Value Stream Mapping: What to Do Before You Dive In

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Value Stream Mapping:What to do before you dive in

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Value Stream Mapping:What to do before you dive in

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Value Stream Mapping: What to Do Before you Dive in

Webinar hosted by 5S SupplyJanuary 28, 2014

Coach / Facilitator / Consultant / Trainer: Lean transformation & business performance improvement in all industries.

Teacher: University of California, San Diego

Author & Speaker:Karen Martin, President

The Karen Martin Group, Inc.www.ksmartin.com

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2013 Shingo Prize winner!

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Just released!

© 2014 The Karen Martin Group, Inc. 8

Topics will include:

• Leadership – what is their role?• Scoping – how “big” should you go?• Team formation – who are the right people to include

• Facilitator selection – what traits and skills are needed

• Charter development and socialization – it’s far more than a planning tool!

• Logistics and communication – how do you make sure everyone is prepared?

Value Stream Defined

Value Stream: All of the activities required totransform a customer request into a good or service.

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Value Stream

First defined in The Machine That Changed the World, James Womack, Daniel Jones, & Daniel Roos, 1990.

Process ProcessProcess

CustomerRequest

CustomerReceipt

© 2014 The Karen Martin Group, Inc.


Value Stream Mapping Benefit:Seeing the Whole

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Value Stream Mapping enables a mapping team to get ABOVE the work

Work: Degrees of Granularity

Value Stream

Process Process Process

Step StepStep

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Macro Perspective

• Define strategic direction (“what”)

• Heavy leadership involvement

• Value Stream Mapping

Micro Perspective

• Identify the tactical “how”

• Heavy frontline involvement

• Metrics‐Based Process Mapping



VSM Enables Systems Thinking

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System Efficiency = Optimal Value Stream Performance

Individual Efficiency = Sub‐optimization


Value Stream Maps:Strategy Before Tactics

Where am I? Where do I want

to go?

I‐80 option I‐40 option I‐70 option

Which route should I take?

? ??


Value Stream Mapping Benefit:Reaching Leadership Consensus

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Basic Current State Value Stream Map: 3 Sections

1

2

3



Customer

1

Process 3

Function E

LT = 0.5 daysPT = 30 mins.%C&A = 95%

4

4

10 mins.1 days

120 mins.2 days

30 mins.0.5 days Total LT = 3.5 days

Total PT = 160 mins.Activity Ratio = 9.5%Rolled %C&A = 89.3%

Process 2

Function C

LT = 2 daysPT = 120 mins.%C&A = 95%

3

3

IT-1 IT-2

5 items

Process 1

Function A

LT = 1 daysPT = 10 mins.%C&A = 99%

5

2

1 items 10 items

Standard work

Modified approvals

IT interface

Cross-train

Cross-train

Standard workError

proof

Basic Value Stream Map: Future State


Basic Value StreamFuture State Performance Metrics

Metric Current State ProjectedFuture State

Projected% Improvement

Total Lead Time 9.5 days 3.5 days 63.2%

Total Process Time 180 minutes 160 minutes 11.1%

Activity Ratio 3.9% 9.5% 143.6%

Rolled % Complete & Accurate 30.0% 89.3% 197.7%

User defined

User defined

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Enterprise‐Wide Value Stream



Value Stream Maps ≠ Process Flow Charts


Value Stream Maps ≠ Swim Lane Process Maps0

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156-1

0Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A

1 Fax PO to Sales Rep 0 0 45%

2

Review PO; clarify with

customer as needed

20 2 90% Fax PO to warehouse 10 4 90%

5

6

Check inventory levels; notify

Sales Rep re: status

5 4 95% Fax PO to Sales Rep 5 0.33 90%

0 20 10 5 50 2 4 4 0.33

45% 90% 90% 95% 90%0 20 10 5 5

Rolled %C&ACritical Path LT

Total PT

Critical Path PT

5431 2

Mary Townsend

Hours Worked per Day Sally DampierOccurrences per Year Sam Parks

Current State Metrics-Based Process Map

Dave Morgan25-Jun-088 Facilitator

Process Details

Michael Prichard

Order FulfillmentProcess NameSpecific Conditions Domestic orders through sales force

