Value Stream MappingManagement is Essential

The lean transformation should provide: Growth with improved margins Growth with minimal capital Growth without more employees

What are our main stumbling blocks? Years of bad habits Financial focus with limited cost

understanding A lack of system thinking and incentives Metrics supporting a legacy model Limited customer focus Absence of effective operating strategies

How have these stumbling blocks been addressed? Programs of the month (band aids) Meetings, meetings, meetings, meetings

If we could just start over…..with Activities aligned with our business strategy Efforts focused on NET improvements for the

company Metrics supportive of fundamental change Simple, constant communication of our plans

and achievements as an enterprise

Why not take the value stream perspective?

• “Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.”

3 enterprise value streams:

Raw Materials to Customer – Manufacturing Concept to Launch – Engineerin Order to Cash - Administrative Functions

A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

Value Stream Improvement vs. Process Improvement

RawMaterial

Finished Product

Stamping

Process

Welding

Process

AssemblyCell

ProcessCustomer

Value Stream

Value Stream Mapping Follow a “product” or “service” from

beginning to end, and draw a visual representation of every process in the material & information flow

Then, draw (using icons) a “future state” map of how value should flow

Levels of a Value Stream

process level

single plant(door to door)

multiple plants

across companies

Start Here

Value Stream Managers

Process 1 Process 2 Process 3

“Customer”

The ValueStream Manager

Kaizen

Using the Value Stream Mapping Tool

Understanding how things currently operate. Our Baseline!

Product/Service “Family”

plan and implementation

current state drawing

future state drawing

Designing a lean flow. Our vision!

The Goal of Mapping

Current State Mapping Completed in a day Performed by a cross functional team of

middle managers responsible for implementing new ideas

Resulting in a picture (and team observations) of what we “see” when following the product

Future State Mapping Completed in a day with the same team Focused on:

Creating a flexible, reactive system that quickly adapts to changing customer needs

Eliminating waste Creating flow Producing on demand

Current State Value Stream Map

Future State Value Stream Map

Planning and Implementing

Don’t Wait! You need a plan!

Tie it to your business objectives Make a VS Plan: What to do by when Establish an appropriate review frequency Conduct VS Reviews walking the flow

Remember the other two value streams?

Administrative activities are often a major percentage of the total throughput time

Goal: 400% improvement in productivity over 10 years

Modest opportunities on the plant floor; Untapped opportunities off the plant floor

Enterprise Perspective

Engineer to Order Configure to Order Capital equipment manufacturers Small companies (<500 employees) Service Firms

We might begin in…

Processes directly impacting the part production Engineering Quoting

Or, in value streams with direct customer contact Order entry Invoicing

Value Stream Mapping

Helps you visualize more than the single process level

Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniques

Value Stream Management

The map is just a picture of ideas! The fundamental change is in how we choose

to manage the value stream as an integrated system of decisions and tasks

Value Stream Management

Use your strategic plan as a guide Find the gaps in necessary performance Improve value streams to meet the performance Create new metrics to support new ways of thinking

and acting Understand true product family costs Manage operations by the value stream data Always have a future state

Critical Success Factors

Management must understand, embrace, and lead the organization into lean thinking

Value stream managers must be empowered and enabled to manage implementations

Improvements must be planned in detail with the cross functional Kaizen teams

Successes must be translated to the bottom line and/or market share

Putting it to Work! Continuously improving fundamentally flawed

processes will yield limited results. Simply automating existing manual processes can

also yield limited results. Seriously challenging old practices will provide

the dramatic results desired.