Value Stream Mapping - Strategy Before Tactics

Value Stream Mapping: Strategy Before Tactics

WebinarAugust 23, 2012

Karen Martin

Founder: Karen Martin & Associates, LLC (1993).

Consultant / Coach: Lead Lean transformations & develop people in office, service and knowledge environments.

Teacher: University of California, San Diego’s Lean Enterprise program.

Author:

Karen Martin, Principal

Just released! 2nd Edition October 2012!

Value Stream Mapping’s Roots

3

Mike Rother & John Shook, 1999 Beau Keyte & Drew Locher, 2004

Whenever there is a product for a customer, there is a value stream.

The challenge lies in seeing it.

— Mike Rother & John Shook, Learning to See

© Karen Martin & Associates, LLC

Value Stream Defined

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

Customer

4

Value Stream

Process ProcessProcess

CustomerRequest

CustomerReceipt


Why Value Stream Mapping?

5© Karen Martin & Associates, LLC

Value Stream Mapping Benefit #1:Seeing the Whole

6

60,000 foot view; Rooftop view


VSM Promotes Systems Thinking

7

Individual Efficiency = Sub‐optimization

System Efficiency = Optimal Value Stream

Performance

Value Stream Mapping Benefit #1:Seeing the Whole

8

60,000 foot view; Rooftop view


TruthTruth

TruthTruth

TruthTruth

TruthTruth

Truth9

Value Stream Mapping Benefit #2

How are we really performing?What’s our customer really experiencing?


10

Value Stream Maps Serve as Visual “Storyboards”

Makes the disconnects and obstacles to flow visible at a macro level

Shows the linkage between material and information flow


11

AMBIGUITY

Problems Nearly Always Extend Outside the Functional Silos in Which They’re Discovered


Value Stream Mapping Benefit #3:Consensus Building


Value Stream Mapping Benefit #4:Metrics-Based

14

What are you going to do to change the numbers?


Outpatient Imaging Value StreamProjected Results

15

MetricCurrent

StateProjected

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 Pass Yield 29% 40% 38%

# Macro Steps 14 11 21%Tech turnover(annual) 100% 25% 75%

Note: Freed capacity (PT reductions) allowed the organization to earn $500,000 additional annual revenue w/o increasing staff.


Value Stream Mapping Benefit #5:Strategy Before Tactics

16

Where am I? Where do I want

to go?

I‐80 option I‐40 option I‐70 option

Which route should I take?

? ??


The Work We Do:Degrees of Granularity

17

Value Stream

Process Process Process

Step Step Step

Value Stream Map

In the Weeds

(Tactical)

Rooftop View

(Strategic)

Metrics-Based Process Map


18

Value Stream Mapping Projects,

Kaizen Events, Just‐Do‐Its


19

Value Stream Mapping:As Much Art as Science


Key VSM Components:Manufacturing

Process 1 Process 2 Process 3 Process 4

SUPPLIER CUSTOMER

Production Control

Inform

ation Flow

Prod

uct F

low

Minutes Minutes Minutes Minutes

Hours Hours Hours

Timeline

1

2

3

I I I

LT

PT

ABC Widget Value StreamCurrent State Map

Demand = 1,800/year 08/08/2012

Facilitator: Sally Parker

Hours


Key VSM Components: Office / Service

Process 3 Process 4

CUSTOMER

Inform

ation Flow

Prod

uct F

low

Timeline

1

2

3PT

LT

I.T. I.T. I.T.

Process 1 Process 2

XYZ Value StreamCurrent State Map Demand = 250/year

08/08/2012Facilitator: Robert Parker


Current State Value Stream Map Outpatient Imaging Services

Demand = 15 per day

Customer Demand:15 patients per Day

(Takt Time 1920 seconds)8 hours per day

Referring Physician

% C&A = 65 %

Check-in Patient

(Admitting)

Cycle Time = 2 mins.% C&A = 90 %

5

Send Reports

(Imaging)


6

Hospital

5 mins.

