Lean Management in Service Industry: Technologies

LEAN MANAGEMENT
IN SERVICE INDUSTRY
Technologies
An Indian outsource provider of software services
Rohit Bebarta 09BS 000 1940

Peeyush Kumar 09BS 000 8715
It is the story of a large IT services organization that
adopted Lean as a source of competitive advantage to
sustain its low-cost, high-quality strategy while
growing rapidly.
ABOUT WIPRO
IT services
Industry
IT consulting
Founded 1945
Founder(s) M. H. Premji
Headquarters Bangalore,
Azim Premji (Chairman)
Key people Girish Paranjpe (joint CEO)
Suresh Vaswani (joint CEO)
Application Development and Maintenance
BPO
Services Product Engineering Solutions
Technology Infrastructure Services
Consulting
840 active customers 100,000-employee mark

WHY LEAN
When the members of Wipro’s senior executive
team decided to implement Lean in 2004, they
realized that the quality models used before,
such as CMMI and Six Sigma, were very good
for meeting software specifications but were less
well suited for delivering business solutions.
It is the story of a large IT services organization that
adopted Lean as a source of competitive advantage to
sustain its low-cost, high-quality strategy while
growing rapidly.
4 PRINCIPLES OF THE TOYOTA
PRODUCTION SYSTEM DEFINED BY HBS
Rule 1: All work shall be highly

specified as to content, sequence,
timing, and outcome.
Rule 2: Every customer-supplier
connection must be direct, and there must
be an unambiguous yes or no way to send
requests and receive responses.
Rule 3: The pathway for every
product and service must be simple
and direct.
Rule 4: Any improvement must be
made in accordance with the
scientific method, under the guidance
of a teacher, at the lowest possible
level in the organization.
IMPLEMENTING…
Implementation of lean should be slow and controlled.
"They didn't come out with big banners and say, 'OK, today
your work is lean work, and yesterday it wasn't.' They started
with a small group and recruited other people from there. It was
a very controlled experimentation."
PHASE ZERO: EXPERIMENTING WITH LEAN.
The implementation of Lean began with the creation of the Lean productivity office (PO).
The PO’s mission was to:
1) incubate the Lean concepts; 2) Transcript Lean tools and practices such as Just-In-
Time (JIT), Visual Control Board, Value Stream Mapping (VSM)
automation, and leveling into the IT
3) select a few pilot projectsfor experimentation and help the project managers implementing
them; and
4) Measure the tools’ impact on performance. Only projects that could demonstrate more
than 10% performance increases on prespecified metrics (schedule, effort, or quality), were
labeled as
Lean.
PHASE 1: MAINSTREAMING LEAN
The staff in the PO grew gradually from 10 in 2005 to 25 today. This Lean center
of excellence (CoE) is responsible for:
1) leading the deployment of Toyota’s Lean practices in IT services

2) Championing productivity, cost containment, and delivery excellence;
3) Guiding project teams through the entire course of Lean deployment
4) providing statistical evidence of benefits accumulated. During mainstreaming,
the PO mandated the implementation of Lean toolsacross more than 1,000 large
and midsize projects involving greater than 100 man month (MM)
of effort and tracked their performance.
PHASE 2: GATHERING LEAN MOMENTUM.
The PO team started selecting larger and more complex
projects for Lean intervention, meaning projects involving more than 200 MM. The
statistic measurements showed that in spite of the increase in size and complexity of the
projects, Lean continued to deliver sustained performance improvements. During this
phase, the PO dedicated additional effort to:
1) marketing Lean via deliberate evangelization campaigns supported
through newsletters
2) forming communities of practice
3) creating contextual and customized Lean workshops to address specific business

