Value Stream Analysis: Beyond the Mechanics - Part 2 (Mapping Execution)

Value Stream Analysis:Beyond the Mechanics (Part 2 of 3)

WebinarJanuary 21, 2014

© 2014 The Karen Martin Group, Inc.

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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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© 2014 The Karen Martin Group, Inc. 4

After the webinar…• Recordings:

– www.vimeo.com/karenmartingroup– www.youtube.com/karenmartingroup– www.slideshare.net/karenmartingroup– www.ksmartin.com/webinars

• Materials:– www.slideshare.net/karenmartingroup

Before the webinar…• The materials are available on:

– www.ksmartin.com/files/webinarmaterials/01‐21‐2014_slides.pdf (or _handout.pdf)

More VSM Webinars!11:00 am‐12:15 pm PT

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• Tuesday, February 18, 2014– Value Stream Analysis: Beyond the Mechanics – Part 3 of 3 (Executing the Transformation Plan)

– https://www2.gotomeeting.com/register/154959186

• Thursday, March 27, 2014– Value Stream Mapping: Case Studies– https://www2.gotomeeting.com/register/288652530


If you missed Part 1: www.ksmartin.com/webinars or www.vimeo.com/karenmartingroup


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You will learn…

• How to facilitate a two‐stage mapping process. • The importance of walking the value stream—even if you can't "see" the work.

• Facilitation tips for constructing the current state map and designing the future state map.

• Tips for successful briefings.

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


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



Value Stream Mapping Benefit:Seeing the Whole

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

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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%

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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%

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3

IT-1 IT-2

5 items

Process 1

Function A

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

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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%

Other?

Other?

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Value Stream Mapping: Visualize the delivery of customer value on a single sheet of paper


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


TuesdayJanuary 7, 2014

TuesdayFebruary 18, 2014

TuesdayJanuary 21, 2014


DesignFuture State


Plan


Plan

Create the Current State Map: 5 Steps

1. Value stream walk #12. Layout the map3. Value stream walk #24. Add map details5. Add timeline; calculate summary metrics

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Value Stream Walk #1• Purpose – To identify:

– What? (Processes)• High level description of the work accomplished• Work received; work passed on• Aim for 5‐15 process blocks across the value stream

– Who? (Functions involved)– When? (Sequence and handoffs)

• Avoid getting into the details• Approach from a place of humility and curiosity• Capture thoughts, but avoid problem solving• Entire team walks & stays together


Post‐it Note Conventionafter Value Stream Walk #1

Process (verb/noun)

Function(s)


DesignFuture State


Plan


Plan



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Value Stream Map Process Block Placement

Map what happens 80% of the time

Narrow the scope if needed

Place Post‐its serially or in parallel as appropriate

Parallel processes

Serial processes

100%

100%

Minimal branching is acceptable on a Value Stream Map


DesignFuture State


Plan


Plan



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2nd Walk ‐ Gain a Deeper Understanding

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• Work input & output; trigger; prioritization• 3 key metrics for each process block:

– Process Time (PT)– Lead Time (LT)– Percent Complete & Accurate (%C&A)

• WIP – quantity of work‐in‐process (queued work)• Information flow; IT Systems used• Significant barriers to flow

– Batching, system downtime, inaccessible resources, long setup, etc.

• # of people who do the work (if relevant)


Lead Time vs. Process Time

Lead Time (LT)

Work Received

Work passed to next process or department

Process Time (PT)

Lead Time = Elapsed time; Throughput time; turnaround timeProcess Time = Touch time; work time; cycle time

Work is Idle Work is Idle


Measuring Process Quality

Customer

Process 1

Process 2

Process 3

Process 4


Multiple downstream customers reporting different %C&As from the same supplier

Block 5 reported that they rework Block 4’s output 25% of the time

Block 7 reported that they, too, rework Block 4’s output 50% of the time.

(0.75 x 0.50) x 100 = 37.5%

Value Stream Walk #2:Which systems/applications and other means are

used to convey information?

Hand carrying work

Emailing work

Post‐it Note Convention after Value Stream Walk #2

Significantbarriers to flow

# People who typically do the work PT

LT%C&A29

Quantifying WIP: 3 Places Work Can Accumulate


DesignFuture State


Plan


Plan



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Value Stream Map: Map Details


DesignFuture State


Plan


Plan



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Value Stream Map Summary Timeline



Projected % Improvement

Timeline PT 46.0 hours*

Timeline LT 44.0 days*

LT – RFQ(CS blocks 2-4)

11 days

LT – PO-Dev (CS blocks 6-10)

27 days

Activity Ratio (full value stream)

13.1%

Rolled %C&A 4.8%

Golden State Equipment, Inc.Capital Equipment Value Stream

* Specify whether business hours or clock hours; whether business days or calendar days.** Based on 1,000 orders per year and 1,950 available work hours per employee per year.

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.


12 13 24 35 4

51 62 73 84 95 10

12 13 24 35 4

1234 Date: Date:

Name

NameLourdes Dwyer

Diana MarieDave GeraldRyan Austin

FacilitatorValue Stream Champion

Sean MichaelsContact Information

Contact Information

Demand RateTrigger

1,000 per yearCustomer submits RFQ

Value Stream Mapping CharterScope Accountable Parties Logistics

Allen Ward

Nancy LittleSpecific Conditions

Engineer to order, requires both hardware & software customization

Value Stream Champion

Capital equipment Executive SponsorValue Stream

Event Dates & Times

July 24-26, 20138:00 am - 5:00 pm

Dave Parks Base-camp LocationFacilitator

Current State Problems & Business Needs Mapping Team

Boundaries & Limitations

Improvement Time Frame

No new software; only minor changes to existing IT systems; no additional staff; no budget changes

Future state design is fully realized by December 31, 2013.