ScheduleAppointment

Cycle Time = 11 mins.Lead Time = 12 mins.% C&A = 98 %

6

Pre-register Patient


5

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

Lead Time = 12 mins.Lead Time = 990 mins.

PrepPatient(Tech)


2

Check-inPatient

(Imaging)


3

CompleteExam(Tech)


2

TransmitImages(Tech)


2

Read/DictateExam

(Radiologist)


2

TranscribeReport (MDI)


6

ReviewDraft/Sign

(Radiologist)


2

PrintReports

(Imaging)


230 mins. 5 mins. 248 mins. 365 mins. 960 mins. 110 mins. 120 mins.45 mins.

E Pay

Excel

ADS

Symposium

Internet

Waiting RoomManagement

System

Fax OrderSolutions

PACS

5 mins.

Lead Time = 24 days

Meditech

1234

5 6 7 8 9 10 11 12 13 14

Auto Fax 50% Us Mail 25%MD Mailbox 25%

Rework Loop via Fax 25% of the time

Rolled First Pass yield = 29%

5 minutes

2 minutes 11520 minutes

1 minutes

45 minutes

10 minutes

30 minutes

15 minutes

5 minutes

3 minutes

248 minutes

15 minutes

365 minutes

5 minutes

960 minutes

1 minutes

110 minutes

1 minutes

120 minutes

3 minutes

L/T = 13464 minutes

VA/T = 11576 minutes


Value Stream Mapping ProcessDefine

Product Family

Design Future State

Document Current State

Implement!

3 Day Event

Foundation (the basis) for the future state; 70‐80% accurate isacceptable (directionally correct)

Create flow by eliminating waste (now obvious from yourcurrent state map); typically 3‐6months out

Products (good or services) withcommon process steps

Repe

at

The goal of mapping!

Create Implementation Plan

Include accountability andtimeframes for completion

24

Interim Briefing(s)

1 Contact Information2 13 24 35 4

51 62 73 84 95 10

1 Contact Information2 13 24 35 4

1234 Date: Date:

Signature:Date:

Potential Obstacles ApprovalsExecutive Sponsor…to the team's success with the mapping activity.

Implementation Plan

Current state VSM FunctionFuture state VSM SMEs that may not be needed full time

Always a nice touch; keeps the team from wandering.

Need ample wall space

Planned Deliverables On-Call Support

Aim for objectives w/ measurable targets (from X to X). Goals & Measureable Objectives

Why are you doing this? What are the current state issues? FunctionLeadership-heavy

Event Drivers Mapping Team

List required attendees; others are optional

Briefing Attendees

Boundaries & Limitations

FS Implementation Timeframe

What is the team NOT authorized to change?

Typically 90-120 days

Last Step Task on last process block

Value Stream Mapping CharterEvent Scope Leadership / Coordination Schedule

Start/End Times

VP or C-level

If needed - often Director or Manager level

Specific Conditions

What circumstances you're including and excluding? (type of cust, time of year, etc.)

Value Stream Champion

Contract processing, rebate processing, etc. Executive SponsorValue Stream Event Date(s)

Team Lead Not always needed

Skilled person leading the activity

Meals Provided?

Location

CoordinatorThe person arranging logistics (reserving the room, ordering food, sending meeting notices, etc.)

Facilitator

First Step Task on first process block

Customer Demand

Trigger

How many times is this done per wk, qtr, mo, or yr.?

What need does the value stream address?

Signature: Signature:

3 days typically; sequential is best

6 hrs minimum; 7 or 8 is best

FacilitatorValue Stream Champion

Aid in consensus building and organizational learning.

