Value Stream Mapping in Non-Manufacturing Environments

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Learn how to create value stream maps to set an improvement strategy in office and service environments. Includes tips regarding the subtle differences between manufacturing and non-manufacturing maps.

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  • 1. Value Stream Mapping in Non-Manufacturing Environments June 15, 2009 Company LOGO
  • 2. Welcome! To new friends and old across the U.S. (28 states) To our global friends in:        Canada India Ireland Mexico Portugal Spain Sweden © 2010 Karen Martin & Associates 2
  • 3. GoToWebinar Attendee Interface Viewer Window Control Panel
  • 4. Two Ways to Listen OR © 2010 Karen Martin & Associates 4
  • 5. Two Ways to Ask Questions 1. Raise your hand – you will be un-muted and can ask verbally. 2. Type your question into the question log. © 2010 Karen Martin & Associates 5
  • 6. Please Provide Feedback as you Exit the Webinar Click File, then Exit – End Webinar © 2010 Karen Martin & Associates 6
  • 7. Your Instructor  Early career as a scientist; migrated to quality & operations design in the mid-80’s.  Launched Karen Martin & Associates in 1993; applied Total Quality Management.  Introduced to Lean in 2000.  Specialize in Lean transformations in nonmanufacturing environments.  Co-author of The Kaizen Event Planner; co-developer of Metrics-Based Process Mapping: An Excel-Based Solution.  Instructor in University of California, San Diego’s Lean Enterprise program. © 2010 Karen Martin & Associates Karen Martin, Principal Karen Martin & Associates 7
  • 8. Learning Objectives Participants will learn:       What a Value Stream Map is – and what it is not. 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. Key differences between manufacturing and office/service VMSs. How to create an implementation plan from the future state VSM. © 2010 Karen Martin & Associates 8
  • 9. Webinar Structure Value Stream Mapping… What is it?  Why is it needed?  What’s a value stream map look like?  How do I create one?  Then what?  © 2010 Karen Martin & Associates 9
  • 10. Value Stream Mapping’s Beginnings Learning to See, Mike Rother & John Shook Administrative & Office Environments The Complete Lean Enterprise, Beau Keyte & Drew Locher
  • 11. Womack’s Five Principles of a Lean Enterprise  Value  Value stream  Flow  Pull  Perfection — Jim Womack, Lean Thinking, 1996, 2003 © 2010 Karen Martin & Associates 11
  • 12. 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 Request © 2010 Karen Martin & Associates Customer Receipt 12
  • 13. The Work We Do: Degrees of Granularity Rooftop View (Strategic) Value Stream Process In the Weeds (Tactical) © 2010 Karen Martin & Associates Step Step Value Stream Map Process Process Step Metrics-Based Process Map 13
  • 14. Improvement Roles Strategic Who? Accountability Tool Leadership “What has to happen” Value Stream Mapping “How it will happen” Kaizen Events, Just-do-its, and Projects Tactical Middle Management Workforce © 2010 Karen Martin & Associates 14
  • 15. Why Value Stream Mapping? To set strategy before diving into tactics. Enables us to SEE the process. Promotes systems thinking / seeing the whole  Helps us avoid sub-optimizing © 2010 Karen Martin & Associates 15
  • 16. VSM Goal: System Efficiency System Efficiency = Optimal Value Stream Performance Individual Efficiency = Sub-optimization © 2010 Karen Martin & Associates 16
  • 17. Types of Value Streams Product Value Streams   Goods - manufacturing Services Healthcare – ED, inpatient, outpatient Financial Services – banking, loans, credit, investments Repair and maintenance Energy Government Military Professional Services – Accounting, legal, architecture, engineering, etc.  Non-Profit services        Support Value Streams Value Stream “Segments” © 2010 Karen Martin & Associates 17
  • 18. Types of Value Streams (continued)  Product Value Streams  Support Value Streams       Recruiting and Hiring Process Tech Support Accounts Receivable Payroll Physician credentialing Billing  Value Stream “Segments”      Order fulfillment Product development New account set-up Laboratory services Imaging services © 2010 Karen Martin & Associates 18
