Value stream mapping for non manufacturing environments
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Value stream mapping for non manufacturing environments

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Karen Martin, recognized expert on lean in office and administrative processes, shares instruction on applying value stream mapping to non-manufacturing organizations.

Karen Martin, recognized expert on lean in office and administrative processes, shares instruction on applying value stream mapping to non-manufacturing organizations.

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  • 1. Learning Objectives Participants will learn:  What V l St Wh t a Value Stream Map is – and what it i not. M i d h t is t  Key differences between manufacturing and office/service VSMs.  Best practices for holding a Value Stream Mapping activity.  How to define office & service product families.  Step-by-step approach for creating current and future state maps maps.  How to create an implementation plan from the future state VSM. © 2010 Karen Martin & Associates 2
  • 2. Value Stream Administrative & Office Mapping’s Beginnings Environments Learning to See, The Complete Lean Enterprise, Mike Rother & John Shook Beau Keyte & Drew Locher
  • 3. Womack’s Five Principles of a Lean Enterprise  Value  Value stream  Flow  Pull  Perfection — Jim Womack Lean Thinking, 1996 2003 Womack, Thinking 1996, © 2010 Karen Martin & Associates 4
  • 4. Value Stream Defined Value Stream: All of the activities, required to fulfill a customer request from order to delivery (and beyond to cash received). Value Stream Process Process Process Custom er Customer Customer Request Receipt © 2010 Karen Martin & Associates 5
  • 5. The Work We Do: Degrees of Granularity Rooftopp Value Value Stream View Map (Strategic) Stream Process Process Process In the Metrics-Based Weeds Step Step Step Process Map (Tactical) ( ) © 2010 Karen Martin & Associates 6
  • 6. Improvement Roles Who? Accountability Tool ategic Leadership “What has to happen” happen Value Stream Stra What Mapping Middle Management cal Workforce “How it will happen” Kaizen Events Events, Tactic How Just-do-its, and Projects © 2010 Karen Martin & Associates 7
  • 7. Why Value Stream Mapping? To set strategy before diving into tactics. t ti  The future state VSM is a macro level blueprint for change; road map Enables us to SEE the process. Promotes s stems thinking / systems seeing the whole  Helps us avoid sub optimizing sub-optimizing © 2010 Karen Martin & Associates 8
  • 8. VSM Goal: System Efficiency System Efficiency = Optimal Value Stream Performance Individual Efficiency = Sub-optimization © 2010 Karen Martin & Associates 9
  • 9. Types of Value Streams Product Value Streams Support Value Streams Value Stream “Segments” © 2010 Karen Martin & Associates 10
  • 10. Types of Value Streams  Product Value Streams  Goods – wide range of manufactured p g products  Services  Healthcare – Emergency department patient flow, surgical patient flow, outpatient testing  Financial Services – credit application process, mortgage process, equipment leasing process  Education – college application to arrival  Repair and maintenance – wind blade repair oil field maintenance repair, maintenance, refrigeration system service and repair  Energy – Nuclear energy production, Oil production  Government – Property tax assessment and processing  Law enforcement – undercover operations, background check process  Military – radar system development, troop deployment  Non-Profit services – Donation processing, disaster aid process  Etc. © 2010 Karen Martin & Associates 11
  • 11. Types of Value Streams (continued)  Value Stream “Segments”  Order fulfillment  Product development  New account set-up  Laboratory services  Imaging services  Support Value Streams  Recruiting, hiring and onboarding process  Revenue cycle  Information Technology request fulfillment  Purchasing  Accounts payable  Physician credentialing © 2010 Karen Martin & Associates 12
  • 12. Why Value Stream Mapping? (continued) Shows the linkage between information and material fl i f ti d t i l flow. Makes the disconnects and obstacles t fl b t l to flow visible at a i ibl t macro level Metrics-based d i i making: M t i b d decision ki What are you going to do to affect the numbers? © 2010 Karen Martin & Associates 13
  • 13. Key Metrics: Time Process time (PT)  The ti Th time it takes to actually perform the work, if one is t k t t ll f th k i able to work on it uninterrupted  Includes task-specific doing, talking, and thinking task specific  aka “touch time,” work time, cycle time Lead time (LT) ( )  The elapsed time from the time work is made available until it’s completed and passed on to the next person or department in th chain d t t i the h i  aka throughput time, turnaround time, elapsed time  Includes Process Time not merely waiting time Time, time. © 2010 Karen Martin & Associates 14
