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Value stream mapping for non manufacturing environments

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Karen Martin, recognized expert on lean in office and administrative processes, shares instruction on applying value stream mapping to non-manufacturing organizations.

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Page 1: Value stream mapping for non manufacturing environments
Page 2: Value stream mapping for non manufacturing environments

Learning Objectives

Participants will learn:Wh t V l St M i d h t it i t What a Value Stream Map is – and what it is not.

Key differences between manufacturing and office/service VSMs.office/service VSMs.

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 mapsstate maps. How to create an implementation plan from the future

state VSM.

© 2010 Karen Martin & Associates 2

Page 3: Value stream mapping for non manufacturing environments

Value Stream Administrative & OfficeValue Stream Mapping’s Beginnings

Administrative & Office Environments

Learning to See, The Complete Lean Enterprise, Mike Rother & John Shook Beau Keyte & Drew Locher

Page 4: Value stream mapping for non manufacturing environments

Womack’s Five Principles of a Lean Enterprise

Value Value stream Flow Flow Pull Perfection

Jim Womack Lean Thinking 1996 2003— Jim Womack, Lean Thinking, 1996, 2003

© 2010 Karen Martin & Associates 4

Page 5: Value stream mapping for non manufacturing environments

Value Stream Defined

Value Stream: All of the activities, required to fulfill a customer request from order to deliveryfulfill a customer request from order to delivery (and beyond to cash received).

Value Stream

Process ProcessProcess

Customer

CustomerRequest

CustomerReceipt

© 2010 Karen Martin & Associates 5

Page 6: Value stream mapping for non manufacturing environments

The Work We Do:Degrees of Granularity

Value Value StreamRooftop Value Stream

Value Stream Map

pView

(Strategic)

Process Process Process

Step Step StepIn the Weeds

(Tactical)

Metrics-Based Process Map

© 2010 Karen Martin & Associates 6

( )

Page 7: Value stream mapping for non manufacturing environments

Improvement Roles

Who? Accountability Tool

Leadership “What has to happen” Value Streamateg

ic

Leadership What has to happen Value Stream MappingSt

ra

Middle

Workforce “How it will happen” Kaizen Eventscal

Management

Workforce How it will happen” Kaizen Events, Just-do-its, and ProjectsTa

ctic

© 2010 Karen Martin & Associates 7

Page 8: Value stream mapping for non manufacturing environments

Why Value Stream Mapping?

To set strategy before diving into t titactics. The future state VSM is a macro

level blueprint for change; road maplevel blueprint for change; road mapEnables us to SEE the process.Promotes s stems thinking /Promotes systems thinking /

seeing the wholeHelps us avoid sub optimizing Helps us avoid sub-optimizing

© 2010 Karen Martin & Associates 8

Page 9: Value stream mapping for non manufacturing environments

VSM Goal: System Efficiency

System Efficiency = Optimal Value Stream

Performance

Individual Efficiency =

Performance

Individual Efficiency = Sub-optimization

© 2010 Karen Martin & Associates 9

Page 10: Value stream mapping for non manufacturing environments

Types of Value Streams

Product Value StreamsSupport Value StreamsValue Stream “Segments”

© 2010 Karen Martin & Associates 10

Page 11: Value stream mapping for non manufacturing environments

Types of Value Streams

Product Value Streams Goods – wide range of manufactured productsg p Services

Healthcare – Emergency department patient flow, surgical patient flow, outpatient testing

Financial Services – credit application process, mortgage process, equipment leasing process

Education – college application to arrival Repair and maintenance wind blade repair oil field maintenance Repair and maintenance – wind blade repair, oil field maintenance,

refrigeration system service and repair Energy – Nuclear energy production, Oil production Government – Property tax assessment and processing Law enforcement – undercover operations, background check process Military – radar system development, troop deployment Non-Profit services – Donation processing, disaster aid process

© 2010 Karen Martin & Associates

Etc.

11

Page 12: Value stream mapping for non manufacturing environments

Types of Value Streams (continued)

Value Stream “Segments” Order fulfillment Order fulfillment Product development New account set-up

Laboratory services Laboratory services Imaging services

Support Value Streams Recruiting, hiring and onboarding process Revenue cycle Information Technology request fulfillment Purchasing Accounts payable Physician credentialing

© 2010 Karen Martin & Associates 12

Page 13: Value stream mapping for non manufacturing environments

Why Value Stream Mapping? (continued)

Shows the linkage between i f ti d t i l flinformation and material flow.Makes the disconnects and

b t l t fl i ibl tobstacles to flow visible at a macro levelM t i b d d i i kiMetrics-based decision making:

What are you going to do to affect the numbers?affect the numbers?

© 2010 Karen Martin & Associates 13

Page 14: Value stream mapping for non manufacturing environments

Key Metrics: Time

Process time (PT)Th ti it t k t t ll f th k if i 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 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 d t t i th h idepartment in the chain

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

© 2010 Karen Martin & Associates

Includes Process Time, not merely waiting time.

14

Page 15: Value stream mapping for non manufacturing environments

Lead Time vs. Process TimeScenario 1

Lead TimeLead Time

Work Received

Work passed to next step

Process Time

LT = PT + Waiting / Delays

© 2010 Karen Martin & Associates 15

g y

Page 16: Value stream mapping for non manufacturing environments

Lead Time vs. Process TimeScenario 2

Lead Time

Process TimeWork

ReceivedWork passed to next step

LT = PT + Waiting / Delays

© 2010 Karen Martin & Associates 16

g y

Page 17: Value stream mapping for non manufacturing environments

Summary Metrics: Time

Activity Ratio (expressed as a percentage) The percentage of time anything is being done

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

%Act = (∑PT ÷ ∑LT) × 100 100 – %Activity = % Time Work is Idle Common finding = 1-10% Could also calculate %VA Activity to show how

little time is spent on value-adding activities.

