Saturday, October 2, 2010

JIT Knowledge Creation

This is our business. Just-in-time knowledge creation. (It is not just-in-time knowledge management.)

Why? And why is it so important?

Well, ultimately the answer is because people are important. Or maybe it is better to say we respect the customer. And the firm's shareholders.

What do I mean, you say?

Let's start from the beginning. A long time ago the Lean people discovered that any Work-In-Process waste (WIP) or inventory, is muda. No, they weren't being silly. All Lean firms still have some WIP and inventory, but they have been relentlessly reducing the ratio of WIP and inventory to sales for 50 years now. And now it is a very small fraction of what it used to be. And they are still not satisfied. It must be reduced more.

And why did they do that? Well, in the auto industry they realized that an unsold car in inventory is trouble. It can only get worse, it cannot get better. The sun can spoil the paint job. Rain can cause rust. Hail can damage the exterior. Time can make it go out of the current model year. In other words, they noticed that the car can decay. (There are other reasons too.)

In software development, our business is knowledge. In the form of working code.

How fast can our knowledge decay compared to a car?

And here we mean not only the final knowledge (the working code), but also all the other tacit and explicit knowledge needed in the course of building the working product.

My opinion, and I usually demonstrate this easily in each Scrum class, is that our knowledge decays exponentially faster than a car. And a car's value will only go down a bit at a time. But our knowledge can lose its value as much as 100% in one day.

So, although no one told you, we in the software industry need to be relentlessly reducing our all our work-in-process and inventory. So, WIP is any work we have done that has not resulted in finished inventory. Finished inventory is fully finished software, that is all but deployed and in use by the 'customer'.

Now, we don't mean you should be foolish. For example, there is a minimum marketable feature set concept that does apply. Although we think that the size of the MMFS is much smaller than we almost always want to believe.

Again, a key goal of how we organize things should be to minimize WIP and inventory. And because there are many reasons for that, we can also organize things to minimize the negative impact of the WIP and inventory we 'must' have. (We will talk later about some of the other negative impacts of WIP and inventory.)

We must have a greater percentage reduction in WIP and inventory than the auto industry. We have lots of work to do to make that happen. Lots of impediments to remove. It was hard for the auto industry, and it will be hard for us. And now we have made the first step -- someone has told you that is absolutely key to your job.

Now, you know what your job really is. To know and not to do, is not to know.

BTW, Takeuchi and Nonaka have written many many pages about knowledge creation. They are the godfathers of Scrum. (A hint, for those who want a hint.)

1 comment:

MyOpenDraft said...

Nice post, thanks for sharing.