Value Stream Mapping: Beyond the Mechanics - Part 3 (Executing the Transformation Plan)

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Recorded webinar: http://slidesha.re/1gGFkFM

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Purchase the book: http://bit.ly/VSMbk

In Part 3 of this 4-part webinar series to celebrate the launch of Karen Martin & Mike Osterling's new book, VALUE STREAM MAPPING, you'll learn how to avoid a common failing in value stream mapping: taking no action to actually transform operations.

Specifically, you will learn:

• How the transformation plan should be managed and by whom.
• How to apply PDSA to assure that you’re making the best improvements.
• How to engage the entire workforce in making change.
• How to measure your progress.

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Value Stream Mapping: Beyond the Mechanics - Part 3 (Executing the Transformation Plan)

  1. Value Stream Analysis: Beyond the Mechanics (Part 3 of 3) Webinar February 18, 2014
  2. Welcome! • • • • • • • • Australia Brazil Botswana Canada Denmark Egypt Great Britain Ireland • • • • • • • • Lithuania Malaysia Netherlands New Zealand Russia Saudi Arabia Spain United States www.ksmartin.com/subscribe © 2014 The Karen Martin Group, Inc.
  3.  Coach / Facilitator / Consultant / Trainer:  Lean transformation & business performance  improvement in all industries.  Teacher: University of California, San Diego  Author & Speaker: Karen Martin, President The Karen Martin Group, Inc. www.ksmartin.com 2013 Shingo  Prize winner! www.ksmartin.com/subscribe 3
  4. Before the webinar… • Materials: – www.ksmartin.com/files/webinarmaterials/02‐18‐ 2014_slides.pdf (or _handout.pdf) After the webinar… • Recordings: – – – – www.ksmartin.com/webinars www.vimeo.com/karenmartingroup www.youtube.com/karenmartingroup www.slideshare.net/karenmartingroup • Materials: – www.slideshare.net/karenmartingroup © 2014 The Karen Martin Group, Inc. 4
  5. More VSM Learning • Next Webinar – Thursday, March 27, 11:00 am – 12:15 pm PT – Value Stream Mapping: Case Studies – https://www2.gotomeeting.com/register/288652530 • Recorded webinars (including 5S Supply and iGrafx) – www.ksmartin.com/webinars • Podcasts – www.ksmartin.com/media (Podcast tab) • Public VSM workshops – SHS and AME conferences – www.ksmartin.com/events • In‐house VSM workshops & facilitated VSM activities – Call us! © 2014 The Karen Martin Group, Inc. 5
  6. You will learn how to… • Create & manage a value stream  transformation plan. • Apply PDSA to assure that you’re making the  best improvements. • Engage the entire workforce in making  change. • Measure your progress. © 2014 The Karen Martin Group, Inc. 6
  7. Basic Current State Value Stream Map:  3 Sections 1 2 3 © 2014 The Karen Martin Group, Inc. 7
  8. Basic Value Stream Map: Future State 1 Customer IT interface Standard work Error proof IT-1 Crosstrain Modified approvals 2 Process 1 3 Crosstrain Process 2 Function A 1 items IT-2 LT = 1 days PT = 10 mins. %C&A = 99% Process 3 Function C 5 items 5 4 Standard work Function E 10 items 3 LT = 2 days PT = 120 mins. %C&A = 95% 4 LT = 0.5 days PT = 30 mins. %C&A = 95% 1 days 2 days 0.5 days Total LT = 3.5 days 10 mins. 120 mins. 30 mins. Total PT = 160 mins. Activity Ratio = 9.5% Rolled %C&A = 89.3% © 2014 The Karen Martin Group, Inc. 8
  9. Basic Value Stream Future State Performance Metrics Current State  Projected Future State  Projected % Improvement 9.5 days 3.5 days 63.2% 180 minutes 160 minutes 11.1% Activity Ratio 3.9% 9.5% 143.6% Rolled % Complete &  Accurate 30.0% 89.3% 197.7% Metric Total Lead Time Total Process Time Other? Other? © 2014 The Karen Martin Group, Inc. 9
  10. Value Stream Mapping: Phases and Timing Repeat Prepare 4 Weeks Prior  to Mapping Understand  Current State Design Future State Develop  Transformation  Plan Three Consecutive Days Execute  Transformation  Plan Following  Mapping 10
