value stream mapping and metrics based process mapping

Consultant – We help clients in all industries establish and grow Lean management systems, globally.

Author & Speaker:

Karen Martin, President

The Karen Martin Group, Inc.

@karenmartinopex

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You will learn…

• The similarities and differences between value stream maps (VSM) and metrics-based process maps (MBPM).

• The circumstances under which to select each type of map.

• Tips for successful mapping activities.

Value Stream Mapping vs. Metrics-Based Process Mapping

© 2015 The Karen Martin Group, Inc. 8

Feature Value Stream Mapping Metrics-Based Process Mapping

Purpose / outcome Strategic improvement plan Tactical improvement plan

Team composition Cross-functional; leadership heavy Cross-functional; frontline heavy

When created Precedes kaizen events, projects, etc. During kaizen events, projects, etc.

Perspective Macro – Interconnected processes Micro – Steps within each processes

Physical look Circular loop; request to delivery Swim lanes

Information flow Essential component Less obvious

Key metrics Lead time (LT), Process time (PT), Percent Complete & Accurate (%C&A)

Lead time (LT), Process time (PT), Percent Complete & Accurate (%C&A)

Facilitator Must be strong & able to relate to strategic thinkers

Must be strong & able to relate to the people who do the work

How long to create? 3 days 1-2 days















What problem are you trying to solve?


Desired State (or known standard)

Current State

Gap = Problem















Value Stream Transformation is Strategic

© 2015 The Karen Martin Group, Inc. 12For more information, see Value Stream Mapping, Karen Martin & Mike Osterling

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Process Improvement is Tactical

© 2015 The Karen Martin Group, Inc. 13For more information, see Metrics-Based Process Mapping, Karen Martin & Mike Osterling

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Work: Degrees of Granularity

Value Stream

Process Process Process

Step StepStep

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Macro Perspective

• Define strategic direction (“what”)

• Heavy leadership involvement

• Value Stream Mapping

Micro Perspective

• Identify the tactical “how”

• Heavy frontline involvement

• Metrics-Based Process Mapping

Which do you need? Macro or Micro View?

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Work: Levels of Granularity


Negotiate contract

Process order

Configure software

Value Stream

Process Negotiate pricing Approve Negotiate

terms Approve Execute

Degrees of Granularity: Hiring Value Stream

Hire

Recruit Select Onboard

Write job description

Post externally

Post internally

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Process-level Perspective

Value-stream Perspective

What problem are you trying to solve?


Desired State (or known standard)

Current State

Gap = Problem















Visualize the entire cycle of value delivery on a single sheet of paper

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Timeline

3

Basic Value Stream Map

Work Flow

Information Flow

1

2

Customer

0.0 hrs.0.5 days

1.0 hrs.5.0 days

3.6 hrs.0.6 days

0.0 hrs.1.0 days

0.2 hrs.0.5 days

16.0 hrs. 0.0 hrs.7.0 days

8.0 hrs. 0.0 hrs.7.0 days

0.1 hrs.26.0 days

0.0 hrs.0.2 days Total LT =

Total PT = Activity Ra

SAP

Summary Invoice (Excel)Obtain Order;

Enter Order in Offline Order

Form

Sales (Key at night)

LT = 4.5 hrs.PT = 18 mins.%C&A: 80%

1Review & Release

Credit Holds

Sales

LT = 4 hrs.PT = 10 mins.%C&A: 99%

3Issue DO To Transporter; Create Pick

List

WH1

LT = 8 hrs.PT = 1 mins.%C&A: 95%

5Pick

& Load Order

Logistics

LT = 4 hrs.PT = 15 mins.%C&A: 95%

6Collect

POD from Customer

Transporter

LT = 2 days

7 Collect POD From

Transporter

WH1

LT = 7 daysPT = 1 mins.%C&A: 99%

8Deliver POD to

Accounting

MessengerBatch = 1x/day

LT = 1 days

9Review POD

For Accuracy

Accounting


10Deliv er Bill; Collect from Customer;

Deposit

SalesBatch = 1x monthly

LT = 26 daysPT = 5 mins.

