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Learning Objectives

Participants will learn:
            What V l St
             Wh t a Value Stream Map is – and what it i not.
                                    M i        d h t is t
            Key differences between manufacturing and
             office/service VSMs.
            Best practices for holding a Value Stream Mapping
             activity.
            How to define office & service product families.
            Step-by-step approach for creating current and future
             state maps
                    maps.
            How to create an implementation plan from the future
             state VSM.


© 2010 Karen Martin & Associates                                     2
Value Stream            Administrative & Office
Mapping’s Beginnings          Environments




     Learning to See,      The Complete Lean Enterprise,
Mike Rother & John Shook     Beau Keyte & Drew Locher
Womack’s Five Principles of a
                                        Lean Enterprise

   Value
   Value stream
   Flow
   Pull
   Perfection
                                     — Jim Womack Lean Thinking, 1996 2003
                                           Womack,     Thinking 1996,




© 2010 Karen Martin & Associates                                             4
Value Stream Defined

     Value Stream: All of the activities, required to
      fulfill a customer request from order to delivery
      (and beyond to cash received).

                                    Value Stream

                      Process        Process       Process



                                                                    Custom er




    Customer                                             Customer
     Request                                              Receipt



© 2010 Karen Martin & Associates                                                5
The Work We Do:
                                          Degrees of Granularity

 Rooftopp                                               Value     Value Stream
   View                                                               Map
(Strategic)                                             Stream


                                              Process   Process     Process



  In the                                                           Metrics-Based
  Weeds                            Step        Step      Step      Process Map
(Tactical)
(        )


© 2010 Karen Martin & Associates                                                   6
Improvement Roles

                  Who?             Accountability         Tool
      ategic




                  Leadership       “What has to happen”
                                                happen    Value Stream
   Stra




                                    What
                                                          Mapping
               Middle
               Management
        cal




                  Workforce        “How it will happen”   Kaizen Events
                                                                 Events,
   Tactic




                                    How
                                                          Just-do-its,
                                                          and Projects


© 2010 Karen Martin & Associates                                           7
Why Value Stream Mapping?

To set strategy before diving into
 tactics.
 t ti
            The future state VSM is a macro
             level blueprint for change; road map
Enables us to SEE the process.
Promotes s stems thinking /
           systems
 seeing the whole
            Helps us avoid sub optimizing
                            sub-optimizing



© 2010 Karen Martin & Associates                               8
VSM Goal: System Efficiency




 System Efficiency =
Optimal Value Stream
    Performance



                                    Individual Efficiency =
                                       Sub-optimization




© 2010 Karen Martin & Associates                                 9
Types of Value Streams

  Product Value Streams
  Support Value Streams
  Value Stream “Segments”




© 2010 Karen Martin & Associates                            10
Types of Value Streams

 Product Value Streams
            Goods – wide range of manufactured p
                             g                  products
            Services
                 Healthcare – Emergency department patient flow, surgical patient flow,
                  outpatient testing
                 Financial Services – credit application process, mortgage process,
                  equipment leasing process
                 Education – college application to arrival
                 Repair and maintenance – wind blade repair oil field maintenance
                                                          repair,       maintenance,
                  refrigeration system service and repair
                 Energy – Nuclear energy production, Oil production
                 Government – Property tax assessment and processing
                 Law enforcement – undercover operations, background check process
                 Military – radar system development, troop deployment
                 Non-Profit services – Donation processing, disaster aid process
                 Etc.

© 2010 Karen Martin & Associates                                                           11
Types of Value Streams
                                        (continued)
   Value Stream “Segments”
               Order fulfillment
               Product development
               New account set-up
               Laboratory services
               Imaging services
   Support Value Streams
               Recruiting, hiring and onboarding process
               Revenue cycle
               Information Technology request fulfillment
               Purchasing
               Accounts payable
               Physician credentialing


© 2010 Karen Martin & Associates                             12
Why Value Stream Mapping?
                                           (continued)


Shows the linkage between
 information and material fl
 i f      ti    d   t i l flow.
Makes the disconnects and
 obstacles t fl
   b t l to flow visible at a
                   i ibl t
 macro level
Metrics-based d i i making:
M t i b      d decision     ki
 What are you going to do to
 affect the numbers?



© 2010 Karen Martin & Associates                               13
Key Metrics: Time

Process time (PT)
            The ti
             Th time it takes to actually perform the work, if one is
                        t k t       t ll      f     th     k       i
             able to work on it uninterrupted
            Includes task-specific doing, talking, and thinking
                      task specific
            aka “touch time,” work time, cycle time
Lead time (LT)
           ( )
            The elapsed time from the time work is made available
             until it’s completed and passed on to the next person or
             department in th chain
             d       t    t i the h i
            aka throughput time, turnaround time, elapsed time
            Includes Process Time not merely waiting time
                                 Time,                  time.

