Company
LOGO
Lean Webinar Series Value Stream Mapping in Office &
Service Environments
November 4, 2009
© 2010 Karen Martin & Associates
Learning Objectives
Participants will learn:
What a Value Stream Map is – and what it is not.
Best practices for holding a Value Stream Mapping
activity.
How to define office & service product families.
Step-by-step approach for creating current and future
state maps.
Key differences between manufacturing and
office/service VMSs.
How to create an implementation plan from the future
state VSM.
2
© 2010 Karen Martin & Associates
Womack’s Five Principles of a
Lean Enterprise
Value
Value stream
Flow
Pull
Perfection
3
— Jim Womack, Lean Thinking, 1996, 2003
Value Stream Mapping’s Beginnings
Mike Rother & John Shook
© 2010 Karen Martin & Associates
Value Stream Defined
Value Stream: All of the activities, required to fulfill a customer request from order to delivery (and beyond to cash received).
Customer
5
Value Stream
Process Process Process
Customer
Request
Customer
Receipt
© 2010 Karen Martin & Associates
The Work We Do:
Degrees of Granularity
6
Value
Stream
Process Process Process
Step Step Step
Value Stream
Map
In the
Weeds
(Tactical)
Rooftop
View
(Strategic)
Metrics-Based
Process Map
© 2010 Karen Martin & Associates
Types of Value Streams
Product Value Streams
Support Value Streams
Recruiting and Hiring Process
Tech Support
Accounts Receivable
Payroll
Value Stream “Segments”
The order fulfillment segment of a product line
The product development cycle
New account set-up
7
Customer
Fabrication
PT = 3 minutes
C/O = 2.2 hrs.
Uptime = 85%
FPY: 93%
5
Test & Pack
PT = 2 mins.
FPY: 100%
4
Production
Control
Supplier
Work
Order &
Schedule
19 days
3 mins.
12 days
42 mins.
3 days
2 mins.
34 days Total LT = 68.1 days
Total PT = 47 mins.
AR = 0.144%
19 days
Shipper
Assembly
PT = 42 mins.
C/O = 0.1 hrs.
Uptime = 60%
FPY: 98%
22
Forecast
PO
Schedule
PO
PO
Forecast
Sales
PT = 20 mins.
%C&A = 90%
25
Order
Entry
PT = 2 mins.
%C&A = 75%
5
On-time Delivery=55%
34 days3 days12 days
2 x weekly
PT = Process Time LT = Lead Time C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100) RFPY = Rolled First Pass Yield
Value Stream: Product Family ABC
Current State Value Stream Map
Customer Demand: 200 units / day
RFPY = 91.1%
Weekly
Current State VSM – ABC Product Family
Production
Loop
Supplier
Loop
Order
Fulfillment
Loop
Current State VSM - Order Fulfillment Loop
Customer
Enter Order
Order Entry
PT = 5 mins.
%C&A = 90%
5
Pick and ship
order
Warehouse
PT = 15 mins.
%C&A = 99%
5
2 hrs.
15 mins.
4 hrs.
5 mins.
2 hrs.
20 mins.
2 hrs.
15 mins.
10 hrs. Total LT = 20.9 hrs.
Total PT = 55 mins.
AR = 4.38%
Run Credit
Check
Finance
PT = 20 mins.
%C&A = 99%
1
PO
On-time delivery = 55%
10 hrs.2 hrs.2 hrs.4 hrs.
SAP System
2 hrs.
Review &
approve PO
Sales
PT = 15 mins.
%C&A = 90%
25
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield
Value Stream Loop: Domestic Order Fulfillment
Current State Value Stream Map
Customer Demand: 150 orders / day
RFPY = 55.6%
Excel
Account data
Sales Order
Shipper
Approval
2 x
weekly
%C&A = 70%
© 2010 Karen Martin & Associates
Why Value Stream Mapping?
To set strategy before diving into tactics.
Enables us to SEE the process.
Promotes systems thinking / seeing the whole
Helps us avoid sub-optimizing
10
© 2010 Karen Martin & Associates
VSM Goal: System Efficiency
11
Individual Efficiency =
Sub-optimization
System Efficiency =
Optimal Value Stream
Performance
© 2010 Karen Martin & Associates
Why Value Stream Mapping? (continued)
Shows the linkage between information and material flow.
Makes the disconnects and obstacles to flow visible at a macro level
Metrics-based decision making: What are you going to do to affect the numbers?
12
© 2010 Karen Martin & Associates
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.
