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Lean Systems Engineering is evolutionary, based on Lean Thinking and Six Sigma bodies of knowledge, and those of other business process improvement efforts. Many of these efforts share common elements, on the one hand, yet on the other hand differ from each other in significant ways. The notes below are intended to help the reader grasp the similarities and differences between these improvement strategies.

How is Lean SE related to the former Faster Better Cheaper (FBC) initiative?
Lean SE is focused on the delivery of value. It is what the FBC might have been intended to be: Better systems, better Systems Engineering leading to better Mission Assurance and Mission Success, but also Faster due to a better planning and executability of programs, and Cheaper for national competitiveness. In other words, a BFC with the emphasis on B. Most emphatically, Lean SE is not what the actual implementation of FBC was in the 1990s: cuts in SE effort, cuts in verification testing, too often leading to dramatic failures and no value delivered to the customer.

The implementation of FBC was not based upon proven practices. Rather it was mandated from the above without a clear strategy for implementation. In this sense, it was more aligned with “Reengineering” described below that with Lean Thinking. The goal of Lean SE is to build upon proven principles, practices and tools from lean thinking and Six Sigma. Before lean six sigma approaches were well understood, it was a common belief that "improving quality incurred cost and schedule penalties". Now it is well known that by focusing on quality from the very start of system or product design, both cost and schedule are actually reduced. It is expected that similar benefits will be seen through lean systems engineering.

“Total quality management (TQM) programs took the corporate world by storm in the 1980s, and TQM continues to serve as an important means of meeting customer expectations (for example, product performance, reliability, durability, aesthetics, and perceived utility) by improving the efficiency of the organization - its products, processes, and services. TQM helped disprove an assumption that had emerged from mass production that productivity and quality are incompatible - that you cannot not have both, since pushing for higher quality in a mass production system would mean falling behind in quantity and thus would cost more."

“Key quality principles came from work on quality control during World War II at Bell Laboratories in the United States , finding their way into Japan right after the war. With the emergence of quality circles and a culture of continuous improvement, ensuring quality became an integral part of the emerging lean production system. But Japan’s dramatically new approach to quality did not become apparent to US companies until about the 1980s, when the inroads made into the US domestic market by Japanese electronics and automotive producers highlighted the importance of a new way of thinking."

“While today the term ‘TQM’ has receded - reflecting the reality that quality alone is insufficient to address the full scale and scope of required change - many of the principles associated with TQM have endured, and are integral to lean operations.”

Lean Enterprise Value , Murman et al, pp109-110

The fundamentals of TQM are embedded in both Six Sigma and Lean Thinking, and are therefore embedded in Lean Systems Engineering. However Lean SE goes beyond quality principles to include a number of flow and people-oriented practices.

“Reengineering, or business reengineering, was introduced in the early 1990s with the promise to revolutionize American business. The goal of reengineering was no less than to ‘retire’ the business principles and practices - going all the way back to Adam Smith’s famous pin factory - that set out the concept of a division of labor, and that had then fueled the rise of the mass production system. Reengineering's leading proponents, Michael Hammer and James Champy, defined it as ‘the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed’ aimed at standing ‘the industrial model on its head’. It was not about fixing anything, downsizing, automation, or taking small and cautious steps; it was, rather, about starting all over again. At the heart of reenginering was the notion of a discontinuous process. Hammer and Champy even coined one of reengineering’s enduring maxims: ‘If it isn’t broke, break it.’

“Reengineering focused on business processes - collections of activities that turn inputs into outputs of value to the customer - rather than on organizations, structures, tasks, jobs, or people. Reengineering was thus devoted to the task of reunifying the tasks performed by corporations into coherent business processes . That focus on process - shared by TQM - may be likened to value stream mapping, an important lean practice to eliminate waste and make the value-adding steps ‘flow’ in meeting customer requirements.

“However, many applications of reengineering differ from lean thinking in a fundamental way. Reengineering sought breakthrough solutions by discarding existing processes and replacing them with new ones, which often included massive layoffs and other forms of organizational restructuring. In essence, this approach optimized value primarily for senior leaders and shareholders. While lean thinking may produce major restructuring, it is oriented around a different way of operating the enterprise - taking into account mechanisms for creating value from multiple stakeholder perspectives. Lean thinking depends on and gives priority to building knowledge and capability, which directly contrasts with forms of reengineering that discount or disregard such factors.”