Name

Name

Team-Based Improvement ActivitiesRules of Engagement

1. The team starts and ends the day together; begin and end breaks together.

2. No interruptions or distractions – 100% focus; phones on silent; no email; no texting.

3. Rank has no privilege.4. Seek the wisdom of ten instead of the knowledge of one.5. Use creativity before capital (in designing improvements).6. Finger-pointing and blame has no place: “It is what it is.”7. Respectful disagreement is encouraged. (It’s OK to disagree; it’s not

OK to be disagreeable.)8. No veto power from outside the team.9. No silent objectors; don’t leave in silent disagreement.10. One conversation at a time; no side bars.11. What’s said in the room stays in the room.12. Ask Why? Why not? What if?13. Ban “Can’t” and “No, because…” from your vocabulary. Think/say:

“Yes, if…”14. Ban internal, silo’d thinking; think externally (customer); value stream. 25

Step 1 – Label Map

• Label your map in upper right corner:– Value stream name– Current or future state– Customer demand (volume of work per time

period)– Takt time (if relevant)– Date– Facilitator’s name (and/or team)


Takt Time: The Key to Continuous Flow

27

Available work timeTakt time =

Customer demand

480 minutes/dayTakt time = = 10.7 mins

45 new accounts/day

OR…Time Available divided by what Kustomer Takes

“Touch Down”


Step 2 – Define Process Blocks

• Identify all blocks in the process (target 5-15 blocks)– Each block (post-it) contains an activity or group of activities that

occurs before a significant break in the timeline occurs (typically build up of WIP or handoff)

– 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– Activity format is verb/noun – what happens to what– Include the function who performs the task– If relevant, include number of workers who perform the task– Include any major barriers to flow – batches, shared/inaccessible

resources, system downtime, etc.– When possible, walk the process!


Step 3 – Define I.T. Systems

• 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 any scheduling that occurs (calendar, system, etc.)– Who tells whom to do what? How do they tell them?


Current State Value Stream Map Outpatient Imaging Services

VSM Champion: Paul Scanner Created: July 17, 2007

Demand = 15 per day



Referring Physician

% C&A = 65 %

Check-in Patient

(Admitting)


5

Send Reports

(Imaging)


6

Hospital

5 mins.

ScheduleAppointment


6

Pre-register Patient


5


Lead Time = 12 mins.Lead Time = 990 mins.

PrepPatient(Tech)


2

Check-inPatient

(Imaging)


3

CompleteExam(Tech)


2



2

Read/DictateExam

(Radiologist)


2

TranscribeReport (MDI)


6

ReviewDraft/Sign

(Radiologist)


2

PrintReports

(Imaging)


230 mins. 5 mins. 248 mins. 365 mins. 960 mins. 110 mins. 120 mins.45 mins.

E Pay

Excel

ADS

Symposium

Internet


System

Fax OrderSolutions

PACS

5 mins.

Lead Time = 24 days

Meditech

1234

5 6 7 8 9 10 11 12 13 14




5 minutes

2 minutes 11520 minutes

1 minutes

45 minutes

10 minutes

30 minutes

15 minutes

5 minutes

3 minutes

248 minutes

15 minutes

365 minutes

5 minutes

960 minutes

1 minutes

110 minutes

1 minutes

120 minutes

3 minutes

L/T = 13464 minutes

VA/T = 11576 minutes


Step 4 – Number the Process Blocks

• Number the process blocks• Connect the customer and supplier,

process blocks and I.T. systems– “Lightning bolt” arrow for electronic/automatic

information flow– Regular arrow for push systems– “Hollow” arrow for product flow

• If parallel processes exist, use alpha modifiers – e.g. 8A, 8B, etc.


Step 5 – Add Data

• Add key metrics for all process blocks– Process Time (PT)– Lead Time (LT)– Percent Complete & Accurate (%C&A)

• Add work-in-process (WIP) at every step.


Key Metrics: Time

• Process time (PT)– The time it takes to actually perform the work, if one is able to

work on it uninterrupted– Includes task-specific doing, talking, and thinking– 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 the chain

– aka throughput time, turnaround time, elapsed time– Includes Process Time, not merely waiting time.