13
© 2010 Karen Martin & Associates
Lead Time vs. Process Time
Scenario 1
14
Lead Time
Work
Received Work passed
to next step
Process Time
LT = PT + Waiting / Delays
© 2010 Karen Martin & Associates
Lead Time vs. Process Time
Scenario 2
15
Lead Time
Work
Received
Work passed
to next step
Process Time
LT = PT + Waiting / Delays
© 2010 Karen Martin & Associates
Show of Hands
How many of your currently include a
quality metric for each process block on
your value stream maps?
16
© 2010 Karen Martin & Associates
Key Metrics: Quality
%Complete and Accurate (%C&A)
The percentage of input that’s deemed “usable as is”
by the person doing the work
% of incoming work where 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
Measured by the immediate downstream customer
and all subsequent downstream customers.
Similar to first pass yield in manufacturing.
17
© 2010 Karen Martin & Associates
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…
Common finding = 0-15%
Multiply ALL %C&A’s, even if parallel processes
18
© 2010 Karen Martin & Associates
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 finding = 1-10%
Could also calculate %VA to show much activity
is value-adding – is typically lower than % Act.
19
Current State Value Stream Map
Outpatient Imaging Services
VSM Champion: Paul Scanner
Created: July 17, 2007
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)
Cycle Time = 3 mins.
% C&A = 90 %
6
Hospital
5 mins.
Schedule
Appointment
Cycle Time = 11 mins.
Lead Time = 12 mins.
% C&A = 98 %
6
Pre-register
Patient
Cycle Time = 30 mins.
Lead Time = 990 mins.
% C&A = 100 %
5
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
0.0833 hrs.
2 mins.
0.0833 hrs.
1 mins.
0.75 hrs.
10 mins.
0.5 hrs.
15 mins.
0.0833 hrs.
3 mins.
4.13 hrs.
15 mins.
6.08 hrs.
5 mins.
16 hrs.
1 mins.
1.83 hrs.
1 mins.
2 hrs.
3 mins.
LT = 32.5 hrs.
CT = 56 mins.
CT/LT Ratio = 2.87%
Lead Time = 12 mins.Lead Time = 990 mins.
Prep
Patient
(Tech)
Cycle Time = 10 mins.
% C&A = 100 %
2
Check-in
Patient
(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Complete
Exam
(Tech)
Cycle Time = 15 mins.
% C&A = 90 %
2
Transmit
Images
(Tech)
Cycle Time = 3 mins.
% C&A = 100 %
2
Read/Dictate
Exam
(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Transcribe
Report
(MDI)
Cycle Time = 5 mins.
% C&A = 75 %
6
Review
Draft/Sign
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports
(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
230 mins. 5 mins. 248 mins. 365 mins. 960 mins. 110 mins. 120 mins.45 mins.
E Pay
Excel
ADS
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
PACS
5 mins.
Lead Time = 24 days
Meditech
123
4
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%
Future State Value Stream Map
Outpatient Imaging Services
VSM Champion: Paul Scanner
Created: July 18, 2007
Demand = 15 per day
Referring
Physician
% C&A = 85 %
Send
Reports
(Imaging)
Cycle Time = 3 mins.
% C&A = 90 %
6
Hospital
Schedule appt
Pre-register
Cycle Time = 11 mins.
Lead Time = 45 mins.
% C&A = 98 %
6
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
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
Prep
Patient
(Tech)
Cycle Time = 10 mins.
% C&A = 100 %
2
Check-in
Patient
(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Complete
Exam
(Tech)
Cycle Time = 10 mins.
% C&A = 90 %
2
Transmit
Images
(Tech)
Cycle Time = 2 mins.
% C&A = 100 %
2
Read/Dictate
Exam
(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Review
Draft/Sign
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports
(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
220 mins. 5 mins. 120 mins. 420 mins. 2 mins. 30 mins.35 mins.
E Pay
Excel
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
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
Auto Fax 80%
Us Mail 15%
MD Mailbox 5%
Rolled First Pass
yield = 40%
Rework Loop via Fax 10% of the time
Customer Demand:
15 patients per Day
(Takt Time 1920 seconds)
8 hours per day
12
3
45 6 7 8 9 10 11
Risk Reduction
(Joint Commision)
Meditech
© 2010 Karen Martin & Associates
Outpatient Imaging
Projected Results
22
Metric
Current
State
Projected
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 with no additional headcount
© 2010 Karen Martin & Associates
Summary Metrics: Measuring
Productivity Gains
Labor Effort
23
Total PT (in hrs) X # occurrences/year
# FTEs
Available work hrs/year/employee =
Freed
Capacity = Current State FTEs – Future State FTEs
Note: Improvement can be expressed as Freed
Capacity (FTEs), Time, or Labor Expense (or all)
# FTEs = Full Time Equivalents; 2 half-time people = 1 FTE
© 2010 Karen Martin & Associates
What do you do with freed capacity?