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

PHASE 3: TAKING STOCK.
As the Lean intervention gained momentum and touched a large
number of projects, the focus of the PO turned to cross-utilizing Lean and Six Sigma and
integrating the combined approach with other established methodologies such as Agile, the
Wipro Quality Management System, and other practices. The goal was to move away from
silo productivity improvements to an integrated portfolio of improvement tools and correlate

them through a unified improvement process as part of project execution.
The solution was the development and implementation of an excellence index (EI) model
consisting of a customized tool kit for various project types. The PO selected and documented the
tools based on experiential data and ranked them using weightings based on the impact seen in
past projects
PHASE 4: MEASURING IMPROVEMENT
The PO employed the EI model to validate the coverage and rigor of

implementing Lean. It introduced and started tracking two metrics
across the entire organization: planned EI and actual EI. While doing so,
it continued to:
1)guide project teams in selection of suitable tools (planned EI);
2)provide assistance in deployment;
3)ensure depth and rigor with frequent tenet usage reviews (actual EI).
FACTS :
 Thanks to the pioneering success of Toyota, the
concept of a "lean" operating system has been
implemented in countless manufacturing companies
and even adapted for industries as diverse as insurance
and healthcare
 Not all lean manufacturing ideas translate from

factory floor to office cubicle.
EFFECTS OF LEAN
 A lean operating system alters the way a company learns
through changes in problem solving, coordination
through connections, and pathways and standardization.
 Successful lean operations at Wipro involved a small

rollout, reducing hierarchies, continuous improvement,
sharing mistakes, and specialized tools.
 The use of lean principles affected the workflow at Wipro
 The concept of "kaizen," or continuous improvement,

for example, resulted in a more iterative approach to
software development projects versus a sequential,
"waterfall" method in which each step of the process is
completed in turn by a separate worker.
By sharing mistakes across the process, the customer
and project team members benefit individually and
collectively from increased opportunities to learn
from their errors; the project also moves along more
quickly because bugs are discovered in the system
earlier in the development process.
More time, coupled with a better understanding of the

different moving parts of a project, creates feelings of
empowerment in workers who haven't traditionally
taken part in innovation.
TOOLS USED
The DSM (design structure matrix)
Defines connections and pathways for a project's workflow and suggests an order of
tasks
The SCE (system complexity estimator),

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

To identify and decrease wasted time and effort throughout the software
development process.
Orthogonal Arrays
IMPROVING FROM THE BOTTOM UP
Goal of lean
Is to open up the work process and abolish the usual

hierarchies. Inertia that many employees experience when
faced with yet another new initiative
"One of the main ideas behind lean is to take parts of a task

that don't require human intervention and give them to
machines so that humans can focus on the important issues
Getting involved in much bigger-picture issues than they
ever had before
Ex:
"In the case of value stream mapping, every member of the
team was able to get a sense of the overall picture of what they
were doing and spot problems they wouldn't have been able to
see before."
THANK YOU
"These companies are intellectual environments. People are very interested

in taking conceptual ideas and figuring out how to put them into practice”

Lean Management in Service Industry: Technologies

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Lean Management in Service Industry: Technologies

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LEAN MANAGEMENT

Rohit Bebarta 09BS 000 1940

840 active customers 100,000-employee mark

Rule 1: All work shall be highly

Implementation of lean should be slow and controlled.

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

1) marketing Lean via deliberate evangelization campaigns supported

2) forming communities of practice

3) creating contextual and customized Lean workshops to address specific business

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

silo productivity improvements to an integrated portfolio of improvement tools and correlate

The PO employed the EI model to validate the coverage and rigor of

1)guide project teams in selection of suitable tools (planned EI);

2)provide assistance in deployment;

 Not all lean manufacturing ideas translate from

 Successful lean operations at Wipro involved a small

 The concept of "kaizen," or continuous improvement,

More time, coupled with a better understanding of the

The SCE (system complexity estimator),

Value Stream Mapping (VSM)

Is to open up the work process and abolish the usual

"One of the main ideas behind lean is to take parts of a task

"These companies are intellectual environments. People are very interested

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