Strategic Management: Between Value and Waste I (Introduction)

 

Independently on whether Lean Management is considered in the context of Manufacturing, Software Development (SD), Project Management (PM) or any other business-related areas, there are three fundamental business concepts on which the whole scaffolding of the Lean philosophies is built upon, namely the ones of value, value stream and waste. 

From an economic standpoint, value refers to the monetary worth of a product, asset or service (further referred as product) to an organization, while from a qualitative perspective, it refers to the perceived benefit associated with its usage. The value is thus reflected in the costs associated with a product’s delivery (producer’s perspective), respectively the price paid on acquiring it and the degree to which the product can fulfill a demand (customer’s perspective).

Without diving too deep into theory of product valuation, the challenges revolve around reducing the costs associated with a product’s delivery, respectively selling it to a price the customer is willing to pay for, typically to address a given set of needs. Moreover, the customer is willing to pay only for the functions that satisfy the needs a product is thought to cover. From this friction of opposing driving forces, a product is designed and valued.

The value stream is the sequence of activities (also steps or processes) needed to deliver a product to customers. This formulation includes value-added and non-value-added activities, internal and external customers, respectively covers the full lifecycle of products and/or services in whatever form it occurs, either if is or not perceived by the customers.  

Waste is any activity that consumes resources but creates no value for the customers or, generally, for the stakeholders, be it internal or external. The waste is typically associated with the non-added value activities, activities that don’t produce value for stakeholders, and can increase directly or indirectly the costs of products especially when no attention is given to it and/or not recognized as such. Therefore, eliminating the waste can have an important impact on products’ costs and become one of the goals of Lean Management. Moreover, eliminating the waste is an incremental process that, when put in the context of continuous improvement, can lead to processes redesign and re-engineering.

Taiichi Ohno, the ‘father’ of the Toyota Production System (TPS), originally identified seven forms of waste (Japanese: muda): overproduction, waiting, transporting, inappropriate processing, unnecessary inventory, unnecessary/excess motion, and defects. Within the context of SD and PM, Tom and Marry Poppendieck [1] translated the types of wastes in concepts closer to the language of software developers: partially done work, extra processes, extra features, task switching, waiting, motion and, of course, defects. To this list were added later further types of waste associated with resources, confusion and work conditions.

Defects in form of errors and bugs, ineffective communication, rework and overwork, waiting, repetitive activities like handoffs or even unnecessary meetings are usually the visible part of products and projects and important from the perspective of stakeholders, which in extremis can become sensitive when their volume increases out of proportion.

Unfortunately, lurking in the deep waters of projects and wrecking everything that stands in their way are the other forms of waste less perceivable from stakeholders’ side: unclear requirements/goals, code not released or not tested, specifications not implemented, scrapped code, overutilized/underutilized resources, bureaucracy, suboptimal processes, unnecessary optimization, searching for information, mismanagement, task switching, improper work condition, confusion, to mention just the important activities associated to waste.

Through their elusive nature, independently on whether they are or not visible to stakeholders, they all impact the costs of projects and products when the proper attention is not given to them and not handled accordingly.

References:
[1] Mary Poppendieck & Tom Poppendieck (2003) Lean Software Development: An Agile Toolkit, Addison Wesley, ISBN: 0-321-15078-3

Strategic Management: Agile vs. Lean Organizations

Agile and lean are two important concepts that pervaded the organizations in the past 20-30 years, though they continue to have little effect on organizations’ operations.

Agile is rooted in the need to respond promptly to the changing needs of an organization. The agile philosophy was primarily groomed in Software Development to reconcile the changing customer requirements with disciplined project execution, however it can be applied to an organization’s processes as well. An agile process is in general a process designed to deliver the intended results in an effective and efficient manner by addressing promptly the changing requirements in customers’ needs.

Lean is a systematic method for the minimization of waste, rooted as philosophy in manufacturing. The lean mindset attempts removing the non-value-added activities from processes because they bring no value for the customers. Thus a lean process is a process designed to deliver the intended results in an effective and efficient manner by focusing on the immediate needs of the customers, what customers want and value (when they want it). 

