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					             Agenda
• Overviews:
   – Supply Chain Operations
    Reference model (SCOR)
   –Six Sigma and Lean
• Toolset Integration
• Supply Chain Optimization
 CQSDI 2008
          Converging SCOR & Lean Six Sigma:
              Supply Chain Excellence




        A United Space Alliance Supply Chain Case Study

   Laura Mills, C.P.M.            Amy Petitt            Scott L. Sealing
Lean Six Sigma Black Belt   Lean Six Sigma Black Belt   Project Lead, SCM


 March 3, 2008
Complimentary, not Competitive
       •   Standard framework
       •   Identification of Improvement opportunities
       •   End-to-End Visibility


                         SCOR




              LEAN     Converge   SIX SIGMA




    Making Complex Supply Chains Simpler
      Establishing a Framework
• SCOR provides a valuable framework and infrastructure.

• Lean focuses on
  reduced lead time and
                                                      SCOR
  reduced costs.
• Six Sigma focuses on
                                Lean Focus                        Six Sigma
  improved quality and           Shorter Delivery
                                                                    Focus
                                                                Improved Product
  reduced costs.                     Times
                                                                     Quality

• The convergence                                    Improvement
  combines the benefits                             Opportunities &
                                                    Reduced Costs
  and power of all
  three methodologies.
                                     Resulting in sustainable
                                     Improvement Opportunities
Convergence Continuum
               Identify
             Opportunities
                SCOR

Implement                     Prioritize
 Solutions                   Opportunities
                Lean
              Six Sigma
               Discover
              Root Causes
Convergence is a Structured
        Approach
  SCOR
 Combined
 Lean 6s                   Business
                           Strategy
                           Strategy

                          Supply Chain
                         Supply Chain
SCOR                     Benchmarking
                         Benchmarking

                         Supply Chain
                         Supply Chain
                          Assessment
                         Assessment

                         Value Stream
                         Value Stream       SYNERGISTIC
                           Mapping
                           Mapping
Lean Six
Sigma                            Projects
                       Six Sigma Projects
                       Six
                               Kaizen
                           and Kaizen
                           and

                          Bottom-line
                          Bottom-line
                            Results
                           Results


Convergence bridges the gap between strategic enterprise
         planning & continuous improvement
 日期                        內容                          日期                          內容

9/15    國家資訊基礎建設之遠景與藍圖 (Introduction)                 11/17   1.    The Art of Lean Software Development (2)
                                                              2.    Syst. Strategy for Lean IT (2)
                                                              3.    Value Stream Mapping (3)

9/22    具e-pedigree功能的藥品供應鏈跨平台設計                      11/24   1.    The Art of Lean Software Development (3)
                                                              2.    Syst. Strategy for Lean IT (3)
                                                              3.    Value Stream Mapping (4)

9/29    企業經營策略規劃、機會與挑戰 (The New                       12/1    1.    The Art of Lean Software Development (4)
        Language of Business)                                 2.    Syst. Strategy for Lean IT (4)
                                                              3.    Value Stream Mapping (5)

10/6    元件化的營運模式(Component Business                   12/8    1.    The Art of Lean Software Development (5)
        Model)                                                2.    Syst. Strategy for Lean IT (5)
                                                              3.    Value Stream Mapping (6)

10/13   讓企業經營靈活應變的DNA                                 12/15   1.    The Art of Lean Software Development (6)
                                                              2.    Syst. Strategy for Lean IT (6)
                                                              3.    Value Stream Mapping (7)

10/20   資訊基礎建設資訊技術功能標準 (XML, SOAP,                    12/22   1.    The Art of Lean Software Development (7)
        WSDL & UDDI)                                          2.    Syst. Strategy for Lean IT (7)
        聯網服務(Web Services)基礎技術  Oct 29                       3.    Value Stream Mapping (8)

10/27   SaaS, e-pedigree, 檢體精實, Value stream          12/29   1.    The Art of Lean Software Development (8)
        mapping, Lean IT, Art of Lean software Dept           2.    Syst. Strategy for Lean IT (8)
        國家資訊基礎建設授課調整 (Lean Hospital)                         3.    Value Stream Mapping (9)

