Used discuss mitigation plans and team recovery action plans – Benefits: • Quick, simple and short meetings, freeing up resources and reducing cost Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 17 Lean Project Management – Monitoring & Control (cont.) • Buffer Management – The Main Metric – Schedule margin consumption rate vs. progress along the critical chain – Type of corrective action based on the relative status of this metric – Benefits: • Greatly simplifies management of the project • Easy to compare status across projects • Predictive metric • Focuses team on project status, encouraging team work and ownership Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 18 Lean Project Management Project Buffer Status Report • Percentage Project Buffer Consumed vs. Percent CC Complete Team members actively work to recover buffer Mit iga tion pla ns are ide ntif ied Management action taken To assist team recover 100 100 0 Team members actively work to recover buffer Mitig ation plan s ar e ide ntifie d Management action taken To assist team recover 50 50 Percentage of Critical Chain Completed Percentage of Safety Margin Consumed Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 19 Team Support Is Critical To Success • Boeing’s Space Exploration LPM projects included active support from: – Program Management – Project Managers / Engineers – Functional Managers – Technical Leads – Business Management – Contracts – Procurement – Plus over 75 personnel from engineering, business management, contracts and procurement as well as outside vendors have been involved with our projects. Joe Eggert, 281-380-6686, February 2009, LPM.ppt pg. 20 Summary & Conclusion • Projects Often Fail To Meet Customer Expectations • Variability Is The Key Project Management Constraint • Traditional Project Management Methods Are Ineffective In Managing Variability • Lean Project Management Provides A Different Focus • LPM Planning, Execution and Monitoring & Control Manage Task Variability • Team Support Is Critical To Success • Lean Project Management Offers NASA and Its Contractors An Unprecedented Opportunity To Dramatically Improve Project Performance Questions?