© 2010 Karen Martin & Associates                                        14
Lead Time vs. Process Time
                                           Scenario 1

                                         Lead Time




   Work                                 Process Time
                                                           Work passed
  Received                                                 to next step



                           LT = PT + Waiting / Delays
                                           g       y
© 2010 Karen Martin & Associates                                     15
Lead Time vs. Process Time
                                           Scenario 2


                                         Lead Time



                                         Process Time
  Work                                                    Work passed
 Received                                                 to next step



                        LT = PT + Waiting / Delays
                                        g       y
© 2010 Karen Martin & Associates                                    16
Summary Metrics: Time

Activity Ratio (expressed as a percentage)
            The percentage of time anything is being done
             to the work passing through the system
             (whether value-adding or non value adding)
                      value adding non-value-adding)
            %Act = (∑PT ÷ ∑LT) × 100
            100 – %Activity = % Time Work is Idle
            Common finding = 1-10%
            Could also calculate %VA Activity to show how
             little time is spent on value-adding activities.

© 2010 Karen Martin & Associates                                17
Key Metrics: Quality

  %Complete and Accurate (%C&A)
               The percentage of input that’s deemed “usable as is”
                by the person doing the work
               % of incoming work where the downstream customer
                can perform task without having to “CAC”:
                    Correct information or material that was supplied
                    Add information that should have been supplied
                    Clarify information that should have or could have been
                     clearer
               Measured by the immediate downstream customer
                and all subsequent downstream customers.
               Similar to first pass yield in manufacturing
                                               manufacturing.

© 2010 Karen Martin & Associates                                               18
Summary Metrics: Quality

Rolled First Pass Yield (RFPY)
            The percent of value stream output that passes
             through the process “clean,” with no “hiccups,”
             no rework required.
                        required
            RFPY = %C&A x %C&A x %C&A…
            Common fi di = 0 15%
             C         finding 0-15%
            Multiply ALL %C&A’s, even if parallel processes




© 2010 Karen Martin & Associates                               19
Current State Value Stream Map
                                   Purchasing — Non-repetitive purchases less than $5,000

                                                                                                                                         Inititate Req.    1

                                                                                                                                              Originator
                                                                                                                                         31
                                                                                                                                         PT = 10 mins.
                                                                                                                                         C&A = 10%
                                                                                                                                                                                                                                           Supplies
                            Hard Copy




                                                                                                                                                                              Vendor
                       Form File                               File Maker                               Quicken                                   Excel                                                          ERP
                                                                                                                                                                              Website




                                                                                                                  Data Entry




                                                                                           4                                                                                    Enter        7                Approve in    8                    Submit PO
                  Review     2                             3                 Review                           Review 5                              Review 6                                                                                                   9                              10
                                            Review Req.           20 Reqs                                                                                                     Requisition        10 Reqs        ERP             63 Reqs          to Supplier
                  Budget                                                    Requisition                      Requisition                           Requisition
                                                                                                                                                                                                                                                                                   External
                                                                                                                                                                                                            Corp Purchasing                                                        Supplier
                                                                            Sys Engineer                                                                                      Admin Asst                                                    Corp Purchasing
                  Finance                    Supervisor                                                      IS Manager                           Financial Mgr                                                 Manager
              6                              2                               1                                1                                    1                           1                             1
                                                                                                                                                                                                                                             6
2 hrs.       PT = 5 mins.
                     i           4 hrs.     PT = 5 mins.
                                                    i             40 hrs.   PT = 5 mins.       8 hrs.       PT = 5 mins.
                                                                                                                    i           8 hrs.           PT = 10 mins.
                                                                                                                                                          i       4 hrs.     PT = 15 mins.
                                                                                                                                                                                      i           24 hrs.    PT = 5 mins.
                                                                                                                                                                                                                     i           56 hrs.                           80 hrs.     PT = 20 mins.
                                                                                                                                                                                                                                                                                        i
                                                                                                                                                                                                                                            PT = 15 mins.
             C&A = 60%                      C&A = 95%                       C&A = 90%                       C&A = 100%                           C&A = 95%                   C&A = 98%                       C&A = 90%
                                                                                                                                                                                                                                            C&A = 98%


 0.25 days                       0.5 days                         5 days                       1 days                            1 days                           0.5 days                        3 days                         7 days                                      10 days               LT = 28.4 days
                  5 mins.                     5 mins.                            5 mins.                          5 mins.                            10 mins.                  15 mins.                         5 mins.                           15 mins.                                         PT = 65 mins.
                                                                                                                                                                                                                                                                                                   AR = 0.477%

                                                                                                                                                                                                                                                                                                   RFPY = 4.2%
                                                                                                                                                                                                     PT = Process Time
                                                                                                                                                                                                     LT = Lead Time
                                                                                                                                 Customer Demand:                                                    C&A = % Complete & Accurate
                                                                                                                               615 requisitions per y ear                                            AR = Activ ity Ratio (PT/LT x 100)
                                                                                                                                                                                                     RFPY = Rolled First Pass Y ield
Future State Value Stream Map
              Purchasing — Non-repetitive purchases less than $5,000
                                                                                  Additional
                                                                                  IT access
                                                                                                 Enter Req.   1
                                                                                                   in ERP


              Integrate Form                                                                     Originator
               File with File                                                                   31
                   Maker                                                                        PT=30 mins.
                                                                                                C&A = 85%

                                                                                                                                                              Supplies
                                                                                                                    Requisition
                                                                                                                     Checklist
                                  Vendor
                                                                           File Maker               ERP
                                  Websites



                                                                                                                                        Use budget in place
                                  Cross                                                                                                     of Quicken
                                                             Auto Notify
                                 Training