11/3    資訊產業物品採購電子資料交換模式                              元/5     Syst. Strategy for Lean IT (9)
        (Rosettnet PIP 3A4) & ebXML & BPEL
                                                               Lean accounting system
11/10   精實信念(Lean Thinking) review                    元/12    Final Examination (兩人一組)
        & Lean Hospital based on TPS
                                                               What, State-of-Arts, Expectation
        Information Highway Agenda
• Cloud Computing
   – Infrastructure as a service
        • A set of virtual machine with storage space and external network bandwidth
        • Example: Amazon Web Service
   – Platform as a service
        • An operating environment including (application-specific) libraries and DBMS support
        • Example: Google’s App Engine. Microsoft’s Azure, IBM’s XaaS
   – Software as a service
        • Turn-Key software hosted on the cloud and accessible through the browser
        • Example: salesforce.com
• Quality of Service: 精實六標準差 (Lean + Six Sigma)
   – Six Sigma
   – R&D in Lean
   – Lean Hospital
        • The Pittsburgh Way to Efficient Healthcare
• IT for Lean
   –   Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Review: Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Systems Strategy for Lean IT
   –   The Case for Lean IT
                                雲端運算
              (cloud computing  Grid computing  SOA)
• 雲端運算(cloud computing),是一種基於網際網路的運算新方式,透過網際網路上
  異構、自治的服務為個人和企業使用者提供按需即取的運算。由於資源是在網際網路
  上,而在電腦流程圖中,網際網路常以一個雲狀圖案來表示,因此可以形象地類比為
  雲運算,『雲端』同時也是對底層基礎設施的一種抽象概念。
   – In concept, it is a paradigm shift whereby details are abstracted from the users
     who no longer need knowledge of, expertise in, or control over the technology
     infrastructure "in the cloud" that supports them.[2] It typically involves the
     provision of dynamically scalable and often virtualised resources as a service
     over the Internet
• 雲端運算的資源是動態易擴充套件而且虛擬化的,透過網際網路提供。終端使用者不
  需要了解「雲端」中基礎設施的細節,不必具有相應的專業知識,也無需直接進行控
  制,只關注自己真正需要什麼樣的資源以及如何透過網路來得到相應的服務
   – (The term cloud is used as a metaphor for the Internet, based on how the
     Internet is depicted in computer network diagrams and is an abstraction of the
     underlying infrastructure it conceals.[5] Typical cloud computing services provide
     common business applications online that are accessed from a web browser,
     while the software and data are stored on the servers.)
• 雲端運算可以認為包括以下幾個層次的服務:基礎設施即服務(IaaS),平台即服務
  (PaaS)和軟體即服務(SaaS)。雲端運算服務通常提供通用的透過瀏覽器存取的線
  上商業應用,軟體和資料可儲存在資料中心。
   – Infrastructure-as-a-Service (IaaS)
   – Platform-as-a-Service (PaaS), and
   – Software-as-a-Service (SaaS).
    雲端運算 (cloud computing): Comparisons
• Cloud computing can be confused with:
   – Grid computing — "a form of distributed computing,
      whereby a 'super and virtual computer' is composed of a
      cluster of networked, loosely coupled computers acting in
      concert to perform very large tasks"
   – Utility computing — the "packaging of computing resources,
      such as computation and storage, as a metered service
      similar to a traditional public utility, such as electricity"
   – Autonomic computing — "computer systems capable of self-
      management"
• Indeed, many cloud computing deployments depend on grids,
  have autonomic characteristics, and bill like utilities, but cloud
  computing tends to expand what is provided by grids and
  utilities.
• Some successful cloud architectures have little or no centralized
  infrastructure or billing systems whatsoever, including peer-to-
  peer networks such as BitTorrent and Skype, and volunteer
  computing such as SETI@home
    雲端運算 (cloud computing): Architecture
• The majority of cloud computing infrastructure, as of
  2009, consists of reliable services delivered through
  data centers and built on servers with different levels
  of virtualization technologies.
• The services are accessible anywhere that provides
  access to networking infrastructure. Clouds often
  appear as single points of access for all consumers'
  computing needs.
• Commercial offerings are generally expected to meet
  quality of service (QoS) requirements of customers
  and typically offer SLAs.
• Open standards are critical to the growth of cloud
  computing, and open source software has provided
  the foundation for many cloud computing
  implementations.
   雲端運算 (cloud computing): Key characteristics (1/3)
1. Agility improves with users able to rapidly and inexpensively re-provision
   technological infrastructure resources.
2. Cost is claimed to be greatly reduced and capital expenditure is converted
   to operational expenditure[31]. This ostensibly lowers barriers to entry, as
   infrastructure is typically provided by a third-party and does not need to be
   purchased for one-time or infrequent intensive computing tasks. Pricing on a
   utility computing basis is fine-grained with usage-based options and fewer IT
   skills are required for implementation (in-house).
3. Device and location independence: enable users to access systems using
   a web browser regardless of their location or what device they are using
   (e.g., PC, mobile). As infrastructure is off-site (typically provided by a third-
   party) and accessed via the Internet, users can connect from anywhere.[32]
4. Multi-tenancy
5. Reliability
6. Scalability
7. Security
8. Sustainability
     雲端運算 (cloud computing): Key characteristics (2/3)
1.   Agility
2.   Cost
3.   Device
4.   Multi-tenancy enables sharing of resources and costs across a large pool
     of users thus allowing for:
     – Centralization of infrastructure in locations with lower costs (such as real estate,
       electricity, etc.)
     – Peak-load capacity increases (users need not engineer for highest possible
       load-levels)
     – Utilization and efficiency improvements for systems that are often only 10–
       20% utilized.
5. Reliability improves through the use of multiple redundant sites, which
   makes cloud computing suitable for business continuity and disaster
   recovery. Nonetheless, many major cloud computing services have suffered
   outages, and IT and business managers can at times do little when they are
   affected.
6. Scalability
7. Security
8. Sustainability
     雲端運算 (cloud computing): Key characteristics (3/3)
1. Agility
2. Cost
3. Device
4. Multi-tenancy
5. Reliability
6. Scalability via dynamic ("on-demand") provisioning of resources on a fine-
   grained, self-service basis near real-time, without users having to engineer
   for peak loads. Performance is monitored, and consistent and loosely-
   coupled architectures are constructed using web services as the system
   interface.
7. Security typically improves due to centralization of data[37], increased
   security-focused resources, etc., but concerns can persist about loss of
   control over certain sensitive data, and the lack of security for stored
   kernels[38]. Security is often as good as or better than under traditional
   systems, in part because providers are able to devote resources to solving
   security issues that many customers cannot afford[39]. Providers typically
   log accesses, but accessing the audit logs themselves can be difficult or
   impossible. Furthermore, the complexity of security is greatly increased
   when data is distributed over a wider area and / or number of devices.
8. Sustainability comes about through improved resource utilization, more
   efficient systems, and carbon neutrality.[40][41] Nonetheless, computers
   and associated infrastructure are major consumers of energy.
   雲端運算 (cloud computing): Layers (1/3)
1. Clients
   – A cloud client consists of computer hardware and/or computer software that
     relies on cloud computing for application delivery, or that is specifically designed
     for delivery of cloud services and that, in either case, is essentially useless
     without it.[43] For example:
   – Mobile (Android, iPhone, Windows Mobile)[44][45][46]
   – Thin client (CherryPal, Zonbu, gOS-based systems)[47][48][49]
   – Thick client / Web browser (Mozilla Firefox, Google Chrome, WebKit)
2. Application
   –   A cloud application leverages cloud computing in software architecture, often eliminating
       the need to install and run the application on the customer's own computer, thus alleviating
       the burden of software maintenance, ongoing operation, and support. For example:
   –   Peer-to-peer / volunteer computing (BOINC, Skype)
   –   Web applications (Facebook, Twitter, YouTube)
   –   Security as a service (MessageLabs, Purewire, ScanSafe, Zscaler)
   –   Software as a service (Google Apps, Salesforce)
   –   Software plus services (Microsoft Online Services)
   –   Storage [Distributed]
         • Content distribution (BitTorrent, Amazon CloudFront)
         • Synchronisation (Dropbox, Live Mesh)
3. Platform
4. Infrastructure
5. Servers
   雲端運算 (cloud computing): Layers (2/3)
1. Clients
2. Application
3. Platform
    –   A cloud platform (PaaS) delivers a computing platform and/or solution stack as a service,
        generally consuming cloud infrastructure and supporting cloud applications. It facilitates
        deployment of applications without the cost and complexity of buying and managing the
        underlying hardware and software layers.[50][51] For example:
    –   Services
         •   Identity (OAuth, OpenID)
         •   Payments (Amazon Flexible Payments Service, Google Checkout, PayPal)
         •   Search (Alexa, Google Custom Search, Yahoo! BOSS)
         •   Real-world (Amazon Mechanical Turk)
    –   Solution stacks
         •   Java (Google App Engine)
         •   PHP (Rackspace Cloud Sites)
         •   Python Django (Google App Engine)
