Value Stream Mapping: Case Studies

TKMG, Inc.
TKMG, Inc.President, The Karen Martin Group, Inc. at TKMG, Inc.
Value Stream Mapping
Webinar
March 27, 2014
Value Stream Mapping 
Case Studies
© 2014 The Karen Martin Group, Inc.
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 Coach / Facilitator / Consultant / Trainer: 
Lean transformation & business performance 
improvement in all industries.
 Teacher: University of California, San Diego
 Author & Speaker:
Karen Martin, President
The Karen Martin Group, Inc.
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Prize winner!
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© 2014 The Karen Martin Group, Inc. 4
After the webinar…
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– www.slideshare.net/karenmartingroup (+ slides)
Before the webinar…
• Materials available one hour prior:
– www.ksmartin.com/files/webinarmaterials/MM‐DD‐YYYY_slides.pdf 
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Wednesday, April 23, 2014 
11:00 am – Noon PT
Hosted by Gemba Academy 
http://www.gembaacademy.com/webinars
Value Stream Mapping: From Tool to 
Management Practice 
More Webinars!
11:00 am‐12:15 pm PT
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Coaching: The Art of Asking 
the Right Questions
© 2014 The Karen Martin Group, Inc. 6
May, June, July Webinars:
The Agenda is Yours!
• Refresher & current thinking on 
previous topics?
– E.g., Kaizen Events, A3, Work Standardization, 
Metrics‐Based Process Mapping, Visual 
Management, Kanban, Process Management, 
Lean 101, etc.
• New topic I haven’t covered before?
– E.g., Leadership standard work, going to the 
Gemba, countering resistance to change, Lean 
transformation model, facilitation tips, etc.
© 2014 The Karen Martin Group, Inc. 7
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When you leave today’s webinar, 
click “File – Exit” vs.
closing your browser window
© 2014 The Karen Martin Group, Inc. 8
You will learn…
• What the driver was for value stream 
improvement.
• What the planning process consisted of.
• The discoveries and challenges that 
surfaced—and the shifts that occurred—
during the 3‐day activity.
• Projected & actual transformation results.
© 2014 The Karen Martin Group, Inc. 9
To order from Amazon: www.bitly.com/VSMbk
For more information: www.ksmartin.com/VSM
Now available!
Prepare
Understand 
Current State
Design
Future State
Develop 
Transformation 
Plan
Execute 
Transformation 
Plan
Three Consecutive Days
4 Weeks Prior 
to Mapping
Following 
Mapping
Repeat
Value Stream Mapping Activity
Phases and Timing
10
January 7, 2014 February 18, 2014January 21, 2014
www.ksmartin.com/webinars
© 2014 The Karen Martin Group, Inc. 11
www.ksmartin.com/VSM
Value Stream Defined
Value Stream: All of the activities required to
transform a customer request into a good or service.
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Value Stream
First defined in The Machine That Changed the World, 
James Womack, Daniel Jones, & Daniel Roos, 1990.
Process ProcessProcess
Customer
Request
Customer
Receipt
© 2014 The Karen Martin Group, Inc.
Degrees of Granularity: 
Hiring Value Stream
Hire
Recruit Select Onboard
Write job 
description
Post externallyPost internally
13© 2014 The Karen Martin Group, Inc.
Tactical
Process‐level 
Perspective
Strategic
Value‐stream 
Perspective
© 2014 The Karen Martin Group, Inc. 14
Value Stream Mapping Benefit:
Seeing the Whole
14
Value Stream Mapping enables a           
mapping team to get ABOVE the work
15
Value Stream Mapping: A Storyboard 
Visualize the flow of work on a single sheet of paper
© 2014 The Karen Martin Group, Inc. 15
© 2014 The Karen Martin Group, Inc. 16
Value Stream Map ≠ Process Flow Chart
Value Stream Map ≠ Swim Lane Process Map
Benefits
Administrator
Receive
negative
drug screen
results
Complete
“New Hire
Approval”
form; send
to recruiter
Recruiter
Sign “New
Hire
Approval”
form
Recruiter
Sign “New
Hire
Approval”
form
Set up
employee
in SAP;
notify hiring
manager
Hiring
Manager
Request
laptop on
“New Hire
Equip.
Request”
form
IT
Manager
Approve
“New Hire
Equip.
Request”
© 2014 The Karen Martin Group, Inc. 18
Value Stream Mapping Benefit:
Reaching Leadership Consensus
© 2014 The Karen Martin Group, Inc. 19
Why do organizations 
map their value streams?