              Standard
              Work for
               review                                                       Approval




                                                Additional
                                                IT access                                                                                         Dedicated
                 Review                                                          Approve                                     Place                 Buyers
                             2                                                              3                                            4                                                        5
                  Req.                                                           in ERP                                      Order                                                     External
                                                                                                                                                                                       Supplier
                                                                                   Dept.
                                                                                   Dept
                Supervisor                                                       Manager                               Corp Purchasing
                2                              6 hrs.                            1                                       6                                                         PT=20 mins.
                                                                                                   8 hrs.                                               80 hrs.
4 hrs.
              PT=5 mins.                                                       PT=5 mins.                                PT=20 mins.
              C&A = 95%                                                        C&A = 90%                                 C&A = 98%


   0.5 days                                  0.75 days                                             1 days                                                                10 days                      LT = 12.3 days
                 5 mins.                                                          5 mins.                                    20 mins.                                                                 PT = 30 mins.
                                                                                                                                                                                                      AR = 0 508%
                                                                                                                                                                                                           0.508%
                                                                                                                                                                                                      RFPY = 71%
                                                                                                     PT = Process Time
                                                                                                     LT = Lead Time
                                                          Customer Demand:                           C&A = % Complete & Accurate
                                                        615 requistions per year                     AR = Activity Ratio (PT/LT x 100)
                                                                                                     RFPY = Rolled First Pass Yield
Purchasing Process
                                       Projected Results

                                   Current      Projected          %
           Metric
           M ti                     State
                                    St t       Future State
                                               F t    St t    Improvement
                                                              I         t
  Lead Time                        28.4 days    12.3 days        56.7%
  Process Time                      65 mins      30 mins         53.8%
                                                                 53 8%
  % Activity                         0.48%        0.51%           6.3%
  Rolled First
                                     4.2%         71.0%         1,590%
  Pass Yield
  # Handoffs                          10            5            50%
  # IT Systems                        6             3            50%
  Freed capacity                                2.1 FTEs         10%


© 2010 Karen Martin & Associates
Summary Metrics: Measuring
                                      Productivity Gains

 Labor Effort
                                       Total PT (in hrs) X # occurrences/year
         # FTEs                    =
                                         Available work hrs/year/employee
         Freed
                  = Current State FTEs – Future State FTEs
         Capacity

         Note: Improvement can be expressed as Freed
         Capacity (FTEs), Time, or Labor Expense (or all)

           # FTEs = Full Time Equivalents; 2 half-time people = 1 FTE



© 2010 Karen Martin & Associates                                                23
What do you do with freed capacity?

 Absorb additional work without increasing staff
 Reduce payroll through natural attrition
 Innovate – create new revenue streams
 Conduct ongoing continuous improvement activities
 D a b tt job with f
  Do better j b ith fewer errors and hi h safety
                                      d higher f t
 Talk and work with your customers and suppliers
 Mentor staff to create career growth opportunities
 Provide additional workforce development; cross-train
 Better work/life balance
 Slow down & think
 Get/stay caught up
 Do the things you haven’t been able to get to
 Collaborate with other areas

© 2010 Karen Martin & Associates                          24
Basic Mapping Icons
         External
       Organization
                                                   Push Arrow
                                                                     Operator / Employee

                                 I
                         Work-in-Process       Material receipts
                                                & shipments

      Process Block                                                  Go See Scheduling

                                                    Manual
        PT= 25 m                               Information Flow
        C/O=
        C/O 40 m
                             In-box
        2 Shifts
        Takt= 60m                                                          Movement
                                                    Electronic
        Data Block                                 Information              by Truck
                                                                             y
                                                       Flow


 Lead Time               Hours                 Hours               Hours
Process Time   Minutes               Minutes             Minutes             Minutes

                                        Timeline
Current State Value Stream Map                                                                                                                                                                            Demand = 15 per day
                                                                               Outpatient Imaging Services
                                                                                                                                                                                                                                                       Customer Demand:
                                                                                                                                                                                                                                                        15patients perDay
                                                                                                                                                                                                                                                     (Takt Time1920seconds)
                                                                          Pre-register                                                                      Schedule                                                                                      8 hours per day
                                                                            Patient                                                                        Appointment
                                                                                                                                                                                                                       Referring
              Hospital
                                                                                                                                                                                                                       Physician
                     4                                                                                                                                                                                                           1
                                     Lead Time = 24 days                       5           3                Lead Time = 990 mins.                           6         2              Lead Time = 12 mins.
                                                                     Cycle Time = 30 mins.                                                            Cycle Time = 11 mins.                                                      % C&A = 65 %
                                                                     Lead Time = 990 mins.                                                            Lead Time = 12 mins.
                                                                     % C&A
                                                                     %C&A = 100 %                                                                     % C&A
                                                                                                                                                      %C&A = 98 %



                                                                                                                                                                                                                                                                                      CT=Cycle Time
                                                                                                                                                                                                                                                                                      LT=Lead Time
                                                                                                                                                                                                                                                                                      %C&A=% Complete & Accurate



                         Symposium                   E Pay                         Excel                  ADS                        Meditech                   Internet                                         Fax Order                  PACS
                                                                                                                                                                                      Waiting Room                                                                                            Auto Fax 50%
                                                                                                                                                                                                                 Solutions
                                                                                                                                                                                      Management
                                                                                                                                                                                      M          t                                                                                            Us Mail 25%
                                                                                                                                                                                        System
                                                                                                                                                                                                                                                                                              MD Mailbox 25%