         •   Ruby on Rails (Heroku)
         •   NET (Azure Services Platform, Rackspace Cloud Sites)
         •   Proprietary (Force.com, WorkXpress, Wolf Frameworks)
    –   Storage [Structured]
         •   Databases (Amazon SimpleDB, BigTable)
         •   File storage (Amazon S3, Nirvanix, Rackspace Cloud Files)
         •   Queues (Amazon SQS)
4. Infrastructure
5. Servers
     雲端運算 (cloud computing): Layers (3/3)
1.   Clients
2.   Application
3.   Platform
4.   Infrastructure
     – Cloud infrastructure (IaaS) is the delivery
       of computer infrastructure, typically a
       platform virtualization environment, as a
       service.[52] For example:
     – Compute (Amazon CloudWatch,
       RightScale)
         •   Physical machines)
         •   Virtual machines (Amazon EC2, GoGrid,
             Rackspace Cloud Servers)
         •   OS-level virtualisation
     – Network (Amazon VPC)
     – Storage [Raw] (Amazon EBS)
5. Servers
     – The servers layer consists of computer
       hardware and/or computer software
       products that are specifically and solely
       designed for the delivery of cloud
       services.[43] For example:
         •   Fabric computing (Cisco UCS)
    Infrastructure as a Service (IaaS)
•   IaaS is the delivery of computer infrastructure (typically a platform virtualization
    environment) as a service.
     – These 'virtual infrastructure stacks' are an example of the everything as a service trend and
       shares many of the common characteristics. Rather than purchasing servers, software,
       data center space or network equipment, clients instead buy those resources as a fully
       outsourced service.
     – The service is typically billed on a utility computing basis and amount of resources
       consumed (and therefore the cost) will typically reflect the level of activity. It is an evolution
       of web hosting and virtual private server offerings.
•   Key components:
     –   Service level agreements (optional)
     –   Utility computing billing (eg per instance hour)
     –   Platform virtualization environment for running client specified virtual machines
     –   Computer hardware (typically set up as a grid for massive horizontal scalability)
     –   Computer network (including firewalls, load balancing, etc.)
     –   Internet connectivity
•   Key characteristics
     – Resources delivered as a service including servers, network equipment, memory, CPU,
       disk space, data center facilities,
     – Dynamic scaling of infrastructure which scales up and down based on application
       resource needs
     – Variable cost service using fixed prices per resource component
     – Multiple tenants typically coexist on the same infrastructure resources
     – Enterprise grade infrastructure allows mid-size companies to benefit from the aggregate
       compute resource pools
     'Platform as a service' (PaaS)
• PaaS is the delivery of a computing platform and solution stack as a service.
  It facilitates deployment of applications without the cost and complexity of
  buying and managing the underlying hardware and software layers,
  providing all of the facilities required to support the complete life cycle of
  building and delivering web applications and services entirely available from
  the Internet — with no software downloads or installation for developers, IT
  managers or end-users. It's also known as cloudware.
• PaaS offerings include workflow facilities for application design, application
  development, testing, deployment and hosting as well as application
  services such as team collaboration, web service integration and
  marshalling, database integration, security, scalability, storage, persistence,
  state management, application versioning, application instrumentation and
  developer community facilitation. These services are provisioned as an
  integrated solution over the web.
• A second definition of PaaS is more client oriented. PaaS can be defined as
  the concept to deliver a cost-effective cloud based workspace environment –
  the platform - to the End-user which integrates work/life environment and
  facilitates him or/her to work, communicate, interact and play (games)
  anywhere, anytime, any device in a safe manner based on the roles
  assigned to the end-user. As such PaaS could also be described as .
     PaaS: Key characteristics (1/3)
1. Services to develop, test, deploy, host and maintain applications in the
   same integrated development environment
     – Different PaaS offerings provide different combinations of services to support the
       application development lifecycle. Comprehensive PaaS should provide all
       service options in an integrated development environment within the actual
       target delivery platform, with source code control, version control, dynamic
       (interactive) multiple user testing, roll out and roll back with the ability to audit
       and track who made what changes when to accomplish what purpose
2. Web based user interface creation tools
     – PaaS offerings typically provide some level of support to ease the creation of
       user interfaces, either based on standards such as HTML and JavaScript or
       other Rich Internet Application technologies like Adobe Flex, Flash and AIR.
       Rich, interactive, multi-user environments and scenarios can be defined, tried
       out by real people (non-programmers), with tools that make it easy to log/single
       out features that annoy or frustrate either novices or experts. Creation tools
       allow interfaces to be defined for different user profiles by function or expertise.
       PaaS offer improved user experience[citation needed] by incorporating channels
       for real people feedback through out creation, design, development, testing,
       rollout, production ... the entire lifecycle through to 'end-of-life" "reincarnation" or
       "next generation evolution" of the application.
3.   Multi-tenant architecture
4.   Integration with web services and databases
5.   Support for development team collaboration
6.   Utility-grade instrumentation
  PaaS: Key characteristics (2/3)
1. Services to develop, test, deploy, host and maintain
   applications in the same integrated development
   environment
2. Web based user interface creation tools
3. Multi-tenant architecture
   – PaaS offerings typically attempt to support use of the application by
     many concurrent users, by providing concurrency management,
     scalability, failover and security. The architecture enables defining the
     "trust relationship" between users in security, access, distribution of
     source code, navigation history, user (people and device) profiles,
     interaction history, and application usage.
4. Integration with web services and databases
   – Support for SOAP and REST interfaces allow PaaS offerings to create
     compositions of multiple Web services, sometimes called "Mashups" as
     well as access databases and re-use services maintained inside private
     networks. Support for keeping the user/relationships (if multiple
     users)/device context and profile through the mashup across web
     services, databases and networks.
5. Support for development team collaboration
6. Utility-grade instrumentation
  PaaS: Key characteristics (3/3)
1. Services to develop, test, deploy, host and maintain applications in the
   same integrated development environment
2. Web based user interface creation tools
3. Multi-tenant architecture
4. Integration with web services and databases
5. Support for development team collaboration
   – The ability to form and share code with ad-hoc or pre-defined or distributed
     teams greatly enhances the productivity of PaaS offerings. Schedules,
     objectives, teams, action items, owners of different areas of responsibilities,
     roles (designers, developers, tester, QC) can be defined, updated and tracked
     based on access rights.
6. Utility-grade instrumentation
   – PaaS offerings provide developers insight into the inner workings of their
     applications, and the behavior of their users. Some PaaS offerings use
     information about user behavior to enable pay-per-use billing. Historical/usage
     evidence may help:
       •   determine whether services are of value to users/customers,
       •   compare the value of different services, and
       •   track activity based costs and revenues.
   – Visualization tools could show usage patterns, exposing functional or
     correlational relationships between:
       •   services &/or user interactions,
       •   the value to the user or users, and
       •   the cost of alternative service paths such as web and cell phone
     Software as a Service (SaaS)
• Software as a Service (SaaS, typically pronounced 'sass')
   – is a model of software deployment whereby a provider licenses an application to
     customers for use as a service on demand. SaaS software vendors may host the
     application on their own web servers or download the application to the
     consumer device, disabling it after use or after the on-demand contract expires.
     The on-demand function may be handled internally to share licenses within a firm
     or by a third-party application service provider (ASP) sharing licenses between
     firms.
   – The sharing of end-user licenses and on-demand use may also reduce
     investment in server hardware or the shift of server use to SaaS suppliers of
     applications file services.
• History
   – The concept of "software as a service" started to circulate before 1999.[1] In
     December 2000, Bennett et al. noted the term as "beginning to gain acceptance
     in the marketplace".[2]