  • 14. Lead Time vs. Process Time Scenario 1 Lead Time Work Process Time Work passed Received to next step LT = PT + Waiting / Delays g y © 2010 Karen Martin & Associates 15
  • 15. Lead Time vs. Process Time Scenario 2 Lead Time Process Time Work Work passed Received to next step LT = PT + Waiting / Delays g y © 2010 Karen Martin & Associates 16
  • 16. Summary Metrics: Time Activity Ratio (expressed as a percentage)  The percentage of time anything is being done to the work passing through the system (whether value-adding or non value adding) value adding non-value-adding)  %Act = (∑PT ÷ ∑LT) × 100  100 – %Activity = % Time Work is Idle  Common finding = 1-10%  Could also calculate %VA Activity to show how little time is spent on value-adding activities. © 2010 Karen Martin & Associates 17
  • 17. Key Metrics: Quality %Complete and Accurate (%C&A)  The percentage of input that’s deemed “usable as is” by the person doing the work  % of incoming work where the downstream customer can perform task without having to “CAC”:  Correct information or material that was supplied  Add information that should have been supplied  Clarify information that should have or could have been clearer  Measured by the immediate downstream customer and all subsequent downstream customers.  Similar to first pass yield in manufacturing manufacturing. © 2010 Karen Martin & Associates 18
  • 18. Summary Metrics: Quality Rolled First Pass Yield (RFPY)  The percent of value stream output that passes through the process “clean,” with no “hiccups,” no rework required. required  RFPY = %C&A x %C&A x %C&A…  Common fi di = 0 15% C finding 0-15%  Multiply ALL %C&A’s, even if parallel processes © 2010 Karen Martin & Associates 19
  • 19. Current State Value Stream Map Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Vendor Form File File Maker Quicken Excel ERP Website Data Entry 4 Enter 7 Approve in 8 Submit PO Review 2 3 Review Review 5 Review 6 9 10 Review Req. 20 Reqs Requisition 10 Reqs ERP 63 Reqs to Supplier Budget Requisition Requisition Requisition External Corp Purchasing Supplier Sys Engineer Admin Asst Corp Purchasing Finance Supervisor IS Manager Financial Mgr Manager 6 2 1 1 1 1 1 6 2 hrs. PT = 5 mins. i 4 hrs. PT = 5 mins. i 40 hrs. PT = 5 mins. 8 hrs. PT = 5 mins. i 8 hrs. PT = 10 mins. i 4 hrs. PT = 15 mins. i 24 hrs. PT = 5 mins. i 56 hrs. 80 hrs. PT = 20 mins. i PT = 15 mins. C&A = 60% C&A = 95% C&A = 90% C&A = 100% C&A = 95% C&A = 98% C&A = 90% C&A = 98% 0.25 days 0.5 days 5 days 1 days 1 days 0.5 days 3 days 7 days 10 days LT = 28.4 days 5 mins. 5 mins. 5 mins. 5 mins. 10 mins. 15 mins. 5 mins. 15 mins. PT = 65 mins. AR = 0.477% RFPY = 4.2% PT = Process Time LT = Lead Time Customer Demand: C&A = % Complete & Accurate 615 requisitions per y ear AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 20. Future State Value Stream Map Purchasing — Non-repetitive purchases less than $5,000 Additional IT access Enter Req. 1 in ERP Integrate Form Originator File with File 31 Maker PT=30 mins. C&A = 85% Supplies Requisition Checklist Vendor File Maker ERP Websites Use budget in place Cross of Quicken Auto Notify Training Standard Work for review Approval Additional IT access Dedicated Review Approve Place Buyers 2 3 4 5 Req. in ERP Order External Supplier Dept. Dept Supervisor Manager Corp Purchasing 2 6 hrs. 1 6 PT=20 mins. 8 hrs. 80 hrs. 4 hrs. PT=5 mins. PT=5 mins. PT=20 mins. C&A = 95% C&A = 90% C&A = 98% 0.5 days 0.75 days 1 days 10 days LT = 12.3 days 5 mins. 5 mins. 20 mins. PT = 30 mins. AR = 0 508% 0.508% RFPY = 71% PT = Process Time LT = Lead Time Customer Demand: C&A = % Complete & Accurate 615 requistions per year AR = Activity Ratio (PT/LT x 100) RFPY = Rolled First Pass Yield
  • 21. Purchasing Process Projected Results Current Projected % Metric M ti State St t Future State F t St t Improvement I t Lead Time 28.4 days 12.3 days 56.7% Process Time 65 mins 30 mins 53.8% 53 8% % Activity 0.48% 0.51% 6.3% Rolled First 4.2% 71.0% 1,590% Pass Yield # Handoffs 10 5 50% # IT Systems 6 3 50% Freed capacity 2.1 FTEs 10% © 2010 Karen Martin & Associates
  • 22. Summary Metrics: Measuring Productivity Gains Labor Effort Total PT (in hrs) X # occurrences/year # FTEs = Available work hrs/year/employee Freed = Current State FTEs – Future State FTEs Capacity Note: Improvement can be expressed as Freed Capacity (FTEs), Time, or Labor Expense (or all) # FTEs = Full Time Equivalents; 2 half-time people = 1 FTE © 2010 Karen Martin & Associates 23
  • 23. What do you do with freed capacity?  Absorb additional work without increasing staff  Reduce payroll through natural attrition  Innovate – create new revenue streams  Conduct ongoing continuous improvement activities  D a b tt job with f Do better j b ith fewer errors and hi h safety d higher f t  Talk and work with your customers and suppliers  Mentor staff to create career growth opportunities  Provide additional workforce development; cross-train  Better work/life balance  Slow down & think  Get/stay caught up  Do the things you haven’t been able to get to  Collaborate with other areas © 2010 Karen Martin & Associates 24
