Lean and contracting situations - Mary Poppendieck

post il 3-1-2007 RE: [leandevelopment] Budgeting a Lean Project

Tal,

It seems that you are in a contracting situation, as opposed to developing software for use within your own organization. If I can make that assumption, then I would suggest that lean principles are not particularly viable unless lean contracting is also part of the equation. When you reach organizational barriers and lean organizations run up against non-lean organizations, it is often impossible for the supplier to act in a lean manner.

As an example, many automotive suppliers have adopted lean practices in order to supply Toyota. The lean areas of their plants are much more efficient and cost-effective, but they are usually not able to supply other automobile companies with the lean area of the plant – they have to maintain a non-lean (and less efficient) area of the plant to serve those other customers. Why? Because the Detroit automotive companies still want parts delivered in large batches – they thin the economies of scale are the dominating factor in their business, despite decades of evidence to the contrary.

Similarly, if you have customers that believe that accumulating huge batches of detailed requirements is the most efficient way to contract with suppliers, then you may have to operate in a non-lean way with those customers. When you find customers that want a lean supplier, you can partner with them in a lean way, and as the automotive suppliers found out, deliver better, more cost effective software. However, in general, the choice lies with the customer, not the supplier.

Mary Poppendieck