   – Whilst the phrase "software as a service" passed into common usage, the
     TitleCase acronym "SaaS" was allegedly not coined until circa 2000 to 2001 in a
     white paper called "Strategic Backgrounder: Software as a Service", which was
     published in February 2001 by the Software & Information Industry's (SIIA)
     eBusiness Division, but actually written in the fall of 2000 (according to internal
     Association records).[3]
   – One of the first SaaS applications was SiteEasy, a website-in-a-box for small-
     businesses that launched in 1998 at Siteeasy.com. Developed by Atlanta-based
     firm WebTransit co-founded by Gary Troutman and Drew Wilkins, SiteEasy was
     sold on a subscription-basis for a monthly fee to its first customer in the Fall of
  SaaS: Key characteristics (1/2)
• Characteristics of SaaS software include
   – network-based access to, and management of, commercially
     available software
   – activities managed from central locations rather than at each
     customer's site, enabling customers to access applications
     remotely via the Web
   – application delivery typically closer to a one-to-many model
     (single instance, multi-tenant architecture) than to a one-to-
     one model, including architecture, pricing, partnering, and
     management characteristics
   – centralized feature updating, which obviates the need for
     end-users to download patches and upgrades.
   – frequent integration into a larger network of communicating
     software - either as part of a mashup or as a plugin to a
     platform as a service. (Service oriented architecture is
     naturally more complex than traditional models of software
     deployment.)
  SaaS: Key characteristics (2/2)
• Providers of SaaS generally price applications on a per-user
  basis, sometimes with a relatively small minimum number of
  users and often with additional fees for extra bandwidth and
  storage. SaaS revenue streams to the vendor are therefore
  lower initially than traditional software license fees, but are also
  recurring, and therefore viewed as more predictable, much like
  maintenance fees for licensed software.
• In addition to the characteristics mentioned above, SaaS
  software turns the tragedy of the commons on its head and
  frequently[weasel words] has these additional benefits:
   – More feature requests from users since there is frequently
     no marginal cost for requesting new features;
   – Faster releases of new features since the entire community
     of users benefits from new functionality; and
   – The embodiment of recognized best practices — since the
     community of users drives the software publisher to support
     best practice.
              SaaS: Implementation
• Level 1 - Ad-Hoc/Custom: At the first level of maturity, each customer has its
  own customized version of the hosted application and runs its own instance
  of the application on the host's servers. Migrating a traditional non-
  networked or client-server application to this level of SaaS typically requires
  the least development effort and reduces operating costs by consolidating
  server hardware and administration.
• Level 2 - Configurable: The second maturity-level provides greater program
  flexibility through configurable metadata, so that many customers can use
  separate instances of the same application code. This allows the vendor to
  meet the different needs of each customer through detailed configuration
  options, while simplifying maintenance and updating of a common code
  base.
• Level 3 - Configurable, Multi-Tenant-Efficient: The third maturity level adds
  multi-tenancy to the second level, so that a single program instance serves
  all customers. This approach enables more efficient use of server resources
  without any apparent difference to the end user, but ultimately comes up
  against limits in scalability.
• Level 4 - Scalable, Configurable, Multi-Tenant-Efficient: The fourth and final
  SaaS maturity level adds scalability through a multitier architecture
  supporting a load-balanced farm of identical application instances, running
  on a variable number of servers. The provider can increase or decrease the
  system's capacity to match demand by adding or removing servers, without
  the need for any further alteration of applications software architecture.
            SaaS: SaaS and SOA
• Much like any other software,
  Software as a Service can also
  take advantage of Service
  Oriented Architecture to enable
  software applications to
  communicate with each other.
• Each software service can act as
  a service provider, exposing its
  functionality to other
  applications via public brokers,
  and can also act as a service
  requester, incorporating data
  and functionality from other
  services. Enterprise Resource
  Planning (ERP) Software
  providers leverage SOA in
  building their SaaS offerings; an
  example is SAP Business
  ByDesign from SAP AG.
        Information Highway Agenda
• Cloud Computing
   – Infrastructure as a service
        • A set of virtual machine with storage space and external network bandwidth
        • Example: Amazon Web Service
   – Platform as a service
        • An operating environment including (application-specific) libraries and DBMS support
        • Example: Amazon Web Service
   – Software as a service
        • Turn-Key software hosted on the cloud and accessible through the browser
        • Example: Amazon Web Service
• Quality of Service: 精實六標準差 (Lean + Six Sigma)
   – Six Sigma
   – R&D in Lean
   – Lean Hospital
        • The Pittsburgh Way to Efficient Healthcare
• IT for Lean
   –   Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Review: Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Systems Strategy for Lean IT
   –   The Case for Lean IT
           What's Lean Production ?
• 豐田汽車的生產方式(TPS, Toyota
  Production System)在過去,一直是
  企業界競相模仿學習的對象,一般稱
  這種生產方式為「精實生產, Lean
  Production」。
• 2004年,豐田汽車在全世界的銷售金
  額僅次於通用汽車(General Motor),
  但其獲利卻超過美國三大汽車(通用、
  福特、克萊斯勒)獲利總合,顯示豐
  田汽車之獨到的經營管理模式。
   – 其基本理念為:消除浪費、降低成本
   – 應用在組織、管理和顧問的關係、供
     應鏈、產品發展和生產運作等方面,
     使工作效率和利用率能得到大幅的提
     升:即以
       • 越來越少的投入,
       • 獲得越來越多的產出。
• Get more with less work
世界級的生產水準-從Lean出發
Six Sigma
              Six Sigma 基本原理
• Six Sigma是一種追求「最小變異」
  的經營管理思維,借用統計學上的
  常態分配
  與機率模式,來主導企業的戰略與
  戰術,此之經營理念在強力且有效
  的管理工具的配合之下,大可從公
  司營運策略、管理方式一路做到產
  品研發、製程改善/作業改善、品質
  提升、到售後服務滿意度的提升。
• 所謂Six Sigma就是以品質計量為技
  術觀點,對每一製程、產品、服務
  的每一作業而言,發生缺點的機率
  每一百萬的機會中不到3.4次,即為
  3.4 dpmo (3.4 defects per million
  opportunities)。
             DMAIC in 6 Sigma
The DMAIC project methodology has five phases:
1. Define high-level project goals and the current process.
2. Measure key aspects of the current process and collect
   relevant data.
3. Analyze the data to verify cause-and-effect relationships.
   Determine what the relationships are, and attempt to ensure
   that all factors have been considered.
4. Improve or optimize the process based upon data analysis
   using techniques like Design of experiments.
5. Control to ensure that any deviations from target are corrected
   before they result in defects. Set up pilot runs to establish
   process capability, move on to production, set up control
   mechanisms and continuously monitor the process.
                             Lean Kaizen
Lean Kaizen is created with lean techniques. This DMAIC based lean kaizen
   methodology is for waste elimination in the daily activities. Kaizen workshop or event
   is one of key improvement tools used by the world-class companies like Toyota.
• Define (D): Define the scope and set objectives in project charter.
• Measure (M) : Measure the current state process map such as process steps,
   process time, lead time, WIP, etc from the work place or gemba.
• Analyze (A) : Analyze current state, i.e. value and non-value added processes,
   bottleneck constraint and process efficiency.
• Improve (I) : Improve process by designing a future state map.
• Control (C) : Control and hold the gain with metrics to monitor results over time.
                Lean Six Sigma (1/2)
•   An integrated and balanced combination of the speed and variation
    reduction power of both Lean and Six Sigma to achieve business
    management process full optimization.
•   Six Sigma is deployed mainly for innovative, breakthrough and continual
    improvements under the black belt projects led by Black Belts and Master
    Black Belts while Lean is deployed mainly for daily continual improvements
    and performance sustaining activities under the lean kaizen events led by
    Line Engineers and Supervisors.
              Lean Six Sigma (2/2)
Why do we need Lean Six Sigma?
• This below chart illustrates
  more steps in the process bring
  down the overall yield at
  various sigma level. Note: This
  chart is modified from a study
  done by Motorola Six Sigma
  Research Institute.
      –   Lean eliminates non-
          value added steps or
          waste from the process.
      –   Six Sigma improve
          quality of value add steps
          by reducing the variability
          in the process.
  Lean Six Sigma DMAIC Integration Model
• Lean
    –    Time Variability
    –    Increase Speed
    –    Eliminate Waste
    –    Quick Fix Solutions
• Six Sigma
    –    Process Variability
    –    Improve Quality
    –    Increase Yield
    –    Root Cause
         Solutions
  Lean Six Sigma Improvement Strategy
A three-pronged strategy involving
   System + Technology +
   People is deployed to eliminate
   waste with the customer value is
   given priority and appropriate IT
   technology such ERP or MRP II is
   chosen to link up information
   and material flow.