Absorb additional work without increasing staff
Reduce payroll through natural attrition
Innovate – create new revenue streams
Conduct ongoing continuous improvement activities
Do a better job with fewer errors and higher safety
Talk and work with your customers and suppliers
Mentor staff to create career growth opportunities
Provide additional workforce development; cross-train
Better work/life balance
Slow down & think
Get/stay caught up
Do the things you haven’t been able to get to
Collaborate with other areas
24
© 2010 Karen Martin & Associates
Value Stream Mapping Activities
Team-based
Heavily weighted with those who can
authorize an innovative future state.
The team goes to the gemba to obtain the
metrics from those doing the work.
Three day activity; three deliverables.
Leadership learning is huge.
Interim briefings are a key success factor.
25
HR Value Stream Mapping Charter Event Scope Leadership / Coordination Schedule
Value Stream Recruiting, Hiring, & Onboarding Process Executive Sponsor Sherrye Hutcherson Event Date(s) Oct 27, 28 & 29, 2009
Specific Conditions External hires Value Stream
Champion N/A Start/End Times
Oct 27, 28 8:00 am - 4:30 pm
Oct 29 7:30 am - 2:00 pm
Customer Demand 100 per year Facilitator Karen Martin Location 9 West Seminar
Trigger Vacancy
First Step Hiring manager completes VPA Team Lead N/A
Meals
Provided?
Lunch, morning & afternoon
snacks Last Step Employee completes NEI
Boundaries &
Limitations N/A
Coordinator Andrew Peacock
Interim
Briefing(s)
Oct 27 & 28 3:30-4:30 pm
Oct 29 1-2 pm
Improvement
Timeframe Future state will be fully implemented by 2/15/2009
Briefing
Attendees
Tim Burke, Sherrye H and other
Division Managers
Event Drivers Mapping Team
1 Cumbersome process as perceived by the customer. Function Name Contact Information
2 Need to free capacity and operate more effectively. 1 Staffing Paula Pittman
3 2 FCS HR Patty Yager
4 3 Talent Management Tad Leeper
5 4 HRIS Chris Ritz
Measureable Objectives 5 HR Compliance Carl Olsen
1 Reduce LT from req to offer acceptance from 45-55 days to 30 days. 6 Comp & Benefits Nyla Cork
2 7 Recruiting Sheila Love
3 8 Diversity / Affirmative Action Joyce Cooper
4 9 Hiring Manager, Call Ctr Deb Emerson
5 10 Hiring Manager, Production Ops
Planned Deliverables On-Call Support
1 Current State VSM Function Name Contact Information
2 Future State VSM 1 IT Gary Van Osdel
3 Implementation Plan 2 Fort Calhoun - Security Herb Childs
4 3
5 4
Potential Obstacles Approvals
1 Executive Sponsor Value Stream Champion Facilitator
2
3 Signature: Signature: Signature:
4 Date: Date: Date: 26
Value Stream Mapping Process
Define
Product Family
Design Future
State
Document Current
State
Implement!
3 Day
Event
Foundation (the basis) for the
future state; 70-80% accurate is
acceptable (directionally correct)
Create flow by eliminating waste
it is now obvious from your
current state map); typically 3-6
months out
Products (good or services) with
common process steps
Rep
eat
The goal of mapping!
Create
Implementation Plan
Include accountability and
timeframes for completion
© 2010 Karen Martin & Associates
One VSM per Product Family
Process Steps & Equipment
Step A Step B Step C Step D Step E Step F
Products
Product
ABC X X X X X
Product
XYZ X X X X X
Product
IBM X X X
Product
AWR X X X X
Product
ACC X X X
Product
SUB X X X
Product
IDR X X X X X X 28
Group Product Families by similar downstream processes, steps or equipment.
Vol.
50
73
2
5
15
12
1
© 2010 Karen Martin & Associates
Narrowing the Scope:
Selected Specific Conditions
29
Hiring
Process
Replacements
New
Positions
Exempt
Staff
Non-Exempt
Staff
Exempt
Staff
Non-Exempt
Staff
Narrowing the Scope:
Selecting Specific Conditions
30
Order
Fulfillment
Process
International
Domestic
Service Parts
Consumables
Units
Non-
Warranty
Warranty
Service Parts
Consumables
Units
Non-
Warranty
Warranty
Value Stream Mapping Process
Define
Product Family
Design Future
State
Document Current
State
Implement!
3 Day
Event
Foundation (the basis) for the
future state; 70-80% accurate is
acceptable (directionally correct)
Create flow by eliminating waste
it is now obvious from your
current state map); typically 3-6
months out
Products (good or services) with
common process steps
Rep
eat
The goal of mapping!