• To provide greater customer value
• To solve vexing problems
– Quality Cost Delivery Safety Morale
• To stay ahead of the competition
• To generate cross‐functional teamwork
• To develop its leadership team
• To experiment with the approach
Value Stream Mapping
Value Stream Mapping 
Case Study #1
© 2014 The Karen Martin Group, Inc. 21
Manufacturing: Quote to Cash
Why VSM?
• New General Manager who has 
extensive Lean experience
• His goal: improve overall performance & 
create capable, repeatable processes
Projected Results*
• Reduced lead time (PO to Ready‐to‐Ship) 
from 17 months to 7.5 months.
• Freed capacity: the equivalent of 23 FTEs 
(due to process time reduction).
• Freed $25M in working capital 
(annualized).
* 11 months to fully realize the future state. As of today, 
they about a month behind due to CEO change.
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2
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4 Date: Date:
Contact Information
Budget-to-actual expenses per PO/project. Signature: Signature: Signature:
Date:
2013 average ontime delivery. Executive Sponsor Value Stream Champion Facilitator
Annualized quantity of change orders.
Profitably grow our business and open new markets. Prod Development Charlie F
Relevant Data Agreement
Reduce customer's warranty & LD exposure. Finance Lori P
Capable processes that are repeatable (process focused). Design Manager Andrew M
Projects completed on time (customer) & under budget (business). Function Name
Reduced lead times & increased sales opportunities. IT Mars L
Sales Kellie McMahon
Benefits to Customers & Business On-Call Support
Create variance tracking methodology. Program Mgmt Leia Chang
Standardize the change process to reduce the # of Change Orders. Manufacturing Robert Cashman
Reduce lead time (PO to ready to ship) from 12 mos to 8 mos. CFO Sharon Prince
No KPIs. Sales Ed Borge
Goals & Measurable Targets Engineering Joakim Gutan
On-going changes to project parameters (design, test dates, & supply chain). Supply Chain, purch, log, ware Tom Johnson
Consistently late delivery. CEO Mark Simpson
Increase average ontime delivery (to "ready to ship") from 17% to 60%. Quality Sally Jones
Projects are not scoped accurately (voice of the customer). Function Name
Lack of consistant processes and execution. Operations John Morgan
Briefing
Dates
&Times
Feb 3, 4 & 5, 2014
4:00 - 5:00 pmImprovement
Timeframe
Future state realized by December 31, 2014
Current State Problems & Business Needs Mapping Team
Contact Information
Last Step Product shipped
Boundaries &
Limitations
Must use existing resources (people, IT, etc.) Briefing
Attendees
** required
*optional
** Frank L, Rick M, Cory C, Glen
S, Sinan, Ben, Jane, Sal,
Malaika, Andrew, AE's, Sales
Mgr's, Rachel, Adam, Dustan
Base-camp
Location
Bldg B, Conf Room A
Trigger Customer submits RFQ
First Step Sales receives RFQ Logistics
Coordinator
Georgette Winters
Meals
Provided
Continental breakfast, lunch,
snacks
Specific
Conditions
Land-based
Value Stream
Champion
Janice Mitchell
Demand Rate 300 units (40 projects; 20 POs) per year
Facilitator Karen Martin
Value Stream Mapping Charter
Scope Accountable Parties Logistics
Value Stream Equipment type A
Executive
Sponsor
Joe Abrams
Event Dates
& Times
Mon, Tue, Wed
Feb 3, 4 & 5, 2014
8:00 am - 5:00 pm
© 2014 The Karen Martin Group, Inc. 24
Mid‐Mapping Charter Revisions
Improvement
Timeframe
Future state realized by December 31, 2014
Last Step Product shipped
Boundaries &
Limitations
Must use existing resources (people, IT, etc.)
Trigger Customer submits RFQ
First Step Sales receives RFQ
Specific
Conditions
Land-based
Demand Rate 300 units (40 projects; 20 POs) per year
Value Stre
Scope
Value Stream Equipment type A
• Land‐based
• Retractable
• Multi‐stage
• Medium complexity (3 drawings, 6 new parts)
• 3 units per project
1. Added additional specific conditions.
2. Discovered current state was worse than assumed.
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4
5
Create variance tracking methodology.
Standardize the change process to reduce the # of Change Orders.
Reduce lead time (PO to ready to ship) from 12 mos to 8 mos.
Goals & Measurable Targets
Increase average ontime delivery (to "ready to ship") from 17% to 60%.
Median current state lead time was 
actually 17 months.