  • 24. Basic Mapping Icons External Organization Push Arrow Operator / Employee I Work-in-Process Material receipts & shipments Process Block Go See Scheduling Manual PT= 25 m Information Flow C/O= C/O 40 m In-box 2 Shifts Takt= 60m Movement Electronic Data Block Information by Truck y Flow Lead Time Hours Hours Hours Process Time Minutes Minutes Minutes Minutes Timeline
  • 25. Current State Value Stream Map Demand = 15 per day Outpatient Imaging Services Customer Demand: 15patients perDay (Takt Time1920seconds) Pre-register Schedule 8 hours per day Patient Appointment Referring Hospital Physician 4 1 Lead Time = 24 days 5 3 Lead Time = 990 mins. 6 2 Lead Time = 12 mins. Cycle Time = 30 mins. Cycle Time = 11 mins. % C&A = 65 % Lead Time = 990 mins. Lead Time = 12 mins. % C&A %C&A = 100 % % C&A %C&A = 98 % CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel ADS Meditech Internet Fax Order PACS Waiting Room Auto Fax 50% Solutions Management M t Us Mail 25% System MD Mailbox 25% Rework Loop via Fax 25% of the time Prep Complete Transmit Read/Dictate Transcribe Review Print Send Check-in Check-in Patient Exam Images Exam Report Draft/Sign Reports Reports Patient Patient (Tech) (Tech) (Tech) (Radiologist) (MDI) (Radiologist) (Imaging) (Imaging) (Admitting) (Imaging) 5 mins. 5 5 5 mins mins. 3 6 45 mins. 2 7 30 mins. 2 8 5 mins. 2 9 248 mins. 2 10 365 mins. 6 11 960 mins. 2 12 110 mins. 2 13 120 mins. 6 14 Cycle Time = 2 mins. Cycle Time = 1 mins. Cycle Time = 10 mins. Cycle Time = 15 mins. Cycle Time = 3 mins. Cycle Time = 15 mins. Cycle Time = 5 mins. Cycle Time = 1 mins. Cycle Time = 1 mins. Cycle Time = 3 mins. % C&A = 90 % % C&A = 98 % % C&A = 100 % % C&A = 90 % % C&A = 100 % % C&A = 95 % % C&A = 75 % % C&A = 95 % % C&A = 99 % % C&A = 90 % 0.0833 hrs. 0.0833 hrs. 0.75 hrs. 0.5 hrs. 0.0833 hrs. 4.13 hrs. 6.08 hrs. 16 hrs. 1.83 hrs. 2 hrs. LT = 32.5 hrs. 2 mins. 1 mins. 10 mins. 15 mins. 3 mins. 15 mins. 5 mins. 1 mins. 1 mins. 3 mins. CT = 56 mins. CT/LT Ratio = 2.87% Rolled First Pass yield = 29% VSM Champion: Paul Scanner Created: July 17, 2007
  • 26. Future State Value Stream Map Demand = 15 per day Outpatient Imaging Services Standard Customer Demand: Work Co-locate Work 15 patients perDay Balance (Takt Time1920 seconds) Schedule appt 8 hours per day Pre-register Referring Hospital Physician 3 1 Lead Time = 15 days 6 2 Lead Time = 45 mins. Cycle Time = 11 mins. % C&A = 85 % Lead Time = 45 mins mins. % C&A = 98 % Risk Reduction (Joint CT=Cycle Time Commision) LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel Meditech Internet Waiting Room a g oo Fax Order PACS Auto Fax 80% Solutions Management Us Mail 15% System MD Mailbox 5% Pull System Value Stream 5S Rework Loop (Supplies Alignment via Fax 10% of Kanban) the time Remove Check in and Reduce Work Batch System Access Balancing B l i Visual Reductions R d ti Standard Workplace Voice Work Set-up Continuous Recognition Reduction Flow Prep Complete Transmit Read/Dictate Review Print Send Check-in Patient Exam Images Exam Draft/Sign Reports Reports Patient (Tech) (Tech) (Tech) (Radiologist) (Radiologist) (Imaging) (Imaging) (Imaging) 5 mins. 35 mins. 5 20 mins. 6 5 mins. 7 120 mins. 8 420 mins. 9 2 mins. 10 30 mins. 11 3 4 2 2 2 2 2 2 6 Cycle Time = 1 mins. Cycle Time = 10 mins. Cycle Time = 10 mins. Cycle Time = 2 mins. Cycle Time = 15 mins. Cycle Time = 1 mins. Cycle Time = 1 mins. Cycle Time = 3 mins. % C&A = 98 % % C&A = 100 % % C&A = 90 % % C&A = 100 % % C&A = 95 % % C&A = 95 % % C&A = 99 % % C&A = 90 % 0.0833 hrs. 0.583 hrs. 0.333 hrs. 0.0833 hrs. 2 hrs. 7 hrs. 0.0333 hrs. 0.5 hrs. LT = 11.3 hrs. 1 mins. 10 mins. 10 mins. 2 mins. 15 mins. 1 mins. 1 mins. 3 mins. CT = 43 mins. CT/LT Ratio = 6.32% Rolled First Pass yield = 40% VSM Champion: Paul Scanner Created: July 18, 2007
  • 27. Outpatient Imaging Projected Results Current Projected % Metric State Future State Improvement Lead Time 32.5 hrs 11.3 hrs 65% Process Time 56 mins 43 mins 23% Percent Activity 2.9% 6.3% 117% Rolled First 29% % 40% % 38% % Pass Yield # Macro Steps 14 11 21% Tech turnover 100% 25% 75% (annual) Note: Freed N t F d capacity (PT reductions) allowed th organization t earn it d ti ) ll d the i ti to $500,000 additional annual revenue with no additional headcount © 2010 Karen Martin & Associates 28
  • 28. Value Stream Mapping Process Define D fi Products (good or services) with Product Family common process steps Foundation (the basis) for the F d ti (th b i ) f th Document Current future state; 70-80% accurate is State acceptable (directionally correct) Create flow by eliminating waste Design Future it is now obvious from your 3 Day State current state map); typically 3-6 at Repea Event months out Create Include accountability and Implementation Plan timeframes for completion ti f f l ti Implement! The Th goal of mapping! l f i !