37,500

Date Mapped

Sean Michaels

Sales Rep

Ryan AustinDiane O'SheaMapping Team

LT Units

Function / Department

PT Units

Step # ►

Customer

Finance

Warehouse / Shipping

Seconds

Minutes

Hours

Days

Seconds

Minutes

Hours

Days

Metrics‐Based Process Mapping is used to improve tactically & define standard work


Executing Transformation

Plan

Value Stream Mapping

Making Specific

Improvements

Prepare Understand Current State

DesignFuture State

Develop Transformation

Plan

Execute Transformation

Plan

Three Consecutive Days4 Weeks Prior to Mapping

Following Mapping

Repeat

Value Stream Mapping ActivityPhases and Timing


Prepare Understand Current State

DesignFuture State

Develop Transformation

Plan

Execute Transformation

Plan

Activity Preparation

1. Engage executive sponsor2. Draft charter3. Socialize charter4. Plan logistics (including Gemba walk)5. Gather data6. Deliver VSM overview

23© 2014 The Karen Martin Group, Inc.


Accountable Parties• Executive Sponsor

– Typically VP or higher– Authority over significant portion of value stream (or strong

relationship w/ peer group)– Ultimately accountable for results– Must attend briefings

• Value Stream Champion– Oversee significant portion of the value stream– Heavily engaged in entire value stream transformation (own the

transformation plan)– Member of mapping team– In small companies or those just starting out, the VS Champion

and Exec Sponsor could be the same person.• Facilitator

– Objective; no “skin in the game”– Skilled in both mapping/improvement mechanics, and high‐level

team dynamics.


Facilitator Skills & Traits

• Technical knowledge & skills– Value stream mapping mechanics– Key metrics– Countermeasures

• Psychology– Team dynamics (especially leadership level)– Countering resistance to change

• Other– Time management– Action Plan development


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1234 Date: Date:engagement, financials, lead time, safety records, etc.

effectiveness, market trends, customer satisfaction, employee Signature:Date:

Relevant Data Agreement

Examples: work volume & volume variation, process quality & Executive SponsorWhat data is required to understand relevant current state isues.

Signature: Signature:

How will the business, internal and external customers, and Functioninternal and external suppliers benefit from value stream improvement? SMEs that may not be needed full time

Always a nice touch; keeps the team from wandering

On-site, ample wall space, quiet/private location

Benefits to Customers & Business On-Call Support

Increase <defined metric> from X to Y (Z% improvement).Reduce <defined metric> from X to Y (Z% improvement).

Measurable Target Condition

What's driving the need for improvement? FunctionLeadership-heavy

Current State Problems & Business Needs Mapping Team

Boundaries & Limitations

Improvement Time Frame

What is the team NOT authorized to change?

Typically 3-6 months

Last Step Task on last process blockLogistics

Coordinator Not always needed

Aids in consensus building and organizational learning. Typically the last hour of the day.

First Step Task on first process block

Briefing Dates &

Times

Meals Provided

Briefing Attendees

** required *optional

List the the people that are required to attend the briefings (**) and those whose attendance is optional (*).

Demand RateTrigger

How many times is this done per wk, qtr, mo, or yr?

What initiates the process?

Value Stream Mapping CharterScope Accountable Parties Logistics

Required: typically VP or C-level

If needed—often director or manager level

Specific Conditions

What circumstances are included and excluded? (e.g., type of customer, geographic location, etc.)

Value Stream Champion

Value stream being improvedExecutive

SponsorValue StreamEvent Dates

& Times

3 days typically; consecutive is best; 6 hrs per day minimum; 7 or 8 hrs is best

Required: skilled, objective person leading the activity

Base-camp LocationFacilitator

Name

Name

FacilitatorValue Stream Champion

Contact Information

Contact Information

Charter: Critical planning, communication, and consensus‐building tool


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Briefing Dates &

Times

Meals Provided

Briefing Attendees



Demand RateTrigger






Specific Conditions





& Times




Name

Name


Contact Information

Contact Information

Patient care

Inpatient

Medical/Surgical

Intensive Care

Pediatric

Outpatient

Vaccine Clinic

Imaging

X‐Rays

CT Scans

MRI

Mammography

OB/GYNServices

Value Stream Scoping DiagramDefining Specific Conditions

Potential selection criteria:• Highest volume?• Highest margin?• Most painful?• Most supportive

leadership?