Reengineering is more aligned with FBC than with Lean Thinking principles. Its top-down, radical change approach differs from the more bottoms- up, evolutionary approach of lean thinking.

“INCOSE recognizes that effective application of systems engineering practices requires “tailoring” them to a specific systems or phase of the system.

“Standards and handbooks are written to address generic practices that may, or may not, apply to a given organization or system-of-interest. Most are accompanied by a recommendation to adapt the processes and activities to the situation at hand. This adaptation is called tailoring.”

“The principle behind tailoring is to establish an acceptable amount of process overhead committed to activities not otherwise directly related to the creation of the system. Oppressive overhead, with no visible value-added contributions, is demoralizing, and may result in a system that costs more than it is worth. Insufficient process results in uncoordinated human effort and thrashing – which also adds cost.”

INCOSE System Engineering Handbook , V.3, INCOSE-TP-2003-002-03, June 2006. pg 10.1

Lean Systems Engineering is very much aligned with tailoring, but will go beyond the broad framework outlined by INCOSE to include specific practices and tools based upon proven lean six sigma methods.

There is a strong overlap and a few differences between the Theory of Constraints by Eliyahu M. Goldratt, (North River Press), and Lean, as follows. TOC represents a manufacturing business as a simple financial input-system-output model, where:

– Input is defined as the "Inventory, I", that is all the money that the system has invested in purchasing things which it intends to convert into sales; undefined

– Output is defined as the "Throughput, T", that is the rate at which the system generates money through sales;

– System is defined as the plant "Operational Expense, OE", that is all the money the system spends in order to turn Inventory into Throughput, including labor, energy and administrative costs. undefined

The TOC argues as follows. Even under the best circumstances, the potential for cutting I and OE is finite. They should be reduced (here we have convergence with Lean) but I cannot be reduced to zero because some I is needed to compensate for process fluctuations. Only T is unbounded, assuming the market can absorb the additional products. Therefore businesses should focus their resources on increasing T. As the plant attempts to increase T by flowing the work faster, inevitably some single worst bottleneck (constraint) shows up, which prevents the flow from flowing faster. The entire energy of the people should then be focused on identifying that constraint and eliminating (elevating) it. The flow than can proceed at a faster rate, increasing T. As the flow is made to accelerate, the next worst bottleneck impedes the flow, must be identified, elevated, and so on. An important step after identifying the given bottleneck and before elevating it, is to subordinate the entire flow to that bottleneck, so that when it is elevated, the entire flow can immediately accelerate, as opposed to only its fragments. Goldratt described this in his popular book The Goal , which has also been made into a feature movie. Both the book and the movie show an attractive scenario of boy scouts marching through the woods, with analogies to manufacturing. After a few hours of walking, the boys become dispersed all along the trail, the fastest boy leading way ahead of the slowest, with the troop falling behind the hike schedule. The troop leader then asks the boys to rearrange themselves so that the slowest boy is leading (subordinate the flow to the worst bottleneck). Now the boys march together as a cohesive group. Next, the slowest boy's backpack is unloaded and the load shared among others. The bottleneck has been eliminated, the slowest boy picks up speed, and the entire troop marches faster. The flow and T are increased. The similarities with Lean are in eliminating the impediments to flow, and providing value. The focus is different: Lean emphasizes the creation of value while reducing waste, while the TOC the finding and eliminating bottlenecks for faster flow. While the emphases are different, the two approaches are not mutually contradictory.

Critical Chain
Another approach proposed by Eliyahu M. Goldratt in his novel Critical Chain addresses the notoriously difficult problem of scheduling tasks in projects. Instead of rushing all tasks all at once as is often the practice, Goldratt suggests to identify the tasks which must be executed in sequence (chains), pay attention to the "feeder" chains, and organize their sequences into "critical chains". Then, to focus resources on the execution of the critical chains and leave the non-critical ones off the focus. He advocates not padding individual tasks with extra time during project planning, but instead to use time buffers at well-designed points in the chains. The Critical Chain approach offers attractive thinking about planning task precedence network, avoidance of delays, and project scheduling, which are complementary to Lean Thinking. It does not, however, address the multitude of aspects that Lean PD does. The Critical Chain method has been tried in a number of aerospace projects, providing some scheduling benefits, but recognized as clearly not sufficient on its own.