© 2014 The Karen Martin Group, Inc. 25
3. Expanded scope to include receive cash. Modified 
definition of “shipped” to “ready to ship.”
4. Refined target : “internally‐produced” change orders.
… to reduce the # of internally‐
produced change orders.
Improvement
Timeframe
Future state realized by December 31, 2014
Last Step Product shipped
Boundaries &
Limitations
Must use existing resources (people, IT, etc.)
Trigger Customer submits RFQ
First Step Sales receives RFQ
Specific
Conditions
Land-based
Demand Rate 300 units (40 projects; 20 POs) per year
Scope
Value Stream Equipment type A
Modified Last Step: Receive cash.
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3
4
5
Create variance tracking methodology.
Standardize the change process to reduce the # of Change Orders.
Reduce lead time (PO to ready to ship) from 12 mos to 8 mos.
Goals & Measurable Targets
Increase average ontime delivery (to "ready to ship") from 17% to 60%.
Mid‐Mapping Charter Revisions
© 2014 The Karen Martin Group, Inc. 26
Current and Future State Maps
End‐of‐Day Briefing #2
J F M A M J J A S O N D
1 PROJ Joakim
2 PROJ Leia
3 KE Kellie
4 KE Joakim
5 PROJ Joakim
6 PROJ Ed
7 KE Sharon
8 PROJ Mark
9 JDI Kellie
10 PROJ Robert
11 PROJ Joakim
12 PROJ Robert
13 JDI Ed
14 PROJ Tom
15 PROJ Tom
16 KE Tom
Value Stream Champion Janice Mitchell Start: 2/10/2014
Value Stream Mapping Facilitator Karen Martin
Value Stream Transformation Plan
Value Stream Land-based, retractable, medium complexity equipment Scheduled Review Dates
Executive Sponsor Joe Abrams Every other Monday 10 am
Socialize new criteria for engineering,
quality, & purchasing involvement.
Date Created 1/5/2014
Kaizen
Burst #
Measurable Target Objectives Proposed Countermeasure
Exec.
Method *
Owner
Planned Timeline for Execution
Status
Create procedure/train GS service engineers to
properly feedback suggestions to engineering.
Create bulletin re: standardized headplate
design to eliminate flange orientation.
Create visual "milestone" timeline to
educate customers.
Define technical info Ebara needs from
customer and when.
Revise standard Ts & Cs to incorporate time limit
for customer approval for final payment.
Error proof P.O. info (correct specs, ship to,
etc.); notify customer re missing info and
drop dead date.
Create criteria for LOI acceptance.
Add initial project release in SF.
Enforce customer-requested CO
procedure.
One piece engineering flow
Move to one release (equip & systems)
Create commodity management team &
supplier SLAs.
Standardize WPS/PQR from suppliers.
Revise proposal template to limit time to 4
revisions.
Create trigger to release (BOMs) for
purchase.
Removed for confidentiality purposes
© 2014 The Karen Martin Group, Inc. 29
Significant improvements
not reflected in kaizen bursts
• Better customer information upfront
• Proper kick‐off meeting
• P‐PAP before production
• Added pre‐production trials
• Clarified Roles and Responsibilities
• Reduced tension between engineering and 
production
© 2014 The Karen Martin Group, Inc. 30
Defined Key Performance Indicators
• Total Lead Time (PO to Ready to Ship)
• % On‐time delivery
• Total Process Time
• # Internally‐produced Change Orders
Value Stream Mapping
Value Stream Mapping 
Case Study #2
Healthcare: 
Outpatient Imaging Value Stream
• History
– Hospital lost 25% outpatient imaging business in 1
year. 
– Radiology group believed market share loss was due 
to the patient experience at the aging hospital.
• Wanted to enter into JV with hospital to build a free‐standing 
imaging center to compete with the new one across town.
– Hospital leadership believed poor quality radiologist 
work created market share loss.
• Value Stream Mapping was selected as the 
means to analyze & improve performance.