  • 19. Why Value Stream Mapping? (continued) Shows the linkage between information and material flow. Makes the disconnects and obstacles to flow visible at a macro level Metrics-based decision making: What are you going to do to affect the numbers? © 2010 Karen Martin & Associates 19
  • 20. Key Metrics: Time Process time (PT)    The time it takes to actually perform the work, if one is able to work on it uninterrupted Includes task-specific doing, talking, and thinking 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 the chain aka throughput time, turnaround time, elapsed time Includes Process Time, not merely waiting time. © 2010 Karen Martin & Associates 20
  • 21. Lead Time vs. Process Time Scenario 1 Lead Time Process Time Work Received Work passed to next step LT = PT + Waiting / Delays © 2010 Karen Martin & Associates 21
  • 22. Lead Time vs. Process Time Scenario 2 Lead Time Process Time Work passed to next step Work Received LT = PT + Waiting / Delays © 2010 Karen Martin & Associates 22
  • 23. Summary Metrics: Time % Activity (also referred to as Activity Ratio)      The percentage of time anything is being done to the work passing through the system (whether value-adding or 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 23
  • 24. 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. © 2010 Karen Martin & Associates 24
  • 25. 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. RFPY = %C&A x %C&A x %C&A… Common finding = 0-15% Multiply ALL %C&A’s, even if parallel processes © 2010 Karen Martin & Associates 25
  • 26. Current State Value Stream Map Supplies Purchasing - Current State VSM Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Form File File Maker Quicken Vendor Website Excel ERP Data Entry Review Budget 2 Review Req. Finance PT = 5 mins. C&A = 60% 0.25 days 4 hrs. PT = 5 mins. C&A = 95% 0.5 days 5 mins. 20 Reqs Review 4 Requisition 40 hrs. PT = 5 mins. C&A = 90% 8 hrs. PT = 5 mins. C&A = 100% 1 days 5 mins. 8 hrs. 7 10 Reqs 1 PT = 10 mins. C&A = 95% 4 hrs. PT = 15 mins. C&A = 98% 0.5 days 10 mins. Approve in ERP 24 hrs. PT = 5 mins. C&A = 90% 3 days 15 mins. Submit PO to Supplier 8 63 Reqs 9 10 External Supplier Corp Purchasing Manager 1 Admin Asst Financial Mgr 1 1 days 5 mins. Enter Requisition Review 6 Requisition IS Manager 1 1 5 days 5 mins. Review 5 Requisition Sys Engineer Supervisor 2 6 2 hrs. 3 Corp Purchasing 6 56 hrs. PT = 15 mins. C&A = 98% 7 days 5 mins. 80 hrs. PT = 20 mins. 10 days 15 mins. LT = 28.4 days PT = 65 mins. AR = 0.477% RFPY = 4.2% Customer Demand: 615 requisitions per y ear PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 27. Future State Value Stream Map Supplies Purchasing - Future State VSM Purchasing — Non-repetitive purchases less than $5,000 Additional IT access Enter Req. in ERP Integrate Form File with File Maker 1 Originator 31 PT=30 mins. C&A = 85% Supplies Requisition Checklist Vendor Websites File Maker Cross Training Approval Additional IT access 2 4 hrs. 6 hrs. 0.75 days 5 mins. Place Order 3 4 5 External Supplier 6 PT=20 mins. 80 hrs. PT=20 mins. C&A = 98% 1 days 5 mins. Dedicated Buyers Corp Purchasing 8 hrs. PT=5 mins. C&A = 90% PT=5 mins. C&A = 95% 0.5 days Approve in ERP Dept. Manager 1 Supervisor 2 Use budget in place of Quicken Auto Notify Standard Work for review Review Req. ERP 10 days 20 mins. LT = 12.3 days PT = 30 mins. AR = 0.508% Customer Demand: 615 requistions per year PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activity Ratio (PT/LT x 100) RFPY = Rolled First Pass Yield RFPY = 71%
  • 28. Purchasing Process Projected Results Metric Lead Time Process Time % Activity Rolled First Pass Yield # Handoffs # IT Systems Freed capacity © 2010 Karen Martin & Associates Current State Projected Future State % Improvement 28.4 days 12.3 days 56.7% 65 mins 0.48% 30 mins 0.51% 53.8% 6.3% 4.2% 71.0% 1,590% 10 6 5 3 50% 50% 2.1 FTEs 10%
