Lean Enterprise

Chapter 7. Identify Value and Increase Flow

There is nothing so useless as doing efficiently that which should not be done at all.

Peter Drucker

The measure of execution in product development is our ability to constantly align our plans to whatever is, at the moment, the best economic choice.

Donald Reinertsen and Stefan Thomke

Most enterprises are drowning in a sea of overwork, much of which provides little value to customers. In addition to improving existing products and delivering new ones, every enterprise has several initiatives and strategic projects in play at any given time, and every day unplanned work arrives to distract us from achieving our goals. A common response to this problem is attempting to increase utilization (work harder), improve efficiency (work faster), and cut costs using outdated and counterproductive management processes. Lean Thinking provides a proven alternative which “can be summarized in five principles: precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let the customer pull value from the producer, and pursue perfection.”¹

In the previous chapter we showed how to implement a program-level continuous improvement strategy to improve productivity and quality and reduce costs. In this chapter we show how the five lean principles were adopted by Maersk to reduce the cycle time of new features by over 50% while simultaneously increasing quality and return on investment. ...