Effective means being successful in producing a desired or intended result, while efficient means achieving maximum productivity with minimum wasted effort or expense. The requirement for a process to be effective and efficient is translated in delivering what’s intended by using a minimum of steps designed in such a way that the quality of the end results is not affected, at least not for the essential characteristics. Efficiency is translated also in the fact that the information, material and resources’ flow suffer minimal delays.

Agile focuses in answering promptly the changing requirements in customers’ needs, while lean focuses on what customers wants and value while eliminating waste. Both mindsets seem to imply iterative and adaptive approaches in which the improvement happens gradually. Through their nature the two mindsets seem to complete each other. Some even equate agile with lean however an agile process is not necessarily lean and vice-versa.

To improve the effectiveness and efficiency of its operations an organization should aim developing processes that are agile and lean to optimize the information and material flows, while focusing on its users’ changing needs, and while eliminating continuously the activities that lead to waste. And waste can take so many forms – the unnecessary bureaucracy reflected in multiple and repetitive sign-offs and approvals, the lack of empowerment, not knowing what to do, etc.

There’s important time wasted just because the users don’t know or don’t understand an organization’s processes. If an organization can’t find rules that everyone understands then a process is doomed, independently of the key area the process belongs to. There’s also the tendency of attempting to address each exception within a process to the degree that multiple processes result. There’s no perfect process, however one can define the basic flow and document the main exceptions, while providing users some guidelines in navigating the unknown and unpredictable.

As part of same tendency it makes sense to move requests that respect a standard procedure on the list of standard requests instead of following futile steps just for the sake of it. It’s the case of requests that can be fulfilled with internal resources, e.g. the development of reports or extraction of data, provisioning of SharePoint websites, some performance optimizations, etc. In addition, one can unify processes that seem to be disconnected, e.g. the handling of changes as part of the Change Management respectively Project Management as they involve almost the same steps.

Probably it's in each organization’s interest to discover and explore the benefits of applying the agile and lean mindsets to its operation and integrate them in its culture

Software Engineering: DevOps (Definitions)

"An application delivery philosophy that stresses communication, collaboration, and integration between software developers and their information technology (IT) counterparts in operations. DevOps is a response to the interdependence of software development and IT operations. It aims to help an organization rapidly produce software products and services." (Pierre Pureur & Murat Erder, "Continuous Architecture", 2015)

DevOps is an approach based on lean and agile principles in which business owners and the development, operations, and quality assurance departments collaborate to deliver software in a continuous manner that enables the business to more quickly seize market opportunities and reduce the time to include customer feedback. Indeed, enterprise (Sanjeev Sharma & Bernie Coyne, "DevOps For Dummies" 2nd Ed, 2015)

"Is a method for software development and management that integrates the development and deployment cycles to achieve a more agile, continuous evolution of software-based products and services" (Diego R López & Pedro A. Aranda, "Network Functions Virtualization: Going beyond the Carrier Cloud", 2015)

"DevOps is a mindset, a culture, and a set of technical practices. It provides communication, integration, automation, and close cooperation among all the people needed to plan, develop, test, deploy, release, and maintain a Solution." (Dean Leffingwell, "SAFe 4.5 Reference Guide: Scaled Agile Framework for Lean Enterprises" 2nd Ed., 2018)

"Short for development operations, an information technology environment in which development and operations are tightly tied together, yielding small incremental releases to gain user feedback." (O Sami Saydjari, "Engineering Trustworthy Systems: Get Cybersecurity Design Right the First Time", 2018)

"The practice of incorporating developers and members of operations and quality assurance (QA) staff into software development projects to align their incentives and enable frequent, efficient, and reliable releases of software products." (Shon Harris & Fernando Maymi, "CISSP All-in-One Exam Guide" 8th Ed., 2018)

"The tighter integration between the developers of applications and the IT department that tests and deploys them. DevOps is said to be the intersection of software engineering, quality assurance, and operations." (William Stallings, "Effective Cybersecurity: A Guide to Using Best Practices and Standards", 2018)

"A software engineering practice that aims at unifying software development (Dev) and software operation (Ops)." (Jun Bi et al, "Automatic Address Scheduling and Management for Broadband IP Networks", Emerging Automation Techniques for the Future Internet, 2019)

