Value Stream Mapping: What to Do Before You Dive In

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Value Stream Mapping is a powerful way to improve performance across a large portion of an enterprise. But, before you dive into mapping, there are significant steps you must take to assure a successful outcome. In this webinar, award-winning author, Karen Martin shares the proper preparation an organization must take to reap the full set of benefits Value Stream Mapping offers.

Topics 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 & communication – how do you make sure everyone is engaged and prepared?

Watch this webinar for a no-nonsense discussion about the key success factors and common failings in preparing to value stream map.

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Value Stream Mapping: What to Do Before You Dive In

  1. Lean simplified. Everything you need… all in one place. Value Stream Mapping: What to do before you dive in © 5S Supply 2014
  2. Welcome to Value Stream Mapping: What to do before you dive in The webinar will be starting shortly Please read Our formal presentation will run from 12:00 pm - 12:45 pm CDT. The final 15 minutes will be dedicated to your Questions & Answers. Please feel free to submit your questions at any time during our session. Submit them in writing (as the phone lines and microphones are muted) in the Questions section of your webinar control panel. If you have any technical issues during our event please call GoToWebinar at 800-263-6317 and be sure to give our Webinar ID 259-740-031 This webinar audio portion is offered in VOIP (through your computer’s speakers) or by dial-in. For dial-in call 877-309-2074 and enter Access Code 508-806-781. Your telephone line will be muted to diminish any background noise. © 5S Supply 2014
  3. Questions © 5S Supply 2014
  4. Questions © 5S Supply 2014
  5. Activate • Let’s get started! • There will be a slight delay while we start the  recording © 5S Supply 2014
  6. Value Stream Mapping: What to Do Before you Dive in Webinar hosted by 5S Supply January 28, 2014
  7.  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 Just released! 2013 Shingo  Prize winner! www.ksmartin.com/subscribe 7
  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? © 2014 The Karen Martin Group, Inc. 8
  9. 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. 9
  10. 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
  11. 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 11
  12. VSM Enables Systems Thinking Individual Efficiency = Sub‐optimization System Efficiency = Optimal Value Stream Performance  © 2014 The Karen Martin Group, Inc. 12
  13. Value Stream Maps: Strategy Before Tactics Where am I?  Where do I want  to go? Which route  should I take? I‐80 option © 2014 The Karen Martin Group, Inc. ? ? ? I‐40 option I‐70 option 13
  14. Value Stream Mapping Benefit: Reaching Leadership Consensus © 2014 The Karen Martin Group, Inc. 14
  15. Basic Current State Value Stream Map:  3 Sections 1 2 3 © 2014 The Karen Martin Group, Inc. 15
  16. 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. 16
  17. 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 User defined User defined © 2014 The Karen Martin Group, Inc. 17
  18. Enterprise‐Wide Value Stream © 2013 The Karen Martin Group, Inc. 18
  19. Value Stream Maps ≠ Process Flow Charts © 2014 The Karen Martin Group, Inc. 19
  20. Value Stream Maps ≠ Swim Lane Process Maps Current State Metrics-Based Process Map 0 PT Units 1 0 Seconds Hours Minutes Days LT Units 15 6 -1 0 Seconds Hours Minutes Days 1 Customer Diane O'Shea Sean Michaels Sam Parks Sally Dampier Michael Prichard Specific Conditions Domestic orders through sales force Occurrences per Year 37,500 Hours Worked per Day 8 Date Mapped 25-Jun-08 Step # ► Function / Department Mapping Team Process Details Process Name Order Fulfillment 1 2 Activity PT LT %C&A Fax PO to Sales Rep 0 0 Ryan Austin Mary Townsend Facilitator Dave Morgan 3 4 45% PT LT %C&A Activity PT LT %C&A Review PO; clarify with customer as needed 20 2 90% Fax PO to warehouse 10 4 Activity PT LT %C&A Activity PT LT %C&A Check inventory levels; notify Sales Rep re: status 2 Sales Rep Activity 5 90% 5 4 95% Fax PO to Sales Rep 5 0.33 90% 5 Finance 6 Warehouse / Shipping Critical Path PT Critical Path LT Rolled %C&A Total PT 0 20 0 45% 0 10 2 90% 20 5 4 90% 10 5 4 0.33 95% 5 90% 5 Metrics‐Based Process Mapping is used to improve tactically & define standard work  © 2014 The Karen Martin Group, Inc. 20
  21. Value Stream  Mapping Executing  Transformation  Plan Making  Specific   Improvements © 2014 The Karen Martin Group, Inc. 21
  22. Value Stream Mapping Activity Phases and Timing Repeat Prepare 4 Weeks Prior  to Mapping © 2013 The Karen Martin Group, Inc. Understand  Current State Design Future State Develop  Transformation  Plan Three Consecutive Days Execute  Transformation  Plan Following  Mapping 22
  23. Activity Preparation Prepare Understand  Current State Design Future State Develop  Transformation  Plan Execute  Transformation  Plan 1. Engage executive sponsor 2. Draft charter 3. Socialize charter 4. Plan logistics (including Gemba walk) 5. Gather data 6. Deliver VSM overview © 2014 The Karen Martin Group, Inc. 23