Key Metrics: TimeScenario 1

34

Lead Time (LT)

Work Received

Work passed to next step

Process Time (PT)

LT = PT + Waiting / Delays


Key Metrics: TimeScenario 2

35

Work Received

Work passed to next step

Process Time

LT = PT + Waiting / Delays

Lead Time (LT)


3 Types of Work-in-Process (WIP)

36

Process 1WIP

WIP

WIP

Step 2’s WIP

Waiting to be

processedCurrentlyin process

Completed, but not yet passed on

Process 2 Process 3


Current State Value Stream MapPurchasing —Non‐repetitive purchases less than $5,000

Finance

Review Budget

PT = 5 mins.C&A = 60%

6

Corp Purchasing Manager

Approve in ERP

PT = 5 mins.C&A = 90%

1

0.25 days

5 mins.

0.5 days

5 mins.

5 days

5 mins.

1 days

5 mins.

1 days

10 mins.

0.5 days

15 mins.

3 days

5 mins.

7 days

15 mins.

10 days LT = 28.4 days

PT = 65 mins.

AR = 0.477%

Supervisor

Review Req.

PT = 5 mins.C&A = 95%

2

Sys Engineer

Review Requisition

PT = 5 mins.C&A = 90%

1IS Manager

Review Requisition

PT = 5 mins.C&A = 100%

1Financial Mgr

Review Requisition

PT = 10 mins.C&A = 95%

1

Admin Asst

Enter Requisition

PT = 15 mins.C&A = 98%

1

4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.

Originator

Inititate Req.

PT = 10 mins.C&A = 10%

31

2 hrs.

Form File

File Maker

ERP

Quicken

Vendor Website

Excel

4 hrs.

Customer Demand:615 requisitions per y ear

20 ReqsExternal Supplier

PT = 20 mins.

Hard CopySupplies

Data Entry

Corp Purchasing

Submit PO to Supplier

PT = 15 mins.C&A = 98%

6

10 Reqs 63 Reqs

1

2 3 4 5 6 7 8 9 10

RFPY = 4.2%

PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield

80 hrs.

WIP only noted at the 3 steps where it has accumulated.


Key Metrics: Quality

• %Complete and Accurate (%C&A)– % of incoming work that’s “usable as is”; 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– Determined by the person receiving the input; metric

goes on the output block.– Measured by the immediate downstream customer

and all subsequent downstream customers.– Similar to first pass yield in manufacturing.


Post‐it Conventions

# Staff (if relevant)

Significant Barriers to flow

Process (Verb/Noun)

Function

%C&AProcess Time

Lead Time

Process #


Step 6 – Create Timeline

• Create timeline• Calculate summary metrics

– Timeline PT Sum– Timeline LT Sum– % Activity Ratio (AR)– Rolled First Pass Yield (RFPY)


Concurrent Work / Parallel Flows

41

LT = 8 hrs

Process

LT = 4 hrs

Process Process Process

Process

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


Summary Metrics: Time

• Percent Activity (%Act)– Also referred to as Activity Ratio– The percentage of time anything is being done to the

work passing through the system (whether value-adding or non-value-adding)

– %Act = (∑PT ÷ ∑LT) × 100– 100 – %Act = % Time Work is Idle– Common current state finding = 1-10% (across value

stream)– Could also calculate %VA to show proportion of value-

adding time (often significantly lower than % Act).


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.

– RFPY = (%C&A x %C&A x %C&A…) x 100– Example: (0.80 x 0.50 x 0.99 x 0.75) x 100 = 29.7%– Common current state finding = 0-15%

43

Summary Metrics: Labor Requirements

• Total PT– Sum of all activities, not just critical path

• Labor Requirements

44

Total PT (in hrs) X # occurrences/year# FTEsAvailable work hrs/year

=

* FTE = Full‐time Equivalent (2 half time employees = 1 FTE)