Create
Implementation Plan
Include accountability and
timeframes for completion
© 2010 Karen Martin & Associates
Value Stream Mapping Facilitator
Range of Necessary Traits
Skills / Knowledge Improvement tools (root cause analysis, flow-enhancing tools, etc.)
Project & time management
Mediation; consensus building
People effectiveness – from front line workers to execs
Authority / Respect Designated change agent / influence leader
Trustworthy
Comfortable removing obstacles & reaching out to senior leadership
Personality / Energy Naturally curious
Challenging, yet supportive
Positive, upbeat, energetic
Pushy without irritating
Objectivity / Fairness No attachment to the work being improved
32
© 2010 Karen Martin & Associates 33
Who? Accountability Tool
Leadership “What has to happen” Value Stream
Mapping
Workforce “How it will happen” Kaizen Events,
Just-do-its,
and Projects
Improvement Roles S
tra
teg
ic
Tac
tic
al
Middle
Management
© 2010 Karen Martin & Associates 34
The VSM Event
3 days
Sequestered team composed primarily of those
who can authorize change
Schedule
Day 1 – Document and analyze the current state
Go to the Gemba!
Day 2 – Design the future state (3-6 months out)
Day 3 – Create the implementation plan
Interim briefings (preferably daily) to non-team
leadership
© 2010 Karen Martin & Associates 35
Interim Briefings
Day 1 – here’s what we’ve learned
Establishes a mental framework for embracing
improvements; “sells” the need for improvement
Day 2 – here’s what we plan to do
Does anyone object? If so, why?
Challenge policies
Day 3 – here’s how we’re going to execute
Priorities, approach, timeframes, accountability
Obtain final buy-in right then and there
Value Stream Mapping Process
Define
Product Family
Design Future
State
Document Current
State
Implement!
3 Day
Event
Foundation (the basis) for the
future state; 70-80% accurate is
acceptable (directionally correct)
Create flow by eliminating waste
it is now obvious from your
current state map); typically 3-6
months out
Products (good or services) with
common process steps
Rep
eat
The goal of mapping!
Create
Implementation Plan
Include accountability and
timeframes for completion
Key VSM Components
Process 1 Process 2 Process 3 Process 4
SUPPLIER CUSTOMER
Production
Control
Info
rmati
on
Flo
w
Pro
du
ct
Flo
w
Minutes Minutes Minutes Minutes
Hours Hours Hours
Tim
eli
ne
1
2
3
I I I
LT
PT
Order Initiation
Current State Map
Demand = XXXX
May 8, 2008
Robert Parker
Hours
Key VSM Components -
Office / Service
Process 3 Process 4
CUSTOMER
Info
rmati
on
Flo
w
Pro
du
ct
Flo
w
Minutes Minutes Minutes Minutes
Hours Hours Hours
Tim
eli
ne
1
2
3 LT
PT
ABC Value Stream
Current State Map
Demand = XXXX/yr
Date
Key Contact
I.T. I.T. I.T.
Process 1 Process 2
© 2010 Karen Martin & Associates
The timeline is the most important of the three defining characteristics of a
VSM:
1) information flow
2) product flow
3) timeline
If your map doesn’t include a timeline, it is not a VSM. If your map has swim
lanes, it’s not a VSM. 39
Basic Mapping Icons
Push Arrow
Electronic
Information
Flow
Manual
Information Flow
Operator / Employee
Material receipts
& shipments
Go See Scheduling
External
Organization
Process Block
2 Shifts Takt= 60m
C/O= 40 m PT= 25 m
Data Block
Movement
by Truck
In-box
Minutes Minutes Minutes Minutes
Hours Hours Hours Lead Time
Process Time
Timeline
Work-in-Process
I
© 2010 Karen Martin & Associates
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.”
© 2010 Karen Martin & Associates
Step 1
Label your map
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)
42
© 2010 Karen Martin & Associates
Takt Time:
The Key to Continuous Flow
43
Available work time Takt time = Customer demand
480 minutes/day Takt time = = 10.6 mins 45 new accounts
OR…
Time Available divided by what Kustomer Takes
“Touch down”
© 2010 Karen Martin & Associates
Step 2
Identify all blocks in the process (target 5-15 blocks)
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
Each block (post-it) contains an activity or group of activities that
occurs before a break in the timeline occurs (typically WIP or
handoff)
Activity format is verb/noun – what happens to what
Include the function who performs the task
Include number of workers who perform the task
Include any obstacles to flow – batches, shared/inaccessible
resources, system downtime, etc.
Consider walking the process
44
Post-it Conventions
# Staff
(if relevant)
Barriers to flow
Process
(Verb/Noun)
Function
© 2010 Karen Martin & Associates
Step 3
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 (rare in
current state)
Who tells whom to do what?
46
Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000 Supplies Purchasing - Current State VSM
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%
1
IS 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.