                                                                                                                                                                                                                                                                                                               Rework Loop
                                                                                                                                                                                                                                                                                                               via Fax 25% of
                                                                                                                                                                                                                                                                                                               the time




                                                                                        Prep                         Complete                          Transmit                      Read/Dictate                    Transcribe                        Review                                Print                          Send
                 Check-in                        Check-in
                                                                                       Patient                         Exam                            Images                           Exam                          Report                          Draft/Sign                           Reports                         Reports
                  Patient                          Patient
                                                                                       (Tech)                         (Tech)                            (Tech)                       (Radiologist)                     (MDI)                         (Radiologist)                        (Imaging)                       (Imaging)
                (Admitting)                      (Imaging)
 5 mins.

                 5
                            5     5 mins
                                    mins.
                                                 3
                                                             6     45 mins.           2          7   30 mins.
                                                                                                                      2          8      5 mins.
                                                                                                                                                       2          9    248 mins.
                                                                                                                                                                                       2      10     365 mins.
                                                                                                                                                                                                                      6       11     960 mins.
                                                                                                                                                                                                                                                       2       12     110 mins.
                                                                                                                                                                                                                                                                                          2          13   120 mins.
                                                                                                                                                                                                                                                                                                                          6          14
           Cycle Time = 2 mins.             Cycle Time = 1 mins.           Cycle Time = 10 mins.                Cycle Time = 15 mins.             Cycle Time = 3 mins.           Cycle Time = 15 mins.           Cycle Time = 5 mins.             Cycle Time = 1 mins.               Cycle Time = 1 mins.            Cycle Time = 3 mins.
           % C&A = 90 %                     % C&A = 98 %                   % C&A = 100 %                        % C&A = 90 %                      % C&A = 100 %                  % C&A = 95 %                    % C&A = 75 %                     % C&A = 95 %                       % C&A = 99 %                    % C&A = 90 %


0.0833 hrs.                     0.0833 hrs.                        0.75 hrs.                         0.5 hrs.                         0.0833 hrs.                        4.13 hrs.                   6.08 hrs.                          16 hrs.                          1.83 hrs.                          2 hrs.                          LT = 32.5 hrs.
                  2 mins.                         1 mins.                             10 mins.                        15 mins.                          3 mins.                         15 mins.                       5 mins.                          1 mins.                            1 mins.                         3 mins.          CT = 56 mins.
                                                                                                                                                                                                                                                                                                                                            CT/LT Ratio = 2.87%

                                                                                                                                                                                                                                                                                                                                             Rolled First Pass
                                                                                                                                                                                                                                                                                                                                               yield = 29%




                                                                                                                                                                                                                                                                     VSM Champion: Paul Scanner
                                                                                                                                                                                                                                                                     Created: July 17, 2007
Future State Value Stream Map                                                                                                                                                             Demand = 15 per day
                                                                             Outpatient Imaging Services

                                                                         Standard                                                                                                                                                    Customer Demand:
                    Work                                                                                                 Co-locate
                                                                           Work                                                                                                                                                       15 patients perDay
                   Balance                                                                                                                                                                                                         (Takt Time1920 seconds)
                                                                                               Schedule appt
                                                                                                                                                                                                                                        8 hours per day
                                                                                                Pre-register
                                                                                                                                                                                                Referring
Hospital
                                                                                                                                                                                                Physician
       3                                                                                                                                                                                                    1
                       Lead Time = 15 days                                                       6       2                                   Lead Time = 45 mins.
                                                                                         Cycle Time = 11 mins.                                                                                          % C&A = 85 %
                                                                                         Lead Time = 45 mins
                                                                                                        mins.
                                                                                         % C&A = 98 %
                                                                                                                                                                  Risk
                                                                                                                                                                Reduction
                                                                                                                                                                  (Joint                                                                                    CT=Cycle Time
                                                                                                                                                               Commision)                                                                                   LT=Lead Time
                                                                                                                                                                                                                                                            %C&A=% Complete & Accurate



           Symposium                  E Pay                    Excel                                             Meditech                Internet
                                                                                                                                                                 Waiting Room
                                                                                                                                                                  a g oo
                                                                                                                                                                                          Fax Order                  PACS                                             Auto Fax 80%
                                                                                                                                                                                          Solutions
                                                                                                                                                                 Management                                                                                           Us Mail 15%
                                                                                                                                                                   System                                                                                             MD Mailbox 5%


                                                                                 Pull System                                                                                     Value Stream                                             5S                                             Rework Loop
                                                                                  (Supplies                                                                                       Alignment                                                                                              via Fax 10% of
                                                                                   Kanban)                                                                                                                                                                                               the time
               Remove
                Check in
              and Reduce                                                                                                           Work                                                                                                                 Batch
             System Access                                                                                                        Balancing
                                                                                                                                  B l i                          Visual                                                                               Reductions
                                                                                                                                                                                                                                                      R d ti
                                                         Standard                                                                                               Workplace                                         Voice
                                                           Work                                       Set-up                                                                          Continuous                Recognition
                                                                                                     Reduction                                                                          Flow