Freed Capacity

= Current State FTEs – Future State FTEs


What do you do with freed capacity?• If expanding market, absorb add’l work without increasing staff• If flat market, reduce payroll through natural attrition• Reduce paid overtime• In-source• Better work/life balance• Slow down & think• Innovate – create new revenue streams• Conduct ongoing continuous improvement activities• Do a better job with fewer errors and higher safety• Get to know your customers better; build stronger supplier

relationships• Mentor staff to create career growth opportunities• Provide additional workforce development; cross-training• Do the things you haven’t been able to get to; get caught up• Collaborate with other areas


Step 7 – Determine VA & N Steps

• Identify all value-adding (VA) and necessary non-value-adding (N) steps– Add “VA” or “N” smaller post-it to relevant

process blocks– All unnecessary non-value-adding blocks

remain unlabelled


Customer-Defined Value

• Value-Adding (VA) - any operation or activity your external customers value and are (or would be) willing to pay for.

• Non-Value-Adding (NVA) - any operation or activity that consumes time and/or resources but does not add value to the product (good or service) the customer receives.– Necessary – support processes, regulatory

requirements, etc.; also referred to as “essential” or “value-enabling.”

– Unnecessary – everything else - WASTE


Typical Current State Findings

Islands of activity (process times) within long lead times.

48

Value Add

Necessary NVA

Order Delivery

Unnecessary NVA


Unnecessary non-valueadding

Necessary non-value-adding

Value-adding

Current State Typical Findings:

Work Effort as Defined by the External Customer



Product Family

Design Future State


Implement!

3 Day Event


Create flow by eliminating waste (now obvious from yourcurrent state map); typically 3‐6months out


Repe

at




Future State Design

• Goal: Eliminate all obstacles to flow (“the thing” should never stop)– Batches– Rework– Bottlenecks & WIP– Handoffs– Setup / changeover– Physical layout– Motion & transportation


Eight Wastes (Muda)

• Overproduction• Inventory• Waiting• Over‐Processing• Errors

• Motion (people)• Transportation (material/data)

• Underutilized people


Eight Questions for Future State VSM

1. What are the customer requirements? What’s the takt time?

2. Will we produce to order or to finished goods inventory? (In office/service sector, you’re almost always producing to order.)

3. Where can continuous flow be put in place?4. Where should pull systems be implemented?5. What is the single point of scheduling?6. How do we level the load and the mix?7. What should the management time frame be?8. What process improvements are necessary to achieve

the future state?‐‐ Rother & Shook, Learning to See


Future State Design Considerations

• Eliminate steps / handoffs• Combine steps• Create parallel paths• Alter task sequencing and/or

timing• Improve quality (error‐proof)• Eliminate unnecessary

approvals / authorizations• Stop performing non‐value

adding (NVA) tasks• Standardize work• Reduce / eliminate batches

• Implement pull• Create an organized, visual

workplace• Reduce setup &

changeover• Eliminate motion &

transportation• Co‐locate functions based

on flow; create cells (teams of cross‐functional staff)

• Balance work to meet takt time requirements


Future State Value Stream Map Outpatient Imaging Services

Demand = 15 per day

Referring Physician

% C&A = 85 %

Send Reports

(Imaging)


6

Hospital

Schedule apptPre-register


6


0.0833 hrs.

1 mins.

0.583 hrs.

10 mins.

0.333 hrs.

10 mins.

0.0833 hrs.

2 mins.

2 hrs.

15 mins.

7 hrs.

1 mins.

0.0333 hrs.

1 mins.

0.5 hrs.

3 mins.

LT = 11.3 hrs.

CT = 43 mins.CT/LT Ratio = 6.32%

Lead Time = 45 mins.Lead Time = 15 days

PrepPatient(Tech)


2

Check-inPatient

(Imaging)


3

CompleteExam(Tech)


2



2

Read/DictateExam

(Radiologist)


2

ReviewDraft/Sign

(Radiologist)


2

PrintReports

(Imaging)


220 mins. 5 mins. 120 mins. 420 mins. 2 mins. 30 mins.35 mins.

E Pay

Excel

Symposium

Internet


System

Fax OrderSolutions

PACS

5 mins.