© 2010 Karen Martin & Associates
Step 4
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.
48
Post-it Conventions
# Staff
(if relevant)
Barriers to flow
PT (process time)
LT (Lead time) % Complete &
Accurate
Process
(Verb/Noun)
Function
Process Block #
© 2010 Karen Martin & Associates
Step 5
Add key metrics for all process blocks
Process Time (PT)
Lead Time (LT)
Percent Complete & Accurate (%C&A)
50
Post-it Conventions
# Staff
(if relevant)
Barriers to flow
PT (process time)
LT (Lead time) % Complete &
Accurate
Process
(Verb/Noun)
Function
Process Block #
© 2010 Karen Martin & Associates
Step 6
Create timeline & calculate summary
metrics
Timeline PT Sum
Timeline LT Sum
% Activity Ratio (AR)
Rolled First Pass Yield (RFPY)
52
© 2010 Karen Martin & Associates 53
Process 2
PT
LT LT
Process 1
PT
Office/Service Lead Time ―
• From the time work is made available until it’s been completed AND passed on
to the next person/work group/department in the process.
• Placed on the peak of the timeline to the left of the process block it refers to.
• Represents total throughput time, including process time; not merely wait time.
How to Treat Lead Time in
Office/Service Environments (new slide)
Lead Time
Process Time
© 2010 Karen Martin & Associates
Value Stream Mapping OPPD Recruiting, Hiring, Onboarding Process Results
54
Metric
Current State
Projected
Future State
Projected %
Improvement
Lead Time
Process Time
% Activity
Rolled First
Pass Yield
Other?
© 2010 Karen Martin & Associates
Typical Current State Findings
Islands of activity (process times) within long lead times.
55
Value Add
Necessary
NVA
Available
to work on Available to
next step
Unnecessary
NVA
© 2010 Karen Martin & Associates
Step 7
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
56
© 2010 Karen Martin & Associates
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.
Unnecessary – everything else - WASTE
57
Unnecessary Non-value adding
Necessary non-value-adding
Value-adding
Work Effort as Defined by the
External Customer
Value Stream Mapping Process
Define
Product Family
Design Future
State
Document Current
State
Implement!
3 Day
Event
Foundation (the basis) for the
future state; 70-80% accurate is
acceptable (directionally correct)
Create flow by eliminating waste
it is now obvious from your
current state map); typically 3-6
months out
Products (good or services) with
common process steps
Rep
eat
The goal of mapping!
Create
Implementation Plan
Include accountability and
timeframes for completion
© 2010 Karen Martin & Associates
Designing the Future State Value
Stream
60
Target All Waste!
© 2010 Karen Martin & Associates
Eight Wastes (Muda)
Overproduction
Inventory
Waiting
Over-Processing
Errors
Motion (people)
Transportation (material/data)
Underutilized
people
61
© 2010 Karen Martin & Associates
Future State Design
Goal: Removing all obstacles to flow (“the
thing” should never stop)
Batches
Rework
WIP / Bottlenecks
Handoffs
Setup / changeover
Physical layout
Motion & transportation
62
© 2010 Karen Martin & Associates 63
Eight Questions for
Future State VSM
1. What are the customer requirements? What’s the takt
time?
2. With goods, will we produce to order or to finished
goods inventory? (With services, 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
Implement pull
Reduce / eliminate batches
Improve quality
Create an organized, visual workplace
Reduce changeover
Eliminate motion & transportation
Standardize work
Eliminate unnecessary approvals / authorizations
Stop performing non-value adding (NVA) tasks
Co-locate functions based on flow; create cells (teams of cross-functional staff)
Balance work to meet takt time requirements
64
© 2010 Karen Martin & Associates
The Right Process
Standardize work
Mistake proof work
Make problems visual
Fix problems immediately
Create continuous flow
Level demand
Balance work
Create pull systems
65
Building a Lean Enterprise
Process
Stabilization
Tools
Building a Lean Enterprise
Flow Enabling
Tools
© 2010 Karen Martin & Associates 68
Team Dynamics
Forming
Storming
Norming
Performing
Tuckman Model
Bruce Tuckman, 1965
Adjourning
Future State Icons
Supermarket
Production
Kanban
Withdrawal
Kanban
Signal
Kanban
Kanban
Arriving
in Batches
Withdrawal
OXOX Leveling,
Mix and/or
Volume
Kanban
Path
Kanban
Post
First-In
First-Out
(max WIP
defined)
FIFO
Max 8 “things”
Kaizen Burst
Buffer Stock
Combined Steps
Eliminated Step
© 2010 Karen Martin & Associates
Value Stream Mapping OPPD Recruiting, Hiring, Onboarding Process Results
70
Metric
Current State
Projected
Future State
Projected %
Improvement
Lead Time
Process Time
Activity Ratio
Rolled First
Pass Yield
Value Stream Mapping Process
Define
Product Family
Design Future
State
Document Current
State
Implement!
