Value Stream Mapping: Case Studies

Value Stream Mapping

WebinarMarch 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.www.ksmartin.com

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2013 Shingo Prize winner!

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© 2014 The Karen Martin Group, Inc. 4

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Wednesday, April 23, 2014 11:00 am – Noon PT

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Value Stream Mapping: From Tool to Management Practice

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Coaching: The Art of Asking the Right Questions


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.


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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.


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Now available!

Prepare Understand Current State

DesignFuture State

Develop Transformation

Plan

Execute Transformation

Plan

Three Consecutive Days4 Weeks Prior to Mapping

Following Mapping

Repeat

Value Stream Mapping ActivityPhases and Timing

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January 7, 2014 February 18, 2014January 21, 2014

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Value Stream Defined

Value Stream: All of the activities required totransform 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

CustomerRequest

CustomerReceipt

© 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.

TacticalProcess‐level Perspective

StrategicValue‐stream Perspective


Value Stream Mapping Benefit:Seeing the Whole

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Value Stream Mapping enables a mapping team to get ABOVE the work

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Value Stream Mapping: A Storyboard Visualize the flow of work on a single sheet of paper



Value Stream Map ≠ Process Flow Chart

Value Stream Map ≠ Swim Lane Process MapB

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Value Stream Mapping Benefit:Reaching Leadership Consensus


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 Case Study #1


Manufacturing: Quote to CashWhy 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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1234 Date: Date:

Contact Information

Budget-to-actual expenses per PO/project. Signature: Signature: Signature:Date:

2013 average ontime delivery. Executive Sponsor Value Stream Champion FacilitatorAnnualized 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 PCapable processes that are repeatable (process focused). Design Manager Andrew M

Projects completed on time (customer) & under budget (business). Function NameReduced 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 ChangStandardize 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 JohnsonConsistently 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 NameLack of consistant processes and execution. Operations John Morgan

Briefing Dates

&Times

Feb 3, 4 & 5, 20144:00 - 5:00 pmImprovement

Timeframe Future state realized by December 31, 2014

Current State Problems & Business Needs Mapping TeamContact 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 RFQFirst 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 yearFacilitator Karen Martin

Value Stream Mapping CharterScope Accountable Parties Logistics

Value Stream Equipment type A Executive Sponsor Joe Abrams

Event Dates & Times

Mon, Tue, WedFeb 3, 4 & 5, 20148:00 am - 5:00 pm


Mid‐Mapping Charter Revisions

Improvement Timeframe Future state realized by December 31, 2014


Boundaries & Limitations Must use existing resources (people, IT, etc.)

Trigger Customer submits RFQFirst Step Sales receives RFQ

Specific Conditions

Land-based

Demand Rate 300 units (40 projects; 20 POs) per year

Value StreScope

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.

12345

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 TargetsIncrease average ontime delivery (to "ready to ship") from 17% to 60%. Median current state lead time was

actually 17 months.


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


Boundaries & Limitations Must use existing resources (people, IT, etc.)

Trigger Customer submits RFQFirst 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.

12345

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 TargetsIncrease average ontime delivery (to "ready to ship") from 17% to 60%.

Mid‐Mapping Charter Revisions


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: 2/10/2014Value Stream Mapping Facilitator Karen Martin

Value Stream Transformation PlanValue 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 1/5/2014Kaizen Burst # Measurable Target Objectives Proposed Countermeasure Exec.

Method * OwnerPlanned 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 f inal 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 con

fiden

tiality pu

rposes


Significant improvementsnot 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


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 Case Study #2

Healthcare: Outpatient Imaging Value Stream

• History– Hospital lost 25% outpatient imaging business in 1year.

– 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.


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1234 Date: Date:

Name

NameSusan Okowski

Sally LetsgetleanEva GarciaTodd Warberg

FacilitatorValue Stream Champion

Joe FlowbergContact Information

Contact Information

Demand RateTrigger

15 CT scans per dayRecognition of need for CT scan


Sally Letsgetlean, VP Ops

Joe Flowberg, Imaging DirectorSpecific Conditions CT Scans Value Stream Champion

Outpatient imaging Executive SponsorValue Stream

Event Dates & Times

February 4-6, 20148:00 AM - 5:00 PM

Joyce Mapper Base-camp LocationFacilitator

Current State Problems & Business Needs Mapping Team

Boundaries & Limitations

Improvement Timeframe

Existing IT; existing CT equipment; current operating budget; no additional staff

6 monthsFuture state fully realized by August 15, 2014

Last Step Physician receives reportLogistics

Coordinator Toni Details

Februrary 4-6, 20144:00 - 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, OperationsDirector, Scheduling & Reg

Referrals down 20% since competing imaging center opened. FunctionHigh 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 ManagerRebecca ColeDee Jones

Dina LeeReduce 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. FunctionAbility to recapture lost market share. Radiologist

Conitinental breakfast & lunch

Conference Rm A


Richard RidenourNicole Coder

Improve staff morale (techs and admin). Manager, ImagingReduce 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:


Survey referring phyisicians.Executive Sponsor

Sally LetsgetleanMarket share intelligence.

Joe FlowbergSignature: Signature:

Joyce Mapper

Imaging

Inpatient

Outpatient

X‐Rays (15%)

MRI(20%)

CT Scans(30%)

Mammography(25%)

Value Stream Scoping DiagramDefining Specific Conditions

Potential selection criteria:• Highest volume?• Highest margin?• Most painful?• Most supportive leadership?

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Outpatient Imaging Current State VSM


Current State Value Stream MapOutpatient Imaging


Future State Value Stream MapOutpatient 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.


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 PlanValue Stream

Value Stream ChampionValue Stream Mapping Facilitator

Allen Ward 1-Nov-12Executive SponsorScheduled Review Dates

21-Nov-12

Outpatient Imaging

Paul ScannerDave Parks 13-Dec-1210/18/2012 10-Jan-13Date Created

Value Stream Mapping Facilitator

Increase % of physicians receiving electronic delivery

Planned Timeline for ExecutionStatus

Signature:

Agreement

Signature: Signature:

FS VSMBlock # 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.


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 GridCreating the Transformation Plan

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Questions?

• What tips and tricks do you have for ensuring that transformation efforts continue once a consultant is no longer on site?

• Others?


Karen Martin, President7770 Regents Road #635San Diego, CA 92122

858.677.6799

[email protected]

Blog & newsletter: www.ksmartin.com/subscribe


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1234 Date: Date:

Contact Information

Budget-to-actual expenses per PO/project. Signature: Signature: Signature:Date:

2013 average ontime delivery. Executive Sponsor Value Stream Champion FacilitatorAnnualized quantity of change orders.

Profitably grow our business and open new markets. Prod Development Charlie F


Reduce customer's warranty & LD exposure. Finance Lori PCapable processes that are repeatable (process focused). Design Manager Andrew M

Projects completed on time (customer) & under budget (business). Function NameReduced lead times & increased sales opportunities. IT Mars L

Sales Kellie McMahon


Create variance tracking methodology. Program Mgmt Leia ChangStandardize 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 JohnsonConsistently 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 NameLack of consistant processes and execution. Operations John Morgan

Briefing Dates

&Times

Feb 3, 4 & 5, 20144:00 - 5:00 pmImprovement

Timeframe Future state realized by December 31, 2014

Current State Problems & Business Needs Mapping TeamContact Information


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 RFQFirst 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 yearFacilitator Karen Martin


Value Stream Equipment type A Executive Sponsor Joe Abrams

Event Dates & Times

Mon, Tue, WedFeb 3, 4 & 5, 20148:00 am - 5:00 pm