  • 29. Summary Metrics: Measuring Productivity Gains Labor Effort # FTEs = Total PT (in hrs) X # occurrences/year 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 29
  • 30. 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  Do a better job with fewer errors and higher safety  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 30
  • 31. Order Initiation Current State Map Demand = XXXX May 8, 2008 Robert Parker Information Flow 2 3 Timeline 1 Product Flow Key VSM Components Production Control SUPPLIER Process 1 I Process 2 Hours Hours Minutes I Process 3 Hours Minutes CUSTOMER I Hours Minutes Process 4 LT Minutes PT
  • 32. 3 Product Flow 2 Timeline 1 Information Flow Key VSM Components Office / Service ABC Value Stream Current State Map Demand = XXXX/yr Date Key Contact CUSTOMER I.T. Process 1 Process 2 Hours Minutes I.T. I.T. Process 3 Hours Minutes Process 4 Hours Minutes LT Minutes PT
  • 33. Basic Mapping Icons External Organization Push Arrow Operator / Employee I Work-in-Process Material receipts & shipments Go See Scheduling Process Block PT= 25 m C/O= 40 m 2 Shifts Takt= 60m Manual Information Flow In-box Data Block Hours Lead Time Process Time Minutes Movement by Truck Electronic Information Flow Hours Minutes Timeline Hours Minutes Minutes
  • 34. Current State Value Stream Map Outpatient Imaging Services Pre-register Patient Customer Demand: 15 patients perDay (Takt Time 1920seconds) 8 hours per day Schedule Appointment Referring Physician Hospital 4 3 5 Lead Time = 24 days 2 6 Lead Time = 990 mins. Cycle Time = 30 mins. Lead Time = 990 mins. % C&A = 100 % Demand = 15 per day 1 Lead Time = 12 mins. Cycle Time = 11 mins. Lead Time = 12 mins. % C&A = 98 % % C&A = 65 % CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel ADS Internet Meditech Fax Order Solutions Waiting Room Management System PACS Auto Fax 50% Us Mail 25% MD Mailbox 25% Rework Loop via Fax 25% of the time Check-in Patient (Admitting) Prep Patient (Tech) Check-in Patient (Imaging) Complete Exam (Tech) Transmit Images (Tech) Read/Dictate Exam (Radiologist) Transcribe Report (MDI) Review Draft/Sign (Radiologist) Print Reports (Imaging) Send Reports (Imaging) 5 mins. 5 5 5 mins. Cycle Time = 2 mins. % C&A = 90 % 0.0833 hrs. 3 Cycle Time = 1 mins. % C&A = 98 % 0.0833 hrs. 2 mins. 6 45 mins. 2 0.75 hrs. 1 mins. 7 30 mins. Cycle Time = 10 mins. % C&A = 100 % 2 0.5 hrs. 10 mins. 8 5 mins. Cycle Time = 15 mins. % C&A = 90 % 2 0.0833 hrs. 15 mins. 9 248 mins. Cycle Time = 3 mins. % C&A = 100 % 2 10 4.13 hrs. 3 mins. 365 mins. Cycle Time = 15 mins. % C&A = 95 % 6 11 6.08 hrs. 15 mins. 960 mins. Cycle Time = 5 mins. % C&A = 75 % 2 12 16 hrs. 5 mins. 110 mins. Cycle Time = 1 mins. % C&A = 95 % 2 1.83 hrs. 1 mins. 13 120 mins. Cycle Time = 1 mins. % C&A = 99 % 6 2 hrs. 1 mins. 14 Cycle Time = 3 mins. % C&A = 90 % LT = 32.5 hrs. 3 mins. CT = 56 mins. CT/LT Ratio = 2.87% Rolled First Pass yield = 29% VSM Champion: Paul Scanner Created: July 17, 2007
  • 35. Future State Value Stream Map Outpatient Imaging Services Standard Work Work Balance Demand = 15 per day Customer Demand: 15 patients perDay (Takt Time1920 seconds) 8 hours per day Co-locate Schedule appt Pre-register Referring Physician Hospital 3 Lead Time = 15 days 2 6 1 Lead Time = 45 mins. Cycle Time = 11 mins. Lead Time = 45 mins. % C&A = 98 % % C&A = 85 % Risk Reduction (Joint Commision) Symposium E Pay Excel Internet Waiting Room Management System Work Balancing Standard Work 3 35 mins. 4 Cycle Time = 1 mins. % C&A = 98 % 0.0833 hrs. 2 Complete Exam (Tech) 5 20 mins. Cycle Time = 10 mins. % C&A = 100 % 0.583 hrs. 1 mins. 2 Transmit Images (Tech) 6 5 mins. Cycle Time = 10 mins. % C&A = 90 % 0.333 hrs. 10 mins. Visual Workplace Set-up Reduction Prep Patient (Tech) Check-in Patient (Imaging) Fax Order Solutions PACS Auto Fax 80% Us Mail 15% MD Mailbox 5% 5S Value Stream Alignment Pull System (Supplies Kanban) Remove Check in and Reduce System Access 5 mins. Meditech CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate 2 7 120 mins. 2 Review Draft/Sign (Radiologist) 420 mins. Cycle Time = 15 mins. % C&A = 95 % 2 hrs. 2 mins. 8 Batch Reductions Voice Recognition Read/Dictate Exam (Radiologist) Cycle Time = 2 mins. % C&A = 100 % 0.0833 hrs. 10 mins. Continuous Flow 2 Print Reports (Imaging) 9 2 mins. Cycle Time = 1 mins. % C&A = 95 % 7 hrs. 15 mins. Rework Loop via Fax 10% of the time 2 30 mins. Cycle Time = 1 mins. % C&A = 99 % 0.0333 hrs. 1 mins. 10 Send Reports (Imaging) 6 0.5 hrs. 1 mins. 11 Cycle Time = 3 mins. % C&A = 90 % LT = 11.3 hrs. 3 mins. CT = 43 mins. CT/LT Ratio = 6.32% Rolled First Pass yield = 40% VSM Champion: Paul Scanner Created: July 18, 2007