3 Day
Event
Foundation (the basis) for the
future state; 70-80% accurate is
acceptable (directionally correct)
Create flow by eliminating waste
it is now obvious from your
current state map); typically 3-6
months out
Products (good or services) with
common process steps
Rep
eat
The goal of mapping!
Create
Implementation Plan
Include accountability and
timeframes for completion
Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000 Supplies Purchasing - Current State VSM
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%
1
IS 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.
Supplies Purchasing - Future State VSM
Customer Demand:
615 requistions per year
Dept.
Manager
Approve
in ERP
PT=5 mins.
C&A = 90%
1
0.5 days
5 mins.
0.75 days
5 mins.
1 days
20 mins.
10 days LT = 12.3 days
PT = 30 mins.
AR = 0.508%
Supervisor
Review
Req.
PT=5 mins.
C&A = 95%
28 hrs.
Originator
Enter Req.
in ERP
PT=30 mins.
C&A = 85%
31
File Maker
ERP
Vendor
Websites
6 hrs.
Standard
Work for
review
Additional
IT access
Requisition
Checklist
Cross
Training
Additional
IT access
External
Supplier
PT=20 mins.
Supplies
4 hrs.
Auto Notify
Integrate Form
File with File
Maker
Use budget in place
of Quicken
Dedicated
Buyers
Corp Purchasing
Place
Order
PT=20 mins.
C&A = 98%
6
Approval
1
2 3 4 5
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield
RFPY = 71%
80 hrs.
Future State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
© 2010 Karen Martin & Associates
Metric
Current
State
Projected
Future State
%
Improvement
Lead Time 28.4 days 12.3 days 56.7%
Process Time 65 mins 30 mins 53.8%
% Activity 0.48% 0.51% 6.3%
Rolled First
Pass Yield 4.2% 71.0% 1,590%
# Handoffs 10 5 50%
# IT Systems 6 3 50%
Freed capacity 2.1 FTEs 10%
Purchasing Process
Projected Results
75
Source Refrigeration & HVAC, Inc.
Current State Value Stream Map
Serv ice Deliv ery
Created February 11, 2009
CONFIDENTIAL
Customer
Receive
customer call
Call Center
PT = 2 mins.
%C&A = 60%
Review &
Post Invoices
Posting Admin
PT = 3 mins.
%C&A = 98%
Batch: 1x/day
0.0833
hours
2 minutes
2 hours
5 minutes
1.5
hours
90 minutes
1.25 hours
75 minutes
2 hours
120 minutes
4 hours
5 minutes
10.7
hours
10 minutes
48
hours
25 minutes
4 hours
3 minutes
10.7
hours
10 minutes
2 hours
4 minutes
480
hours Lead Time = 572 hours
Process Time = 349 minutes
Select &
Dispatch Tech
Dispatcher &
Service
Manager
PT = 5 mins.
%C&A = 60%
Make Repair;
Call to raise
the NTE
Tech
PT = 120 mins.
%C&A = 40%
Complete Call
in GP
Dispatcher
PT = 5 mins.
%C&A = 80%
Review
Service Call
Data
Service
Manager
PT = 10 mins.
%C&A = 50%
Batch: 2x/day
Review Open
Ticket Report
Billing Admin
PT = 25 mins.
%C&A = 75%
Upload time
card
Tech
PT = 0 mins.
%C&A = 70%
Batch: 1x/day
Close call in
Verisae
Account
Manager
(West)
PT = 1 mins.
%C&A = 90%
Batch: 1x/day
Process Time
Cards
Payroll Admin
PT = 10 mins.
%C&A = 90%
Batch: 1x/day
Process A/P
A/P Admin
PT = 15 mins.
%C&A = 85%
Batch: 1x/day
Tech
Assess
Problem
PT = 90 mins.
%C&A = 90%
Tech
Special Order
Part
Tech
Pick up Part
at Parts Store
PT = 75 mins.
%C&A = 95%
Tech
Get Part from
Truck
PT = 0 mins.
120 m.
Great
Plains
Verisae
(Customer)
Review
Invoices;
Close in
Verisae (Pac)
Account
Manager
PT = 10 mins.
%C&A = 85%
Batch: 3-5x per wk
Enter Invoices
into Verisae &
Excel; Mail
Invoices
Billing Admin
PT = 4 mins.
%C&A = 95%
Batch: 1x/week
Excel
Spreadsheet
(Customer)
40%
Receive
Cash; Post
Payment
Collections
75 m. 120 m. 240 m. 640 m. 6 days 240 mins. 640 m. 120 m. 60 days90 m.5 m.