                                                                    Prep                          Complete                        Transmit                       Read/Dictate                                                  Review                              Print                            Send
                                  Check-in
                                                                   Patient                          Exam                          Images                            Exam                                                      Draft/Sign                         Reports                           Reports
                                    Patient
                                                                   (Tech)                          (Tech)                          (Tech)                        (Radiologist)                                               (Radiologist)                      (Imaging)                         (Imaging)
                                  (Imaging)


                   5 mins.                          35 mins.                 5     20 mins.                  6     5 mins.                   7    120 mins.                   8                                 420 mins.                 9      2 mins.                   10     30 mins.                   11
                                  3           4                   2                               2                               2                                2                                                           2                                2                                 6

                             Cycle Time = 1 mins.          Cycle Time = 10 mins.          Cycle Time = 10 mins.              Cycle Time = 2 mins.            Cycle Time = 15 mins.                                        Cycle Time = 1 mins.             Cycle Time = 1 mins.              Cycle Time = 3 mins.
                             % C&A = 98 %                  % C&A = 100 %                  % C&A = 90 %                       % C&A = 100 %                   % C&A = 95 %                                                 % C&A = 95 %                     % C&A = 99 %                      % C&A = 90 %


                 0.0833 hrs.                      0.583 hrs.                      0.333 hrs.                      0.0833 hrs.                       2 hrs.                                                       7 hrs.                       0.0333 hrs.                         0.5 hrs.                          LT = 11.3 hrs.
                                   1 mins.                        10 mins.                        10 mins.                         2 mins.                         15 mins.                                                     1 mins.                          1 mins.                           3 mins.          CT = 43 mins.
                                                                                                                                                                                                                                                                                                                    CT/LT Ratio = 6.32%

                                                                                                                                                                                                                                                                                                                     Rolled First Pass
                                                                                                                                                                                                                                                                                                                       yield = 40%




                                                                                                                                                                                                                                               VSM Champion: Paul Scanner
                                                                                                                                                                                                                                               Created: July 18, 2007
Outpatient Imaging
                                     Projected Results

                                   Current      Projected        %
             Metric                 State      Future State Improvement
  Lead Time                        32.5 hrs       11.3 hrs             65%
  Process Time                     56 mins        43 mins               23%
  Percent Activity                  2.9%           6.3%                117%
  Rolled First
                                    29%
                                      %             40%
                                                      %                 38%
                                                                          %
  Pass Yield
  # Macro Steps                      14               11                21%
  Tech turnover
                                    100%            25%                 75%
  (annual)
              Note: Freed
              N t F d capacity (PT reductions) allowed th organization t earn
                               it      d ti    ) ll    d the       i ti to
               $500,000 additional annual revenue with no additional headcount
© 2010 Karen Martin & Associates                                                 28
Value Stream Mapping Process
               Define
               D fi                    Products (good or services) with
           Product Family              common process steps

                                       Foundation (the basis) for the
                                       F    d ti    (th b i ) f th
          Document Current             future state; 70-80% accurate is
               State                   acceptable (directionally correct)

                                       Create flow by eliminating waste
           Design Future               it is now obvious from your
                               3 Day
               State                   current state map); typically 3-6
    at
Repea




                               Event   months out

               Create                  Include accountability and
         Implementation Plan           timeframes for completion
                                       ti f       f         l ti




           Implement!                  The
                                       Th goal of mapping!
                                             l f      i !
Scoping: One VSM per “Product Family”

 Group Product Families by similar downstream processes, steps or equipment.

                                                   Process Steps & Equipment

                                     Step A   Step B    Step C   Step D    Step E   Step F   Vol.
                      Product
                       ABC            X        X          X                    X     X        50
                      Product
                       XYZ            X        X          X                    X     X        73
                      Product
                       IBM                     X                   X           X               2
Products
                      Product
                       AWR            X                   X                    X     X         5
                      Product
                       ACC                     X                   X           X              15
                      Product
                       SUB            X        X                                     X        12
                      Product
                       IDR            X        X          X        X           X     X          1
  © 2010 Karen Martin & Associates                                                             30
Narrowing the Scope:
                                   Selected Specific Conditions

                                                         Non Exempt
                                                         Non-Exempt
                                                            Staff
                                         Replacements
                                                           Exempt
                                                            Staff
         Hiring
        Process
                                             New         Non-Exempt
                                           Positions        Staff

                                                           Exempt
                                                            Staff

© 2010 Karen Martin & Associates                                      31
Narrowing the Scope:
                                   Selected Specific Conditions
                                                      Units


                                   Domestic        Consumables
                                                   C      bl
                                                                   Warranty
                                                   Service Parts
                                                                    Non-
      Order                                                        Warranty
    Fulfillment
     Process
                                                      Units

                                   International
                                   I t    ti   l   Consumables
                                                   C      bl
                                                                   Warranty
                                                   Service Parts
                                                                    Non-
                                                                    Non
                                                                   Warranty
© 2010 Karen Martin & Associates                                              32
Value Stream Mapping Process
               Define
               D fi                    Products (good or services) with
           Product Family              common process steps

                                       Foundation (the basis) for the
                                       F    d ti    (th b i ) f th
          Document Current             future state; 70-80% accurate is
               State                   acceptable (directionally correct)

