Epicor Brings Lean Six Sigma to Software Development

Lean and Six Sigma are initiatives that were born from the pursuit of operational excellence within manufacturing companies. While Lean serves to eliminate waste, Six Sigma reduces process variability in striving for perfection. And yet even though both have been around a long time, Six Sigma in particular is often under-appreciated and misunderstood, especially outside the world of manufacturing.

Evidence of this was apparent when my Tweet during the recent Epicor Insights 2012 event sparked what one Epicor employee called a “Twitter war.” While I wouldn’t go so far as to call it a war, several comments ensued that made me think my fellow enterprise application industry observers were hardly up to speed on Six Sigma.

I tweeted something along the lines of: “Kudos to Epicor for combining Lean Six Sigma and Agile development. Unique in the software industry.”

I will paraphrase some of the reactions:

Agile development not that unique.” True, but combining the rapid application development process with Lean Six Sigma is that unique.

Does that mean developers remove the clutter from their desks?

Margins in the software industry are large enough that it is not an issue.”

What??? Someone is missing the whole point of Six Sigma.

Understanding Six Sigma

The label “six sigma” itself implies a level of rigor not usually associated with the software industry, considering many software developers today still view what they do as an art, rather than a science. If you don’t believe that, just ask a developer how long it will take to complete a project.

Literally six sigma is a statistical measure that refers to the number of standard deviations away from the mean (or average) point in a bell-shaped curve. Achieving six sigma quality translates to producing no more than 3.4 defects per one million – or in other words, 99.99966% good quality. That might mean 3.4 bugs in a million lines of code. While defect rates are important, Six Sigma is much more than that. It is a rigorous process and a business management strategy with the goal of delivering measurable financial results. In fact to achieve Black Belt certification traditionally the candidate needs to lead a Six Sigma project that has produced significant financial results (e.g. one project that saved at least $500,000 or two projects totaling that cost savings.)

But there are still doubters in terms of its relevance to software. Fellow industry observer P. J. Jakovljevic wrote

While more rigor and analysis cannot hurt, Six Sigma processes can extend the time to market. If one is not careful, one can spend too much time investigating possible risks, since for each issue, you have four levels of analysis in the so-called house of quality, which can become taxing. But if done right, Six Sigma can create sold test plans.

Yes you need to be careful to do it right. As a methodology that uses a structured problem-solving approach, Six Sigma seeks to identify and remove the causes of defects and errors in any process, which is why it makes a nice complement to the Agile development process. But it is not only about quality of the product (in this case the software code) produced, but also the process of developing the product. So it extends far beyond test plans.

Six Sigma is a rigorous program requiring formal training and a special infrastructure of people within the organization who are experts in these methods.  As it is being introduced into the enterprise there might be some risk of introducing delays, since there will be a learning curve, but in the long run, it should have just the opposite effect.

Agile and Six Sigma are new to the original Epicor side of the business.  Kevin Roach, Executive Vice President and General Manager of ERP for the Americas brought both methodologies with him through the merger of Activant with Epicor. I’ve known Kevin for many years and watched him bring them first to the Software division of Rockwell Automation and then to Activant. A Six Sigma Black Belt himself (dating back to his days at GE), he brings the deep understanding of, experience with and commitment to Six Sigma necessary to effectively marry it to the Agile development process.

Indeed, in spite of both Agile and Six Sigma being new to the Epicor side of the business I saw evidence of it producing results already.  While Epicor has struggled with bringing quality releases to the market in the past, the latest “700 release” of Epicor ERP Vs 9 (previously known as Epicor 9) seems to have resolved many of those issues. At the time of Insights 2012 (May 7-9, 2012), six early adopter customers had gone live and another three were scheduled to do so immediately after the event.

What Customers Say

I think it is best to let those early adopters speak for themselves. Here are some general comments from these customers:

“Upgrading [from version 6.07] was so easy. We had trouble doing installs on prior releases, but this time it was effortless. The conversion and schema change ran fast. Because we were already on a later release, the new release was visually similar. Customization and workflows took less than an hour of effort to convert. We especially like the new upgrade utility. From certain releases, it will be effortless.”