?%
?%
Supplier
%C&A %Complete and Accurate
AR Activity Ratio
FTE Full Time Equivalent
LT Lead Time
PT Process Time
RFPY Rolled First Pass Yield
Acronym Key
Lead Time to invoice = 86.2 hrs
Process Time =5.9 hrs.
NOTE: Business hours
Activity Ratio = 6.8%
RFPY = 1.1%
Lead time to cash = ? days
Current State Value Stream Map
Service Organization
76
Future State Value Stream Map
Source Refrigeration & HVAC, Inc.
Service Delivery
T&M Target example, refrigeration component repair, non-peak season (35 work orders per day)
Created February 13, 2009
CONFIDENTIAL
Customer%C&A = 99%
Dispatcher
Create W.O.
Dispatch Tech
PT = 7 mins.
%C&A = 85%
Supplier
Tech
Assess
Problem
PT = 75 mins.
%C&A = 90%
Billing Admin
Review W.O.,
payroll, AP &
invoice; post
immediately
PT = 25 mins.
%C&A = 95%
Billing Admin
Compare
invoice
register to
invoices and
mail invoices
PT = 5 mins.
%C&A = 99%
1x daily
Collections
Receive
Cash; Post
Payment
2 hrs.
0.117 hrs.
1.25 hrs.
1.25 hrs.
1.25 hrs.
1.25 hrs.
2 hrs.
2 hrs.
24 hrs.
0.417 hrs.
4 hrs.
0.0833 hrs.
480 hrs. Lead Time = 520 hrs.
Process Time = 5.12 hrs.
Tech
Make Repair;
Complete call
on handheld
PT = 120 mins.
%C&A = 75%
Verisae
(Customer)
Great
Plains
Tech
Pick up Part
at Parts Store
PT = 75 mins.
%C&A = 95%
Lead Time to invoice = 34.5 hrs
NOTE: Business hours
Process Time = 5.1 hrs.
Activity Ratio = 14.8%
RFPY = 45.4%
Lead time to cash = 67 days
`
%C&A %Complete and Accurate
AR Activity Ratio
FTE Full Time Equivalent
LT Lead Time
PT Process Time
RFPY Rolled First Pass Yield
Acronym Key
Excel
Spreadsheet
(Customer)
Billing Admin
Enter data
into Verisae
and Excel
from Daily
Report
PT = 5 mins.
%C&A = 99%
1x daily
Tech
Special Order
Part
10%
?
Tech
Contact Tech
Support As
Needed
Tech
Get Part from
Truck
PT = 0 mins.
?
EDI Interf ace
No EDI
120 mins. 75 mins. 75 mins. 2 hrs. 24 hrs. 4 hrs. 60 days
Create Tech
Support Center
Create EDI
Interface w/
Customers
Centralize
Dispatch
Improve Tech
Onboarding
Standardize
Truck Inventory
Improve Tech
Training; Create
Sub-levels
Install kanban
on trucks
Create
Customer Billing
Teams
Create stnd work
for invoicing
Create invoice
exception report
Explore flat rate
pricing
Create Tech
performance
report
Implement
GPS
Create Source
preferred T & C's
Separate labor
& payroll
Create EDI
Interface w/
Verisae
Establish
parameters for time
& parts by
service type
Future State Value Stream Map
Service Organization
© 2010 Karen Martin & Associates
Repair Value Stream Findings and Projected Results
77
Metric Current State Projected
Future State
Projected %
Improvement
Lead Time (request to invoice)
10.8 days 4.3 days 60.2%
Process Time 5.9 hours 5.1 hours 13.6%
% Activity 6.8% 14.8% 117.6%
Rolled First
Pass Yield 1.1% 45.4% 4027.3%
Parts store
trip required 40% 10% 75%
J F M A M J J A S O N D
1 4,7 Integrate call center and dispatch. PROJ Bill V X X X X X X X X
2Create and implement tech suport
center. PROJ Bill V X X X
3Explore EDI with customers for work
orders & invoicingPROJ Steve M X X X X X X X X X
4 Implement GPS. PROJ Curtis C X X X X X X
5 5,6 Create 90-day onboarding process. KE Justin C X X
KE Complete
working on 30
day List
6Develop & roll-out tech training for
existing employees. DOWKE Rich T X
7 Revise tech level criteria. KE Husein A X X
8
35 WO/day = 735 WO/month. 40% to parts store =
294 WO x 75 mins = 367.5 hrs. If 3.25 hrs/repair =
add'l 113 repairs per month x X avg labor
charge/invoice = X potential add'l rev.
Create standardization plan for
trucks (e.g. tools, equipment, parts,
PPE).