                                       Create flow by eliminating waste
           Design Future               it is now obvious from your
                               3 Day
               State                   current state map); typically 3-6
    at
Repea




                               Event   months out

               Create                  Include accountability and
         Implementation Plan           timeframes for completion
                                       ti f       f         l ti




           Implement!                  The
                                       Th goal of mapping!
                                             l f      i !
Value Stream Mapping Activity

 3-day activity; three deliverables
           Day 1 – Document and analyze the current state
              y                      y
                Go to the Gemba!
           Day 2 – Design the future state (3-6 months out)
           Day 3 – Create the implementation plan
 Sequestered team composed primarily of those who can
  authorize change
           Typically manager and above
           The team goes to the gemba to obtain the metrics from the
            frontlines doing the work.
 Leadership learning and development is a powerful side
  benefit.
 K success f t - i t i b i fi
  Key          factor interim briefings t communicate and
                                        to      i t      d
  achieve consensus.
© 2010 Karen Martin & Associates                                        34
Interim Briefings

Day 1 – “Here’s what we’ve learned.”
            Establishes a mental framework for embracing
             improvements; “sells” the need for improvement.
Day 2 – “Here’s what we plan to do.”
            Does anyone object? If so, why?
                     y       j             y
            Challenge policies and paradigms
Day 3 – “Here’s how we re going to execute ”
          Here s     we’re          execute.
            Priorities, approach, timeframes, accountability
            Obtain full commitment right then and there
                                                   there.

© 2010 Karen Martin & Associates                                35
Value Stream Mapping



                          Planning Your Activity:
             A well-developed charter aids in
                  ll d    l   d h t     id i
                communication, consensus
                    building and planning




© 2010 Karen Martin & Associates                          36
Value Stream Mapping Charter
                             Event Scope                                                     Leadership / Coordination                                        Schedule
                                                                                            Executive                                                        3 days typically; sequential is
     Value Stream Engineering design, ED patient flow , Credit processing, etc.                       VP or C-level                          Event Date(s)
                                                                                             Sponsor                                                         best

           Specific What circumstances you're including and                             Value Stream If needed - often Director or                Start/End
                                                                                                                                                            6 hrs minimum; 7 or 8 is best
         Conditions excluding?                                                             Champion Manager level                                    Times
Customer Demand How many times is this done per wk, mo, or yr.?
                                                                                           Facilitator Skilled person leading the activity        Location Need ample wall space
            Trigger What need does the value stream address?
          First Step Task on first process block                                                                                                     Meals Always a nice touch; keeps
                                                                                          Team Lead Not always needed
          Last Step Task on last process block
                                 p                                                                                                               Provided? the team from wandering.
                                                                                                                                                                                 g

      Boundaries &                                                                                                                                  Interim Aid in consensus building and
                    What is the team NOT authorized to change?                                        The person arranging logistics
        Limitations                                                                                                                              Briefing(s) organizational learning.
                                                                                          Coordinator (reserving the room, ordering food,
FS Implementation                                                                                     sending meeting notices, etc.)               Briefing List required attendees; others
                  Typically 90-120 days
       Timeframe                                                                                                                                 Attendees are optional
                             Event Drivers                                                                                       Mapping Team
 1 Wh are you doing thi ?
   Why        d i this?                                                                 Function                              Name                           Contact Information
 2                                                                                  1 Leadership-heavy
 3                                                                                  2
 4                                                                                  3
 5                                                                                  4
               Goals & Measureable Objectives
                                     j                                              5
 1 Aim for objectives w/ measurable targets (from X to X).                          6
 2                                                                                  7
 3                                                                                  8
 4                                                                                  9
 5                                                                                 10
                       Planned Deliverables                                                                                      On-Call
                                                                                                                                 On Call Support
 1 Current state VSM                                                                    Function                              Name                           Contact Information
 2 Future state VSM                                                                 1 SMEs that may not be needed full time
 3 Implementation Plan                                                              2
 4                                                                                  3
 5                                                                                  4
                        Potential Obstacles                                                                                          Approvals
 1 To the team's success with the mapping activity.                                       Executive Sponsor                      Value Stream Champion                 Facilitator
 2
 3                                                                                Signature:                                  Signature:                     Signature:
                                                                                  Date:                                       Date:                          Date:
 4
                                                                                                                                                                                               37
Value Stream Mapping Facilitator
                              Range of Necessary Traits
 Skills / Knowledge                        Personality / Energy
            Lean philosophy
               ea p osop y                       Naturally cu ous
                                                   atu a y curious
            Improvement tools                   Challenging, yet supportive
            Project & time management           Positive, upbeat, energetic
            Mediation; consensus                Pushy without irritating
             building
             b ildi                              Thinks fast on one’s feet
            People effectiveness – from    Objectivity / Fairness
             front line workers to execs
                                                 No attachment to the work
 Authority / Respect                             being improved
                                                  b i i        d
            Recognized change agent /
             influence leader
            Trustworthyy
            Comfortable removing
             obstacles & reaching out to
             senior leadership



© 2010 Karen Martin & Associates                                                38
Value Stream Mapping Process
               Define
               D fi                    Products (good or services) with
           Product Family              common process steps