“Getting up and running on the new release was like getting a new car – everything is crisper, cleaner, good quality. I have now been out of the office for a week and haven’t gotten a single call or email with an issue.  I actually called in to make sure everyone was still there. We run MRP every night. A full regen went from 90 minutes to 15 minutes. Now we can run ‘what ifs’ and try other options to tune our production.”

“On the prior release, we had 16 known issues that we were living with. We know from testing that 14 are resolved and the other two aren’t re-creatable.”

“We did a fresh install, starting from scratch. We felt this would provide us with the most opportunity to improve our implementation. We simply upgraded our database when we went live. We went live April 23, 2012 and I can tell you the first month-end close was the cleanest and easiest we have ever done.”

“We have 300 employees across 7 plants. We engineer to order a custom built product. Every customer wants something different. We started on Epicor 3 years ago (version 6.04.) Problems we had with performance and quality were immediately resolved in this release.  We have ticked off all but two issues and those are about enhancements. We went through a 14-hour conversion process. It was seamless and achieved over the weekend.”

“We’ve been an Epicor customer for 20 years running the Vantage product. We bought source code and over the years heavily customized it to the point where we stopped doing upgrades. When Epicor 9 came out its ability to customize without customizing was enormous. We upgraded last week. Actually we [line of business] went home early on Friday and IT [Information Technology] upgraded us over the weekend. It was a very seamless process. The IT guys came in Monday morning in a good mood. We were in a good mood.”

“Our upgrade was fast and clean. After a couple of crossword puzzles it was in and clean. The next day we had users asking, ‘Is it supposed to be this fast? What’s wrong? What is it not doing? What did you do to Epicor?” The only complaints we hear now are based on users not being able to enter data incorrectly. We’ve been trying since I have been here to get the users to enter the data correctly. Now it won’t allow them to do otherwise. They ask, ‘Why can’t I do this now?’ We tell them, because you were never supposed to be able to do that to begin with.”

“We’re finding new functionality we didn’t know was there. People are like kids in a playground finding new things to play with – different ways of getting data and answers.”

“We are a 12-year customer, having migrated from Vantage to Epicor 9. We tend to stay current. Sometimes upgrade is a bad word. We have to convince users it is worth it. This time we cut people loose and challenged them to try to break it. After a couple of days they came to us and said, ‘Can we stop now? We can’t get it to fail.’ We do have one minor issue in pricing but it’s not Epicor’s fault. We do things differently. But Epicor resolved it.  This is a smooth, smooth conversion.”

In Conclusion…

In summary, I would repeat my first impression: Kudos to Epicor for bringing a level of rigor to the process of software development. While more and more software developers are embracing Agile, you almost never hear the phrase “Six Sigma” being uttered in relation to developing enterprise applications.

Of course only time will tell, but the combination of the rapid development methodologies of “Agile” and the rigors of Six Sigma should bode well for Epicor customers willing to go through the upgrade process.

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IFS promotes Lean methodologies in complex environments

I just finished reading an interesting white paper written by IFS (an ERP solution provider that specializes in addressing the needs of complex manufacturing). The title – Lean Enterprise in Complex ETO (Engineer to Order). Drawing from works by Lean experts such as James Womack and Jerry Kilpatrick, the paper does a great job of educating the reader on the principles and benefits of Lean methodologies.
The paper rightfully identifies Lean’s heritage in more high volume, repetitive manufacturing. After all it was pioneered by Toyota. But it also makes a case for Lean in a low volume, highly complex environment. Seems like some of these low volume manufacturers have been listening. According to data collected by The MPI Group for its 2010/2011 Manufacturers Data Report on manufacturing metrics and best practices, low-volume/high-mix manufacturers are actually more likely to have adopted Lean Manufacturing methodologies than an average of all plants surveyed (66.1% of low-volume/high-mix versus 60.8% of all plants) and are also more likely to use the Toyota Production System (TPS) (13.3% of low-volume/high-mix versus 10.5% of all plants). They are also more likely to use pull systems with kanban signals and one-piece flow techniques to manage inventory. As a result, they were able to shave an average of 26% off manufacturing cycle times (versus an average of 14% across all plants) over the past three years and more than half (53%) were also able to increase inventory turns, with 8.8% increasing them by more than 20%.
So if you happen to be one of those complex manufacturers dealing with the challenges of a engineer to order environment and have not embraced Lean methodologies thinking they only pertain to a more simple, repetitive environment… think again.
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