  • 29. Scoping: One VSM per “Product Family” Group Product Families by similar downstream processes, steps or equipment. Process Steps & Equipment Step A Step B Step C Step D Step E Step F Vol. Product ABC X X X X X 50 Product XYZ X X X X X 73 Product IBM X X X 2 Products Product AWR X X X X 5 Product ACC X X X 15 Product SUB X X X 12 Product IDR X X X X X X 1 © 2010 Karen Martin & Associates 30
  • 30. Narrowing the Scope: Selected Specific Conditions Non Exempt Non-Exempt Staff Replacements Exempt Staff Hiring Process New Non-Exempt Positions Staff Exempt Staff © 2010 Karen Martin & Associates 31
  • 31. Narrowing the Scope: Selected Specific Conditions Units Domestic Consumables C bl Warranty Service Parts Non- Order Warranty Fulfillment Process Units International I t ti l Consumables C bl Warranty Service Parts Non- Non Warranty © 2010 Karen Martin & Associates 32
  • 32. Value Stream Mapping Process Define D fi Products (good or services) with Product Family common process steps Foundation (the basis) for the F d ti (th b i ) f th Document Current future state; 70-80% accurate is State acceptable (directionally correct) Create flow by eliminating waste Design Future it is now obvious from your 3 Day State current state map); typically 3-6 at Repea Event months out Create Include accountability and Implementation Plan timeframes for completion ti f f l ti Implement! The Th goal of mapping! l f i !
  • 33. Value Stream Mapping Activity  3-day activity; three deliverables  Day 1 – Document and analyze the current state y y  Go to the Gemba!  Day 2 – Design the future state (3-6 months out)  Day 3 – Create the implementation plan  Sequestered team composed primarily of those who can authorize change  Typically manager and above  The team goes to the gemba to obtain the metrics from the frontlines doing the work.  Leadership learning and development is a powerful side benefit.  K success f t - i t i b i fi Key factor interim briefings t communicate and to i t d achieve consensus. © 2010 Karen Martin & Associates 34
  • 34. Interim Briefings Day 1 – “Here’s what we’ve learned.”  Establishes a mental framework for embracing improvements; “sells” the need for improvement. Day 2 – “Here’s what we plan to do.”  Does anyone object? If so, why? y j y  Challenge policies and paradigms Day 3 – “Here’s how we re going to execute ” Here s we’re execute.  Priorities, approach, timeframes, accountability  Obtain full commitment right then and there there. © 2010 Karen Martin & Associates 35
  • 35. Value Stream Mapping Planning Your Activity: A well-developed charter aids in ll d l d h t id i communication, consensus building and planning © 2010 Karen Martin & Associates 36
  • 36. Value Stream Mapping Charter Event Scope Leadership / Coordination Schedule Executive 3 days typically; sequential is Value Stream Engineering design, ED patient flow , Credit processing, etc. VP or C-level Event Date(s) Sponsor best Specific What circumstances you're including and Value Stream If needed - often Director or Start/End 6 hrs minimum; 7 or 8 is best Conditions excluding? Champion Manager level Times Customer Demand How many times is this done per wk, mo, or yr.? Facilitator Skilled person leading the activity Location Need ample wall space Trigger What need does the value stream address? First Step Task on first process block Meals Always a nice touch; keeps Team Lead Not always needed Last Step Task on last process block p Provided? the team from wandering. g Boundaries & Interim Aid in consensus building and What is the team NOT authorized to change? The person arranging logistics Limitations Briefing(s) organizational learning. Coordinator (reserving the room, ordering food, FS Implementation sending meeting notices, etc.) Briefing List required attendees; others Typically 90-120 days Timeframe Attendees are optional Event Drivers Mapping Team 1 Wh are you doing thi ? Why d i this? Function Name Contact Information 2 1 Leadership-heavy 3 2 4 3 5 4 Goals & Measureable Objectives j 5 1 Aim for objectives w/ measurable targets (from X to X). 6 2 7 3 8 4 9 5 10 Planned Deliverables On-Call On Call Support 1 Current state VSM Function Name Contact Information 2 Future state VSM 1 SMEs that may not be needed full time 3 Implementation Plan 2 4 3 5 4 Potential Obstacles Approvals 1 To the team's success with the mapping activity. Executive Sponsor Value Stream Champion Facilitator 2 3 Signature: Signature: Signature: Date: Date: Date: 4 37
