To subscribe: http://ksmartin.com/subscribe To purchase the book: http://bit.ly/VSMbk These are slides from a talk given on 1/8/14 in San Diego, California at SME Connect's Operations Roundtable. Too many organizations today suffer from silo-centric behavior and intra-organizational conflict. And yet most don’t understand what’s holding them back from achieving outstanding performance. This is where Karen Martin’s new book Value Stream Mapping comes into play. Value stream mapping can unleash the full potential of an organization and deliver greater customer value, increased profit margins, and create fulfilling work environments. In this talk, Karen discussed how to: • Prepare and engage your leadership team in the transformation process • Gain a deep understanding about your current work systems and the related barriers to delivering value • Design a future state that enables outstanding performance on all fronts • Adopt a new design and lay the foundation for continued improvement

1. Value Stream Transformation:
Achieving Excellence through Leadership Alignment
and Holistic Design
CONNECT
January 8, 2014

2. Why Value Stream Mapping?
Why Now?
© 2014 The Karen Martin Group, Inc.
To order from Amazon: www.bitly.com/VSMbk
For more information: www.ksmartin.com/VSM
2

3. Value Stream Mapping’s Roots
•
•
•
•
•
Value
Value Stream
Flow
Pull
Perfection
1996
© 2014 The Karen Martin Group, Inc.
3

4. Value Stream Defined
Value Stream: All of the activities required to
transform a customer request into a good or service.
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.
4

5. Silo-Centric vs. Value Stream Thinking
Function
Function
Function
Function
Support Value Stream
Value stream
segment
Core Value Stream
Value stream
segment
Support Value Stream
© 2014 The Karen Martin Group, Inc.
5

6. Value Stream Mapping’s Roots
Mike Rother & John Shook
1999
Beau Keyte & Drew Locher
2004
Whenever there is a product for a customer,
there is a value stream.
The challenge lies in seeing it.
© 2014 The Karen Martin Group, Inc.
— Mike Rother & John Shook, Learning to See
6

7. Value Stream Mapping: Common Failings
•
•
•
•
•
•
•
Using the mapping process solely as a work design exercise
Using the map to make tactical improvements
Creating maps but taking no action
Mapping with an inappropriate team—or no team at all
Creating value stream maps during a kaizen event
Creating maps with no metrics
Mapping without a team charter or not socializing it
© 2014 The Karen Martin Group, Inc.
7

8. Value Stream Thinking: 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
8

9. Value Stream Mapping Benefit:
Reaching Leadership Consensus
© 2014 The Karen Martin Group, Inc.
9

10. Value Stream Mapping enables a
mapping team to get ABOVE the work
© 2014 The Karen Martin Group, Inc.
10

11. VSM Promotes Systems Thinking
Individual Efficiency = Sub-optimization
System Efficiency = Optimal Value Stream Performance
© 2014 The Karen Martin Group, Inc.
11

12. Work: Degrees of Granularity
Macro
Perspective
•
•
•
Value
Stream
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
12

13. Work: Degrees of Granularity
Order Fulfillment Value Stream
Order
Fulfillment
Strategic
Value-stream
Perspective
Quote
Tactical
Process-level
Perspective
© 2014 The Karen Martin Group, Inc.
Design
Produce
Fabricate
Assemble
Ship
13

14. Value Stream Mapping:
Visualize your Entire Operation on a Single Sheet of Paper
© 2014 The Karen Martin Group, Inc.
14

15. Basic Value Stream Map:
3 Sections
ABC Technology, Inc.
Current State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
1
Customer
1
Information
Flow
IT-1
IT-2
3
2
4
5
6
Process 1
Work
Flow
1 items
Process 3
Process 4
Process 5
Function A
2
Process 2
Function B
Function C
Function D
Function E
5
11
Timeline
LT = 0.5 days
PT = 5 mins.
%C&A = 75%
480 mins.
240 mins.
10 mins.
3
LT = 1 days
PT = 10 mins.
%C&A = 50%
5 mins.
45 items
3
LT = 5 days
PT = 120 mins.
%C&A = 85%
10 items
7
4
LT = 2 days
PT = 30 mins.
%C&A = 99%
LT = 1 days
PT = 15 mins.
%C&A = 95%
5 days
2 days
480 mins.
120 mins.
30 mins.
15 mins.
Total LT = 9.5 days
Total PT = 180 mins.
Activ ity Ratio = 3.9%
Rolled %C&A = 30.0%
© 2014 The Karen Martin Group, Inc.
15