Set-upReduction

Remove Check in

and ReduceSystem Access

Work Balancing

StandardWork

Pull System(Supplies Kanban)

VisualWorkplace

Voice Recognition

Batch Reductions

5S

Co-locate

StandardWork

Work Balance

ContinuousFlow

Value StreamAlignment






123

4 5 6 7 8 9 10 11

Risk Reduction

(Joint Commision)

Meditech

Note: Process Time (PT) is referred to as Cycle Time (CT) on this map



Product Family

Design Future State


Implement!

3 Day Event


Create flow by eliminating waste it is now obvious from yourcurrent state map); typically 3‐6months out


Repe

at




57

PACE Prioritization Matrix

High LowAnticipated Benefit

Ease

of

Imp

lem

enta

tion

Difficult

Easy

7

5

13

4

23

1

22

8

9

2

10

16

11

6

12

14

19

15

17

3

21

18

24

20

25

26

27

Policy

I.T.

Process

58

Chart Title

Number of Items 54

Item NameOrganizational

Benefit Execution EaseDegree of Urgency*

Item 1 9 1 1Item 2 7 3 2Item 3 5 5 3Item 4 3 7 4Item 5 1 9 5

* Degree of urgency is indicated by bubble size.

The Outstanding Organization: Achieving Focus

Prioritization Chart 1) Enter the title of the chart in Cell B2 2) Enter the number of items (e.g. projects, improvement activities, etc.) in cell B4

3) Enter the item name and ranking information into A8-D8 and so on.

To use this Template:

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

Execution Ease

Organizational Benefit

Prioritization Chart

Downloadable Excel Prioritization Chartwww.ksmartin.com/the‐outstanding‐organization


Value Stream

1 2 3 4 5 6 7 8 9 10 11 12

2 Improve quality of referral KE Sean O'Ryan

3, 4 Reduce lead time beween schedulingand preregistration steps PROJ Dianne

Prichard

5, 6 Eliminate the need for two patient check-ins KE Michael

O'Shea

6 Eliminate bottleneck in waiting area KE Dianne Prichard

9 Eliminate lead time associated with transcription step PROJ Sam Parks

10 Eliminate batched reading KE Sam Parks

7 Reduce inventory costs, regulatory risk and storage needs KE Michael

O'Shea

12 Reduce delay in report delivery PROJ Martha Allen

12 Reduce delay in report delivery KE Martha Allen

Implement voice recognition technology

Reduce setup required

Cross-train and colocate work teams

Implement additional fax ports

Collect copays in Imaging

Balance work / level demand

5S CT supplies area; implement kanban

Value Stream Mapping Facilitator

Increase percentage of physicians receiving electronic delivery (rather than hard copy)

Approvals

Executive Sponsor Value Stream Champion

Signature:

Date: Date: Date:

Signature: Signature:

Block# Goal / Objective Improvement Activity

Implement standard work for referral process

Type Owner Implementation Schedule (weeks) Date Complete

Date Created

11/21/2007Allen WardSally McKinseyDave Parks 12/13/200710/18/2007 1/10/2008

Future State Implementation PlanExecutive Sponsor

Value Stream ChampionValue Stream Mapping Facilitator

Implementation Plan Review Dates11/1/2007

Outpatient Imaging


60

Where Should We Start?


61

What’s the Problem?


Which comes first? A3 or VSM?

62

A3

VSM

VSM

A3

“We have a MAJOR

problem.”

“Let’s look at the entire

value stream.”

“We need to improve our entire value stream.”

“Let’s explore this problem in the value stream.”


e.g., losing market share

e.g., to look at overall product quality and the

reason(s) for long lead times

e.g., new construction

e.g., why plans are so far off in terms of construction logistics

63

Karen Martin, Principal7770 Regents Road #635

San Diego, CA 92122858.677.6799

[email protected]: @karenmartinopex

Subscribe: www.ksmartin.com/subscribe

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Value Stream Mapping - Strategy Before Tactics