Lean: Development is not Manufacturing

The conclusions of lean manufacturing theories are not necessarily valid in the domain of (software) product development.

There’s good reasons why it’s so difficult to fix time, budget, and feature scope all at once in a software development project.

I’ve been listening to a talk by Don Reinertsen, and one of his points, although not the main point, is about variability:  if you could reduce variability in the workflow by 10%, or you could reduce capacity utilization by 10%, by far you would prefer to reduce capacity utilization.  That’s where the economic payoff is.

The reason is that increased capacity utilization increases queue size and lead time exponentially.  In other words, if you try to keep all your resources busy all the time, everything takes forever to finish.  This goes for both manufacturing and development.  Variability in workflow, however, is bad in manufacturing, but can’t be avoided in product development, and might even be exploited.

So what else is different about development compared to manufacturing?

Manufacturing Development
Tasks are…. repetitive non-repetitive
Tasks are… predictable unpredictable
Requirements are… a constraint a degree of freedom
Requirements are… fixed evolving
Cost of delay is… homogeneous non-homogeneous
Task durations are… homogeneous non-homogeneous
Variability is… always waste not always waste
Inventory is… physical objects information
Inventory is… visible invisible

A talk by Don Reinertsen,
Second Generation Lean Product Development: From Cargo Cult to Science

One thought on “Lean: Development is not Manufacturing”

  1. Hei Ingvald!
    Thanks for the email! This post is very relevant for the current state of affairs in manufacturing when we talk about high-cost regions such as Norway, UK and the Netherlands. Recent trends have seen the standard, low variability products most suited to lean (Just-in-Time) methods shift to low cost countries in Eastern Europe and China, leaving us with the hi-tech, high variety and low volume products – often-one-of-a-kind – which means we need to reconsider our approach to “lean production” in high-cost regions, given these characteristics.
    This makes manufacturing in Norway a lot more similar to software development, particular when we look at the characteristics of development vs. manufacturing stated by Reinertsen. Of course, when we cannot reduce variability, we need to increase capacity (reduce capacity utilization) – a standard rule in factory physics. But many managers are reluctant to report low capacity utilization in their KPIs. This is a paradox that must be addressed if we are to remain competitive in the manufacturing sector!
    I look forward to following your blog!
    Best wishes,

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