Value Stream Mapping and Management

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Value Stream Mapping and Management
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Agenda

• How We Got Here
• Value Stream Mapping
• Value Stream Management

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The lean transformation should provide

• Growth with improved margins
• Growth with minimal capital
• Growth without more employees

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What are our main stumbling blocks?

• 75 years of bad habits
• Financial focus with limited cost understanding
• A lack of system thinking and incentives
• Metrics supporting a 75 year old model
• Limited customer focus
• Absence of effective operating strategies

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How have we elected to address these stumbling
blocks?

• Programs of the month (band aids)
• Meetings, meetings, meetings, meetings
• Silo optimization

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Whats the impact of silo improvements?

• Plant to plant key players

Material Control
Purchasing
Transportation
Slide courtesy of HLS, Inc.
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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

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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 - Engineering
• Order to Cash - Administrative Functions

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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.
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Value Stream Improvement vs. Process Improvement
Value Stream
Process
Process
Process
Customer
Assembly Cell
Stamping
Welding
RawMaterial
Finished Product
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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.

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Value Stream Map
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Levels of a Value Stream
Start Here
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Value Stream Managers
Each Value Stream needs a Value Stream Manager
Customer
Kaizen

• The conductor of implementation
• Focused on system wins
• Reports to the top dog

The Value Stream Manager
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Using the Value Stream Mapping Tool
Product/Service Family
Understanding how things currently operate. Our
Baseline!
current state drawing
future state drawing
Designing a lean flow. Our Vision!
plan and implementation
The goal of mapping!
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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

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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

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Current State Value Stream Map
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Future State Value Stream Map
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Planning and Implementing

• Dont 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.

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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

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Enterprise Perspective

• Engineer to Order
• Configure to Order
• Capital equipment manufacturers
• Small companies (lt500 employees)
• Service Firms

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We might begin in

• Processes directly impacting the part production
• Engineering
• Quoting
• Or, in value streams with direct customer contact
• Order entry
• Invoicing

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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
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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.

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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

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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

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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.