© 2014 The Karen Martin Group, Inc. 33
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Name
Name
Susan Okowski
Sally Letsgetlean
Eva Garcia
Todd Warberg
FacilitatorValue Stream Champion
Joe Flowberg
Contact Information
Contact Information
Demand Rate
Trigger
15 CT scans per day
Recognition of need for CT scan
Value Stream Mapping Charter
Scope Accountable Parties Logistics
Sally Letsgetlean, VP Ops
Joe Flowberg, Imaging DirectorSpecific Conditions CT Scans
Value Stream
Champion
Outpatient imaging
Executive
Sponsor
Value Stream
Event Dates
& Times
February 4-6, 2014
8:00 AM - 5:00 PM
Joyce Mapper
Base-camp
Location
Facilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement
Timeframe
Existing IT; existing CT equipment; current
operating budget; no additional staff
6 months
Future state fully realized by August 15, 2014
Last Step Physician receives report
Logistics
Coordinator
Toni Details
Februrary 4-6, 2014
4:00 - 5:00 PM
First Step Physician office calls to schedule appointment
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
*Rick Green (CEO), **Paul
Johnston (COO), *Connie Miller
(VP Fin), **Jerry Vickers (VP IT),
*Jeanette Wiser (CMO)
Director, Admitting
Measurable Target Condition Radiologist
Average patient wait time is 45 mins. VP, Operations
Director, Scheduling & Reg
Referrals down 20% since competing imaging center opened. Function
High staff turnover (50% last year); using too many agency techs. Director, Imaging
Increase referrals by 20% in 2014 & an add'l 15% in 2015 & 2016. Referring MD Office Manager
Rebecca Cole
Dee Jones
Dina Lee
Reduce lead time (patient arrival to report received) by 50%. Lead CT Tech
Ability to attract and retain highly skilled techs.
Faster response time & report quality - happier doctors and patients. Function
Ability to recapture lost market share. Radiologist
Conitinental breakfast & lunch
Conference Rm A
Benefits to Customers & Business On-Call Support
Richard Ridenour
Nicole Coder
Improve staff morale (techs and admin). Manager, Imaging
Reduce rework when sending reports by 50%. Director, IT
Improved ROI for imaging equipment.
Review patient sat surveys, especially anecdotal feedback.
Survey radiologists & imaging staff. Signature:
Date:
Relevant Data Agreement
Survey referring phyisicians.
Executive Sponsor
Sally Letsgetlean
Market share intelligence.
Joe Flowberg
Signature: Signature:
Joyce Mapper
Imaging
Inpatient
Outpatient
X‐Rays 
(15%)
MRI
(20%)
CT Scans
(30%)
Mammography
(25%)
Value Stream Scoping Diagram
Defining Specific Conditions
Potential selection criteria:
• Highest volume?
• Highest margin?
• Most painful?
• Most supportive leadership?
34
© 2014 The Karen Martin Group, Inc. 35
Outpatient Imaging Current State VSM
© 2014 The Karen Martin Group, Inc. 36
Current State Value Stream Map
Outpatient Imaging
© 2014 The Karen Martin Group, Inc. 37
Future State Value Stream Map
Outpatient Imaging
Imaging Value Stream Transformation –
Round #1 Results
Metric Before After
% 
Improvement
Timeline Lead Time 4.0 days 1.3 days 67.5%
Timeline Process Time* 59 minutes 48 minutes 18.6%
Activity Ratio 3.1% 7.6% 145.2%
Rolled % Complete & 
Accurate
30.5% 65.0% 113.1%
Tech Turnover (annual) 100%  0%
Surprise discovery!
* Reduction in Tech’s PT frees 
enough capacity to earn add’l
$500K in annual revenue.
© 2014 The Karen Martin Group, Inc. 39
1 2 3 4 5 6 7 8 9 10 11 12
2 Improve quality of referral to 85% KE
Sean
Michaels 100%
3,4
Reduce lead time between scheduling
and preregistration step to 45 minutes
Proj
Dianne
Marie 75%
4 Only one check in per patient KE
Ryan
Austin 50%
4 Reduce wait time in waiting area by 50% KE
Dianne
Marie 50%
6
Eliminate 6 hour lead time associated
with transcription step
Proj
Dave
Gerald 50%
7 Eliminate redundant data entry Proj
Dave
Gerald 25%
5
Visually managed inventory; no outages
or expired items
KE
Michael
O'Shea 100%
6 Reduce imaging LT to one hour Proj
Martha
Allen 25%
8 Reduce report delivery LT to 30 minutes Proj
Martha
Allen 0%
7 Reduce LT at image review to 1 day JDI
Dave
Gerald 100%
Value Stream Transformation Plan
Value Stream
Value Stream Champion
Value Stream Mapping Facilitator
Allen Ward 1-Nov-12Executive Sponsor
Scheduled Review Dates
21-Nov-12
Outpatient Imaging
Paul Scanner
Dave Parks 13-Dec-12
10/18/2012 10-Jan-13Date Created
Value Stream Mapping Facilitator
Increase % of physicians receiving
electronic delivery
Planned Timeline for Execution
Status
Signature:
Agreement
Signature: Signature:
FS VSM
Block #
Measurable Target Proposed Countermeasure
Implement standard work for referral
process
Exec.