  11. Current State Value Stream Map <Client> CURRENT STATE Value Stream Map (Product> <Map assumptions> Demand Rate = XXXX/ Year February 03, 2014 Customer SalesForce 2 1 Prepare Proposal 450 items 3 4 Hand Over to Proj Mgmt Send PO or LOI 7 items 150 items Excel 9 items Plan & Schedule Project 5 7 items Review Specs; scope project. Prepare initial cust. docs 7 Customer Sales 2 approvals Project Mgmt 41 items LT = 2 weeks PT = 12 hrs . %C&A = 2% LT = 0 week s PT = 16 hrs. %C&A = 35% 10A 11A 12 13A 14 15A 17 LT = 6 week s PT = 92 hrs. %C&A = 0% 16 19 items Customer Release Long LT Items to Production Release Complete Final Design Issue Reqs for Short Lead Parts 21 items 3 items Build for Test Product 6 items 3 items Test & Disassemble Product 4 items Build for Shipment PRODUCT 20 items Package & Ship Product & Systems 50 items Customer 3 items Approve Final Documents Eng Eng Purchasing Planning Production Production Production LT = 105 day s PT = 360 hrs . %C&A = 75% LT = 2 weeks % C&A = 5% Invoice Customer (final) Finalize Customer Documents Review & Approve Docs Start designing project LT = 1 y ears %C&A = 5% 8A 6 Eng, Quality, Planning Sales (~ 200 pp) LT = 2 week s PT = 2.5 day s %C&A = 75% MS Project LT = 85 day s PT = 144 mins . %C&A = 25% LT = 2 week s PT = 3 hrs . %C&A = 5% LT = 4 week s PT = 48 hrs . %C&A = 95% LT = 5 day s PT = 14 hrs . %C&A = 90% LT = 3 days PT = 18 hrs . %C&A = 95% Engineering Quality Logistics Finance LT = 6 months 120 items 6B 8B 0 items Begin Create Customer Docs Create Demand; Issue Reqs for Long Lead Items X3 PM Planning Doc Control ME Engineering Quality 9 10B 11B LT = 4 week s PT = 72 hrs. %C&A = 99% LT = 2 months %C&A = 50% 13B 15B 3 items Procure Long Lead Items 3 items Invoice Customer Test & Build from Test Systems 18 items LT = 1 months PT = 3 hrs . %C&A = 95% Build for Shipment SYSTEMS Invoice Customer (Shipment) 3 items Purchasing Finance LT = 2 week s PT = 3 hrs . %C&A = 5% LT = 2 months PT = 4 hrs . %C&A = 5% Production Systems Production Finance Logistics PM LT = 6 day s PT = 44 hrs . %C&A = 95% LT = 1 days PT = 8 hrs . %C&A = 95% LT = 30 day s PT = 6 hrs . %C&A = 95% 22 items LT = 7 months PT = 124 hrs. %C&A = 0% LT = 5 day s PT = 8 hours %C&A = 80% 6C 25 items 10C Invoice Customer Supplier Send Parts Finance LT = 7 months LT = 4 weeks PT = 2.5 hrs . %C&A = 95% 10.0 days 0.5 weeks 10.0 days 50.4 weeks 0.3 weeks 30.0 days 0.4 weeks 147.0 days 105.0 days 85.0 days 10.0 days 42.0 days 20.0 days 5.0 days 3.0 days 20.0 days 2.3 weeks 3.1 weeks 9.0 weeks 0.1 weeks 0.1 weeks 0.1 weeks 1.2 weeks 0.3 weeks 0.5 weeks 1.8 weeks 21.0 days 8.4 weeks 25.2 weeks Total LT = 930.0 days 0.1 weeks Total PT = 103.7 weeks Activity Ratio = 55.8% Rolled %C&A = 0%
  12. Future State Value Stream Map 3.Create v isual timeline to educate customers 7. Error proof P.O. info (correct s pecs , s hip to, etc .); notify c us tomer re mis sing info and drop dead date 5. Soc ializ e new c riteria for engineering, quality & purc hasing involv ement 4. Define technic al info Ebara needs from customer and when 1. Create procedure/train GS s ervic e engineers to properly feedbac k suggestions to engineering Customer 6. Rev is e s tandard Ts & Cs to inc orporate time limit for c us tomer approv al for final pay ment 2.Create bulletin re: s tandardized headplate des ign to eliminate flange orientation. 1 13. Revis e proposal template to limit time to 4 revisions 9. Add initial projec t releas e in SF 16. Create trigger to release (BOMs) for purchas e. 10. Enforce customer -reques ted CO procedure 8. Create c riteria for LOI ac ceptanc e 4A Review PO 6A Approve cust. doc package Customer 8 7A Procure items PM Stage order (100% comp.) Prod. Control Hydrotest Send materials Customer Sales 25. Trans ition data reduction to test engineer 5A Plan & Schedule Project 26. Update data book process to submit after test reports received. 