System Level   Loading with    Total            Pull Demand    Six Sigma
               Balanced Flow   Productive       with Kanban    Quality
                               Maintenance
Technology     SMED            Small Lot Size   Cellular Layout Poka-Yoke
People         Standardized    Visual           Good           Employee
               Work            Management       Housekeeping   Involvement


Customer's     Voice of the    Value Stream     Motion and     Lean
Value          Customer        Map              Time Study     Accounting
http://www.motorola.com.tw/mu/Article/TypeArticle.asp?ModeID=1&ID=813
             精實六標準差
1. 定義機遇-哪些是重要事項?        3. 分析機遇-錯在哪裡?
  –   確定業務改進的機會           –   尋找潛在錯誤根源
  –   建立專案團隊章程            –   實施比較鑑別法
  –   定義顧客需求              –   進行差異來源分析
  –   將業務流程文檔化            –   進行相關和迴歸分析
  –   理解基本概念            4. 改進業績-需要做什麼?
2. 衡量業績-我們做得如何?           –   構思可能的解決方案
  –   通過價值流圖對過程進行深入理解     –   評估並選擇解決方案
  –   決定需要衡量的內容           –   形成"期望"價值流圖
  –   開發有效的資料獲取方法         –   組織並實施試運行
  –   評估衡量系統            5. 控制業績-我們如何保持成果?
  –   決定流程能力              – 建立錯誤防呆流程, 去除流程中的
                            缺陷
                          – 完成全部文檔,包括標準操作規程、
                            流程控制計畫和培訓計畫
                          – 建立一個監控體系並實行統計程序
                            控制和目視程序控制來對流程提供
                            及時的反饋
Lean Hospital
     The Pittsburgh Way to Efficient Healthcare:
     Improving Patient Care Using Toyota Based Methods (1/8)
1. Chapter 1. Why it matters
     – Even when healthcare professionals seek care for
       themselves or their families, they find the current system
       non-navigable.
     – In this chapter you will hear a very personal story intended
       to describe, in excruciating detail, why healthcare
       improvement matters: because every medical statistic has
       a face..
2.   Chapter   2.    Eliminating infection
3.   Chapter   3.    Moving closer to the patient
4.   Chapter   4.    Making handoffs safer
5.   Chapter   5.    Reducing medication errors
6.   Chapter   6.    Eliminating the wait
7.   Chapter   7.   Applying best practices
8.   Chapter   8.   Transforming a medical specialty
        The Pittsburgh Way to Efficient Healthcare:
       Improving Patient Care Using Toyota Based Methods (2/8)
1.   Chapter 1. Why it matters
2. Chapter 2. Eliminating infection
    – Section 1. Regional project reduces infections. When 30 Pittsburgh-area hospitals
      pooled their knowledge and determination, central line-associated bloodstream
      infections declined by 63% over four years.
    – Section 2. Eliminating central line infections in 90 days. In an effort led by one
      physician, Perfecting Patient CareSM techniques all but eliminate central line
      infections in two intensive care units within 90 days.
    – Section 3. Sustaining the gain against central line infections. When one inspiring
      leader leaves the organization after a major gain, how can it be sustained?
      (Quick answer: find another physician leader.)
    – Reducing antibiotic-resistant infections. A sustained, wide-ranging Perfecting
      Patient CareSM program at the VA Pittsburgh Healthcare System reduced a
      strain of antibiotic-resistant infection (methicillin-resistant Staphylococcus aureus
      or MRSA) by more than 85%.
    – Redesigning a system: the wheelchairs. It’s an emotional issue among staff. Will
      there be a wheelchair when my patient needs one? Will it be the right
      configuration? Will it be clean? Wheelchair availability and cleanliness are system
      issues, requiring the application of Perfecting Patient CareSM throughout the
      entire VA Pittsburgh Healthcare System.
3.   Chapter 3. Moving closer to the patient
4.   Chapter 4. Making handoffs safer
5.   Chapter 5. Reducing medication errors
6.   Chapter 6. Eliminating the wait
7.   Chapter 7. Applying best practices
8.   Chapter 8. Transforming a medical specialty
       The Pittsburgh Way to Efficient Healthcare:
      Improving Patient Care Using Toyota Based Methods (3/8)
1. Chapter 1. Why it matters
2. Chapter 2. Eliminating infection
3. Chapter 3. Moving closer to the patient
    – Section 1. Housekeepers: key to reducing injuries and
      infections. When a 20-year veteran housekeeper developed
      occasional back pain, the hospital looked to process
      improvement to fix the problem. In the process, they
      developed a better way to clean the rooms and paved the
      way for better infection control.
    – Section 2. Putting nurses in the driver’s seat. Giving nurses
      standardized ways to respond immediately to certain
      emergencies makes patients safer and nurses more satisfied.
    – Section 3. Stop the revolving door on nursing turnover. A
      nurse-led program stopped the exodus of nurses in a liver
      transplant unit, bringing turnover from 12% to zero in a year.
4.   Chapter   4.    Making handoffs safer
5.   Chapter   5.    Reducing medication errors
6.   Chapter   6.    Eliminating the wait
7.   Chapter   7.   Applying best practices
    The Pittsburgh Way to Efficient Healthcare:
     Improving Patient Care Using Toyota Based Methods (4/8)
1. Chapter 1. Why it matters
2. Chapter 2. Eliminating infection
3. Chapter 3. Moving closer to the patient
4. Chapter 4. Making handoffs safer
    – Section 1. Eliminating tangled lines leads to other
      improvements. The symptom: tangled IV lines following
      cardiac surgery. Solving the problem meant looking at every
      handoff from admission through discharge.
    – Section 2. Safer shift change. High-tech and low-tech ways
      of imparting more complete information about each patient
      to the next shift more quickly.
    – Section 3. Eliminating falls. Better handoffs reduce falls.
5. Chapter 5. Reducing medication errors
6. Chapter 6. Eliminating the wait
7. Chapter 7. Applying best practices
8. Chapter 8. Transforming a medical specialty
       The Pittsburgh Way to Efficient Healthcare:
      Improving Patient Care Using Toyota Based Methods (5/8)
1.   Chapter   1.   Why it matters
2.   Chapter   2.   Eliminating infection
3.   Chapter   3.   Moving closer to the patient
4.   Chapter   4.   Making handoffs safer
5. Chapter 5. Reducing medication errors
    – Section 1. Low-cost, low-tech pharmacy improvements.
      Watch as two hospital pharmacies, UPMC South Side and
      LifeCare Hospitals of Pittsburgh, implement low-cost, low-
      tech quality improvements.
    – Section 2. Identifying every patient. In a small community
      hospital where neighbors are the healthcare providers, not
      everyone feels the need to band every patient. It takes
      complete collaboration to change this culture.
    – Section 3. Secret of deploying high-tech machines: People
      first. Getting medications to patients on time 99% of the
      time requires high-tech assistance—and sometimes the
      services of a plumber.
6. Chapter 6. Eliminating the wait
7. Chapter 7. Applying best practices
8. Chapter 8. Transforming a medical specialty
        The Pittsburgh Way to Efficient Healthcare:
       Improving Patient Care Using Toyota Based Methods (6/8)
1.   Chapter 1.   Why it matters
2.   Chapter 2.   Eliminating infection
3.   Chapter 3.   Moving closer to the patient
4.   Chapter 4.   Making handoffs safer
5.   Chapter 5.   Reducing medication errors
6. Chapter 6. Eliminating the wait
    – Section 1. Streamlining the Ambulatory Surgery Center ―as quality permits.‖ The
      Ambulatory Surgery Center at The Western Pennsylvania Hospital implemented
      improvements as fast as they could go, but no faster than quality permitted.
      Patient dignity was at the forefront.
    – Section 2. Let’s eliminate the waiting room. Why should patients wait? Why
      should they be asked the same question over and over? Looking at processes
      from the patient’s point of view led to improvements at West Penn’s Ambulatory
      Surgery Center.
    – Section 3. Eliminating ―Code Red‖ in a hospital Emergency Room. The
      Emergency Room at Forbes Hospital applied for an ―Extreme Makeover‖ from the
      quality chief, and got one. Staff and patients were the beneficiaries.
    – Section 4. Getting to the Operating Room on time in a big-city hospital: the
      98.6% solution. Patients were arriving on time in the surgery suite about half the
      time. Within weeks, almost all of of them were. Staff called it the 98.6%
      solution.
    – Section 5. Streamlining intake for children and mentally ill patients. The most
      vulnerable patients, children and the mentally ill, shouldn’t have to wait for
      appointments or be held up on intake.
7.   Chapter 7. Applying best practices
       The Pittsburgh Way to Efficient Healthcare:
      Improving Patient Care Using Toyota Based Methods (7/8)
1.   Chapter   1.   Why it matters
2.   Chapter   2.   Eliminating infection
3.   Chapter   3.   Moving closer to the patient
4.   Chapter   4.   Making handoffs safer
5.   Chapter   5.   Reducing medication errors
6.   Chapter   6.   Eliminating the wait
7. Chapter 7. Applying best practices
    – Section 1. Can controlling blood glucose reduce post-surgical infections? VAPHS
      physician, Harsha Rao, M.D. presented a glucose control protocol to the
      community that is being used for tight control of blood glucose following cardiac
      surgery. The result is declining infection rates.
    – Section 2. Best diabetes care applied in two community health centers. The
      advantages of the renowned ―Wagner Model‖ for delivering diabetes care are
      beyond dispute. Actually implementing the Wagner Model is difficult. Eileen
      Boyle, M.D., a physician with a local federally qualified health center, finds that
      Perfecting Patient CareSM makes the Wagner Model possible.
    – Section 3. Building a better diabetes appointment. Instead of the patient going
      to a series of doctors, Harsha Rao, M.D., the team of healthcare providers come
      to the veteran during a one-hour appointment.
    – Section 4. Nine Myths about Electronic Medical Records. While electronic ―fixes‖
      may not always pan out, one private practice decided to install an expensive
      Electronic Medical Record system without delay. The results have paid off for
      patients, physicians and healthcare professionals alike.
8. Chapter 8. Transforming a medical specialty
       The Pittsburgh Way to Efficient Healthcare:
      Improving Patient Care Using Toyota Based Methods (8/8)
1.   Chapter   1.    Why it matters
2.   Chapter   2.    Eliminating infection
3.   Chapter   3.    Moving closer to the patient
4.   Chapter   4.    Making handoffs safer
5.   Chapter   5.    Reducing medication errors
6.   Chapter   6.    Eliminating the wait
7.   Chapter   7.   Applying best practices
• Chapter 8. Transforming a medical specialty
   – Section 1. Small improvement yield big results at pathology
     lab at UPMC Shadyside. What would it take to apply the
     principles of Perfecting Patient CareSM to the numerous,
     hand-done processes in a pathology laboratory? One
     hospital’s improvement work led to improved turnaround
     times and improved satisfaction of workers and patients.
   – Section 2. Culture change transforms Henry Ford Hospital
     Pathology Department. One physician and one process
     engineer lead the nation’s 13th largest pathology unit
     toward vigorous, rapid-cycle work redesign that is largely
     employee-driven. The key to all improvements? Culture
     change.
        Information Highway Agenda
• Cloud Computing
   – Infrastructure as a service
        • A set of virtual machine with storage space and external network bandwidth
        • Example: Amazon Web Service