  • 37. Value Stream Mapping Facilitator Range of Necessary Traits  Skills / Knowledge  Personality / Energy  Lean philosophy ea p osop y  Naturally cu ous atu a y curious  Improvement tools  Challenging, yet supportive  Project & time management  Positive, upbeat, energetic  Mediation; consensus  Pushy without irritating building b ildi  Thinks fast on one’s feet  People effectiveness – from  Objectivity / Fairness front line workers to execs  No attachment to the work  Authority / Respect being improved b i i d  Recognized change agent / influence leader  Trustworthyy  Comfortable removing obstacles & reaching out to senior leadership © 2010 Karen Martin & Associates 38
  • 38. Value Stream Mapping Process Define D fi Products (good or services) with Product Family common process steps Foundation (the basis) for the F d ti (th b i ) f th Document Current future state; 70-80% accurate is State acceptable (directionally correct) Create flow by eliminating waste Design Future it is now obvious from your 3 Day State current state map); typically 3-6 at Repea Event months out Create Include accountability and Implementation Plan timeframes for completion ti f f l ti Implement! The Th goal of mapping! l f i !
  • 39. The timeline is the most important of the three defining characteristics of a VSM: 1) information flow 2) product flow 3) timeline If your map doesn’t include a timeline, it is not a VSM. If your map has swim y p lanes, it’s not a VSM. © 2010 Karen Martin & Associates 40
  • 40. Order Initiation Typical VSM Components - Current State Map Demand = XXXX Manufacturing g May 8, 2008 Robert Parker formation Flow Production SUPPLIER Control CUSTOMER n 1 Inf ow Process 1 I Process 2 I Process 3 I Process 4 roduct Flo 2 Pr Hours Hours Hours Hours LT Timeline 3 Minutes Minutes Minutes Minutes PT
  • 41. Typical VSM Components - ABC Value Stream Current State Map Office / Service Demand = XXXX/yr Date Key Contact formation Flow CUSTOMER n 1 I.T. I.T. I.T. Inf ow Process 1 Process 2 Process 3 Process 4 roduct Flo 2 Pr Hours Hours Hours LT eline 3 Minutes Minutes Minutes Minutes PT Time
  • 42. Concurrent Work / Parallel Flows Process Process LT = 8 hrs Process Process Process LT = 4 hrs Bring longest lead time to the timeline, unless it’s a “dead end step.” © 2010 Karen Martin & Associates 43
  • 43. Common Differences - Manufacturing vs. Office VSMs Manufacturing Office Customer icon Upper right Center Supplier icon Upper left None “The thing we’re The thing” we re Raw material sub- material, sub Paper, verbal, Paper verbal and following assemblies, finished goods electronic Information More structured / Multiple I.T. systems and Information Flow y formalized I.T. systems work-arounds Schedule notification Multiple points across VSM Work not scheduled Material flow (via ( Yes Y Sometimes S ti hollow arrow) WIP icon Inventory triangle In-bin (if preferred) Percent Complete & Quality M t i Q lit Metric First P Fi t Pass Yield (FPY) Yi ld Accurate (%C&A) Only applicable with Takt Time Typically can be applied dedicated resources LT determination for Based on WIP between Based on a single item each block process blocks passing through
  • 44. Preparing to Map Schedule time to go to the Gemba  Prepare frontlines for questions the team will ask; establish a safe haven for them to communicate the true current state (no matter how ugly it is) to high level leaders they may not usually interface with.  No written procedures allowed – creates bias toward communicating what should h i ti h t h ld happen rather th what th than h t does happen. © 2010 Karen Martin & Associates 45
  • 45. Preparing to Map (continued) Draw map manually!  11 x 17” paper  Or 36” wide plotter paper and 3 x 6” post-its for process blocks (my preference) Only convert to electronic medium if absolutely necessary (e-distribution, training, etc.) (e distribution,  iGrafx FlowCharter (my preference)  Systems2Win – Excel-based y  Minitab  e-VSM  Others © 2010 Karen Martin & Associates 46
  • 46. Step 1 Label your map (draw manually or use 36” wide plotter paper and 3 x 6” post-its)  Value stream name  Current or future state  Customer demand (volume of work p time ( per period)  Takt time (if relevant)  Date  Facilitator’s name (and/or team) ( ) © 2010 Karen Martin & Associates 47
  • 47. Takt Time: The Key to Continuous Flow Available work time Takt ti T kt time = “Touch down” “T hd ” Customer demand 480 minutes/day Takt time = = 10.6 mins 45 new accounts OR… Time Available divided by what Kustomer Takes © 2010 Karen Martin & Associates 48