  • 36. Outpatient Imaging Projected Results Metric Current State Projected % Future State Improvement Lead Time 32.5 hrs 11.3 hrs 65% Process Time Percent Activity Rolled First Pass Yield # Macro Steps Tech turnover (annual) 56 mins 2.9% 43 mins 6.3% 23% 117% 29% 40% 38% 14 11 21% 100% 25% 75% Note: Freed capacity (PT reductions) allowed the organization to earn $500,000 additional annual revenue with no additional headcount © 2010 Karen Martin & Associates 36
  • 37. Value Stream Mapping Process Products (good or services) with common process steps Document Current State Repeat Define Product Family Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Design Future State Create flow by eliminating waste it is now obvious from your current state map); typically 3-6 months out Create Implementation Plan Implement! 3 Day Event Include accountability and timeframes for completion The goal of mapping!
  • 38. Value Stream Mapping Planning Your Activity © 2010 Karen Martin & Associates 38
  • 39. Value Stream Mapping Activity Team-based Heavily weighted with those who can authorize an innovative future state.   Typically manager and above The team goes to the gemba to obtain the metrics from those doing the work. Three day activity; three deliverables. Leadership learning is a significant side benefit. Key success factor - interim briefings to communicate and achieve consensus. © 2010 Karen Martin & Associates 39
  • 40. Value Stream Mapping Charter Event Scope Leadership / Coordination Schedule Value Stream Executive Sponsor Event Date(s) Specific Conditions Value Stream Champion Start/End Times Facilitator Location Logistics Coordinator Meals Provided? Customer Demand Takt Time First Step Last Step Boundaries & Limitations Briefing(s) Date & Time Required Briefing Attendees FS Implementation Timeframe Event Drivers / Current State Issues Gemba Walk Date & Time Mapping Team Function 2 Name 2 4 Contact Information 1 3 Name Function 1 3 5 4 Event Goals & Measurable Objectives 5 1 6 2 7 3 8 4 9 5 10 Projected Deliverables On-Call Support 1 Current State Value Stream Map 2 Future State Value Stream Map 1 3 Implementation Plan 2 4 Contact Information 3 5 4 Potential Obstacles to Event Success 1 Approvals Executive Sponsor Value Stream Champion Facilitator 2 3 4 Signature: Date: Signature: Date: Signature: Date: 40
  • 41. Scoping: One VSM per “Product Family” Group Product Families by similar downstream processes, steps or equipment. Process Steps & Equipment Step A Step C Product ABC X X Product XYZ Products Step B X X Product AWR X Step F X X X 50 X X X 73 X X X Product ACC Product SUB X X X X X © 2010 Karen Martin & Associates 2 X X 5 15 X X X Product IDR Vol. Step E X Product IBM Step D X X X 12 X 1 41
  • 42. Narrowing the Scope: Selected Specific Conditions Non-Exempt Staff Replacements Exempt Staff Hiring Process New Positions Non-Exempt Staff Exempt Staff © 2010 Karen Martin & Associates 42
  • 43. Narrowing the Scope: Selecting Specific Conditions Units Domestic Consumables Warranty Service Parts Order Fulfillment Process NonWarranty Units International Consumables Warranty Service Parts NonWarranty 43
  • 44. Value Stream Mapping Process Products (good or services) with common process steps Document Current State Repeat Define Product Family Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Design Future State Create flow by eliminating waste it is now obvious from your current state map); typically 3-6 months out Create Implementation Plan Implement! 3 Day Event Include accountability and timeframes for completion The goal of mapping!