Value Stream Scoping DiagramDefining Specific Conditions

Golden State Equipment, Inc.

Capital Equipment

Catalog

Configure to order

Engineer to order

Custom hardware

Custom software

BothNew Product Development

Spares & subassemblies

Catalog

Engineer to order

29© 2014 The Karen Martin Group, Inc.


Where should the “fenceposts” be?Function Activity

Marketing Generates sales leads

Sales Calls on and qualifies customers

Customer Submits RFQ to sales

Sales Reviews RFQ

Estimating Generates quote

Sales Approve quote

Customer Accepts quote; submits a PO

Sales Approves PO

Customer service Creates SO; compiles spec package

EE/ME design Designs product; generates BOM

Customer Approves design

EE/ME design Forwards design to SW dev

Software Dev Writes code

Purchasing/Planning Releases WO; schedules production

Supplier (external) Delivers materials

Production Manufactures & ships product

Customer Installs equipment

Field service Conducts 90‐day follow‐up


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Briefing Dates &

Times

Meals Provided

Briefing Attendees



Demand RateTrigger






Specific Conditions





& Times




Name

Name


Contact Information

Contact Information


Who should represent the processes in the value stream?

Function Activity

Marketing Generates sales leads

Sales Calls on and qualifies customers

Customer Submits RFQ to sales

Sales Reviews RFQ

Estimating Generates quote

Sales Approve quote

Customer Accepts quote; submits a PO

Sales Approves PO

Customer service Creates SO; compiles spec package

EE/ME design Designs product; generates BOM

Customer Approves design

EE/ME design Forwards design to SW dev

Software Dev Writes code

Purchasing/Planning Releases WO; schedules production

Supplier (external) Delivers materials

Production Manufactures & ships product

Customer Installs equipment

Field service Conducts 90‐day follow‐up


CEO

COO

VP Operations

Director, Manufacturing

Manager, Plant Operations (x3)

Supervisor, Production (x6)

Team Lead (x12)

Director, Supply Chain

Manager, Planning (x3)

Planner (x3)

Manager, Purchasing (x3)

Buyer (x8)

VP Engineering

Director, Product Development

Manager, Mechanical Engineering

Mechanical Engineers

Manager, Electrical

Engineering

Electrical Engineers

Manager, Application Engineering

Scrum Master (x2)

Scrum Team

VP Quality

Manager, Quality (x3) CFO

Controller (x3)

Manager, Finance (x3)

VP, Human Resources

Manager, Human

Resources (x3)

CIO

VP, Information Systems

Director, IT

Director, Security

VP, Sales

Director, Sales

Manager, Estimating

Manager, Sales (x4)

VP, Customer Service

Director, Service Centers (x2)

Manager, Customer Service

Who should be on the team, be on call, and attend briefings?

Mapping team

On call

Attend briefings

Briefing #1

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Purpose: Reduce resistance to future state design

Briefing #2

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Purpose: Build consensus around future state design

Briefing #3

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Purpose: Gain commitment re: improvement priorities, ownership, resources needed, and timeline.


Socializing the Charter

• Conversation, not merely an email attachment.• To the entire workforce who will be affected by change.

• Adjust the charter if new discoveries or concerns surface.


Suggested VSM Overview Content

• What value streams and value stream maps are.• Benefits of VSM and expected outcomes.• What to expect from the activity

– Projected schedule– “Rules of engagement.”

• Charter review.


Karen Martin, [email protected]

858.677.6799

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For Further Questions

Blog & newsletter: www.ksmartin.com/subscribeCharter: www.ksmartin.com/downloads


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Value Stream Mapping

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Value Stream Mapping: What to Do Before You Dive In

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