16. Basic Value Stream Map:
Future State
ABC Technology, Inc.
Future State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
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
5
Process 3
Function C
5 items
LT = 1 days
PT = 10 mins.
%C&A = 99%
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
© 2014 The Karen Martin Group, Inc.
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%
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. Value Stream
Mapping
Executing
Transformation
Plan
© 2014 The Karen Martin Group, Inc.
Making
Specific
Improvements
18

19. Value Stream Mapping Activity
Phases and Timing
Repeat
Prepare
4 Weeks Prior
to Mapping
© 2014 The Karen Martin Group, Inc.
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Three Consecutive Days
Execute
Transformation
Plan
Following
Mapping
19

20. Charter: Critical planning, communication, and consensus-building tool
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
Briefing
Attendees
** required
*optional
Improvement Time Future state design is fully realized by
Frame December 31, 2013.
Meals
Continential breakfast & lunch
Provided
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
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
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)
JR Hunt
4
Contact Information
Sean Michaels
9
Goals & Measurable Target Conditions
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.
3 Freed capacity to absorb additional business w/o increasing staff.
2 Production Supervisor
4
Contact Information
1 Planning / Purchasing, Planner Lourdes Dwyer
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.
20

21. Charter: Critical planning, communication, and consensus-building tool
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
Briefing
Attendees
** required
*optional
Improvement Time Future state design is fully realized by
Frame December 31, 2013.
Meals
Continential breakfast & lunch
Provided
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
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
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)
JR Hunt
4
Contact Information
Sean Michaels
9
Goals & Measurable Target Conditions
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.
3 Freed capacity to absorb additional business w/o increasing staff.
2 Production Supervisor
4
Contact Information
1 Planning / Purchasing, Planner Lourdes Dwyer
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.
21

22. Charter: Critical planning, communication, and consensus-building tool
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
Briefing
Attendees
** required
*optional
Improvement Time Future state design is fully realized by
Frame December 31, 2013.
Meals
Continential breakfast & lunch
Provided
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
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
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)
JR Hunt
4
Contact Information
Sean Michaels
9
Goals & Measurable Target Conditions
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.
3 Freed capacity to absorb additional business w/o increasing staff.
2 Production Supervisor
4
Contact Information
1 Planning / Purchasing, Planner Lourdes Dwyer
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.
22

23. Charter: Critical planning, communication, and consensus-building tool
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
Briefing
Attendees
** required
*optional
Improvement Time Future state design is fully realized by
Frame December 31, 2013.
Meals
Continential breakfast & lunch
Provided
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
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
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)
JR Hunt
4
Contact Information
Sean Michaels
9
Goals & Measurable Target Conditions
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.
3 Freed capacity to absorb additional business w/o increasing staff.
2 Production Supervisor
4
Contact Information
1 Planning / Purchasing, Planner Lourdes Dwyer
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.
23

24. Value Stream Scoping Diagram
Defining Specific Conditions
Catalog
Configure
to order
Custom
hardware
Engineer
to order
Custom
software
New Product
Development
Both
Capital
Equipment
Golden State
Equipment, Inc.
Catalog
Spares &
subassemblies
Engineer to
order
© 2014 The Karen Martin Group, Inc.
24

25. Where should the “fenceposts” be?
Function
Activity
Marketing
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
© 2014 The Karen Martin Group, Inc.
Generates sales leads
Conducts 90-day follow-up
25

26. Who should be on the team, serve on-call,
and attend daily briefings?
© 2014 The Karen Martin Group, Inc.
26

27. Charter: Critical planning, communication, and consensus-building tool
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
Briefing
Attendees
** required
*optional
Improvement Time Future state design is fully realized by
Frame December 31, 2013.
Meals
Continential breakfast & lunch
Provided
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
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
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)
JR Hunt
4
Contact Information
Sean Michaels
9
Goals & Measurable Target Conditions
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.
3 Freed capacity to absorb additional business w/o increasing staff.
2 Production Supervisor
4
Contact Information
1 Planning / Purchasing, Planner Lourdes Dwyer
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.
27

28. Create the Current State Map
Prepare
1.
2.
3.
4.
5.
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Value stream walk #1
Layout the map
Value stream walk #2
Add map details
Add timeline; calculate
summary metrics
28