                                       Foundation (the basis) for the
                                       F    d ti    (th b i ) f th
          Document Current             future state; 70-80% accurate is
               State                   acceptable (directionally correct)

                                       Create flow by eliminating waste
           Design Future               it is now obvious from your
                               3 Day
               State                   current state map); typically 3-6
    at
Repea




                               Event   months out

               Create                  Include accountability and
         Implementation Plan           timeframes for completion
                                       ti f       f         l ti




           Implement!                  The
                                       Th goal of mapping!
                                             l f      i !
The timeline is the most important of the
               three defining characteristics of a
                               VSM:
                      1) information flow
                        2) product flow
                           3) timeline

            If your map doesn’t include a timeline, it
                is not a VSM. If your map has swim
                                   y       p
                        lanes, it’s not a VSM.
© 2010 Karen Martin & Associates                         40
Order Initiation
                            Typical VSM Components -                                Current State Map
                                                                                     Demand = XXXX
                                  Manufacturing
                                              g                                        May 8, 2008
                                                                                      Robert Parker
  formation Flow




                                                          Production
                           SUPPLIER                         Control                 CUSTOMER
          n




1
Inf           ow




                       Process 1       I      Process 2      I      Process 3   I       Process 4
     roduct Flo




2
    Pr




                   Hours              Hours                 Hours               Hours               LT
    Timeline




3                          Minutes             Minutes                Minutes            Minutes PT
Typical VSM Components -                                  ABC Value Stream
                                                                                   Current State Map
                              Office / Service                                     Demand = XXXX/yr
                                                                                         Date
                                                                                     Key Contact
      formation Flow



                                                   CUSTOMER
              n




1
                                           I.T.        I.T.        I.T.
    Inf          ow




                       Process 1           Process 2           Process 3           Process 4
        roduct Flo




2
       Pr




                                   Hours               Hours               Hours
                                                                                                 LT
          eline




3                      Minutes               Minutes            Minutes              Minutes     PT
       Time
Concurrent Work / Parallel Flows

                         Process             Process

                        LT = 8 hrs




                         Process             Process           Process

                        LT = 4 hrs



                             Bring longest lead time to the timeline,
                                  unless it’s a “dead end step.”


© 2010 Karen Martin & Associates                                         43
Common Differences - Manufacturing vs. Office VSMs
                            Manufacturing                     Office
Customer icon                  Upper right                    Center
Supplier icon                   Upper left                     None
“The thing we’re
 The thing” we re          Raw material sub-
                                material, sub           Paper, verbal,
                                                        Paper verbal and
following               assemblies, finished goods    electronic Information
                             More structured /       Multiple I.T. systems and
Information Flow
                                           y
                          formalized I.T. systems          work-arounds

Schedule notification   Multiple points across VSM     Work not scheduled

Material flow (via
              (
                                   Yes
                                   Y                        Sometimes
                                                            S   ti
hollow arrow)
WIP icon                    Inventory triangle          In-bin (if preferred)
                                                       Percent Complete &
Quality M t i
Q lit Metric              First P
                          Fi t Pass Yield (FPY)
                                    Yi ld
                                                        Accurate (%C&A)
                                                       Only applicable with
Takt Time                Typically can be applied
                                                       dedicated resources
LT determination for     Based on WIP between        Based on a single item
each block                  process blocks              passing through
Preparing to Map

  Schedule time to go to the Gemba
               Prepare frontlines for questions the team will ask;
                establish a safe haven for them to communicate the
                true current state (no matter how ugly it is) to high
                level leaders they may not usually interface with.
               No written procedures allowed – creates bias toward
                communicating what should h
                         i ti     h t h ld happen rather th what
                                                         th than h t
                does happen.




© 2010 Karen Martin & Associates                                        45
Preparing to Map (continued)

  Draw map manually!
               11 x 17” paper
               Or 36” wide plotter paper and 3 x 6” post-its for
                process blocks (my preference)
  Only convert to electronic medium if absolutely
   necessary (e-distribution, training, etc.)
             (e distribution,
               iGrafx FlowCharter (my preference)
               Systems2Win – Excel-based
                  y
               Minitab
               e-VSM
               Others
© 2010 Karen Martin & Associates                                    46
Step 1

  Label your map (draw manually or use 36”
   wide plotter paper and 3 x 6” post-its)
               Value stream name
               Current or future state
               Customer demand (volume of work p time
                                      (          per
                period)
               Takt time (if relevant)
               Date
               Facilitator’s name (and/or team)
                                    (          )

© 2010 Karen Martin & Associates                         47
Takt Time:
                                   The Key to Continuous Flow

                                      Available work time
  Takt ti
  T kt time =                                               “Touch down”
                                                            “T   hd    ”
                                      Customer demand

                                     480 minutes/day
  Takt time =                                               = 10.6 mins
                                     45 new accounts


                               OR…
          Time Available divided by what Kustomer Takes

© 2010 Karen Martin & Associates                                          48
Step 2

 Identify all blocks in the process (target 5-15 blocks)
            Customer icon is placed in upper right or middle
                 Upper right if supplier exists (supplier is placed in upper left)
                 Middle position if a separate supplier doesn’t exist
            Supplier (if relevant) is placed in upper left
            Each block (post-it) contains an activity or group of activities that
             occurs before a break in the timeline occurs - typically a handoff to
             another function/work team
                                      team.
            Activity format is verb/noun – what happens to what
            Include the function who performs the task
            Include number of workers who perform the task
            Include any obstacles to flow – batches, shared/inaccessible
             resources, system downtime, etc.
            Consider walking the process