  • 48. Step 2  Identify all blocks in the process (target 5-15 blocks)  Customer icon is placed in upper right or middle  Upper right if supplier exists (supplier is placed in upper left)  Middle position if a separate supplier doesn’t exist  Supplier (if relevant) is placed in upper left  Each block (post-it) contains an activity or group of activities that occurs before a break in the timeline occurs - typically a handoff to another function/work team team.  Activity format is verb/noun – what happens to what  Include the function who performs the task  Include number of workers who perform the task  Include any obstacles to flow – batches, shared/inaccessible resources, system downtime, etc.  Consider walking the process © 2010 Karen Martin & Associates 49
  • 49. Post-it Conventions Process (Verb/Noun) ( ) Function # Staff (if relevant) Barriers to flow
  • 50. Step 3 Identify all I.T. systems used in the process and information flow  For most VSMs, these are placed above the process blocks  In very complicated VSMs with two rows of process blocks, I.T. systems can be placed between the rows, if necessary.  Note N t any scheduling th t occurs ( h d li that (rare i in current state)  Who tells h Wh t ll whom t d what? to do h t? © 2010 Karen Martin & Associates 51
  • 51. Current State Value Stream Map Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Vendor Form File File Maker Quicken Excel ERP Website Data Entry 4 Enter 7 Approve in 8 Submit PO Review 2 3 Review Review 5 Review 6 9 10 Review Req. 20 Reqs Requisition 10 Reqs ERP 63 Reqs to Supplier Budget Requisition Requisition Requisition External Corp Purchasing Supplier Sys Engineer Admin Asst Corp Purchasing Finance Supervisor IS Manager Financial Mgr Manager 6 2 1 1 1 1 1 6 2 hrs. PT = 5 mins. i 4 hrs. PT = 5 mins. i 40 hrs. PT = 5 mins. 8 hrs. PT = 5 mins. i 8 hrs. PT = 10 mins. i 4 hrs. PT = 15 mins. i 24 hrs. PT = 5 mins. i 56 hrs. 80 hrs. PT = 20 mins. i PT = 15 mins. C&A = 60% C&A = 95% C&A = 90% C&A = 100% C&A = 95% C&A = 98% C&A = 90% C&A = 98% 0.25 days 0.5 days 5 days 1 days 1 days 0.5 days 3 days 7 days 10 days LT = 28.4 days 5 mins. 5 mins. 5 mins. 5 mins. 10 mins. 15 mins. 5 mins. 15 mins. PT = 65 mins. AR = 0.477% RFPY = 4.2% PT = Process Time LT = Lead Time Customer Demand: C&A = % Complete & Accurate 615 requisitions per y ear AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 52. Step 4 Number the process blocks from left to right.  If parallel processes exist, use alpha modifiers – e.g. 8A, 8B, etc. Connect the customer, supplier (if present) and process blocks  “Striped” arrow for p p push systems y  Hollow arrow for material flow Connect and I T systems I.T. © 2010 Karen Martin & Associates 53
  • 53. Post-it Conventions Process Block # Process (Verb/Noun) ( ) Function # Staff (if relevant) Barriers to flow PT (process time) (p ) % Complete & LT (Lead time) Accurate
  • 54. Depicting e-Information Flow I.T. I.T. Application Application Arrow pointing to Two-headed arrow: I.T. I T application: li ti Staff b th i St ff both views and d Staff enters data enters data Process Process Block Block I.T. Application #1 I.T. #2 I.T. Application Application Arrow pointing from I.T. application: Staff views data Lightning bolt arrow: Process Block Application #1 auto-populates application #2 55
  • 55. Current State Value Stream Map Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Material flow Vendor Form File File Maker Quicken Excel ERP Website ERP auto- populates Data Entry P.O. 4 Enter 7 Approve in 8 Submit PO Review 2 3 Review Review 5 Review 6 9 10 Review Req. 20 Reqs Requisition 10 Reqs ERP 63 Reqs to Supplier Budget Requisition Requisition Requisition External Corp Purchasing Supplier Sys Engineer Admin Asst Corp Purchasing Finance Supervisor IS Manager Financial Mgr Manager 6 2 1 1 1 1 1 6 2 hrs. PT = 5 mins. i 4 hrs. PT = 5 mins. i 40 hrs. PT = 5 mins. 8 hrs. PT = 5 mins. i 8 hrs. PT = 10 mins. i 4 hrs. PT = 15 mins. i 24 hrs. PT = 5 mins. i 56 hrs. 80 hrs. PT = 20 mins. i PT = 15 mins. C&A = 60% C&A = 95% C&A = 90% C&A = 100% C&A = 95% C&A = 98% C&A = 90% C&A = 98% 0.25 days 0.5 days 5 days 1 days 1 days 0.5 days 3 days 7 days 10 days LT = 28.4 days 5 mins. 5 mins. 5 mins. 5 mins. 10 mins. 15 mins. 5 mins. 15 mins. PT = 65 mins. AR = 0.477% RFPY = 4.2% Push PT = Process Time LT = Lead Time Arrow A Customer Demand: 615 requisitions per y ear C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 56. Step 5 Add key metrics for all process blocks  Process Time (PT)  Lead Time (LT)  Percent Complete & Accurate (%C&A) P tC l t A t Add additional obstacles to flow if any are identified (e.g. b t h id tifi d ( batches, shared resources h d system availability/speed, etc.) Add th WIP ( the (work-in-process) for all ki )f ll process blocks. © 2010 Karen Martin & Associates 57