29. Effective Way to Visualize Relationships between
IT Systems and the Operation
© 2014 The Karen Martin Group, Inc.
29

30. Create the Future State Map
Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
1. Define the “right work”
2. Make the right work flow
3. Manage the right work
30

31. How will you realize the future state?
Prepare
Understand
Current State
Develop
Transformation
Plan
Design
Future State
Execute
Transformation
Plan
Value Stream Transformation Plan
Value Stream
Executive Sponsor
Value Stream Champion
Value Stream Mapping Facilitator
Date Created
FS VSM
Block #
2
Measurable Target
Scheduled Review Dates
Outpatient Imaging
Allen Ward
1-Nov-12
Paul Scanner
21-Nov-12
Dave Parks
13-Dec-12
10/18/2012
10-Jan-13
Proposed Countermeasure
Exec.
Method*
Owner
Planned Timeline for Execution
1
2
3
4
5
6
7
8
9
10 11 12
Status
Improve quality of referral to 85%
Implement standard work for referral
process
KE
Sean
Michaels
100%
Reduce lead time between scheduling
and preregistration step to 45 minutes
Cross-train and co-locate work teams
Proj
Dianne
Marie
75%
4
Only one check in per patient
Collect copays in Imaging
KE
Ryan
Austin
50%
4
Reduce wait time in waiting area by 50% Balance work / level demand
KE
Dianne
Marie
50%
6
Eliminate 6 hour lead time associated
with transcription step
Implement voice recognition technology
Proj
Dave
Gerald
50%
7
Eliminate redundant data entry
Auto populate between PACS and
Meditech
Proj
Dave
Gerald
25%
5
Visually managed inventory; no outages
or expired items
5S CT supplies area; implement kanban
KE
Michael
O'Shea
100%
6
Reduce imaging LT to one hour
Value-stream specific radiologists
Proj
Martha
Allen
25%
8
Reduce report delivery LT to 30 minutes
Increase % of physicians receiving
electronic delivery
Proj
Martha
Allen
0%
7
Reduce LT at image review to 1 day
Visual metrics and indicators
JDI
Dave
Gerald
100%
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)
31

32. Where the rubber meets the road…
Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
• Accountability rests with executive sponsor
• Monthly status meetings
• Adjust plan as new discoveries are made
32

33. And then repeat…
33

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
0.0833 hrs.
2 mins.
6
Cycle Time = 1 mins.
% C&A = 98 %
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%

35. Future State Value Stream Map
Outpatient Imaging Services
Standard
Work
Work
Balance
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
Demand = 15 per day
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%

36. Outpatient Imaging
Value Stream Improvement Results
Current
State
Improved
State
%
Improvement
LT
32.5 hrs
11.3 hrs
65%
PT
AR
RFPY
# Steps
56 mins
2.9%
29%
14
43 mins*
6.3%
40%
11
23%
117%
38%
21%
100%
25%
75%
Metric
Tech turnover
(annual)
* This reduction (freed capacity) enabled the client to collect $500K more in annual
revenue without incurring additional labor or equipment expenses.

37. Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
Supplies Purchasing - Current State VSM
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
Requisition
Review
5
Requisition
PT = 5 mins.
C&A = 90%
8 hrs.
PT = 5 mins.
C&A = 100%
1 days
5 mins.
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
8 hrs.
1 days
5 mins.
Enter
Requisition
Review
6
Requisition
IS Manager
1
1
40 hrs.
5 days
5 mins.
4
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

38. Future State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
Supplies Purchasing - Future State VSM
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
2
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
4 hrs.
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 T ime
LT = Lead T ime
C&A = % Complete & Accurate
AR = Activity Ratio (PT /LT x 100)
RFPY = Rolled First Pass Yield
RFPY = 71%

39. Purchasing Process
Projected Results
Current
State
Projected
Future State
%
Improvement
28.4 days
12.3 days
56.7%
65 mins
30 mins
53.8%
Activity Ratio
0.48%
0.51%
6.3%
Rolled %C&A
4.2%
71.0%
1,590%
# Handoffs
10
5
50%
# IT Systems
6
3
50%
Metric
Total Lead Time
Total Process Time
%C&A = Correct & accurate (Quality)

40. Value Stream Mapping:
As Much Art as Science
© 2014 The Karen Martin Group, Inc.
40

41. Available Now!
To order from Amazon: www.bitly.com/VSMbk
For more information: www.ksmartin.com/VSM
© 2014 The Karen Martin Group, Inc.
41

42. 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.
42