Value Stream Transformation: 10 Keys to Success

Value Stream Transformation: 10 Keys to Success

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Strategy Deployment

Value Stream Transformation

Individual Improvements

Transformation What problems (gaps) do we need to solve?

What opportunities do we want to seize?

VSM Transformation: 10 Key Success Factors

1. Tie value stream transformation to a larger organizational strategy.



1. Create a Strategy

2. Define True North Metrics

3. Prioritize Problems & Opportunities

4. Transform Value Streams As Needed

Gain Alignment and Focus


2. Must be leadership driven.


VSM Transformation: Leadership Driven



3. Must be at the right level: Macro.


Work: Degrees of Granularity

Value Stream

Process Process Process

Step Step Step

11

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

Value Stream Transformation: Begin at Macro Level

12

13

Visualize the entire cycle of value delivery on a single sheet of paper

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4. Scope narrowly.


Value Stream Scoping Diagram Defining Specific Conditions

Golden State Equipment, Inc.

Capital Equipment

Catalog

Configure to order

Engineer to order

Custom hardware

Custom software

Both New Product Development

Spares & subassemblies

Catalog

Engineer to order

15


5. Team composition & size: • Leaders with strategic authority • No more than 10 • Highly cross-functional.


Sample Mapping Teams


123456789

10

Function NameHospitalist Physician

ED Physician PhysicianMedical Group Corporate Director

Nursing DirectorPharmacy & Ancillary Assistant Vice President

Case Management & Quality Assistant Vice PresidentRehab Assistant Vice President

Admitting, Bed Control, UR ManagerEVS Assistant Vice PresidentNursing Chief Nursing Officer

123456789

10 Order management Director

Logistics Vice PresidentIS Vice President

Tech support Chief Operating Officer

Sales DirectorImplementation Director

Legal Vice PresidentStrategic operations Vice President

Client services Vice President

Function NameAccounting, order mgmt Director


6. Sequester the team for three consecutive days.


Prepare Understand Current State

Design Future State

Develop Transformation

Plan

Execute Transformation

Plan

Three Consecutive Days 4 Weeks Prior to Mapping

Following Mapping

Repeat

Value Stream Mapping Activity Phases and Timing

19


7. Hold daily briefings with leaders in all affected areas.


Daily Briefings

#1 – Reduce resistance #2 – Build consensus #3 – Gain commitment 22


8. Use a highly skilled facilitator.


VSM Facilitator: Key Skills & Traits

• Objective; No skin in the game. • Able to sense posturing and draw out objections from

senior leaders. • Able to challenge senior leader mindsets and paradigms. • Highly skilled in measurement, data collection, analysis. • Highly skilled in time and people management. • Significant experience with performance measurement

and a wide variety of countermeasures.



9. Future State: Think BIG!


Sample Future State Decisions

• Replace sales commissions with annual profit sharing. • Insource an outsourced activity. • Merge two departments. • Shift work from one department to another. • Eliminate a department (with staff redeployment to other areas). • Build the means for customers to order online. • Develop, test, and roll out multi-disciplinary bedside rounding. • Double financial levels of authority.



10. Transformation Plan needs to be tightly managed.


J F M A M J J A S O N D

1 PROJ Steve 0%

2 PROJ Steve 100%

3 KE Bruce 50%

4 KE Bruce 50%

5 PROJ Jessie 100%

6 PROJ Sally 100%

7 KE Jessie 0%

8 PROJ Mike 100%

9 JDI Jessie 50%

10 PROJ Steve 80%

11 PROJ Steve 10%

12 PROJ Bob 0%

13 JDI Jessie 100%

14 PROJ Marcia 25%

15 PROJ Tom 30%

16 KE Marcia 50%

17 PROJ Sally 50%

Value Stream Champion Sally BrooksValue Stream Mapping Facilitator Karen Martin

Value Stream Transformation PlanValue Stream Product Y Scheduled Review Dates

Executive Sponsor Jim McMahon 2/10 + bi-weekly Thu 10 am

Socialize new criteria for engineering, quality, & purchasing involvement.

Date Created 1/5/2014Kaizen Burst # Improvement Objective / Hypothesis Proposed Countermeasure Exec.

Method * OwnerPlanned Timeline for Execution

Status

Create procedure/train GS service engineers to properly feedback suggestions to engineering.

Create bulletin re: standardized headplate design to eliminate flange orientation.

Create visual "milestone" timeline to educate customers.

Define technical info needed from customer and when.

Signature: Signature: Signature:

Revise standard Ts & Cs to incorporate time limit for customer approval for f inal payment.

Error proof P.O. info (correct specs, ship to, etc.); notify customer re missing info and drop dead date.

Create criteria for LOI acceptance.

Add initial project release in SF.

Resocialize existing customer-requested CO procedure.

One piece engineering flow

Agreement

Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator

* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)

Move to one release (pump & systems)

Date: Date: Date:

Create commodity management team & supplier SLAs.

Standardize WPS/PQR from suppliers.

Revise proposal template to limit time to 4 revisions.

Create pull signal for invoicing.

Create trigger to release (BOMs) for purchase.

Conf

iden

tial C

onte

nt R

emov

ed


1. Tie to a larger organizational strategy. 2. Leadership driven. 3. Macro level (via value stream mapping). 4. Scope narrowly (one product family or set of conditions). 5. Team composition & size: leaders, no more than 10, highly cross-functional. 6. Sequester the team for 3 consecutive days. 7. Hold daily briefings with full leadership team. 8. Use a highly skilled facilitator. 9. Future state: think big! 10. Transformation plan needs to be tightly managed.


Your Questions

• I’d like to see VSM applied to construction, oil and gas, architecture, education….



Karen Martin, President @karenmartinopex

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Value Stream Transformation: 10 Keys to Success

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