15. Create commodity management team & s upplier SLAs 18. Eliminate Requisitions 3 Send PO or LOI LT = 10 day s PT = 64 hours %C&A = 95% 19. Analyz e/implement c hange management sy stem. 20. Create approved s upplier program 2 Prepare Proposals Sales Engineering Quality Purchasing 14. Standardiz e WBS/QPR from s uppliers 27. Pre-arrange s hipping bas ed on production sc hedule 9A Build for Test (Product) 10 Test & Disassemble Product Total PT = 16h 28. Create the means to have a daily level-loaded production sc hedule (Includes Quality Inspection) 11A Build for Shipment (Product) 12 Package; ready to ship (including docs) 13A Invoice Customer (shipment) Total PT=36h Total PT=72h Total PT=48h Supplier Purchasing Warehouse Production Production Logistics Finance LT = 3.1 day s PT = 24 hrs. %C&A = 99% LT = 8 days PT = 6 hrs. %C&A = 95% Production LT = 1 y ears %C&A = 75% LT = 2 week s LT = 8 hours PT = 4 hrs. %C&A = 95% PT = 16 hrs . %C&A = 90% LT = 8 hours PT = 6 hrs . %C&A = 99% 21. Create c onfigurator (standard part) 12. Move to one release (pump & s ys tems ) Value Stream STOPS if no PO LT = 4 hours PT = 2 hrs . %C&A = 99% LT = 1.1 day s PT = 8 hrs . %C&A = 95% LT = 5 days PT = 16 hrs. %C&A = 95% LT = 3 days PT = 18 hrs. %C&A = 95% 16. Create pull s ignal for inv oicing. 4B 11. Create one-piec e engineering flow LT = 5 months PT = 0 hrs . Complete & release initial customer docs 5B 6B Create balance of customer docs Invoice Customer X 1.5 Total PT=186h 7B Invoice customer (major materials) 9B 23. Automate s hop order release. 24. Eliminate witnes sed tes ting of elec tric al feedthroughs onsite Build for Test (Systems) 11B Build for Shipment (Systems) 13B 12B Approve final documents Invoice Customer (docs) Customer 22. Create engineering tools Eng (32 hrs) Quality (4 hrs) ENG Quality Finance Production Production LT = 5 day s PT = 22 hours %C&A = 95% LT = 1 days PT = 8 hrs . %C&A = 95% Finance Finance LT = 30 day s LT = 5 day s PT = 36 hrs . %C&A = 85% LT = 2 day s PT = 2.5 hrs. %C&A = 95% LT = 3 months PT = 124 hrs. %C&A = 80% LT = 2 days PT = 3 hours %C&A = 95% LT = 2 days PT = 3 hrs . %C&A = 95% 11C 5C Build Crates Complete & Release ENG package BOM Total PT=48h Total PT=268h Logistics LT = 3 days PT = 24 hours %C&A = 99% LT = 7 weeks PT = 206 hrs . %C&A = 85% 8 hrs. 5 days 35 days 8 hrs. 4 hrs. 36 hrs. 206 hrs. 6 hrs. 105 days 4 hrs. 1 days 5 days 3 days 3 days Timeline LT = 160 days 2 hrs. 8 hrs. 16 hrs. 18 hrs. 24 hrs. Timeline PT = 320 hrs. Activity Ratio = 25.0% Rolled %C&A = 21% Total PT = XX
  13. Improvements / Hypotheses Improved quality of information upfront. Removed handoffs. Shifted roles & responsibilities in 4 work areas. Added a proper cross‐functional kick‐off activity. Merged work. Re‐sequenced work. Moved work in parallel. Innovated re: design. Created new work triggers. Created one‐piece flow in engineering by  reconfiguring staff and workloads. • Rationalized suppliers (starting the process). • Implementing a hard stop to work if no PO received. • • • • • • • • • • © 2014 The Karen Martin Group, Inc. 13
  14. Value Stream Performance Improvement Projected Results Current State  Projected Future State  Projected % Improvement 17 months 7.5 months 56% Timeline Process Time 600 hours 450 hour 25% Rolled % Complete &  Accurate 0% 21% > 2,000% On‐time delivery 13% 90% 592% 25/project 12/project 52% Metric Timeline Lead Time (RFQ to shipping) # Internally‐produced  Change Orders © 2014 The Karen Martin Group, Inc. 14
  15. PACE Prioritization chart © 2014 The Karen Martin Group, Inc. 15
  16. Prioritization Grid Creating the Transformation Plan 16
  17. Value Stream Transformation Plan Value Stream Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Date Created Kaizen Burst # 4 5 6 7 8 9 10 11 12 13 14 15 16 Content removed for sanitization purposes 3 Jim McMahon 2/10 + bi-weekly Thu 10 am Sally Brooks Karen Martin 1/5/2014 Exec. Method * Owner Create procedure/train GS service engineers to properly feedback suggestions to engineering. Improvement Objective / Hypothesis 1 2 Scheduled Review Dates Product Y PROJ Create bulletin re: standardized headplate design to eliminate flange orientation. PROJ Steve Create visual "milestone" timeline to educate customers. KE Bruce Define technical info needed from customer and when. KE Bruce Socialize new criteria for engineering, quality, & purchasing involvement. PROJ Jessie Revise standard Ts & Cs to incorporate time limit for customer approval for final payment. PROJ Sally Error proof P.O. info (correct specs, ship to, etc.); notify customer re missing info and drop dead date. KE Jessie PROJ Mike JDI Jessie Resocialize existing customer-requested CO procedure. PROJ Steve One piece engineering flow PROJ Steve Move to one release (pump & systems) PROJ Bob JDI Jessie Standardize WPS/PQR from suppliers. PROJ Marcia Create commodity management team & supplier SLAs. PROJ Tom KE Marcia PROJ Sally Create criteria for LOI acceptance. Add initial project release in SF. Revise proposal template to limit time to 4 revisions. Create trigger to release (BOMs) for purchase. Create pull signal for invoicing. 