Quotes from Donald G. Reinertsen

We will discover that reducing batch size is usually the single most cost-effective way to reduce queues.

that an economically rational buyer would pay for a work product before, and after, the activity is performed.

What should we change in our product development process? Eliminate waste? Increase quality? Raise efficiency? Shorten cycle time? The key to answering this question is to step back to a more basic question: Why do we want to change the product development process? The answer: to increase profits.

Our primary goal in product development is to make good economic choices. All proxy objectives, such as innovation, waste reduction, design for manufacturing, etc., should be viewed as secondary. They are a means to influence overall economic outcomes, never an end in themselves. In

The coefficient of variation is a measure of variability that is computed as the ratio between the standard deviation and the mean of a probability distribution. You can think of it as a general measure of the relative breadth of a probability distribution. Since the square of the standard deviation is the variance of a distribution, this means that queues vary linearly with variance, a point worth remembering.

Our primary goal in product development is to make good economic choices. All proxy objectives, such as innovation, waste reduction, design for manufacturing, etc., should be viewed as secondary. They are a means to influence overall economic outcomes, never an end in themselves.

Decentralized control is based on trust. This trust must be present both hierarchically and laterally. Subordinates must trust their superiors, and superiors must trust their subordinates.

decentralized control is not simply a philosophy; it is a set of technical skills that can be developed and practiced.

The key idea is that product and project attributes that have economic value should be quantified using a standardized and useful unit of measure: life-cycle profit impact.

companies often create complex prioritization algorithms that produce precise priorities based on very imprecise input data.

In product development, our greatest waste is not unproductive engineers, but work products sitting idle in process queues.

The more detailed we made our plans, the longer our cycle times became

In our factories, we create flexibility by paying more to workers who can work at more stations on a production line. We value flexibility, and we pay for it. In contrast, most product development organizations exclusively reward specialization.

without variability, we cannot innovate. Product development produces the recipes for products, not the products themselves. If a design does not change, there can be no value-added. But, when we change a design, we introduce uncertainty and variability in outcomes. We cannot eliminate all variability without eliminating all value-added.

Reducing risk, which is the primary mission of testing, clearly creates economic value for product developers. In fact, reducing risk is so centrally important to product development that it is indispensable for us to quantify its economic impact.

If we have drifted 10 heads above the zero line in our coin flip experiment, what is the probability of getting 10 tails in a row to return us to zero? About 1 in 1,000.

If you are going to worry about it, I won't.

Since high capacity utilization simultaneously raises efficiency and increases delay cost, we need to look at the combined impact of these two factors. We can only do so if we express both factors in the same unit of measure, life-cycle profits. If we do this, we will always conclude that operating a product development process near full utilization is an economic disaster.

To manage product development effectively, we must recognize that valuable new information is constantly arriving throughout the development cycle. Rather than remaining frozen in time, locked to our original plan, we must learn to make good economic choices using this emerging information.

if we incentivize conformance, people will insert contingency reserves to prevent their tasks from missing the schedule. The more granular the schedule, the larger the schedule reserves. And these reserves aggregate into even longer timelines. The more we increase planning detail and the harder we try to incentivize performance, the worse our problem becomes.

We should not prioritize on the basis of project profitability, but rather on how this profitability is affected by delay.

when product developers choose to operate their processes at high levels of utilization, they create unnecessary and wasteful variability in their processes. It is important to realize that this variability is a self-inflicted wound.

agility: the ability to quickly change direction while traveling at a high speed.

Face-to-face communication is inherently real-time and combines both verbal and nonverbal information.