  • 45. The VSM Event 3 days Sequestered team composed primarily of those who can authorize change Schedule  Day 1 – Document and analyze the current state  Go to the Gemba!   Day 2 – Design the future state (3-6 months out) Day 3 – Create the implementation plan Interim briefings (preferably daily) to non-team leadership © 2010 Karen Martin & Associates 45
  • 46. 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? Challenge policies Day 3 – here’s how we’re going to execute   Priorities, approach, timeframes, accountability Obtain final buy-in right then and there © 2010 Karen Martin & Associates 46
  • 47. Value Stream Mapping Process Products (good or services) with common process steps Document Current State Repeat Define Product Family Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Design Future State Create flow by eliminating waste it is now obvious from your current state map); typically 3-6 months out Create Implementation Plan Implement! 3 Day Event Include accountability and timeframes for completion The goal of mapping!
  • 48. 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 lanes, it’s not a VSM. © 2010 Karen Martin & Associates 48
  • 49. 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 49
  • 50. Step 1 Label your map       Value stream name Current or future state Customer demand (volume of work per time period) Takt time (if relevant) Date Facilitator’s name (and/or team) © 2010 Karen Martin & Associates 50
  • 51. Takt Time: The Key to Continuous Flow Available work time Takt time = “Touch down” Customer demand 480 minutes/day Takt time = 45 new accounts = 10.6 mins OR… Time Available divided by what Kustomer Takes © 2010 Karen Martin & Associates 51
  • 52. 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. 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 52
  • 53. Post-it Conventions Process (Verb/Noun) Function # Staff (if relevant) Barriers to flow
  • 54. 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 any scheduling that occurs (rare in current state) Who tells whom to do what? © 2010 Karen Martin & Associates 54
  • 55. Current State Value Stream Map Supplies Purchasing - Current State VSM Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Form File File Maker Quicken Vendor Website Excel ERP Data Entry Review Budget 2 Review Req. Finance PT = 5 mins. C&A = 60% 0.25 days 4 hrs. PT = 5 mins. C&A = 95% 0.5 days 5 mins. 20 Reqs Review 4 Requisition 40 hrs. PT = 5 mins. C&A = 90% 8 hrs. PT = 5 mins. C&A = 100% 1 days 5 mins. 8 hrs. 7 10 Reqs 1 PT = 10 mins. C&A = 95% 4 hrs. PT = 15 mins. C&A = 98% 0.5 days 10 mins. Approve in ERP 24 hrs. PT = 5 mins. C&A = 90% 3 days 15 mins. Submit PO to Supplier 8 63 Reqs 9 10 External Supplier Corp Purchasing Manager 1 Admin Asst Financial Mgr 1 1 days 5 mins. Enter Requisition Review 6 Requisition IS Manager 1 1 5 days 5 mins. Review 5 Requisition Sys Engineer Supervisor 2 6 2 hrs. 3 Corp Purchasing 6 56 hrs. PT = 15 mins. C&A = 98% 7 days 5 mins. 80 hrs. PT = 20 mins. 10 days 15 mins. LT = 28.4 days PT = 65 mins. AR = 0.477% RFPY = 4.2% Customer Demand: 615 requisitions per y ear PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 56. 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 push systems Hollow arrow for material flow Connect and I.T. systems © 2010 Karen Martin & Associates 56
  • 57. Post-it Conventions Process Block # Process (Verb/Noun) Function # Staff (if relevant) Barriers to flow PT (process time) % Complete & Accurate LT (Lead time)
  • 58. Depicting e-Information Flow I.T. Application Process Block I.T. Application Arrow pointing to I.T. application: Staff enters data I.T. Application Process Block Process Block #1 I.T. Application Arrow pointing from I.T. application: Staff views data Two-headed arrow: Staff both views and enters data #2 I.T. Application Lightning bolt arrow: Application #1 auto-populates application #2 58