  • 57. Post-it Conventions Process Block # Process (Verb/Noun) ( ) Function # Staff (if relevant) Barriers to flow PT (process time) (p ) % Complete & LT (Lead time) Accurate
  • 58. Three Places WIP Accumulates Before the process block – work not yet begun. Within the process block – work currently being performed. After the process block – Work that’s complete complete, but hasn’t been passed on WIP WIP WIP Step 1 Step 2 Step 3 © 2010 Karen Martin & Associates 59
  • 59. Current State Value Stream Map Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Vendor Form File File Maker Quicken Excel ERP Website Data Entry 4 Enter 7 Approve in 8 Submit PO Review 2 3 Review Review 5 Review 6 9 10 Review Req. 20 Reqs Requisition 10 Reqs ERP 63 Reqs to Supplier Budget Requisition Requisition Requisition External Corp Purchasing Supplier Sys Engineer Admin Asst Corp Purchasing Finance Supervisor IS Manager Financial Mgr Manager 6 2 1 1 1 1 1 6 2 hrs. PT = 5 mins. i 4 hrs. PT = 5 mins. i 40 hrs. PT = 5 mins. 8 hrs. PT = 5 mins. i 8 hrs. PT = 10 mins. i 4 hrs. PT = 15 mins. i 24 hrs. PT = 5 mins. i 56 hrs. 80 hrs. PT = 20 mins. i PT = 15 mins. C&A = 60% C&A = 95% C&A = 90% C&A = 100% C&A = 95% C&A = 98% C&A = 90% C&A = 98% 0.25 days 0.5 days 5 days 1 days 1 days 0.5 days 3 days 7 days 10 days LT = 28.4 days 5 mins. 5 mins. 5 mins. 5 mins. 10 mins. 15 mins. 5 mins. 15 mins. PT = 65 mins. AR = 0.477% RFPY = 4.2% PT = Process Time LT = Lead Time Customer Demand: C&A = % Complete & Accurate 615 requisitions per y ear AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield WIP
  • 60. Step 6 Create timeline & calculate summary metrics  Timeline PT Sum  Timeline LT Sum  A ti it Activity Ratio R ti  Rolled First Pass Yield (RFPY) © 2010 Karen Martin & Associates 61
  • 61. How to Treat Lead Time in Office/Service Environments Lead Time Process Time Process 1 Process 2 LT LT PT PT Office/Service Lead Time ― • From the time work is made available until it’s been completed AND passed on to the next person/work group/department in the process. • Placed on the peak of the timeline to the left of the process block it refers to. • Represents total throughput time, including process time; not merely wait time. © 2010 Karen Martin & Associates 62
  • 62. Value Stream Mapping Projected Results j Projected Projected % Metric Current State Future State Improvement Timeline L d Ti li Lead Time Timeline Process Time Activity Ratio Rolled Fi t R ll d First Pass Yield Total Process Time ( blocks) (all ) Labor Effort Others, as relevant 63
  • 63. Typical Current State Findings Unnecessary Necessary NVA NVA Available Available to to work on Value Add next step Islands of activity (process times) within long lead times. © 2010 Karen Martin & Associates 64
  • 64. Step 7 Identify all value-adding (VA) and necessary non-value-adding (N) steps l ddi t  Add “VA” or “N” smaller post-it to relevant process blocks  All unnecessary non-value-adding blocks remain unlabelled Enter Check Approve Order Credit Order Customer Rep Finance Sales Rep VA N Unnecessary Value-adding Necessary Non-Value-Adding Non-Value-Adding © 2010 Karen Martin & Associates 65
  • 65. Customer-Defined Value Value-Adding (VA) - any operation or activity your external customers value ti it t l t l and are (or would be) willing to pay for. Non-Value-Adding (NVA) - any operation N V l Addi ti or activity that consumes time and/or resources but does not add value to the product (good or service) the customer receives. receives  Necessary – support processes, regulatory requirements, etc.  Unnecessary – everything else - WASTE © 2010 Karen Martin & Associates 66
  • 66. Work Effort as Defined by the External Customer Unnecessary N U Non- value adding Necessary non-value- adding Value-adding
  • 67. Value Stream Mapping Process Define D fi Products (good or services) with Product Family common process steps Foundation (the basis) for the F d ti (th b i ) f th Document Current future state; 70-80% accurate is State acceptable (directionally correct) Create flow by eliminating waste Design Future it is now obvious from your 3 Day State current state map); typically 3-6 at Repea Event months out Create Include accountability and Implementation Plan timeframes for completion ti f f l ti Implement! The Th goal of mapping! l f i !