"Develop operations, or DevOps, is an agile methodology that merges the functions of software development and operations in the enterprise software development domain. This approach has been adopted in the networking world to facilitate a programmable approach to network operations. Often when applied to networking the term is changed to NetOps." (Patrick Moore, "Model-Centric Fulfillment Operations and Maintenance Automation", Emerging Automation Techniques for the Future Internet, 2019)

"Practices and technologies that promote tighter coupling of software development (Dev) and operations (Ops) - typically marked by more automation, continuous monitoring, shorter development cycles and higher deployment frequencies. A key driver for security policy automation. DevSecOps is a related term that refers to practices and technologies that aim to embed security in DevOps practices." (Myo Zarny et al, "Network Security Policy Automation: Enterprise Use Cases and Methodologies", 2019)

"Development and operations is an abbreviation for 'development' and 'operations'; is a software engineering methodology for managing software development (Dev) and technology operations (Ops). The main aim of DevOps is to enable automation and tracing for all phases of software implementation, from integration, testing, releasing to deployment and infrastructure management." (Antoine Trad & Damir Kalpić, "Using Applied Mathematical Models for Business Transformation", 2020)

"Development and operations (DevOps) has been adopted by prominent software and service companies (e.g., IBM) to support enhanced collaboration across the company and its value chain partners. In this way, DevOps facilitates uninterrupted delivery and coexistence between development and operation facilities, enhances the quality and performance of software applications, improving end-user experience, and help to simultaneous deployment of software across different platforms." (Kamalendu Pal & Bill Karakostas, "Software Testing Under Agile, Scrum, and DevOps", 2021)

"DevOps is a sprint-based approach that can catch coding flaws during the development of code due to security reviews, rework on previous sprint cycles, and testing." (David A Bird, "Hacker and Non-Attributed State Actors", Real-Time and Retrospective Analyses of Cyber Security, 2021)

"It is a set of practices emerging to bridge the gaps between operation and developer teams to achieve a better collaboration." (Mirna Muñoz, "Boosting the Competitiveness of Organizations With the Use of Software Engineering", 2021)

"It is a way to work were the software is rapidly developed and immediately deployed for operating in a computational productive environment. It is continuous delivery product development lifecycle. It must automate the development process. DevOps is both a culture and a set of technologies and tools used for automation." Laura C Rodriguez-Martinez et al, "Service-Oriented Computing Applications (SOCA) Development Methodologies: A Review of Agility-Rigor Balance", 2021)

"People from software development and operations work together to enhance the speed of delivery of new software features. It is a concept for bridging the gap between software development and software operations and integrating the logic of common responsibility for the complete software delivery lifecycle into one cross-functional team." (Anna Wiedemann et al, "Transforming Disciplined IT Functions: Guidelines for DevOps Integration", 2021)

"DevOps is a set of tools and processes that help automate IT operations." (Aniruddha Deswandikar,"Engineering Data Mesh in Azure Cloud", 2024)

"DevOps is a catch‑all term for the blending of roles between developers and operations engineers. As the barriers between roles such as database administrator, systems administrator, and software engineer have eroded, the term DevOps has emerged as a way of describing the intersection of responsibilities from all these camps, and their increasing interrelation in the lifecycle of a product. A crucial enabling aspect of this movement is the increased use of automation in building, deploying, and monitoring large applications." (NGINX) [source]

"DevOps is a collection of best practices and working methods for the software development process whose cumulative goal is to shorten the development life cycle and support practice such as continuous integration, continuous delivery and continuous deployment." (Sum Logic) [source]

"DevOps is a set of practices that works to automate and integrate the processes between software development and IT teams, so they can build, test, and release software faster and more reliably." Atlassian [source] 

"DevOps is the combination of cultural philosophies, practices, and tools that increases an organization’s ability to deliver applications and services at high velocity: evolving and improving products at a faster pace than organizations using traditional software development and infrastructure management processes." (Amazon) [source]

"DevOps refers to a broad range of practices related to the development and operation of software code in production in cloud data centers. DevOps is centered in Agile project management techniques and microservice support. DevOps approaches the entire software development lifecycle with automation based around version control standards." (VMWare) [source]

"The cultural movement that stresses communication, collaboration and integration between software developers and IT operations." (Global Knowledge)