Last Step Production ships productLogistics

Coordinator Dave Parks

July 24, 25, & 264:00-5:00 pm

First Step Sales reviews the RFQ

Briefing Dates &

Times

Meals Provided

Briefing Attendees

** required *optional

** Allen W (COO), Joe M (CIO), Sal T (VP Sales)* Bruce R (VP Ops), Carlos P (HR), Su T (CFO), Bill M (VP CS)

(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master

Goals & Measurable Target Conditions Engineering, Vice President

Unclear & incorrect information flowing through value stream. IT, DirectorLead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller

Desire to stay ahead of the competition & deepen customer loyalty. Function / TitleForecasted growth of 15% for next fiscal year. Sales, Director

Reduce PO to software development lead time by a minimum of 50%. Customer Service, ManagerAmbreen MotiwalaDanny Tran

Nancy LittleReduce RFQ lead time by a minimum of 50%. Manufacturing, Director

Freed capacity to absorb additional business w/o increasing staff. Production Supervisor

Faster delivery; less hassle; less cost. FunctionBetter working relationships between sales, estimating & engineering. Planning / Purchasing, Planner

Continential breakfast & lunch

Surf's Up - Room A

Tom St. James

Benefits to Customers & Business On-Call Support

JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)

Operational: LT in segments (RFQ to quote; PO to development). Signature:Date:

Relevant Data Agreement

Financial: Estimate-to-actual cost comparison.Executive SponsorSales effectiveness: RFQ conversion rate.

Signature: Signature:


DesignFuture State


Plan


Plan

Create the Future State Map: 5 Steps

1. Determine the “right work”2. Make the right work flow3. Manage the right work

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DesignFuture State


Plan


Plan


1. Determine the “right work”2.Make the right work flow3. Manage the right work

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Projected % Improvement

Timeline PT 46.0 hours 34.3 hrs 25.4%Timeline LT 44.0 days 23.0 days 47.7%LT – RFQ(CS blocks 2-4)

11 days 7 days 36%

LT – PO-Dev (CS blocks 6-10)

27 days 9 days 67%

Activity Ratio (full value stream)

13.1% 18.6% 42%

Rolled %C&A 4.8% 53.4% 1,013%

Golden State Equipment, Inc.Capital Equipment Value Stream


DesignFuture State


Plan


Plan


1. Determine the “right work”2. Make the right work flow3.Manage the right work

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OwnershipKPIs (Key Performance Indicators)

Visual ManagementFrequency of Improvement


DesignFuture State


Plan


Plan


1. What?2. How?3. Who?4. When?

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Prioritization GridCreating the Transformation Plan

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1 2 3 4 5 6 7 8 9 10 11 12

2 Improve quality of referral to 85% KE Sean Michaels

3,4 Reduce lead time between scheduling and preregistration step to 45 minutes

Proj Dianne Marie

4 Only one check in per patient KE Ryan Austin

4 Reduce wait time in waiting area by 50% KE Dianne Marie

6 Eliminate 6 hour lead time associated with transcription step

Proj Dave Gerald

7 Eliminate redundant data entry Proj Dave Gerald

5 Visually managed inventory; no outages or expired items

KE Michael O'Shea

6 Reduce imaging LT to one hour Proj Martha Allen

8 Reduce report delivery LT to 30 minutes Proj Martha Allen

7 Reduce LT at image review to 1 day JDI Dave Gerald

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

Cross-train and co-locate work teams

Value-stream specific radiologists

Implement voice recognition technology

Auto populate between PACS and Meditech

5S CT supplies area; implement kanban

Collect copays in Imaging

Balance work / level demand

Visual metrics and indicators

Date: Date:

Executive Sponsor Value Stream Champion

Date:

Signature:

Agreement

Signature: Signature:

10/18/2012 10-Jan-13Date Created

Value Stream Mapping Facilitator

Increase % of physicians receiving electronic delivery

Planned Timeline for ExecutionStatusFS VSM

Block # Measurable Target Proposed Countermeasure

Implement standard work for referral process

Exec. Method* Owner

Value Stream Transformation PlanValue Stream

Value Stream ChampionValue Stream Mapping Facilitator

Allen Ward 1-Nov-12Executive SponsorScheduled Review Dates

21-Nov-12

Outpatient Imaging

Paul ScannerDave Parks 13-Dec-12


Value Stream Mapping Execution: Key Success Factors

• Whenever possible, walk the value stream.• Use “the big 3” key metrics.• Hold daily briefings.• Facilitation techniques:

– The fine line between letting the team go “off script” and sticking with a rigid agenda.

– Use “count down” technique.– Stimulate innovation – Why? Why not? What if?– Refer back to the charter to keep the team focused.– Teach in the moment as needed.– Allow and/or stimulate “spirited conversation.”


Amazon: www.bitly.com/VSMbkMore info: www.ksmartin.com/VSM

“The new bible for value stream mapping.”—Art Byrne, author, The Lean Turnaround


Karen Martin, President7770 Regents Road #635San Diego, CA 92122

858.677.6799

[email protected]

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Value Stream Analysis: Beyond the Mechanics - Part 2 (Mapping Execution)

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