  • 59. Current State Value Stream Map Supplies Purchasing - Current State VSM Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Material flow Form File File Maker Quicken Vendor Website Excel ERP ERP autopopulates P.O. Data Entry Review Budget 2 Review Req. Finance PT = 5 mins. C&A = 60% 0.25 days 4 hrs. PT = 5 mins. C&A = 95% 0.5 days 5 mins. 20 Reqs Review 4 Requisition 40 hrs. PT = 5 mins. C&A = 90% 8 hrs. PT = 5 mins. C&A = 100% 1 days 5 mins. 8 hrs. 7 10 Reqs 1 PT = 10 mins. C&A = 95% 4 hrs. PT = 15 mins. C&A = 98% 0.5 days 10 mins. Approve in ERP 24 hrs. PT = 5 mins. C&A = 90% 3 days 15 mins. Submit PO to Supplier 8 63 Reqs 9 10 External Supplier Corp Purchasing Manager 1 Admin Asst Financial Mgr 1 1 days 5 mins. Enter Requisition Review 6 Requisition IS Manager 1 1 5 days 5 mins. Review 5 Requisition Sys Engineer Supervisor 2 6 2 hrs. 3 Corp Purchasing 6 56 hrs. PT = 15 mins. C&A = 98% 7 days 5 mins. 80 hrs. PT = 20 mins. 10 days 15 mins. LT = 28.4 days PT = 65 mins. AR = 0.477% Push Arrow RFPY = 4.2% Customer Demand: 615 requisitions per y ear PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 60. Step 5 Add key metrics for all process blocks    Process Time (PT) Lead Time (LT) Percent Complete & Accurate (%C&A) Add additional obstacles to flow if any are identified (e.g. batches, shared resources system availability/speed, etc.) Add the WIP (work-in-process) for all process blocks. © 2010 Karen Martin & Associates 60
  • 61. Post-it Conventions Process Block # Process (Verb/Noun) Function # Staff (if relevant) Barriers to flow PT (process time) % Complete & Accurate LT (Lead time)
  • 62. 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, but hasn’t been passed on WIP WIP WIP Step 1 © 2010 Karen Martin & Associates Step 2 Step 3 62
  • 63. Current State Value Stream Map Supplies Purchasing - Current State VSM Purchasing — Non-repetitive purchases less than $5,000 Inititate Req. 1 Originator 31 PT = 10 mins. C&A = 10% Supplies Hard Copy Form File File Maker Quicken Vendor Website Excel ERP Data Entry Review Budget 2 Review Req. Finance PT = 5 mins. C&A = 60% 0.25 days 4 hrs. PT = 5 mins. C&A = 95% 0.5 days 5 mins. 20 Reqs Review 4 Requisition 40 hrs. PT = 5 mins. C&A = 90% 8 hrs. PT = 5 mins. C&A = 100% 1 days 5 mins. 8 hrs. 7 10 Reqs 1 PT = 10 mins. C&A = 95% 4 hrs. PT = 15 mins. C&A = 98% 0.5 days 10 mins. Approve in ERP 24 hrs. PT = 5 mins. C&A = 90% 3 days 15 mins. Submit PO to Supplier 8 63 Reqs 9 10 External Supplier Corp Purchasing Manager 1 Admin Asst Financial Mgr 1 1 days 5 mins. Enter Requisition Review 6 Requisition IS Manager 1 1 5 days 5 mins. Review 5 Requisition Sys Engineer Supervisor 2 6 2 hrs. 3 Corp Purchasing 6 56 hrs. PT = 15 mins. C&A = 98% 7 days 5 mins. 80 hrs. PT = 20 mins. 10 days 15 mins. LT = 28.4 days PT = 65 mins. AR = 0.477% RFPY = 4.2% Customer Demand: 615 requisitions per y ear WIP PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield
  • 64. Step 6 Create timeline & calculate summary metrics Timeline PT Sum  Timeline LT Sum  % Activity Ratio (AR)  Rolled First Pass Yield (RFPY)  © 2010 Karen Martin & Associates 64
  • 65. How to Treat Lead Time in Office/Service Environments Lead Time Process Time Process 1 LT Process 2 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 65
  • 66. Value Stream Mapping Projected Results Metric Current State Projected Future State Projected % Improvement Lead Time Process Time % Activity Rolled First Pass Yield Labor Effort Others, as relevant 66
  • 67. Typical Current State Findings Unnecessary NVA Available to work on Value Add Necessary NVA Available to next step Islands of activity (process times) within long lead times. © 2010 Karen Martin & Associates 67
  • 68. Step 7 Identify all value-adding (VA) and necessary non-value-adding (N) steps   Add “VA” or “N” smaller post-it to relevant process blocks All unnecessary non-value-adding blocks remain unlabelled Enter Order Check Credit Approve Order Customer Rep Finance Sales Rep VA N Value-adding Necessary Non-Value-Adding © 2010 Karen Martin & Associates Unnecessary Non-Value-Adding 68