  24. 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. © 2014 The Karen Martin Group, Inc. 24
  25. 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 © 2014 The Karen Martin Group, Inc. 25
  26. Charter: Critical planning, communication, and consensus‐building tool Value Stream Mapping Charter Scope Accountable Parties Logistics Executive Required: typically VP or C-level Sponsor Value Stream Value stream being improved Value Stream If needed—often director or Champion manager level Specific What circumstances are included and excluded? Conditions (e.g., type of customer, geographic location, etc.) Demand Rate How many times is this done per wk, qtr, mo, or yr? Facilitator Trigger What initiates the process? First Step Task on first process block Required: skilled, objective person leading the activity 3 days typically; consecutive Event Dates is best; 6 hrs per day & Times minimum; 7 or 8 hrs is best Base-camp On-site, ample wall space, Location quiet/private location Logistics Not always needed Coordinator Last Step Task on last process block Boundaries & What is the team NOT authorized to change? Limitations Meals Always a nice touch; keeps Provided the team from wandering Briefing List the the people that are Attendees required to attend the briefings (**) ** required and those whose attendance is *optional optional (*). Improvement Time Typically 3-6 months Frame Current State Problems & Business Needs Aids in consensus building Briefing and organizational learning. Dates & Typically the last hour of the Times day. Mapping Team Function 1 What's driving the need for improvement? 2 3 Contact Information 2 4 Name 1 Leadership-heavy 3 5 4 Measurable Target Condition 5 1 Reduce <defined metric> from X to Y (Z% improvement). 6 2 Increase <defined metric> from X to Y (Z% improvement). 7 3 8 4 9 5 10 Benefits to Customers & Business On-Call Support Function 1 How will the business, internal and external customers, and 2 internal and external suppliers benefit from value stream improvement? 3 Contact Information 2 4 Name 1 SMEs that may not be needed full time 3 5 4 Relevant Data Agreement Executive Sponsor 1 What data is required to understand relevant current state isues. Value Stream Champion Facilitator 2 Examples: work volume & volume variation, process quality & 3 effectiveness, market trends, customer satisfaction, employee Signature: Signature: Signature: 4 engagement, financials, lead time, safety records, etc. Date: Date: Date: © 2014 The Karen Martin Group, Inc. 26
  27. Value Stream Mapping Charter Scope Accountable Parties Logistics Executive Required: typically VP or C-level Sponsor Value Stream Value stream being improved Value Stream If needed—often director or Champion manager level Specific What circumstances are included and excluded? Conditions (e.g., type of customer, geographic location, etc.) Demand Rate How many times is this done per wk, qtr, mo, or yr? Facilitator Trigger What initiates the process? First Step Task on first process block Required: skilled, objective person leading the activity 3 days typically; consecutive Event Dates is best; 6 hrs per day & Times minimum; 7 or 8 hrs is best Base-camp On-site, ample wall space, Location quiet/private location Logistics Not always needed Coordinator Last Step Task on last process block Boundaries & What is the team NOT authorized to change? Limitations Meals Always a nice touch; keeps Provided the team from wandering Briefing List the the people that are Attendees required to attend the briefings (**) ** required and those whose attendance is *optional optional (*). Improvement Time Typically 3-6 months Frame Current State Problems & Business Needs Aids in consensus building Briefing and organizational learning. Dates & Typically the last hour of the Times day. Mapping Team Function 1 What's driving the need for improvement? 2 3 Contact Information 2 4 Name 1 Leadership-heavy 3 5 4 Measurable Target Condition 5 1 Reduce <defined metric> from X to Y (Z% improvement). 6 2 Increase <defined metric> from X to Y (Z% improvement). 7 3 8 4 9 5 10 Benefits to Customers & Business On-Call Support Function 1 How will the business, internal and external customers, and 2 internal and external suppliers benefit from value stream improvement? 3 Contact Information 2 4 Name 1 SMEs that may not be needed full time 3 5 4 Relevant Data Agreement Executive Sponsor 1 What data is required to understand relevant current state isues. Value Stream Champion Facilitator 2 Examples: work volume & volume variation, process quality & 3 effectiveness, market trends, customer satisfaction, employee Signature: Signature: Signature: 4 engagement, financials, lead time, safety records, etc. Date: Date: Date: © 2014 The Karen Martin Group, Inc. 27
  28. Value Stream Scoping Diagram Defining Specific Conditions Medical/Surgical Inpatient Intensive Care Pediatric Patient care X‐Rays Vaccine Clinic CT Scans Potential selection criteria: • Highest volume? • Highest margin? • Most painful? • Most supportive  leadership? © 2013 The Karen Martin Group, Inc. Outpatient Imaging MRI OB/GYN Services Mammography 28