   – Platform as a service
        • An operating environment including (application-specific) libraries and DBMS support
        • Example: Amazon Web Service
   – Software as a service
        • Turn-Key software hosted on the cloud and accessible through the browser
        • Example: Amazon Web Service
• Quality of Service: 精實六標準差 (Lean + Six Sigma)
   – Six Sigma
   – R&D in Lean
   – Lean Hospital
        • The Pittsburgh Way to Efficient Healthcare
• IT for Lean
   –   Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Review: Easier, Simpler, Faster: Systems Strategy for Lean IT
   –   Systems Strategy for Lean IT
   –   The Case for Lean IT
http://www.leanhealthcareeurope.com/?s=recommended-lean-reading&l=en
   Easier, Simpler, Faster: Systems
         Strategy for Lean IT
• Winner of the 2008 Shingo Award for Excellence in Manufacturing
  Research, this compelling book fully explains—
   – Steps your company should take with regard to information systems as it
     implements lean
   – Changes that will be required in your company’s information system to make it a
     partner with, rather than a barrier to becoming a lean manufacturer and
     ultimately a lean enterprise
   – Opportunities that will arise during a lean transformation that will allow an
     information systems team to eliminate waste and apply lean principles in its own
     operations
• For your lean transformation to be successful, your IT system must
  support it!
• To enhance and sustain its lean journey, a company must implement
  information systems that fully support and enhance the lean initiative. In
  Easier, Simpler, Faster: Systems Strategy for Lean IT, Jean
  Cunningham and Duane Jones introduce the case study of an actual lean
  implementation involving the IT system of a mid-size manufacturer,
  highlighting the IT challenges that the manufacturer faced during the lean
  transformation.
• This book will provide you with a broader vision as well as a path
  to what a lean system environment will look like for your company
   Easier, Simpler, Faster: Systems
         Strategy for Lean IT
Introduction: When IS Becomes a Partner in your Lean Journey
1. Lean Basics to Define your Customer Value, Eliminate
   Wastes, and Align IS
2. Applying Standardized to Information Systems
3. Integrate Your Order Entry into the Information
   Highway
4. Selecting, Enabling, and Customizing your ERP System
5. Kanban: A Necessity for Reducing Inventory and
   Managing Pull with Suppliers
6. Reshuffling MRP to Align with Kanban and Lean
7. Mission to Go Live - Building Teams and Overcoming
   Barriers
8. Capturing, Managing, and Sharing Information
9. Lean Accounting System
Appendix I: Seven Steps to Eliminate Standard Cost in Information Systems
Appendix II: The Thirteen Guiding Information System Principles
http://www.matthewsmith.com/easier-simpler-faster.html
    Review: Easier, Simpler, Faster:
   Systems Strategy for Lean IT (1/7)
• Matthew Smith Easier, Simpler, Faster: Systems Strategy for Lean IT by
  Jean Cunningham and Duane Jones focuses on the Information Technology
  (IT) issues faced in the lean transformation of Lantech, a packaging
  company in Louisville, Kentucky.
    – Lantech is a familiar icon in the lean manufacturing world because it was
      prominently featured in the popular Lean Thinking text by James P. Womack and
      Daniel T. Jones.
    – Easier, Simpler, Faster differentiates itself from that text by focusing on the
      specific IT decisions and lessons-learned that were discovered during the
      company's lean transformation.
• In Easier, Simpler, Faster, the authors propose thirteen guiding principles for
  a lean IT company to follow. For brevity's sake, these principles are
  including in Appendix A. The principles focus on common themes in lean
  thinking including standardization, commonality, productivity, and reduction
  of waste. The principles also provide guidance on issues unique to IT such
  as limiting keystrokes for power users, automation strategies, data mining,
  and storage.
• The role of the guiding principles is to help a company develop an
  information system that supports lean changes and captures vital
  information in all value streams so that it can be shared and leveraged by all
     Review: Easier, Simpler, Faster:
    Systems Strategy for Lean IT (2/7)
• A major focus of the book was on systems-specific decisions
  made during the company's lean transformation.
    – The most important of these decisions concerned the procurement of
      hardware and software.
    – Following the guiding principles, the authors suggest that when
      purchasing hardware and software that a company focus on
      standardization and commonality.
    – Standardization is done by centralizing the purchasing decisions and
      limiting the variety of configurations. This allows the company to save
      money in the procurement process and simplify the maintenance and
      repairs for the machines. The configurations are chosen by involving
      users in the discovery process.
•    Decisions are weighted toward choosing software tools that
    are shared across the company. Common tools - such as Word,
    Excel, and the Windows file system - are chosen over
    department-specific tools when they adequately meet the
    needs of the user. Commonality helps reduce waste by limiting
    configurations and compatibility problems. It also allows people
    to more easily share files across the company - increasing the
    availability of information.
    Review: Easier, Simpler, Faster:
   Systems Strategy for Lean IT (3/7)
• Of the software and hardware decisions, the most important to a
  manufacturing company is in the choice of an Enterprise Resource Planning
  (ERP) system. When choosing an ERP system, the authors suggest
  choosing a system that works well with the company's culture. They suggest
  talking to the technicians behind the products, rather than the salespeople.
    – This allows the decision makers to more easily determine if the software will
      adapt to the company's needs.
• During the discovery process, it is important to determine whether the
  company plans on implementing a vanilla (out-of-box) implementation of the
  ERP or customizing the ERP to meet the company's needs. Both solutions
  are feasible, but have their tradeoffs.
    – Implementing a vanilla implementation, allows the company to easily upgrade to
      new technology when it is available, and also requires less support from the
      vendor. However, the vanilla solution might not fit well with the company's
      existing processes.
    – A customized solution makes up for the shortcomings of the vanilla solution by
      allowing the company to modify the application as they see fit. However, this
      benefit comes with the cost of difficult upgrades and higher development
      expenses in the future.
• Lantech chose to customize the product, but only in high-value areas. This
  required more support for the vendor; however, the authors felt that the
  benefits in flexibility more than made up for the additional cost.
     Review: Easier, Simpler, Faster:
    Systems Strategy for Lean IT (4/7)
•   One of the high-value areas in the ERP system that required customization
    at Lantech was the Material Resource Planning (MRP) package.
    – In traditional companies, the MRP system performs all the scheduling, planning,
      and material procurement for manufacturing.
    – However, in lean production many of these functions are not needed.
1. The authors found that through the use of takt time, scheduling was
   simplified and did not require a complex package. Instead, scheduling was
   done based on how many people were needed to produce the required
   product for that day. As a result, scheduling was dropped from the MRP
   system.
2. The material procurement package was also affected by lean thinking.
   Through the use of kanban almost 90% of all material was ordered based
   on a visual card system. Rather than try to integrate kanban into the MRP,
   Lantech separated this process entirely. As a result, the MRP now ordered
   only 10% of material that was not ordered via kanban.
• The authors stated that they considered dropping MRP entirely; however,
   they found that it benefiting the company when exceptions arose such as
   damaged goods, engineering changes, cancelled orders, or sudden orders.
• For Lantech, the MRP was delegated to becoming a safety net rather than a
   key factor in the manufacturing process.
     Review: Easier, Simpler, Faster:
    Systems Strategy for Lean IT (5/7)
•   The example of the MRP system is symbolic of the role IT plays in the lean company.
    The authors describe IT as a support mechanism for lean production. It is meant to
    facilitate communication and not hamper the progress that the company makes. At
    Lantech, IT was the last area of the business that was studied by the company's lean
    process team. It was only done when IT became a barrier to eliminating waste at the
    company. The authors note that this is important because IT reflects the processes
    of the company. If the company's processes are not lean, than IT cannot be lean.
•   The authors conclude the book with some key lessons they learned in aligning IT
    with lean thinking. They found that team building was one of the most important
    aspects of transforming IT.
     – By bringing together team members from across the company, they were able to make
       better decisions and help facilitate a culture of trust at Lantech.
     – This open spirit in decision making was reinforced by providing open access to information
       across the company.
     – The access to open information empowered employees to make better decisions and
       expand their roles in the company.
•   After the lean transformation, the authors found that like other areas that had
    undergone a lean transformation, IT began to develop a new role in the company.
    Rather than simply reacting to requests for changes, IT was now a proactive member
    of the company that could reach out and partner with the company's key value
    streams to produce enhancements. Solutions that came out of IT were now deeply
    rooted in the company's processes. The IT staff was capturing better information and
    providing the correct enhancements the first time.
     Review: Easier, Simpler, Faster:
    Systems Strategy for Lean IT (6/7)
•   Easier, Simpler, Faster: Systems Strategy for Lean IT provides a glimpse into the
    issues concerning IT that affect a company undergoing a lean transformation.
      – The book, itself, is well written and provides interesting examples.
      – For the area of manufacturing, this book is an invaluable resource for choosing
        and implementing an ERP system.
      – For all of IT, the thirteen guiding principles can serve as a basis for starting a
        lean transformation.
•   My main criticism of the book is that it is a little short sighted. It does not delve into
    applying lean principles to the process of developing software.
      – I purchased the book expecting it to describe implementing lean processes in IT.
      – I wanted to learn how kanban and value stream mapping could work within
        software development.
      – This book, however, did not cover any specific implementation of lean thinking in
        respect to IT. In fact, the book describes IT as not having any direct value stream.
        This is true for Lantech; however, this is not the case for most companies.
•   Business-to-consumer and business-to-business e-commerce provides a direct value
    stream tied to information systems. The management of this value stream is as