  • 69. Customer-Defined Value Value-Adding (VA) - any operation or activity your external customers value and are (or would be) willing to pay for. Non-Value-Adding (NVA) - any operation or activity that consumes time and/or resources but does not add value to the product (good or service) the customer receives.   Necessary – support processes, regulatory requirements, etc. Unnecessary – everything else - WASTE © 2010 Karen Martin & Associates 69
  • 70. Work Effort as Defined by the External Customer Unnecessary Nonvalue adding Necessary non-valueadding Value-adding
  • 71. Value Stream Mapping Process Products (good or services) with common process steps Document Current State Repeat Define Product Family Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Design Future State Create flow by eliminating waste it is now obvious from your current state map); typically 3-6 months out Create Implementation Plan Implement! 3 Day Event Include accountability and timeframes for completion The goal of mapping!
  • 72. Designing the Future State Value Stream Target All Waste! © 2010 Karen Martin & Associates 72
  • 73. Eight Wastes (Muda) Overproduction Inventory Waiting Over-Processing Errors © 2010 Karen Martin & Associates Motion (people) Transportation (material/data) Underutilized people 73
  • 74. Future State Design Goal: Removing all obstacles to flow (“the thing” should never stop)        Batches Rework WIP / Bottlenecks Handoffs Setup / changeover Physical layout Motion & transportation © 2010 Karen Martin & Associates 74
  • 75. 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 goods inventory? (With services, you’re almost always producing to order.) 3. Where can continuous flow be put in place? 4. Where should pull systems be implemented? 5. What is the single point of scheduling? 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
  • 76. Future State Design Considerations  Eliminate steps / handoffs  Combine steps  Create parallel paths  Alter task sequencing and/or timing  Implement pull  Reduce / eliminate batches  Improve quality  Create an organized, visual workplace  Reduce changeover  Eliminate motion & transportation  Standardize work  Eliminate unnecessary approvals / authorizations  Stop performing nonvalue adding (NVA) tasks  Co-locate functions based on flow; create cells (teams of crossfunctional staff)  Balance work to meet takt time requirements 76
  • 77. The Right Process Standardize work Mistake proof work Make problems visual Fix problems immediately Create continuous flow Level demand Balance work Create pull systems © 2010 Karen Martin & Associates 77
  • 78. Building a Lean Enterprise Process Stabilization Tools
  • 79. Building a Lean Enterprise Flow Enabling Tools
  • 80. Future State Icons Withdrawal Combined Steps Kanban Arriving in Batches Eliminated Step Max 8 “things” FIFO First-In First-Out (max WIP defined) Production Kanban Withdrawal Kanban Signal Kanban Buffer Stock OXOX Kaizen Burst Supermarket Leveling, Mix and/or Volume Kanban Post Kanban Path
  • 81. Value Stream Mapping Projected Results Metric Current State Projected Future State Projected % Improvement Lead Time Process Time % Activity Rolled First Pass Yield Labor Effort 81
  • 82. Value Stream Mapping Process Products (good or services) with common process steps Document Current State Repeat Define Product Family Foundation (the basis) for the future state; 70-80% accurate is acceptable (directionally correct) Design Future State Create flow by eliminating waste it is now obvious from your current state map); typically 3-6 months out Create Implementation Plan Implement! 3 Day Event Include accountability and timeframes for completion The goal of mapping!
