New Approaches to Risk Management
This tutorial will describe in detail 3 techniques that have evolved in the kanban community that provide improved project flexibility and business agility together with increased sophistication in risk management.
(1) Using classes of service based on cost of delay/failure functions
Four example classes of service will be discussed along with their related pull system policies (for prioritization and scheduling) will be presented. The examples are: expedite; fixed delivery date (unit step cost of delay function); quantitative value delivery; and qualitative value delivery. Other classification schemes are possible and would be domain specific.
(2) Iteration Backlog selection based on market risk
(3) Risk-based Portfolio Management
These three techniques combine elements of Lean Thinking and Edwards Deming’s New Economics (cost of delay/failure functions, waste (transition and coordination costs, rework or scrap)), Real Option Theory and Decision Tree analysis to provide methods that enable simple, fast, and often self-organizing approaches to maximize business value and manage risk throughout a portfolio and the project lifecycle.