17 Planned Timeline for Execution Steve Proposed Countermeasure J F M A M J J A S O N D Status Agreement Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: * Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project) 17
  18. Improvement Roles Strategic Who? Accountability Tool Sr. Leaders “What has to happen” Hoshin Plan, A3,  Value Stream  Mapping “How it will happen” Kaizen Events,  Just‐do‐its,     and Projects Tactical Middle  Management Frontlines © 2014 The Karen Martin Group, Inc. 18
  19. Value Stream Mapping: Phases and Timing Repeat Prepare 4 Weeks Prior  to Mapping Understand  Current State Design Future State Develop  Transformation  Plan Three Consecutive Days Execute  Transformation  Plan Following  Mapping 19
  20. Key Success Factors • Consistent Executive Sponsor involvement – Run or attend status meetings • Consistent status meetings – At least monthly – Every other week to start • Single point of ownership – But collaborative problem solving and obstacle  removal. • PDSA at every meeting • Edit the future state map real time • Adjust the transformation plan as needed © 2014 The Karen Martin Group, Inc. 20
  21. Develop hypothesis Refine Standardize  Stabilize Conduct  experiment Measure  results © 2014 The Karen Martin Group, Inc. 21 21
  22. Physically Post  the Future State Map Physically Post the Transformation Plan © 2014 The Karen Martin Group, Inc. 22
  23. Value Stream Transformation Plan Value Stream Product Y Scheduled Review Dates Executive Sponsor Jim McMahon 2/10 + bi-weekly Thu 10 am Value Stream Champion Sally Brooks Value Stream Mapping Facilitator Karen Martin Date Created 1/5/2014 Kaizen Burst # Improvement Objective / Hypothesis 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Content removed for sanitization purposes 1 17 Planned Timeline for Execution Exec. Method * Owner Create procedure/train GS service engineers to properly feedback suggestions to engineering. PROJ Steve 0% Create bulletin re: standardized headplate design to eliminate flange orientation. PROJ Steve 100% Create visual "milestone" timeline to educate customers. KE Bruce 50% Define technical info needed from customer and when. KE Bruce 50% Socialize new criteria for engineering, quality, & purchasing involvement. PROJ Jessie 100% Revise standard Ts & Cs to incorporate time limit for customer approval for final payment. PROJ Sally 100% Error proof P.O. info (correct specs, ship to, etc.); notify customer re missing info and drop dead date. KE Jessie 0% PROJ Mike 100% JDI Jessie 50% Resocialize existing customer-requested CO procedure. PROJ Steve 80% One piece engineering flow PROJ Steve 10% Move to one release (pump & systems) PROJ Bob 0% JDI Jessie 100% Standardize WPS/PQR from suppliers. PROJ Marcia 25% Create commodity management team & supplier SLAs. PROJ Tom 30% KE Marcia 50% PROJ Sally 50% Proposed Countermeasure Create criteria for LOI acceptance. Add initial project release in SF. Revise proposal template to limit time to 4 revisions. Create trigger to release (BOMs) for purchase. Create pull signal for invoicing. J F M A M J J A S O N D Agreement Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: * Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project) Status
  24. And Repeat… © 2014 The Karen Martin Group, Inc. 24
  25. “The new bible for value stream mapping.” —Art Byrne, author, The Lean Turnaround Amazon: www.bitly.com/VSMbk More info: www.ksmartin.com/VSM © 2014 The Karen Martin Group, Inc. 25
  26. For Further Questions Karen Martin, President 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com Blog & newsletter:  www.ksmartin.com/subscribe © 2014 The Karen Martin Group, Inc. 26 26

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