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COLOR LEGEND

Logistics / W arehouse

Sales

Order Management

Production

10%

90%

Produce Product

Plant 1

LT = 280 mins.PT = 215 mins.%C&A: 99%

4BPick

& Load Order

WH2

LT = 40 mins.PT = 3 mins.%C&A: 99%

5B

40 Days Delivery to Payment Received3.5 Days Order Receipt to Ship

Monthly Sales VolumeWk 1 = 14-23%Wk 2 = 19-24%Wk 3 = 23-25%Wk 4 = 30-42%

Obtain & Revise Sales

Forecast

Sales


1B

Hold S&OP Meeting

6-7 People

LT = 5 daysPT = 3 hrs.%C&A: 99%

2BCreate

ProductionPlan

Production Planning


3B

Produce Product

Plant 2

LT = 280 mins.PT = 215 mins.%C&A: 99%

4C

Offline Order Form

Enter Payment;

Clear Billing

Accounting


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Accounting

Delivery Order(DO)

Pick List

Proof of Delivery (POD)

Transfer Report

Prod. Plan

Check Stock &

Reallocate

Logistics & Warehouse

Batch = 1x/day


4

Prod. Plan

plier

Receive Material

Store

3C

Current State Value Stream MapOrder to Cash

Customer

3.0 hrs.21.0 days

1.0 hrs.5.0 days

3.6 hrs.0.6 days

0.0 hrs.0.5 days

15.0 hrs.30.0 days

0.0 hrs.7.0 days

8.0 hrs. 0.0 hrs.5.0 days

0.1 hrs.26.0 days

0.0 hrs.0.2 days Tota

Tota Acti

SAP

Collect Order From Customer

Sales


2

Collect Customer

Orders

Order Mgmt


2B

Review & Release

Credit Holds

Sales

LT = 4 hrs.PT = 10 mins.

3Issue DO

To Transporter

WH1


4Load & Prepare Invoice

Logistics

LT = 4 hrs.PT = 15 hrs.

5Collect

POD from Customer

Transporter

LT = 2 days

6Enter POD

WH1


7Deliver POD to

Accounting

Messenger

LT = 1 days

8 Rev iew PODfor Accuracy; Email Receipt

to Sales

Accounting


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Produce Product

Plant 1

LT = 285 mins.PT = 215 mins.%C&A: 99%

3B

Pick & Stage

WH2

PT = 15 mins.%C&A: 95%

4B

Create Production

Plan

Production Planning


2C

2%

Produce Product

Plant 2

LT = 285 mins.PT = 215 mins.%C&A: 99%

3C

Accept Customer e-Payment

Bank


6B

Enter Payment,

Clear Billing

Accounting


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Invoice70%30%

Hold S&OP Meeting

LT = 1 mo.PT = 3 hrs.

1

40 Days Delivery to Payment Received1.5 Days Order Receipt to Ship

Monthly Sales VolumeWk 1 = 25%Wk 2 = 25%Wk 3 = 25%Wk 4 = 25%

Prod. Plan

Prod. Plan

Pick List

Invoice Excel Sheet

Inv entory Report

Deliv er Receipt &

Collect from Customer

SalesBatch = 1x

monthly


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POD

50%

50%

98%

COLOR LEGEND

Logistics / W arehouse

Sales

Order Management

Production

Accounting

Future State Value Stream MapOrder to Cash


Current State Value Stream MapOutpatient Imaging


Future State Value Stream MapOutpatient Imaging

Traditional Mapping Method:Process Flow Chart

How is this process performing?

Look up Customer in EclipseSALES

New Customer?

Enter OrderSALES

Print Ship TicketSALES

Load TrucksSHIPPING

Enter Customer Information

ADMIN

Perform Credit Check

FINANCEOkay?

Notify Sales COD Only; Notify Admin

to update Customer Profile

FINANCE

Yes

No

No

YesProduct in Stock?

Yes

Order MaterialPURCHASING

No

Receive MaterialRECEIVING

Complete New Hire

Setup Form

Complete Drug test within 24

hours

HR Receives results within

3 days and issues offer

letter

P: Setup New hire as a vendorIT: Setup user logins and provide hardware, if needed, F: Assign vehicle, issue cell phone order uniforms and guides, if needed.

Submit Candidate

for background check and drug test.

HR Issues Employee ID and Notifies

HM & Support Organizations

Signs offer letter and

required yellow forms. Fax to

HR

Call candidate to welcome

and remind to complete

forms

Gather Support items to transfer to new hire on

day one

New Hire Setup Process MapGood training tool, but how do we know what to improve?