© 2010 Karen Martin & Associates                                                      49
Post-it Conventions

  Process
(Verb/Noun)
(         )

 Function


    # Staff
(if relevant)
                                      Barriers to flow
Step 3

  Identify all I.T. systems used in the
   process and information flow
               For most VSMs, these are placed above the
                process blocks
               In very complicated VSMs with two rows of
                process blocks, I.T. systems can be placed
                between the rows, if necessary.
               Note
                N t any scheduling th t occurs (
                             h d li that        (rare i
                                                      in
                current state)
               Who tells h
                Wh t ll whom t d what?
                                 to do h t?
© 2010 Karen Martin & Associates                             51
Current State Value Stream Map
                                 Purchasing — Non-repetitive purchases less than $5,000

                                                                                                                                         Inititate Req.    1

                                                                                                                                              Originator
                                                                                                                                         31
                                                                                                                                         PT = 10 mins.
                                                                                                                                         C&A = 10%
                                                                                                                                                                                                                                           Supplies
                            Hard Copy




                                                                                                                                                                              Vendor
                       Form File                               File Maker                               Quicken                                   Excel                                                          ERP
                                                                                                                                                                              Website




                                                                                                                  Data Entry




                                                                                           4                                                                                    Enter        7                Approve in    8                    Submit PO
                  Review     2                             3                 Review                           Review 5                              Review 6                                                                                                   9                              10
                                            Review Req.           20 Reqs                                                                                                     Requisition        10 Reqs        ERP             63 Reqs          to Supplier
                  Budget                                                    Requisition                      Requisition                           Requisition
                                                                                                                                                                                                                                                                                   External
                                                                                                                                                                                                            Corp Purchasing                                                        Supplier
                                                                            Sys Engineer                                                                                      Admin Asst                                                    Corp Purchasing
                  Finance                    Supervisor                                                      IS Manager                           Financial Mgr                                                 Manager
              6                              2                               1                                1                                    1                           1                             1
                                                                                                                                                                                                                                             6
2 hrs.       PT = 5 mins.
                     i           4 hrs.     PT = 5 mins.
                                                    i             40 hrs.   PT = 5 mins.       8 hrs.       PT = 5 mins.
                                                                                                                    i           8 hrs.           PT = 10 mins.
                                                                                                                                                          i       4 hrs.     PT = 15 mins.
                                                                                                                                                                                      i           24 hrs.    PT = 5 mins.
                                                                                                                                                                                                                     i           56 hrs.                           80 hrs.     PT = 20 mins.
                                                                                                                                                                                                                                                                                        i
                                                                                                                                                                                                                                            PT = 15 mins.
             C&A = 60%                      C&A = 95%                       C&A = 90%                       C&A = 100%                           C&A = 95%                   C&A = 98%                       C&A = 90%
                                                                                                                                                                                                                                            C&A = 98%


 0.25 days                       0.5 days                         5 days                       1 days                            1 days                           0.5 days                        3 days                         7 days                                      10 days               LT = 28.4 days
                  5 mins.                     5 mins.                            5 mins.                          5 mins.                            10 mins.                  15 mins.                         5 mins.                           15 mins.                                         PT = 65 mins.
                                                                                                                                                                                                                                                                                                   AR = 0.477%

                                                                                                                                                                                                                                                                                                   RFPY = 4.2%
                                                                                                                                                                                                     PT = Process Time
                                                                                                                                                                                                     LT = Lead Time
                                                                                                                                 Customer Demand:                                                    C&A = % Complete & Accurate
                                                                                                                               615 requisitions per y ear                                            AR = Activ ity Ratio (PT/LT x 100)
                                                                                                                                                                                                     RFPY = Rolled First Pass Y ield
Step 4

  Number the process blocks from left to
   right.
               If parallel processes exist, use alpha modifiers
                – e.g. 8A, 8B, etc.
  Connect the customer, supplier (if present)
   and process blocks
               “Striped” arrow for p
                     p              push systems
                                          y
               Hollow arrow for material flow
  Connect and I T systems
               I.T.
© 2010 Karen Martin & Associates                                   53
Post-it Conventions
                                       Process Block #
   Process
 (Verb/Noun)
 (         )

  Function


     # Staff
 (if relevant)
                                       Barriers to flow




                                       PT (process time)
                                          (p           )
% Complete &
                                       LT (Lead time)
  Accurate
Depicting e-Information Flow
   I.T.                                 I.T.
Application                          Application
              Arrow pointing to                      Two-headed arrow:
               I.T.
               I T application:
                       li ti                         Staff b th i
                                                     St ff both views and
                                                                        d
              Staff enters data                           enters data
 Process                               Process
  Block                                 Block




   I.T.
Application                           #1 I.T.                 #2 I.T.
                                    Application             Application
              Arrow pointing from
                I.T. application:
               Staff views data          Lightning bolt arrow:
 Process
  Block
                                     Application #1 auto-populates
                                             application #2



                                                                            55
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments
Value stream mapping for non manufacturing environments

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Value stream mapping for non manufacturing environments

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