    important to most companies as Lantech's core manufacturing process. It is for these
    reasons that the book is better as an introduction, rather than a core reference for
    applying lean principles to information systems.
•   I do not see this book as being a requirement for lean production classes in the
    future; however, it is an interesting read for anyone looking to see the role IT plays in
    a company's lean transformation.
    Review: Easier, Simpler, Faster:
   Systems Strategy for Lean IT (7/7)
The Thirteen Guiding Information System Principles
1. Automate only if it is easier, faster, and complements your culture
2. Build commonality to increase visibility and access to information (互通)
3. The primary purpose of security is to avoid data corruption and provide
   information access
4. Nothing lasts forever (世上唯一不變的原則是變)
5. Systems and software inflexibility can be the greatest inhibitor of change
6. Plain English-system instructions are better than shorthand
7. Keystrokes matter to power users
8. Capture everything you can about your customer (知己知彼)
9. Archive customer history; clean house on internal transactions
10. Capture information once and be done (一次做好收集工作)
11. Use commonality to create an information highway
12. Productivity for all is more important than productivity for one
13. Huge data stores are easy to manipulate.
     Systems Strategy for Lean IT
• Lean Basics to Define Your Customer Value,
  Eliminate Wastes, and Align IS
• Applying Standardization to Information Systems
• Integrating Your Order Entry into the Information
  Highway
• Selecting, Enabling, and Customizing Your ERP
  System
• Kanban: Reducing Inventory and Managing Pull with
  Suppliers
• Reshuffling MRP to Align with Kanban and Lean
• Mission to Go Live – Building Teams and Overcoming
  Barriers
• Capturing, Managing and Sharing Information
• Lean Accounting Systems
                  The Case for Lean IT
•       Executive Summary
•       Change and Persistence
    –     Manufacturing Value
•       Lean IT
    –     IT Value Streams
    –     Waste not
    –     Let the Value Flow
    –     Just-in-Time IT
    –     Strive for Perfection
•       Visual Management Systems for IT
    1.    Transaction Visibility
    2.    Business-IT engagement
    3.    Operational excellence
    4.    Security & Compliance
•       Survive and Thrive
            The Case for Lean IT:
           Executive Summary (1/3)
•   Challenge
    – Today, IT budgets are being cut as the impact of
      the global economic recession becomes local. Yet
      the demands on it are no less than they were
      before.
    – Customer service cannot be compromised,
      compliance mandates continue to proliferate and
      IT complexity is ever increasing. With even tighter
      spending, a new approach is required to address
      these challenges.
•   Opportunity
•   Benefits
             The Case for Lean IT:
            Executive Summary (2/3)
•   Challenge
•   Opportunity
    –   Some leading-edge IT organizations have realized great
        results by applying Lean thinking to IT. The core
        philosophy of lean thinking can be summarized in four
        words: Maximize Value, Minimize Waste.
    –   Lean focuses on analyzing and optimizing Value Streams
        (the sequence of activities to design, produce and deliver a
        good or service) by removing non-value added activity, or
        waste.
    –   The beauty of Lean IT is its pragmatism. It rewards and
        even encourages incremental wins, doesn’t require a grand
        overhaul of systems, and isn’t obscure in its methodology,
        terminology or theory.
•   Benefits
                  The Case for Lean IT:
                 Executive Summary (3/3)
•       Challenge
•       Opportunity
•       Benefits
    –      CIOs should focus on optimizing the IT operations and processes
           supporting their most business-critical applications and services.
    –      Enterprise IT management software is a critical enabler of Lean IT
           because it provides the necessary insight and instrumentation into
           business services and the supporting IT assets, staff and processes.
    –      In addressing the problem of waste there are four dimensions that
           need to be considered:
          1.   Transaction Visibility Provide insight into customer’s experience and
               quickly identify the root cause of problems to ensure a positive experience
          2.   Business-IT Engagement Identify the true requirements of each
               business process, Evaluate the service delivery solution to identify non-
               value added activity
          3.   Operational Excellence Improve agility, service quality and efficiency
          4.   Security and Compliance Streamline and automate compliance
               processes to reduce cost and risk
Change and Persistence (如何永續經營)
•       CIOs find themselves in a tough spot.
    –     The Great Recession is forcing many of them to operate with
          significantly less budget than before.
    –     As the businesses they serve seek to find their footing in the current
          tumultuous times, the priorities that IT must address are often shifting
          faster and more radically than ever before.
•       Notwithstanding all this change, the expectations for service
        delivery from IT remain constant, and astoundingly high.
        Never mind the complexity of IT infrastructure, the range of
        security threats IT must address, and the ever-growing web
        of regulatory and legal compliance mandates IT must support.
•       These ―table stakes‖ must be mastered and addressed in the
        context of round-the-clock service expectations and support
        for business agility, cost reduction and innovation.
•       In short, the service expectations for IT remain the same,
        while the resources to deliver against those expectations are
        changing for the worse. (Do more with less!)
•        What’s a CIO to do?
                   Change and Persistence
                 Manufacturing Value (1/2)
•       IT experts have long used manufacturing as the most suitable metaphor
        for the challenges and opportunities of IT management.
    –      Like IT, manufacturing is a process-based service function that is in the
           business of producing value for customers.
    –      Unlike IT, manufacturing is rarely admonished to stay in alignment with the
           business, because manufacturing is the business, or at least is intrinsic to the
           business.
•       Of course, so is IT in today’s on-line world. Whether in financial services,
        government, telecom, healthcare, retail, transportation, hospitality, or
        virtually any other industry (including manufacturing), IT delivers business
        services that
    –      allow customers to discover, order, pay and get support;
    –      allows suppliers to compete, collaborate, deliver, and get paid; and
    –      enables employees to do just about everything necessary for their jobs.
•       In short, IT manufactures value for the business.
•       Notwithstanding the current economic crisis, manufacturing has long
        perfected a simple and effective process management system that
        ensures maximum value delivery to the end customer with minimum
        wastage of time and money.
                 Change and Persistence
                  Manufacturing Value (2/2)
•       This system — known as Lean Manufacturing or Lean
        Thinking — has proved itself in up markets and down, in
        every subsector of manufacturing, in Asia, North America and
        Europe, and in the largest enterprises down to the most
        successful start-ups.
•       Lean came to prominence in the auto industry as the Toyota
        Production System, though it is perhaps best known in IT via
        Dell Computers’ massive success in rising to become the
        largest PC manufacturer in the world.
    –     Though now taken for granted, Dell turned the manufacturing process
          on its head by not building a computer until it had an order for that
          very computer.
    –     Order in hand, it swung into action, pulling parts from suppliers so
          that production workers could assemble them into a personalized
          product to be shipped shockingly fast to individual customers.
•       So if manufacturing is the most suitable metaphor for the
        management of enterprise IT, and Lean is the proven and
        pragmatic state-of-the-art for manufacturing management,
        what does that suggest for enterprise IT management?
                            Lean IT
•   Lean has been successfully applied to domains
    beyond manufacturing, including to enterprise IT on
    a case-by-case basis.
•   The beauty of Lean is its pragmatism. It rewards
    and even encourages incremental wins, doesn’t
    require a grand overhaul of systems, and isn’t
    obscure in its methodology, terminology or theory.
       IT Value Streams
       Waste not
       Let the Value Flow
       Just-in-Time
       IT Strive for Perfection
    Lean IT  IT Value Streams (1/2)
•    The core philosophy of Lean can be summarized in
     four words: Maximize Value, Minimize Waste. Lean
     focuses on
    –   analyzing and optimizing Value Streams (the sequence of
        activities todesign, produce and deliver a good or service)
    –   to remove non-value added activity, or waste.
•    Value is always defined from the standpoint of the
     end customer. For IT, the end customers include the
    –   executives running the business and the
    –   users (employees, customer customers, and suppliers) of
        the services IT delivers.
•    Thus, IT’s Value Streams are the applications and/or
     services that IT delivers to and for the business,
     along with the care and feeding of these applications
     and services.
    Lean IT  IT Value Streams (2/2)
•    To make IT improvement projects understandable to
     the business and to maximize their positive impact
     on the business, IT should analyze infrastructure
     and processes from a vertically-integrated point of
     view. That is, rather than trying to horizontally
     improve data-center operations supporting all
     business processes, a vertically-integrated approach
     would focus on optimizing infrastructure and
     processes supporting high-impact Value Streams
     first.
•    These high impact Value Streams are often, but not
     always, ―cash-register‖ applications in that they
     directly drive company revenue and are used
     primarily by external (paying) consumers. Examples
     include point-of-sale or e-Commerce applications.
             Lean IT  Waste not
•   In a physical manufacturing plant, tell-tale signs of waste and
    bottlenecks, such as stockpiles of inventory or work-in-
    progress, are easily visible; not so in IT. And yet,
    undoubtedly waste exists in even the best-run IT
    organizations.
•   Server sprawl, underutilized hardware, manual processes,
    redundant applications, slow application response times:
    These are just a few of the signs of waste in IT.
•   In a paper titled ―Lean IT: Waste Not, Want Not,‖ Peter
    Waterhouse characterizes the 8 Elements of Waste in IT,
    commenting that ―each element of waste considered
    independently is highly costly, but when aggregated together,
    these 8 elements can severely compromise IT’s ability to
    support both internal and external customers on a
    sustainable basis.‖
  Eight Elements of Waste In Enterprise IT
Waste Element     Examples                                                        Business Outcome

