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In John Stenbeck’s “PMI-ACP Exam Prep PLUS Desk Reference” guide, in his second chapter “Introducing Agile Project Management”, he takes on the huge topic of explaining the relationship between the development of lean manufacturing principles and the development of agile project management.    It’s important to understand this connection not only to understand the motivations behind agile project management, but also to dispel one of the common misconceptions about agile, that it is limited in its application to IT.

In this second part, I am going to elucidate the connection between Lean Manufacturing Principles and Agile Project Management.   First a brief recap:  here are the five core lean principles, which I’m repeating from the last post (Part 1).

A.  Five Core Lean Principles

1. Define the value the customer desires.
2. For each product, identify the value stream that provides customer value.
3. Challenge all of the wasted steps not directly providing customer value and remove them, so that the remaining value-added steps flow continuously through to the product.
4. Use “pulling” (production based on actual demand) between steps to create continuous flow.
5. Continuously move toward perfection by reducing the number of steps, and the amount of time and information needed, to provide the customer value.

B.  The Relationship between Lean and Agile

Okay, now that we’ve spelled out the lean manufacturing principles and the core beliefs that underlie them, let’s go into how agile project management draws upon them.

Applying manufacturing principles to project management means that rather than the processes of production, you are now dealing with the processes of product creation or development.    The output of production is a series of finished products, and the output of the development process is a new product.

Let’s take a look at Agile Project management concepts and how they map to Lean concepts (principles and core beliefs from the above lists).

1. Agile prioritizes business needs which are defined to create customer value (→ Lean Principle #1, 2).   Top priority is reserved for requirements that are most important to the customer, involve safety, and involve technical issues such as scalability.   The second tier of requirements should be those that focus on improving marketability, performance, and flexibility.  Then and only then should you focus on third-tier requirements that leverage opportunity or create comfort and luxury.
2. Agile focuses on speeding up time-to-market by removing delays in the development process (→ Lean Core Belief #1).   This reduces the elapsed time from idea generation to delivery of value to the customer.
3. Agile eliminates waste (→ Lean Principle #3).   This means waste in terms of time, in terms of money, and in terms of complexity of design (because it creates a lot more quality control work).  (→ Lean Principles #3 and #5)
4. Agile defers commitment on decisions until sufficient information is available.   If decisions are made based upon assumptions that turn out not to be true, then this will turn out to waste time, which is Agile principle #3 above.   These decisions are usually in two areas, 1) defining requirements and 2) planning and estimating.  (→ Lean Principle #5).   On the other hand, decisions cannot be made too late because of an arbitrary desire for increased accuracy.   This is because increasing the accuracy of any estimate requires resources, and at some point, spending more resources on an estimate than is necessary to get a useful level of accuracy will turn out to waste money (→ Lean Principle #3 and #5).
5. Communication with the customer is improved by developing the solution in increments and consulting with the customer at each increment   Instead of “pulling” production based on actual demand, which is the principle in lean manufacturing, in agile project management, the “pulling” that goes on is the clarification at each stage with the customer to make sure that the customer’s valued requirements are being translated into the technical characteristics of the product (→ Lean Principle #2, #4).   The design process can therefore be described as emergent rather than trying to be specified in detail at the very beginning stages as in traditional project management.

You can see by this set of correspondences between lean manufacturing principles and principles of agile project management that the frameworks share a lot in common, but that is because they have evolved in response to decreasing product design cycle times and increasing pressure on resources.

In the next series of posts, I will start a review of the agile frameworks, which include Scrum, Extreme Programming (XP), Lean Software Development, Feature Driven Development (FDD), Agile Unified Process (AUP), Crystal, Test Driven Development, and Agile Modeling (AM).   This will introduce the “agile lexicon” which is needed to understand the overal agile process map and the more detailed agile PM processes grid.

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