Lean and the Project Triangle

If you've been an engineer for any appreciable amount of time, you've seen the Project Triangle. You are given three constraints, as pictured, but told that you can only pick any two. This gives you three choices:

• Fast and Good, but not Cheap. Designing and building something fast and having it come out good will cost lots of money.
• Fast and Cheap, but not Good. You can have something built fast and be cheap, but with a sacrifice of quality.
• Good and Cheap, but not Fast. You can have something built well and at a reasonable price, but it will take longer to think it through.

But this is short term thinking. In the longer run, technology tends to push the parameters closer to the center, allowing you to have Fast and Good, cheaper; Fast and Cheap, better; or Good and Cheap, faster. Instead of thinking in terms of what two features you can choose, think in terms of the maximum area of the circle you are allowed to draw with given resources. Technology allows you to capture more of each feature in a given sized circle.

The other thing that can push all three parameters closer together is Lean Production. Toyota's secret is that their processes are fast, they are error free, and both of these together cost less money. In Natural Capitalism, the authors talk about "tunneling through" the cost barrier. Besides their babbling about how this violates the thinking of "economists" (or at least their straw substitute for economists), it gives the wrong impression of how this kind of thing works. Upon closer inspection, their example is economy of scale.

Lean is an economy of scale with respect to transaction costs within a factory. Information is valuable and finding it incurs cost. Lean is a better way of signaling between workers and their peers, and between workers and management. A kanban is a signal that you are ready for more raw materials (raw to your process). A poka-yoke is a signal to the worker that something is wrong; it doesn't even require someone to initiate the signal, if done perfectly. A kaizen is a focused discussion involving workers, managers, engineers, and designers to perfect a system. A culture that encompasses all of those things uses economy of scale in communication between the various functional divisions within an organization.

This is the kind of thing my wife and I enjoy discussing, which is one reason why she gets a link as the smartest woman I know.

technorati tags: lean, kaizen, kanban, pokayoke, project