Cand

idat

eHi

ring

Man

ager

Adm

inis

trat

orHu

man

Res

ourc

esSu

ppor

t Tea

m [I

T,

Purc

hasi

ng (P

), Fl

eet (

F)]

Value Stream Map ≠ Swim Lane Process Map

Ben

efits

Ad

min

istr

ator Receive

negative drug

screen results

Complete “New Hire Approval” form; send to recruiterR

ecru

iter Sign “New

Hire Approval”

form

Rec

ruite

r Sign “New Hire

Approval” form

Set up employee in SAP; notify hiring

manager

Hiri

ng

Man

ager

Request laptop on “New Hire

Equip. Request”

form

IT

Man

ager Approve

“New Hire Equip.

Request”

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Metrics-Based Process Mapping (MBPM)

The Improved State Becomes Standard Work0

10

156-1

0Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A

1 Fax PO to Sales Rep 0 0 45%

2

Review PO; clarify with

customer as needed

20 2 90% Fax PO to warehouse 10 4 90%

5

6

Check inventory levels; notify

Sales Rep re: status

5 4 95% Fax PO to Sales Rep 5 0.33 90%

0 20 10 5 50 2 4 4 0.33

45% 90% 90% 95% 90%0 20 10 5 5

Rolled %C&ACritical Path LT

Total PT

Critical Path PT

5431 2

Mary Townsend

Hours Worked per Day Sally DampierOccurrences per Year Sam Parks

Current State Metrics-Based Process Map

Dave Morgan25-Jun-088 Facilitator

Process Details

Michael Prichard

Order FulfillmentProcess NameSpecific Conditions Domestic orders through sales force

37,500

Date Mapped

Sean Michaels

Sales Rep

Ryan AustinDiane O'SheaMapping Team

LT Units

Function / Department

PT Units

Step # ►

Customer

Finance

Warehouse / Shipping

Seconds

Minutes

Hours

Days

Seconds

Minutes

Hours

Days

Excel tool included with Metrics-Based Process Mapping book















Current State Value Stream MapOutpatient Imaging

34

Value Stream Maps Help Visualize Problems















VSM & MBPM: Same Metrics

36

Barriers to flow

# peoplePTLT%C&A
















Real-World VSM Facilitation Examples• Two VPs arguing over which leader’s area should perform a

certain process• Discussion about outsourcing a functional area that will result

in 30 people being laid off• Candid discussion about the risk of losing the company’s #1

customer• Candid discussion about a legal or regulatory matter• Value stream needs level loading, work balancing and pull


Real-World MBPM Facilitation Examples• Frontline team member begins to recognize that the work he

does is 100% non-value-adding• Supervisor dictates future state improvement ideas• Manager reveals that she doesn’t support the targets begin

set (nor the objective of the mapping session)• Team doesn’t feel authorized to make tactical decisions• Two team members have obvious tension between them• A team member shuts down
















Prepare Understand Current State

DesignFuture State

Develop Transformation

Plan

Execute Transformation

Plan

Three Consecutive Days4 Weeks Prior to Mapping

Following Mapping

Repeat

Value Stream MappingPhases and Timing

42

Prepare Understand Current State

DesignFuture State

Develop Transformation Plan or Execute

Execute Transformation

Plan

1-2 Consecutive Days4 Weeks Prior to Mapping

Following Mapping

Repeat

Metrics-Based Process MappingPhases and Timing

43

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Mapping Tips

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12 13 24 35 4

51 62 73 84 95 10

12 13 24 35 4

1234

Specific Conditions

Engineer to order, requires both hardware & software customization

Value Stream Champion Nancy Little

Demand Rate 1,000 per yearFacilitator Dave Parks

Value Stream Mapping CharterScope Accountable Parties Logistics

Value Stream Capital equipmentExecutive

Sponsor Allen WardEvent Dates

& TimesJuly 24-26, 20138:00 am - 5:00 pm

Last Step Production ships product

Boundaries & Limitations

No new software; only minor changes to existing IT systems; no additional staff; no budget changes

Briefing Attendees

** required *optional

** Allen W (COO), Joe M (CIO), Sal T (VP Sales)* Bruce R (VP Ops), Carlos P (HR), Su T (CFO), Bill M (VP CS)

Base-camp Location Surf's Up - Room A

Trigger Customer submits RFQFirst Step Sales reviews the RFQ Logistics

Coordinator Dave ParksMeals

Provided Continential breakfast & lunch

Desire to stay ahead of the competition & deepen customer loyalty. Function / Title Name Contact InformationForecasted growth of 15% for next fiscal year. Sales, Director Sean Michaels

Briefing Dates &

Times

July 24, 25, & 264:00-5:00 pmImprovement Time

FrameFuture state design is fully realized by December 31, 2013.