PROJ Fred S X
9 8*5S and pilot kanban on tech trucks;
pilot water spider function for parts.PROJ Fred S X X
10Revise reason codes for credit
memos.JDI Lisa B X Done
11 24* Design & pilot flat rate pricing PROJ Shawn C X
12Draft preferred Source T & C's
(MAC).PROJ Mark K X X X
13Centralize key customers billing;
create billing standard work.PROJ Renae H X X X
14 Separate labor & payroll. PROJ Lisa B X X In Testing
15 Create Target summary invoice. JDI Renae H X In Process
16 Resolve missing invoice situation. JDI Lisa B X
17Create standard work for billing and
collections process.PROJ Lauren X X
19Explore EDI for tech "complete"
status with VerisaePROJ Steve M X X X X X X X X X X
20 24*Create technician performance
report for Service Managers.PROJ Rich B X
21Align remaining call to cash projects
with future state plan.JDI Lisa B X Done
22 17*Create exception report for billing
admins.PROJ Rich B X
24Establish parameters for time, cost
& parts by service type.KE Curtis A X
25Consolidate, simplify, and
standardize parts numbersPROJ Mark K X X X
26 25Evaluate inventory requirements
and process for trackingPROJ Mark K X X X X
27Design and implement new
refrigerant control processKE Bryan B X
3/4/2009
Kaizen
Burst #Objective / Projected Results Pre-req
Date Created
Date
CompleteImprovement Activity
Future State Implementation Plan - CONFIDENTIALExecutive Sponsor
Value Stream Champion
Value Stream Mapping Facilitator
Lauren Abrams
Lisa Baldewin
Karen Martin
Implementation Plan Review Dates
Type OwnerImplementation Schedule (months)
78
Value Stream
1 2 3 4 5 6 7 8 9 10 11 12
2 Improve quality of referral KE Sean O'Ryan
3, 4Reduce lead time beween schedulingand
preregistration stepsPROJ
Dianne
Prichard
5, 6Eliminate the need for two patient check-
insKE
Michael
O'Shea
6 Eliminate bottleneck in waiting area KEDianne
Prichard
9Eliminate lead time associated with
transcription stepPROJ Sam Parks
10 Eliminate batched reading KE Sam Parks
7Reduce inventory costs, regulatory risk
and storage needsKE
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 OwnerImplementation Schedule (weeks) Date
Complete
Date Created
11/21/2007
Allen Ward
Sally McKinsey
Dave Parks 12/13/2007
10/18/2007 1/10/2008
Future State Implementation Plan
Executive Sponsor
Value Stream Champion
Value Stream Mapping Facilitator
Implementation Plan Review Dates
11/1/2007
Outpatient Imaging
© 2010 Karen Martin & Associates
Poll #3
Deliverables produced during Value
Stream Mapping activity
80
81
PACE Prioritization Matrix
High Low Anticipated Benefit
Ease o
f Im
ple
men
tati
on
Dif
fic
ult
E
as
y
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
© 2010 Karen Martin & Associates 82
Common VSM Facilitation Issues
Keeping the team focused on the macro view
(rooftop level); it’s tempting to go into the weeds
Keeping the team focused on the current state
Assuring the team and leadership that
directionally correct data is good enough
Time management
Schedule Gemba time and conference room time
very tightly
Getting the right people on the team
Getting the right people at the interim briefings
Common Differences - Manufacturing vs. Office VSMs
Manufacturing Office
Customer icon Upper right Center
Supplier icon Upper left None
“The thing” we’re
following
Raw material, sub-
assemblies, finished goods
Paper, verbal, and
electronic Information
Information Flow More structured /
formalized I.T. systems
Multiple I.T. systems and
work-arounds
Schedule notification Multiple points across VSM Work not scheduled
Material flow (via
hollow arrow) Yes Sometimes
WIP icon Inventory triangle In-bin (if preferred)
Quality Metric First Pass Yield (FPY) Percent Complete &
Accurate (%C&A)
Takt Time Typically can be applied Only applicable with
dedicated resources
LT determination for
each block
Based on WIP between
process blocks
Based on a single item
passing through
Recommended Resources
The Complete Lean Enterprise,
Beau Keyte & Drew Locher
Value Stream Management for
the Lean Office, Don Tapping &
Tom Shuker
© 2010 Karen Martin & Associates
Learning Objectives
Participants will learn:
What a Value Stream Map is – and what it is not.
Best practices for holding a Value Stream Mapping
activity.
How to define office & service product families.
Step-by-step approach for creating current and future
state maps.
Key differences between manufacturing and
office/service VMSs.
How to create an implementation plan from the future
state VSM.
85
© 2010 Karen Martin & Associates 86
Karen Martin, Principal
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
For Further Questions
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