Method*
Owner
* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)
Cross-train and co-locate work teams
Value-stream specific radiologists
Implement voice recognition technology
Auto populate between PACS and
Meditech
5S CT supplies area; implement kanban
Collect copays in Imaging
Balance work / level demand
Visual metrics and indicators
Date: Date:
Executive Sponsor Value Stream Champion
Date:
Interesting Developments
• Worst LT problem was super easy to fix.
• During kanban and 5S work, team discovered 
$25,000K of expired material and $17,000 of 
obsolete material. 
• Forged a far stronger relationship between 
hospital and radiologists.
• Collecting copays in Imaging was reversed.
• Implementing voice recognition took 2 years 
due to technology issues.
• Creating a break room for techs boosted 
morale beyond anyone’s expectation.
© 2014 The Karen Martin Group, Inc. 41
Storage room was converted into a break room, boosting morale.
Miscellaneous Tips
• Team composition – Leaders; You may have 
to pay subcontractors
• Choosing when to go to the Gemba and 
when not to.
• Involving staff before and during mapping.
• Pre‐mapping Data Collection – how much 
is too much; how much is too little.
• FS VSM is a living document; visually post!
Prioritization Grid
Creating the Transformation Plan
43
© 2014 The Karen Martin Group, Inc. 44
Questions?
• What tips and tricks do you have for 
ensuring that transformation efforts 
continue once a consultant is no 
longer on site?
• Others?
© 2014 The Karen Martin Group, Inc. 45
Karen Martin, President
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Blog & newsletter:  www.ksmartin.com/subscribe
© 2014 The Karen Martin Group, Inc. 46
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5 4
1
2
3
4 Date: Date:
Contact Information
Budget-to-actual expenses per PO/project. Signature: Signature: Signature:
Date:
2013 average ontime delivery. Executive Sponsor Value Stream Champion Facilitator
Annualized quantity of change orders.
Profitably grow our business and open new markets. Prod Development Charlie F
Relevant Data Agreement
Reduce customer's warranty & LD exposure. Finance Lori P
Capable processes that are repeatable (process focused). Design Manager Andrew M
Projects completed on time (customer) & under budget (business). Function Name
Reduced lead times & increased sales opportunities. IT Mars L
Sales Kellie McMahon
Benefits to Customers & Business On-Call Support
Create variance tracking methodology. Program Mgmt Leia Chang
Standardize the change process to reduce the # of Change Orders. Manufacturing Robert Cashman
Reduce lead time (PO to ready to ship) from 12 mos to 8 mos. CFO Sharon Prince
No KPIs. Sales Ed Borge
Goals & Measurable Targets Engineering Joakim Gutan
On-going changes to project parameters (design, test dates, & supply chain). Supply Chain, purch, log, ware Tom Johnson
Consistently late delivery. CEO Mark Simpson
Increase average ontime delivery (to "ready to ship") from 17% to 60%. Quality Sally Jones
Projects are not scoped accurately (voice of the customer). Function Name
Lack of consistant processes and execution. Operations John Morgan
Briefing
Dates
&Times
Feb 3, 4 & 5, 2014
4:00 - 5:00 pmImprovement
Timeframe
Future state realized by December 31, 2014
Current State Problems & Business Needs Mapping Team
Contact Information
Last Step Product shipped
Boundaries &
Limitations
Must use existing resources (people, IT, etc.) Briefing
Attendees
** required
*optional
** Frank L, Rick M, Cory C, Glen
S, Sinan, Ben, Jane, Sal,
Malaika, Andrew, AE's, Sales
Mgr's, Rachel, Adam, Dustan
Base-camp
Location
Bldg B, Conf Room A
Trigger Customer submits RFQ
First Step Sales receives RFQ Logistics
Coordinator
Georgette Winters
Meals
Provided
Continental breakfast, lunch,
snacks
Specific
Conditions
Land-based
Value Stream
Champion
Janice Mitchell
Demand Rate 300 units (40 projects; 20 POs) per year
Facilitator Karen Martin
Value Stream Mapping Charter
Scope Accountable Parties Logistics
Value Stream Equipment type A
Executive
Sponsor
Joe Abrams
Event Dates
& Times
Mon, Tue, Wed
Feb 3, 4 & 5, 2014
8:00 am - 5:00 pm
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