Current State Problems & Business Needs Mapping Team

Competition's RFQ LT is 1 wk; PO to delivery is 4 wks Scrum Master Ryan Austin Goals & Measurable Target Conditions Engineering, Vice President Nancy Little

Unclear & incorrect information flowing through value stream. IT, Director Diana MarieRFQ lead time = 2 weeks; PO to software dev lead time = 5 weeks Finance, Controller Dave Gerald

Improve quality of information flowing throughout value stream. Customer (contract manufacturer) JR Hunt

Reduce RFQ LT from 2 weeks to 3 days (70% improvement). Manufacturing, Director Ambreen MotiwalaReduce PO to software dev LT from 5 wks to 3 wks (40% improvement) Customer Service, Manager Danny Tran

Faster delivery; less hassle; less cost. Function Name Contact InformationBetter working relationships between sales, estimating & engineering. Planning / Purchasing, Planner Lourdes Dwyer

Benefits to Customers & Business On-Call Support

Relevant Data Agreement

Freed capacity to absorb additional business w/o increasing staff. Production Supervisor Tom St. James

Operational: LT in segments (RFQ to quote; PO to development). Signature: Signature: Signature:

Sales effectiveness: RFQ conversion rate. Executive Sponsor Value Stream Champion FacilitatorFinancial: Estimate-to-actual cost comparison.

Date: Date: Date:

Value Stream Scoping DiagramDefining Specific Conditions

Golden State Equipment, Inc.

Capital Equipment

Catalog

Configure to order

Engineer to order

Custom hardware

Custom software

BothNew Product Development

Spares & subassemblies

Catalog

Engineer to order

46

47

12 13 24 35 4

51 62 73 84 95 10

12 13 24 35 4

1234

Specific Conditions

Engineer to order, requires both hardware & software customization

Value Stream Champion Nancy Little

Demand Rate 1,000 per yearFacilitator Dave Parks

Value Stream Mapping CharterScope Accountable Parties Logistics

Value Stream Capital equipmentExecutive

Sponsor Allen WardEvent Dates

& TimesJuly 24-26, 20138:00 am - 5:00 pm

Last Step Production ships product

Boundaries & Limitations

No new software; only minor changes to existing IT systems; no additional staff; no budget changes

Briefing Attendees

** required *optional

** Allen W (COO), Joe M (CIO), Sal T (VP Sales)* Bruce R (VP Ops), Carlos P (HR), Su T (CFO), Bill M (VP CS)

Base-camp Location Surf's Up - Room A

Trigger Customer submits RFQFirst Step Sales reviews the RFQ Logistics

Coordinator Dave ParksMeals

Provided Continential breakfast & lunch

Desire to stay ahead of the competition & deepen customer loyalty. Function / Title Name Contact InformationForecasted growth of 15% for next fiscal year. Sales, Director Sean Michaels

Briefing Dates &

Times

July 24, 25, & 264:00-5:00 pmImprovement Time

FrameFuture state design is fully realized by December 31, 2013.

Current State Problems & Business Needs Mapping Team

Competition's RFQ LT is 1 wk; PO to delivery is 4 wks Scrum Master Ryan Austin Goals & Measurable Target Conditions Engineering, Vice President Nancy Little

Unclear & incorrect information flowing through value stream. IT, Director Diana MarieRFQ lead time = 2 weeks; PO to software dev lead time = 5 weeks Finance, Controller Dave Gerald

Improve quality of information flowing throughout value stream. Customer (contract manufacturer) JR Hunt

Reduce RFQ LT from 2 weeks to 3 days (70% improvement). Manufacturing, Director Ambreen MotiwalaReduce PO to software dev LT from 5 wks to 3 wks (40% improvement) Customer Service, Manager Danny Tran

Faster delivery; less hassle; less cost. Function Name Contact InformationBetter working relationships between sales, estimating & engineering. Planning / Purchasing, Planner Lourdes Dwyer

Benefits to Customers & Business On-Call Support

Relevant Data Agreement

Freed capacity to absorb additional business w/o increasing staff. Production Supervisor Tom St. James

Operational: LT in segments (RFQ to quote; PO to development). Signature: Signature: Signature:

Sales effectiveness: RFQ conversion rate. Executive Sponsor Value Stream Champion FacilitatorFinancial: Estimate-to-actual cost comparison.

Date: Date: Date:

10 people max!

Daily Briefings

#1 – Reduce resistance#2 – Build consensus#3 – Gain commitment

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Mapping results are proportional to the quality of the planning and chartering process

and facilitator skill


Karen Martin, [email protected]@karenmartinopex

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