Craft
Mass Production
Lean Production
Lean Enterprise
Lean Enterprise Value
T h e new est ph ase in th e evo lu t io n of info rm at io n t ech no lo gy is here— bu siness agilit y. A wave of new t ech no lo gies let s bu sinesses resp o nd to cu stom er, co mp et ito r and regu lato ry c hanges, alo ng w ith ot h er m arket fo rc es, muc h mo re rap id ly t h an ever bef ore. B ut ach ieving t ru e agilit y is st ill ah ead fo r mo st o rganiz at io ns. C edar Key So f tware H as d isc overed w hy and o f f ers up th is m etho do logy to ach ieve bu siness agilit y.
Pre-1990
The 90’s
The Future
The Lean Enterprise phase indicates that lean has been successful on the production floor and now must move into the offices and into the minds of all participants in the enterprise. The new efforts in Lean research will focus on the processes that take place in finance, human resources, engineering, and marketing. This is a very opportune time to initiate our concept of the value stream architecture referred to as VALESKA, in conjunction with your Knowledge Management system. Knowledge Management is a back-office related endeavor. The basic concept of Knowledge Management (KM) is to store information about what you do. What you do is described in terms of process. Process is a value stream and value streams are optimized using Lean methods and tools. “If you can't describe what you are doing as a process, you don't know what you're doing.”
Because of the ever-increasing rate of change in the competitive landscape, companies have sought out solutions to keep up with this rate of change and still maintain value for the end consumer. Until now, many companies have found agility in this climate of change difficult to achieve. Simply stated, they are organized around functional silos. They may achieve operational excellence within those silos, but much inefficiency still exists between the silos, crippling efforts to achieve lasting agility. For the past thirty or so years the philosophies and methodologies, which are now being labeled as “Lean”, have been refined. They are finding greater acceptance and are being adopted by organizations of all sizes, and in all industries According to the Lean Aerospace Initiative, the market is in the Lean Enterprise phase.
W. Edwards Deming
In a typical instance of Lean transformation, management has seen the presentations, committees are formed, the buglers sound “charge”, and then somewhere along the way they hit a wall. This tendency to hit walls is so pervasive in Lean transformations that “tenacity”‟ (along with “transistion”,”transparency”, and “totality”) is one of the fundamental tenants of Lean.
Instead of tenaciously hammering at the wall, we suggest finding the root cause of this problem and finding a solution for it. Read on to learn the root cause and the solution. Another concept that crops up during Lean transformations is the so called Lean Islands of Success. Islands of Success are areas where Lean has been implemented and has succeeded in a small area but cannot break its boundary to spread across the organization. After studying multiple organizations that are struggling in their Lean Journey, Cedar Key Software has determined the root cause of the walls and boundaries that impede Lean implementations and constrict Islands of Success. “until everyone sees each organization as part of the total enterprise, and until lean islands of success are linked across that enterprise, true success with lean efforts will remain elusive” - Lean Enterprise Value Insights From MIT’s Lean Aerospace Initiative MURMAN et al The root cause of Lean failure is the inability to get the whole organization (totality) to “Think Lean”. James Womak, the most influential Lean practitioner in North America, titled his book “Lean Thinking” to get the message across that it is Lean Thinking that precedes Lean success. It has also been highlighted in MIT‟s Lean Aerospace Initiative, “While „traditional‟ lean principles and practices represent a key point of departure in developing a new orientation, the experience in aerospace
points to broadening the way lean is typically understood … lean can‟t be approached as a list of things to do. It is a different way of thinking.” So why is there this difficulty to thinking Lean? Again as James P. Womak puts it in Lean Thinking, “We are all born into a mental world of „functions‟ and „departments‟, a common sense conviction that activities ought to be grouped by type so that they can be performed more efficiently and manage more easily.” We are acculturated to view the logical method of organization to be subject based as in the telephone yellow pages, or as in the classification system of the public libraries subject card catalog. At work we are taught to view the bureaucracy in the form of an organizational chart, which is a functional viewpoint. Here in lies the difficulty in thinking lean. We are taught to think in terms of a subject based or functional models. When it is time to go Lean we leave these models intact and expect the Lean transformation to succeed. We are disregarding the Lean tenant of totality. Lean teaches to break the barriers of functional silos, yet it never fails that within the KM system the functional organizational schema remains intact. In this recent survey of Information Model types, the overwhelming majority of respondents‟ preferred a Topical or Subject based structure. The population of this study came from an organization that is deeply committed to Lean transformation.
