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

Webinar
January 21, 2014
Welcome!
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www.ksmartin.com/subscribe
© 2014 The Karen Martin Group, Inc.
 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

2013 Shingo 
Prize winner!

www.ksmartin.com/subscribe
3
Before the webinar…
• The materials are available on:
– www.ksmartin.com/files/webinarmaterials/01‐21‐
2014_slides.pdf (or _handout.pdf)

After the webinar…
• Recordings:
–
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www.vimeo.com/karenmartingroup
www.youtube.com/karenmartingroup
www.slideshare.net/karenmartingroup
www.ksmartin.com/webinars

• Materials:
– www.slideshare.net/karenmartingroup
© 2014 The Karen Martin Group, Inc.

4
More VSM Webinars!
11:00 am‐12:15 pm PT
• 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
© 2014 The Karen Martin Group, Inc.

5
www.ksmartin.com/VSM

© 2014 The Karen Martin Group, Inc.

6
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. 

© 2014 The Karen Martin Group, Inc.

7
Value Stream Defined
Value Stream: All of the activities required to
transform a customer request into a good or service.
Value Stream
Process

Customer
Request

Process

Process

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

© 2014 The Karen Martin Group, Inc.

8
Work: Degrees of Granularity
Value 
Stream

Macro       
Perspective
•
•
•

Define strategic 
direction (“what”) 
Heavy leadership 
involvement
Value Stream 
Mapping

Process

Process

Micro 
Perspective

Process
•
•

Step

© 2014 The Karen Martin Group, Inc.

Step

Step

•

Identify the  
tactical “how”
Heavy frontline 
involvement
Metrics‐Based  
Process Mapping

9
Value Stream Mapping Benefit:
Seeing the Whole

Value Stream Mapping enables a           
mapping team to get ABOVE the work
© 2014 The Karen Martin Group, Inc.

10 10
Basic Current State Value Stream Map: 
3 Sections
1

2

3

© 2014 The Karen Martin Group, Inc.

11
Basic Value Stream Map: Future State
1

Customer

IT interface
Standard
work

Error
proof

IT-1

Crosstrain

Modified
approvals
2

Process 1

3

Crosstrain

Process 2

Function A
1 items

IT-2

LT = 1 days
PT = 10 mins.
%C&A = 99%

Process 3

Function C
5 items

5

4

Standard
work

Function E
10 items

3
LT = 2 days
PT = 120 mins.
%C&A = 95%

4
LT = 0.5 days
PT = 30 mins.
%C&A = 95%

1 days

2 days

0.5 days

Total LT = 3.5 days

10 mins.

120 mins.

30 mins.

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

© 2014 The Karen Martin Group, Inc.

12
Basic Value Stream
Future State Performance Metrics
Current State 

Projected
Future State 

Projected
% Improvement

9.5 days

3.5 days

63.2%

180 minutes

160 minutes

11.1%

Activity Ratio

3.9%

9.5%

143.6%

Rolled % Complete & 
Accurate

30.0%

89.3%

197.7%

Metric
Total Lead Time
Total Process Time

Other?
Other?

© 2014 The Karen Martin Group, Inc.

13
Value Stream Mapping: 
Visualize the delivery of customer value on a single sheet of paper

© 2014 The Karen Martin Group, Inc.

14
Value Stream Mapping Activity
Phases and Timing
Repeat

Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

4 Weeks Prior 
to Mapping

Three Consecutive Days

Following 
Mapping

Tuesday
January 7, 2014

Tuesday
January 21, 2014

Tuesday
February 18, 2014

© 2014 The Karen Martin Group, Inc.

15
Create the Current State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Value stream walk #1
2. Layout the map
3. Value stream walk #2
4. Add map details
5. Add timeline; calculate 
summary metrics
16
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

© 2014 The Karen Martin Group, Inc.

17
Post‐it Note Convention
after Value Stream Walk #1
Process 
(verb/noun)
Function(s)

© 2014 The Karen Martin Group, Inc.