  29. Value Stream Scoping Diagram Defining Specific Conditions Catalog Configure            to order Custom  hardware Engineer              to order Custom   software Capital  Equipment Golden State  Equipment, Inc. New Product  Development Both Catalog Spares &  subassemblies Engineer to  order © 2014 The Karen Martin Group, Inc. 29
  30. 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 © 2014 The Karen Martin Group, Inc. 30
  31. Value Stream Mapping Charter Scope Accountable Parties Logistics Executive Required: typically VP or C-level Sponsor Value Stream Value stream being improved Value Stream If needed—often director or Champion manager level Specific What circumstances are included and excluded? Conditions (e.g., type of customer, geographic location, etc.) Demand Rate How many times is this done per wk, qtr, mo, or yr? Facilitator Trigger What initiates the process? First Step Task on first process block Required: skilled, objective person leading the activity 3 days typically; consecutive Event Dates is best; 6 hrs per day & Times minimum; 7 or 8 hrs is best Base-camp On-site, ample wall space, Location quiet/private location Logistics Not always needed Coordinator Last Step Task on last process block Boundaries & What is the team NOT authorized to change? Limitations Meals Always a nice touch; keeps Provided the team from wandering Briefing List the the people that are Attendees required to attend the briefings (**) ** required and those whose attendance is *optional optional (*). Improvement Time Typically 3-6 months Frame Current State Problems & Business Needs Aids in consensus building Briefing and organizational learning. Dates & Typically the last hour of the Times day. Mapping Team Function 1 What's driving the need for improvement? 2 3 Contact Information 2 4 Name 1 Leadership-heavy 3 5 4 Measurable Target Condition 5 1 Reduce <defined metric> from X to Y (Z% improvement). 6 2 Increase <defined metric> from X to Y (Z% improvement). 7 3 8 4 9 5 10 Benefits to Customers & Business On-Call Support Function 1 How will the business, internal and external customers, and 2 internal and external suppliers benefit from value stream improvement? 3 Contact Information 2 4 Name 1 SMEs that may not be needed full time 3 5 4 Relevant Data Agreement Executive Sponsor 1 What data is required to understand relevant current state isues. Value Stream Champion Facilitator 2 Examples: work volume & volume variation, process quality & 3 effectiveness, market trends, customer satisfaction, employee Signature: Signature: Signature: 4 engagement, financials, lead time, safety records, etc. Date: Date: Date: © 2014 The Karen Martin Group, Inc. 31
  32. 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 © 2014 The Karen Martin Group, Inc. 32
  33. Who should be on the team, be on call,          and attend briefings? CEO COO VP Quality VP Operations Director,  Manufacturing Manager, Plant  Operations (x3) Supervisor,  Production (x6) VP Engineering Director, Supply  Chain Manager,  Planning (x3) Planner (x3) Manager,  Quality (x3) Director, Product  Development Manager,  Purchasing (x3) Buyer (x8) Team Lead (x12) Manager,  Mechanical  Engineering Mechanical  Engineers Manager,  Electrical  Engineering Electrical  Engineers CFO Controller (x3) Manager,  Application  Engineering Manager,  Finance (x3) CIO VP, Human  Resources Manager,  Human  Resources (x3) VP, Sales VP, Information  Systems VP, Customer  Service Director, Sales Director, IT Director,  Security Director, Service  Centers (x2) Manager,  Estimating Manager,  Customer  Service Manager, Sales  (x4) Scrum Master  (x2) Scrum Team Mapping team On call Attend briefings © 2014 The Karen Martin Group, Inc. 33
  34. Briefing #1 Purpose: Reduce resistance to future state design 34
  35. Briefing #2 Purpose: Build consensus around future state design 35
  36. Briefing #3 Purpose: Gain commitment re: improvement priorities,  ownership,  resources needed, and timeline. 36
  37. 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.  © 2014 The Karen Martin Group, Inc. 37
  38. 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. © 2014 The Karen Martin Group, Inc. 38
  39. For Further Questions Karen Martin, President ksm@ksmartin.com 858.677.6799 Blog & newsletter:  www.ksmartin.com/subscribe Charter:  www.ksmartin.com/downloads © 2014 The Karen Martin Group, Inc. 39 39
  40. Your Questions? © 2014 The Karen Martin Group, Inc. 40
  41. Lean simplified. Everything you need… all in one place. © 5S Supply 2014
  42. Lean simplified. Everything you need… all in one place. Please join us for Value Stream Mapping: Understanding the  Current State Thursday, March 13, 2014 © 5S Supply 2014
  43. Value Stream Mapping “Value Stream Mapping: How to Visualize Work and  Align Leadership for Organizational Transformation” On sale at 5S Supply! $30 (Reg. $40) Save 25%! © 5S Supply 2014
  44. Additional Resources 5S Supply on Social Media 5S Supply Group 5S Supply 5S Supply's photostream © 5S Supply 2014
  45. Lean simplified. Everything you need… all in one place. Don’t forget to visit us at 5S Supply! www.5Ssupply.com © 5S Supply 2014

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