This is all the more indicative of the power that these alternatives to process have.
which is what the Value Stream Knowledge Architecture does, the organization gains substantial benefits. Encourage Enterprise Lean Thinking
User's Information Model Preference
50 40 30 % 20 10 0
Topical Process Function Audience Ad-Hoc
Senior Manager's Information Model Preference
60 50 40 % 30 20 10 0
Topical Process Function Audience Ad-Hoc
First and foremost, by this methodology you can get your organization to think Lean. To use a simple analogy, consider for a moment that the knowledge management system is acting as a collective memory. Now consider that the way in which we organize our own memories within the brain is the way we think. If we organize the collective memory by Value Streams (Lean) then the collective will then begin to “Think Lean”. Common Structural Taxonomy
Middle Manager's Information Model Preference
60 40 % 20 0
Topical Process Function Audience Ad-Hoc Admin's Information Model Preference
60 40 % 20 0
Another positive off shoot of organizing by value stream is the preservation of the value stream map that describes a given process. Having this map codified in the KM Information Model allows the value streams to be copied into other areas that support the same standardized processes. Repetition makes finding information easier for those who browse through the Information Model. An Information Model or IM is the structure of folders or containers that create the framework for the system as a whole. Controlled Vocabulary Having the value stream reflected in the names of the folder structure allows anyone who can read a grasp of what needs to be done to produce the artifacts for any particular process. Perform Lean Analysis
Topical Process Function Audience Ad-Hoc
In response to this challenge comes the role of Knowledge Management and Value Stream Knowledge Architecture (VALESKA). With Knowledge Management an organization is attempting to capture the collective knowledge of the enterprise and store it for easy retrieval and reuse. One may wonder, “What is this knowledge being collected?” It is the essence of what an organization does to create value. What is being captured are the artifacts generated while performing these value adding processes. By organizing the knowledge management systems by process or value streams,
In addition, Lean tools and methodologies can now be brought to bear upon an IM created as a value stream in order to make it a more perfect process. This can never be done in an IM based on subject or function.
Every generation sees markets emerge and evaporate. Organizations die and get absorbed. A few survive and even prevail. Agility is more than just a growing trend. The knowledge and the tools available today can increase your organization‟s chances of surviving and even prevailing—enabling it to create or at least respond quickly and costeffectively to change. Traditional function-driven business models—and all elements that support the model—have been fine-tuned to the point of breaking, but they hinder an organization‟s fundamental agility. The answer is a process-driven model, guided by a market- and customercentric strategy and underpinned with people, controls and technology that all move the organization in the same direction. A comprehensive analysis and road map tool that encompasses all of these elements can provide companies with the detailed direction they need to make the journey to enterprise agility.
Figure 1. An example of a Standard VALESKA workspace
From the example in Figure 1 you can see that the top level folder can represent any domain, it does not have to be process. It can represent a geographical region. It could even represent a function. How many areas in your organization can be represented this way? If there is more than one you can see how this structure can be repeated allowing users to navigate a common structural taxonomy no matter what top level area they have come from. All must somehow be managed. All have requirements to be managed, etc. They also gain a common and controllable vocabulary. Having these common road signs permits the user to quickly orient themselves, if they were linked into the middle of such a structure, and easily understand how to move forward and backwards, knowing, with a great deal of certainty what they will find at the next corner. Since many of the layers are process, administrators can conduct Lean Analysis on the structure and determine whether any level adds value to the Value Stream or not.