Kanban Summary 1 of 7: Intro, Benefits, Kiazen

Book summary of Kanban: Successful Evolutionary Change for Your Technology Business by David Andersen. Excerpted content in italics.

Overview

Kanban originates from Lean Manufacturing. It grew up with tools such as the theory of constraints, systems thinking, value stream mapping etc.  Kanban has proven effective in knowledge work. David Andersen is a pioneer in its application to IT.

Kanban is a method to continuously improve a process.  It uses an incremental and evolutionary approach to minimize people's natural resistance to change.

Kanban creates a pull system to match work in process levels to the capacity of a team to do work at a sustainable pace. This pace enables measurable value chain improvements as well as work-life balance. These improvements deliver significant economic benefits. Benefits such as reduction in coordination and transaction costs, faster value delivery, and improved quality and productivity are common.

By exposing problems, focusing an organization on resolving them, and eliminating their effects in future, Kanban facilitates the emergence of a highly collaborative, high-trust, highly empowered, continuously improving organization. This type of organizational culture is often referred to as a Kaizen or continuous improvement culture.

Essential Properties of Kanban Systems

In a "kanban" system, a card is associated with each work item. The total number cards is used to limit how much work can be in process at any time. When a card becomes available it is a signal that a new work item may be started.  This signal is the mark of a pull system - work is only allowed to begin when there is the capacity to complete it; the system can not be overloaded with work.  In Software Development Agile "Card Walls" may act as kanban cards if work in process limits also are in place.

A kanban system is a complex adaptive system for lean. Complex adaptive systems have initial conditions and simple rules that are required in order to seed complex, adaptive, emergent behavior. Kanban uses five core properties to create an emergent set of Lean behaviors in organizations:

1. Visualize Workflow
2. Limit Work-in-Progress 
3. Measure and Manage Flow 
4. Make Process Policies Explicit 
5. Use Models to Recognize Improvement Opportunities

6 Step Recipe for Success

Asking people to change their behavior creates fear and lowers self-esteem, as it communicates that existing skills are clearly no longer valued. I developed what I’ve come to call my Recipe for Success to address these issues. The Recipe for Success presents guidelines for a new manager adopting an existing team. Following the recipe enables quick improvement with low levels of team resistance. The six steps in the recipe are:

1. Focus on quality 
2. Reduce work-in-progress (WIP)
3. Deliver often (shorten lead time and build trust)
4. Balance demand against throughput 
• Identify and subordinate work to bottlenecks
• Frees time for continuous improvement
5. Prioritize (both simply and via levels of service)
6. Attack sources of variability to improve predictability

It is best to start with 1-3 together and then move on to 4-6 (which are more difficult).

Lead Time and WIP:

• Longer lead times are associated with significantly poorer quality e.g. 6 fold increase in lead time leads to 30 fold increase in initial defects
• Longer lead times stem from a larger amount of work-in-progress
• Reducing WIP e.g. shortening the length on an iteration improves quality
• The relationship between WIP and quality is typically exponential rather than linear

Balancing demand against throughput and slack:

Balancing demand against throughput implies that we will set the rate at which we accept new requirements into our software development pipe to correspond with the rate at which we can deliver working code. 

The throughput of your process will be constrained by a bottleneck. It’s unlikely you know where that bottleneck is. In fact, if you speak to everyone in the value stream, they will probably all claim to be completely overloaded. However, once you balance demand against throughput and limit the work-in-progress within your value stream, magic will happen. Only the bottleneck resources will remain fully loaded. 

Much of the stress will be lifted off the organization and people will be able to focus on doing their jobs with precision and quality. The slack capacity created by the act of limiting work-in-progress and pulling new work only as capacity is available will enable improvement no one thought was possible. 

Intuitively, people believe they have to eliminate slack. So after limiting work-in-progress by balancing demand against throughput, the tendency is to “balance the line” by adjusting resources so that everyone is efficiently fully utilized. Although this may look efficient and satisfy typical twentieth-century management accounting practices, it will impede the creation of an improvement culture. You need slack to enable continuous improvement. In order to have slack, you must have an unbalanced value stream with a bottleneck resource. Optimizing for utilization is not desirable.

Sources of Variability and Predictability (i.e. making dates)

• Variability results in more work-in-progress and longer lead times. 
• Variability creates a greater need for slack in non-bottleneck resources in order to cope with the ebb and flow of work as its effects manifest on the flow of work through the value stream (needed to make dates, SLA's).
• Variability in the size of requirements, and in the amount of effort expended on analysis, design, coding, testing, build integration, and delivery adversely affect the throughput of a process and the costs of running a software development value stream.

Kaizen - Continous Improvement Culture

To understand why it is so hard to achieve a kaizen culture, we must first understand what such a culture would look like. Only then can we discuss why we might want to achieve such a culture and what its benefits might be. 

In kaizen culture the workforce is empowered. Individuals feel free to take action; free to do the right thing. They spontaneously swarm on problems, discuss options, and implement fixes and improvements. In a kaizen culture, the workforce is without fear. The underlying norm is for management to be tolerant of failure if the experimentation and innovation was in the name of process- and performance improvement. In a kaizen culture, individuals are free (within some limits) to self-organize around the work they do and how they do it. Visual controls and signals are evident, and work tasks are generally volunteered for rather than assigned by a superior. A kaizen culture involves a high level of collaboration and a collegial atmosphere where everyone looks out for the performance of the team and the business above themselves. A kaizen culture focuses on systems-level thinking while making local improvements that enhance overall performance. 

A kaizen culture has a high level of social capital. It is a highly trusting culture where individuals, regardless of their position in the decision-making hierarchy of the business, respect each other and each person’s contribution. High-trust cultures tend to have flatter structures than lower-trust cultures. It is the degree of empowerment that enables a flatter structure to work effectively. Hence, achieving a kaizen culture may enable elimination of wasteful layers of management and reduce coordination costs as a result. 

Part 2