18
Create the Current State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Value stream walk #1
2. Layout the map
3. Value stream walk #2
4. Add map details
5. Add timeline; calculate 
summary metrics
19
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

100%

100%

Serial   
processes

Parallel 
processes
Minimal branching is acceptable on a 
Value Stream Map
Create the Current State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Value stream walk #1
2. Layout the map
3. Value stream walk #2
4. Add map details
5. Add timeline; calculate 
summary metrics
23
2nd Walk ‐ Gain a Deeper Understanding
• 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)
24
Lead Time vs. Process Time
Lead Time (LT) 

Work is Idle

Work 
Received

Process Time 
(PT)

Work is Idle

Work passed to 
next process or 
department

Lead Time = Elapsed time; Throughput time; turnaround time
Process Time = Touch time; work time; cycle time
© 2014 The Karen Martin Group, Inc.

25
Measuring Process Quality
Customer

Process 
1

© 2014 The Karen Martin Group, Inc.

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%

© 2014 The Karen Martin Group, Inc.

27
Value Stream Walk #2:
Which systems/applications and other  means are            
used to convey information?

Emailing 
work

Hand 
carrying 
work
Post‐it Note Convention 
after Value Stream Walk #2

Significant
barriers to 
flow
# People who 
typically do 
the work

%C&A

PT
LT
29
Quantifying WIP: 
3 Places Work Can Accumulate
Create the Current State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Value stream walk #1
2. Layout the map
3. Value stream walk #2
4. Add map details
5. Add timeline; calculate 
summary metrics
31
Value Stream Map: Map Details
Create the Current State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Value stream walk #1
2. Layout the map
3. Value stream walk #2
4. Add map details
5. Add timeline; calculate 
summary metrics
33
Value Stream Map 
Summary Timeline
Golden State Equipment, Inc.
Capital Equipment Value Stream
Metric

Current State

Timeline PT

Projected %
Improvement

46.0 hours*

Timeline LT

Projected
Future State

44.0 days*

LT – RFQ
(CS blocks 2-4)

LT – PO-Dev
(CS blocks 6-10)

Activity Ratio
(full value stream)

Rolled %C&A

11 days
27 days
13.1%
4.8%

* 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.
© 2014 The Karen Martin Group, Inc.

35
Briefing #1
Purpose: Reduce resistance to future state design

36
Briefing #2
Purpose: Build consensus around future state design

37
Briefing #3
Purpose: Gain commitment re: improvement priorities, 
ownership,  resources needed, and timeline.

38
Value Stream Mapping Charter
Scope

Accountable Parties

Logistics

Executive
Allen Ward
Sponsor

Value Stream Capital equipment
Specific Engineer to order, requires both hardware &
Conditions software customization

Event Dates July 24-26, 2013
& Times 8:00 am - 5:00 pm

Value Stream
Nancy Little
Champion

Demand Rate 1,000 per year

Base-camp
Surf's Up - Room A
Location

Facilitator Dave Parks

Trigger Customer submits RFQ
First Step Sales reviews the RFQ

Logistics
Dave Parks
Coordinator

Last Step Production ships product
Boundaries & No new software; only minor changes to existing IT
Limitations systems; no additional staff; no budget changes

Meals
Continential breakfast & lunch
Provided

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

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

Current State Problems & Business Needs

Briefing
July 24, 25, & 26
Dates &
4:00-5:00 pm
Times

Mapping Team

1 Desire to stay ahead of the competition & deepen customer loyalty.

Function / Title

Name

2 Forecasted growth of 15% for next fiscal year.

1 Sales, Director

Sean Michaels

3 Unclear & incorrect information flowing through value stream.

2 IT, Director

Diana Marie

4 Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks

3 Finance, Controller

Dave Gerald

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

4 Scrum Master

Ryan Austin

5 Engineering, Vice President

Nancy Little

1 Reduce RFQ lead time by a minimum of 50%.

6 Manufacturing, Director

Ambreen Motiwala

2 Reduce PO to software development lead time by a minimum of 50%.

7 Customer Service, Manager

Danny Tran

3 Improve quality of information flowing throughout value stream.

8 Customer (contract manufacturer)

Contact Information

JR Hunt

Goals & Measurable Target Conditions

4

9

5

10

Benefits to Customers & Business

On-Call Support

1 Faster delivery; less hassle; less cost.

Function

Name

2 Better working relationships between sales, estimating & engineering.

1 Planning / Purchasing, Planner Lourdes Dwyer

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

2 Production Supervisor

4

Contact Information

3

5

Tom St. James

4

Relevant Data

Agreement

1 Sales effectiveness: RFQ conversion rate.

Executive Sponsor

Value Stream Champion

Facilitator

2 Financial: Estimate-to-actual cost comparison.
3 Operational: LT in segments (RFQ to quote; PO to development).

Signature:

Signature:

Signature:

4

Date:

Date:

Date:

© 2014 The Karen Martin Group, Inc.

39
Create the Future State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Determine the “right work”
2. Make the right work flow
3. Manage the right work

40
Create the Future State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Determine the “right work”
2. Make the right work flow
3. Manage the right work

41
Golden State Equipment, Inc.
Capital Equipment Value Stream
Current State

Projected
Future State

Projected %
Improvement

Timeline PT

46.0 hours

34.3 hrs

25.4%

Timeline LT

44.0 days

23.0 days

47.7%

11 days

7 days

36%

27 days

9 days

67%

13.1%

18.6%

42%

4.8%

53.4%

1,013%

Metric

LT – RFQ
(CS blocks 2-4)

LT – PO-Dev
(CS blocks 6-10)

Activity Ratio
(full value stream)

Rolled %C&A

© 2014 The Karen Martin Group, Inc.

42
Create the Future State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

1. Determine the “right work”
2. Make the right work flow
3. Manage the right work
Ownership
KPIs (Key Performance Indicators)
Visual Management
Frequency of Improvement

43
Create the Future State Map: 5 Steps
Prepare

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Execute 
Transformation 
Plan

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

44
Prioritization Grid
Creating the Transformation Plan

45
Value Stream Transformation Plan
Value Stream Outpatient Imaging

Scheduled Review Dates

Executive Sponsor Allen Ward
Value Stream Champion Paul Scanner
Value Stream Mapping Facilitator Dave Parks

1-Nov-12
21-Nov-12
13-Dec-12

Date Created 10/18/2012
FS VSM
Block #

Measurable Target

10-Jan-13

Proposed Countermeasure

Exec.
Method*

Owner

Improve quality of referral to 85%

Implement standard work for referral
process

KE

Cross-train and co-locate work teams

Proj

Only one check in per patient

Collect copays in Imaging

KE

Reduce wait time in waiting area by 50% Balance work / level demand

KE

Eliminate 6 hour lead time associated
with transcription step

Implement voice recognition technology

Proj

Eliminate redundant data entry

Auto populate between PACS and
Meditech

Proj

Visually managed inventory; no outages
or expired items

5S CT supplies area; implement kanban

KE

Reduce imaging LT to one hour

Value-stream specific radiologists

Proj

Reduce report delivery LT to 30 minutes

Increase % of physicians receiving
electronic delivery

Proj

Reduce LT at image review to 1 day

Visual metrics and indicators

JDI

9

10 11 12

Status

Martha
Allen

7

8

Martha
Allen

8

7

Michael
O'Shea

6

6

Dave
Gerald

5

5

Dave
Gerald

7

4

Dianne
Marie

6

3

Ryan
Austin

4

2

Dianne
Marie

4

1

Sean
Michaels

Reduce lead time between scheduling
and preregistration step to 45 minutes

Planned Timeline for Execution

Dave
Gerald

2
3,4

Agreement
Executive Sponsor

Value Stream Champion

Value Stream Mapping Facilitator

Signature:

Signature:

Signature:

Date:

Date:

Date:

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

© 2014 The Karen Martin Group, Inc.

46
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.”

© 2014 The Karen Martin Group, Inc.

47
“The new bible for value stream mapping.”
—Art Byrne, author, The Lean Turnaround

Amazon: www.bitly.com/VSMbk
More info: www.ksmartin.com/VSM
© 2014 The Karen Martin Group, Inc.

48
For Further Questions

Karen Martin, President
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Blog & newsletter:  www.ksmartin.com/subscribe

© 2014 The Karen Martin Group, Inc.

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