Defects           • Unauthorized system and application changes.                  Poor customer service,
                  • Sub-standard project execution.                               increased costs
Over-production     • Unnecessary delivery of low-value applications and          Business and IT
(Over-provisioning) services.                                                     misalignment, increased
                                                                                  costs, misuse of resources
Waiting           • Slow application response times                               Lost revenue, poor customer
                  • Manual service escalation procedures                          service, lower productivity
                  • Slow employee on-boarding.
Non-Value         • Reporting technology metrics to business managers.            Miscommunication
Added
Processing
Transportation    • On-site visits to resolve hardware and software issues.       Higher capital and
                  • Physical software, security and compliance audits.            operational expenses
Inventory         • Server sprawl, under-utilized hardware. (消耗預算)                Increased costs: data center,
(Excess)          • Multiple repositories to handle risks and control.            energy; lost productivity
                  • Benched application development teams.
Motion (Excess)   • Fire-fighting repeat problems within the IT infrastructure.   Lost productivity
Employee          • Failing to capture ideas/innovation.                          Talent leakage, low job
Knowledge         • Knowledge and experience retention issues.                    satisfaction, increased
(Unused)          • IT staff spends time on repetitive or mundane tasks.          support and maintenance
                                                                                  costs.
Lean IT  Let the Value Flow (1/2)
•   In Lean, the principle of Flow dictates that the value-
    added steps in a given process should flow in a tight
    and integrated sequence. As you remove waste from
    IT, it’s critical to ensure that the remaining process
    steps are integrated to optimize service delivery.
•   It is especially critical to consider the handoff points
    between different departments as these handoff
    points are often where wait-time is introduced.
•   Here, integrated management solutions can
    automate the workflow between different
    departments, minimizing wait-time. Management
    tools can further support optimizing flow by
    automating key process steps. The degree to which
    different departments use a set of integrated tools
    and processes helps optimize the flow of value to
    the customer.
Lean IT  Let the Value Flow (2/2)
•   An example of this is change management. Suppose
    a business unit wants to adapt a given customer-
    facing application to add in features that would
    differentiate the service from competitive offerings.
•   Supporting this business project requires tight
    collaboration between
    –   the application development team that would make
        the code changes,
    –   the operations team that would need to assess the
        impact of these changes on other services,
    –   the Change Advisory Board that would review, approve
        and schedule the proposed changes, and
    –   the operations team that would deploy the updated
        application.
    Lean IT  Just-in-Time IT (1/2)
•       Another key Lean principle is Pull, which states that no
        step should occur until triggered by a ―pull‖ signal from the
        downstream step.
    –     For instance, just as Dell didn’t start building a computer till getting an
          order for it, IT shouldn’t provision servers till they’re needed.
•       Compare this to the more traditional ―push‖ control
        mechanism, where capacity or inventory is stockpiled in
        anticipation of need.
    –     While pushing capacity into inventory provides a buffer against urgent
          demand, more often than not it results in waste through incorrect
          configuration, version control problems, and incipient quality problems,
          not to mention the carrying cost of maintaining idle infrastructure.
•       Therefore, one of the primary goals of Lean improvement
        initiatives is to reduce cycle times to remove the need to
        perform operations in advance of their pull signals.
    –     For instance, if server provisioning takes days or weeks, there will be
          an inclination to have stand-by servers provisioned just-in-case.
•       A Lean approach would entail streamlining the provisioning
        process so that it takes only hours or minutes and resources
        can be provisioned just-in-time.
    Lean IT  Just-in-Time IT (2/2)
•   Along with cycle time reduction, significant attention
    must be paid to the form and mechanism of pull
    signals within IT Value Streams. For instance, pull
    signals from business executives may be handled
    through the portfolio planning mechanism of an IT
    Governance process, while initial pull signals from
    end users can be captured when they request a
    service via an actionable Service Catalog system.
•   Ongoing pull signals from users stem from real-time
    transaction volumes, which must be monitored and
    managed via application performance management
    coupled to scalable back-end provisioning.
    Lean IT  Strive for Perfection
•   Another critical Lean principle is Perfection.
    Like ITIL’s continuous improvement phase,
    the Lean
•   IT approach recognizes that great gains can
    be achieved through incremental
    improvement and that the journey to
    perfection never ends.
Visual Management Systems for IT (1/4)
Lean manufacturing advocates the use of visual
   management systems to present and share
   critical information and facilitate process
   efficiency. Examples of visual management
   systems include:
• Status boards that show personnel availability
• Lights on machines showing status (red for
   unavailable, yellow for available and green for
   in use)
• Performance metrics posted in public areas
   that show throughput and quality
   performance
Visual Management Systems for IT (2/4)
•   Perhaps the best-known is the kanban card system that
    production workers in the Toyota Production System use as
    inventory pull signals. These manually constructed visual
    management systems work well in discrete manufacturing
    industries like automotive and electronics because of the
    physically tangible nature of the work-in-process (WIP), and
    because the process steps being managed are typically
    conducted in a single location, on the manufacturing floor.
•   In IT, business services consist of bits and packets coursing
    through electronic infrastructure, the ultimate in intangible
    WIP. It’s not visibly apparent which servers and infrastructure
    components are supporting which services. Moreover, the
    infrastructure and personnel supporting service offerings are
    often distributed across the globe.
Visual Management Systems for IT (3/4)
•   Here, then the need to visualize end-to-end
    transactions and the underpinning infrastructure of
    said transactions is even more critical. How can IT
    operations be streamlined, virtualized, automated or
    managed without visibility into what is going on in
    the IT environment?
•   The answer is that IT managers need enterprise IT
    management systems that provide visual
    management of business and IT services. These
    systems require an understanding of the
    infrastructure and staff supporting services, insight
    into the performance and utilization of staff and
    assets, and most importantly a level of data
    consolidation and presentation.
Visual Management Systems for IT (4/4)
To optimize critical business services and achieve
   Lean IT, there are four dimensions that need
   to be considered:
  1.   Transaction Visibility
  2.   Business-IT Engagement
  3.   Operational Excellence
  4.   Security & Compliance
    Visual Management Systems for IT
           Transaction Visibility
•   To improve customer value, it is important to know
    what the customer is experiencing in their business
    interactions. Are your critical business services
    supporting a reputation for first-class service and
    responsiveness or causing frustrated customers to
    seek out the competition?
•   Given that virtually all externally facing applications
    are web-based, it is incumbent that the performance
    of these critical systems be managed. Modern
    application performance management systems can
    both monitor the end-to-end customer experience to
    measure responsiveness and also quickly locate the
    root cause to avoid the finger-pointing engendered
    by manual and after-the-fact sleuthing into
    performance problems.
    Visual Management Systems for IT
         Business-IT engagement
•   The economic downturn has not diminished the demands on IT. Business
    executives still require new or updated IT applications and services to
    support their strategic initiatives. Employees still need access to services
    and service support. Change requests are unabated and need to be
    prioritized, approved, scheduled and managed through a controlled
    process.
•   Meeting and shaping these demands requires that IT and business
    leadership engage in a governance process that uses business-focused
    metrics as decision support. Further, business users should be able to
    directly request (i.e., ―pull‖) tactical and operational requests about the
    systems they use. Medium to large IT shops can only meet these
    requirements with modern project and portfolio management and service
    lifecycle management systems. Together, these systems can provide
    complete transparency into the cost, quality and function of every project
    and service so that the service portfolio can continuously be optimized.
•   IT has the ability to understand how systems are being used to execute
    business processes.
•   This data can be brought to the business and waste can be discussed,
    decisions made, and action taken to improve the process and systems
    efficiency.
    Visual Management Systems for IT
         Operational excellence
•   Strategies to achieve operational excellence include identifying and remediating
    bottlenecks, automating processes to reduce wait-time and errors, and optimizing
    IT asset utilization through virtualization and consolidation efforts. Just-in-time
    resourcing needs to become a key discipline within IT.
•   High-impact transactions are typically supported by web-based front-ends and a
    variety of infrastructure components, often spanning mainframe and distributed
    platforms. The mainframe, it should be noted, is an extremely lean platform due
    to its energy efficiency and extreme reliability. For optimal efficiency, it’s advisable
    to leverage an infrastructure management system that can accommodate complex,
    heterogeneous environments and can integrate processes across all layers of the
    operating stack from applications to servers, networks and databases.
•   Controlled change management processes are also critical for achieving
    operational excellence.
•   Change management solutions help ensure that changes are scheduled to avoid a
    negative impact on the business, and reduce the risk of error and unplanned
    downtime.
•   ITIL is a very good complement to any Lean IT initiative in that it lays a
    framework to address the issues raised from a Lean process review. Lean process
    exercises will identify where waste exists; ITIL recommends best practices for
    improving and streamlining processes across the service management lifecycle.
    Visual Management Systems for IT
          Security & Compliance
•   When focusing on optimizing services to deliver more value and reduce
    costs, risk and compliance is a necessary consideration. Proving that only
    authorized users have access to sensitive information to support
    compliance initiatives continues to be a challenging and expensive
    endeavor that may become even more complex if new financial regulation
    compliance mandates are rolled out in the aftermath of the financial crisis.
•   Integrated Security & Compliance solutions help streamline and automate
    processes to remove waste from compliance processes and reduce the
    cost of assuring and validating compliance.
•   At many companies, compliance processes are highly manual and
    redundant; many different groups use their own spreadsheets or other
    fragmented tool-sets, which can quickly become out of synch leading to
    further risk. Centralizing compliance information and standardizing
    processes and tool-sets, can reduce risk, remove redundancies and
    increase agility to respond as regulations change.
               Survive and Thrive
•   Tough times end. Winners prepare to thrive in up-times even
    as they intelligently survive downturns. Lean IT provides a
    recipe for survival that simultaneously lays the groundwork
    for growth. Said another way, Lean IT is as much or more
    about thriving as it is about surviving.
•   The pragmatism of Lean IT means that CIOs can take
    advantage of it incrementally, adding value every step of the
    way. IT organizations can effectively maximize value and
    minimize cost by focusing on improving IT’s high impact
    Value Streams across four critical dimensions:
•   Transaction Visibility, Business-IT Engagement, Operational
    Excellence and Security &Compliance
•   Companies that take a Lean IT approach to increase
    efficiency and optimize their processes now, will be well-
    positioned to grow when market conditions ultimately and
    inevitably improve.

				
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