  • 83. 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 Block # 2 Goal / Objective Improve quality of referral Improvement Activity Type KE Implement standard work for referral process Owner Sean O'Ryan PROJ 1/10/2008 Implementation Schedule (weeks) 2 3 4 5 6 7 8 9 10 11 12 Dianne Prichard 3, 4 Reduce lead time beween schedulingand Cross-train and colocate work teams preregistration steps 5, 6 Eliminate the need for two patient checkins Collect copays in Imaging KE Michael O'Shea 6 Eliminate bottleneck in waiting area Balance work / level demand KE Dianne Prichard 9 Eliminate lead time associated with transcription step Implement voice recognition technology PROJ Sam Parks 10 Eliminate batched reading Reduce setup required KE Sam Parks 7 Reduce inventory costs, regulatory risk and storage needs 5S CT supplies area; implement kanban KE Michael O'Shea 12 Reduce delay in report delivery Implement additional fax ports PROJ Martha Allen 12 Reduce delay in report delivery Increase percentage of physicians receiving electronic delivery (rather than hard copy) KE 1 Martha Allen Approvals Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: Date Complete
  • 84. PACE Prioritization Matrix Policy 10 5 Easy I.T. 15 6 13 2 23 18 17 7 16 Process 20 9 8 1 14 25 26 12 22 27 Difficult Ease of Implementation 21 24 4 19 11 3 High Anticipated Benefit Low 84
  • 85. VSM Software iGrafx FlowCharter – my favorite Minitab e-VSM Systems2Win – Excel-based © 2010 Karen Martin & Associates 85
  • 86. Common VSM Facilitation Issues Keeping the team focused on the macro view (rooftop level); it’s tempting to go into the weeds Keeping the team focused on the current state Assuring the team and leadership that directionally correct data is good enough Time management  Schedule Gemba time and conference room time very tightly Getting the right people on the team Getting the right people at the interim briefings © 2010 Karen Martin & Associates
  • 87. Value Stream Mapping Facilitator Range of Necessary Traits  Skills / Knowledge     Improvement tools (root cause analysis, flow-enhancing tools, etc.) Project & time management Mediation; consensus building People effectiveness – from front line workers to execs  Authority / Respect    Designated change agent / influence leader Trustworthy Comfortable removing obstacles & reaching out to senior leadership  Personality / Energy     Naturally curious Challenging, yet supportive Positive, upbeat, energetic Pushy without irritating  Objectivity / Fairness  No attachment to the work being improved © 2010 Karen Martin & Associates 87
  • 88. Common Differences - Manufacturing vs. Office VSMs Manufacturing Office Upper right Center Upper left None “The thing” we’re following Raw material, subassemblies, finished goods Paper, verbal, and electronic Information Information Flow More structured / formalized I.T. systems Multiple I.T. systems and work-arounds Multiple points across VSM Work not scheduled Yes Sometimes Inventory triangle In-bin (if preferred) First Pass Yield (FPY) Percent Complete & Accurate (%C&A) Takt Time Typically can be applied Only applicable with dedicated resources LT determination for each block Based on WIP between process blocks Based on a single item passing through Customer icon Supplier icon Schedule notification Material flow (via hollow arrow) WIP icon Quality Metric
  • 89. Learning Objectives Participants will learn:       What a Value Stream Map is – and what it is not. 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. Key differences between manufacturing and office/service VMSs. How to create an implementation plan from the future state VSM. © 2010 Karen Martin & Associates 89
  • 90. Resources to Learn About Metrics-Based Process Mapping The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Environments (Chapter 12) Metrics-Based Process Mapping: An Excel-Based Solution Webinar on work standardization – Tuesday, August 10. © 2010 Karen Martin & Associates 90
  • 91. Your Questions  Level of leadership involvement needed (Ram)  Software programs (Arnoldo)  How to VSM in hospitals (many), laboratory settings (Lynn & Linda), state governments (Cindy), construction (Marc) and office areas in manufacturing (many).  How to create linear VSMs in a world of “swim lane” processes (David).  How to begin VSM’ing (been doing Lean but never VSM’d) (Bonnie)  How to and when to VSM (Carlos).  Who decides what “value” is in the process (Helen). © 2010 Karen Martin & Associates 91
  • 92. Your Questions (continued)  Difference between VSM and other process mapping techniques – advantages & disadvantages (Kathryn).  How non-manufacturing environments benefit from VSMs. (Manuel)  How to use the VSM as a communication tool (Landy)  How to enact VSM without 5S (Sheila).  How to VSM capital program planning (Robert) and lab billing department (Linda).  How to define product families (Mike).  How to roll out the technique to the business (Glenda). © 2010 Karen Martin & Associates 92
  • 93. For Further Questions Karen Martin, Principal 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com © 2010 Karen Martin & Associates 93