  • 68. Designing the Future State Value Stream Target All Waste! © 2010 Karen Martin & Associates 69
  • 69. Eight Wastes (Muda) Overproduction Motion (people) y Inventory p Transportation Waiting (material/data) Over Processing Over-Processing Underutilized people Errors © 2010 Karen Martin & Associates 70
  • 70. Future State Design Goal: Removing all obstacles to flow ( g (“the thing” should never stop)  Batches  Rework  WIP / Bottlenecks  Handoffs  Setup / changeover  Physical layout  Motion & transportation © 2010 Karen Martin & Associates 71
  • 71. Eight Questions for Future State VSM 1. What are the customer requirements? What’s the takt time? 2. With goods, will we produce to order or to finished g goods inventory? ( y (With services, y you’re almost always y producing to order.) 3. Where can continuous flow be put in place? 4. Where should pull systems b i l 4 Wh h ld ll t be implemented?t d? 5. What is the single point of scheduling? 6. 6 How do we level the load and the mix? 7. What should the management time frame be? 8. What process improvements are necessary to achieve the future state? -- Rother & Shook, Learning to See © 2010 Karen Martin & Associates
  • 72. Future State Design Considerations  Error-proof (including  Balance work to meet incoming customer takt time requirements requests)  Co-locate and cross-  Standardize the work train work teams  Eliminate steps / handoffs  Implement pull  Eliminate waste  Implement visual  Combine steps management  Create parallel paths  Organize the workplace  Alter task sequencing and/or so problems are visible timing R d Reduce changeover h  Eliminate or reduce batches  Eliminate motion &  Level demand p transportation © 2010 Karen Martin & Associates 73
  • 73. Building a Lean Enterprise Process Stabilization Tools
  • 74. Building a Lean Enterprise Flow Enabling Tools
  • 75. Future State Icons Supermarket Withdrawal Combined Steps Production Kanban Kanban Arriving Withdrawal Withd l in Batches Kanban Eliminated Step Signal Kanban Max 8 “things” First-In Buffer Stock Kanban FIFO First-Out Post (max WIP defined) Leveling, Kanban OXOX Mix d/ Mi and/or Path Volume Kaizen Burst
  • 76. Value Stream Mapping Projected Results j Projected Projected % Metric Current State Future State Improvement Lead Time Process Time % Activity Rolled First Pass Yield Labor Effort 77
  • 77. Value Stream Mapping Process Define D fi Products (good or services) with Product Family common process steps Foundation (the basis) for the F d ti (th b i ) f th Document Current future state; 70-80% accurate is State acceptable (directionally correct) Create flow by eliminating waste Design Future it is now obvious from your 3 Day State current state map); typically 3-6 at Repea Event months out Create Include accountability and Implementation Plan timeframes for completion ti f f l ti Implement! The Th goal of mapping! l f i !
  • 78. Future State Implementation Plan Value Stream Outpatient Imaging Implementation Plan Review Dates Executive Sponsor Allen Ward 11/1/2007 Value Stream Champion Sally McKinsey 11/21/2007 Value Stream Mapping Facilitator Dave Parks 12/13/2007 Date Created 10/18/2007 1/10/2008 Block Implementation Schedule (weeks) Date Goal / Objective Improvement Activity Type Owner # 1 2 3 4 5 6 7 8 9 10 11 12 Complete Implement standard work for referral 2 Improve quality of referral KE Sean O'Ryan process Reduce lead time beween schedulingand Dianne 3, 4 Cross-train and colocate work teams PROJ preregistration steps Prichard Eliminate the need for two patient check- Michael 5, 6 Collect copays in Imaging KE ins O'Shea Dianne 6 Eliminate bottleneck in waiting area g Balance work / level demand KE Prichard Pi h d Eliminate lead time associated with 9 Implement voice recognition technology PROJ Sam Parks transcription step 10 Eliminate batched reading Reduce setup required KE Sam Parks Reduce inventory costs, regulatory risk Michael 7 5S CT supplies area; implement kanban KE and storage needs O'Shea 12 Reduce delay in report delivery Implement additional fax ports PROJ Martha Allen Increase percentage of physicians 12 Reduce delay in report delivery y p y receiving electronic delivery ( g y (rather than KE Martha Allen hard copy) Approvals Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date:
  • 79. PACE Prioritization Matrix Policy 21 5 10 I.T. IT Easy 6 15 13 Process ion mentati 2 20 14 23 18 17 25 7 Ease of Implem 9 26 16 1 8 12 22 24 19 27 4 E Difficult t 11 3 High Low Anticipated Benefit 80
  • 80. About Karen Martin  Early career as a scientist; migrated to quality & operations design in the mid 80’s mid-80 s.  Launched Karen Martin & Associates in 1993, focusing on operations design and Total Quality Management. Management  Began applying “white collar” lean in 2001.  Co-author of The Kaizen Event Planner: Achieving Rapid Improvement i Offi A hi i R id I t in Office, Service, and Technical Environments; co- developer of Metrics-Based Process Mapping: An Excel-Based Solution Excel Based Solution. Karen Martin, Principal Karen Martin & Associates  University of California, San Diego Lean Enterprise program instructor.  F more information: www.ksmartin.com For i f ti k ti © 2010 Karen Martin & Associates 81