© 2010 Karen Martin & Associates 17

Page 18: Value stream mapping for non manufacturing environments

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 % 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

© 2010 Karen Martin & Associates

Similar to first pass yield in manufacturing.

18

Page 19: Value stream mapping for non manufacturing environments

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 requiredno rework required.

RFPY = %C&A x %C&A x %C&A…C fi di 0 15% Common finding = 0-15%

Multiply ALL %C&A’s, even if parallel processes

© 2010 Karen Martin & Associates 19

Page 20: Value stream mapping for non manufacturing environments

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

Originator

Inititate Req.

PT = 10 mins.C&A = 10%

31

Hard CopySupplies

1

Form File

File Maker

ERP

Quicken

Vendor Website

Excel

Hard Copy

Data Entry

Finance

Review Budget

PT 5 i

6

Corp Purchasing Manager

Approve in ERP

PT 5 i

1Supervisor

Review Req.

PT 5 i

2

Sys Engineer

Review Requisition

1IS Manager

Review Requisition

PT 5 i

1Financial Mgr

Review Requisition

PT 10 i

1

Admin Asst

Enter Requisition

PT 15 i

1

20 ReqsExternal Supplier

PT 20 i

Corp Purchasing

Submit PO to Supplier

6

10 Reqs 63 Reqs2 3 4 5 6 7 8 9 10

PT = 5 mins.C&A = 60%

PT = 5 mins.C&A = 90%

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%

PT = 5 mins.C&A = 95%

PT = 5 mins.C&A = 90%

PT = 5 mins.C&A = 100%

PT = 10 mins.C&A = 95%

PT = 15 mins.C&A = 98%

4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.2 hrs. 4 hrs. PT = 20 mins.PT = 15 mins.C&A = 98%

RFPY = 4.2%

PT = Process Time LT = Lead Time

80 hrs.

Customer Demand:615 requisitions per y ear

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

Page 21: Value stream mapping for non manufacturing environments

Future State Value Stream MapPurchasing — Non-repetitive purchases less than $5,000

Originator

Enter Req.in ERP

PT=30 mins.

31

AdditionalIT access

Integrate Form File with File

Maker

1

C&A = 85%

File Maker

ERP

Vendor Websites

Requisition Checklist

Supplies

Standard Work for review

CrossTraining

Auto Notify

Use budget in place of Quicken

Approval

Dept

Approve in ERP

Review Req.

AdditionalIT access

External Supplier

DedicatedBuyersPlace

Order2 3 4 5

Dept. Manager

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

PT=5 mins.C&A = 95%

2 8 hrs.6 hrs.

PT=20 mins.4 hrs.

Corp Purchasing

PT=20 mins.C&A = 98%

6 80 hrs.

Customer Demand:615 requistions per year

AR 0.508%

PT = Process Time LT = Lead Time C&A = % Complete & Accurate AR = Activity Ratio (PT/LT x 100) RFPY = Rolled First Pass Yield

RFPY = 71%

Page 22: Value stream mapping for non manufacturing environments

Purchasing ProcessProjected Results

M t iCurrent

St tProjected

F t St t%

I tMetric State Future State ImprovementLead Time 28.4 days 12.3 days 56.7%Process Time 65 mins 30 mins 53 8%Process Time 65 mins 30 mins 53.8% % Activity 0.48% 0.51% 6.3%Rolled FirstRolled First Pass Yield 4.2% 71.0% 1,590%

# Handoffs 10 5 50%# IT Systems 6 3 50%Freed capacity 2.1 FTEs 10%

© 2010 Karen Martin & Associates

Page 23: Value stream mapping for non manufacturing environments

Summary Metrics: Measuring Productivity Gains

Labor EffortTotal PT (in hrs) X # occurrences/year

# FTEsAvailable work hrs/year/employee

=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 23

Page 24: Value stream mapping for non manufacturing environments

What do you do with freed capacity?

Absorb additional work without increasing staff Reduce payroll through natural attrition Reduce payroll through natural attrition Innovate – create new revenue streams Conduct ongoing continuous improvement activities D b tt j b ith f d hi h f t Do a better job with fewer errors and higher safety Talk and work with your customers and suppliersMentor staff to create career growth opportunities Provide additional workforce development; cross-train Better work/life balance Slow down & think Slow down & think Get/stay caught up Do the things you haven’t been able to get to Collaborate with other areas

© 2010 Karen Martin & Associates

Collaborate with other areas

24

Page 25: Value stream mapping for non manufacturing environments

Basic Mapping IconsExternal

Push ArrowOperator / Employee

External Organization

Material receipts & shipments

Work-in-Process

I

ManualInformation Flow

Go See SchedulingProcess Block

C/O 40PT= 25 m

ElectronicInformation

2 ShiftsTakt= 60m

C/O= 40 m

Data BlockMovementby Truck

In-box

InformationFlow

Data Block y

Hours HoursHoursLead Time

Minutes MinutesMinutesMinutesProcess Time

Timeline

Page 26: Value stream mapping for non manufacturing environments

Current State Value Stream Map Outpatient Imaging Services

Demand = 15 per day

Customer Demand:Customer Demand:15 patients per Day

(Takt Time 1920 seconds)8 hours per day

Referring Physician

% C&A = 65 %

Hospital

ScheduleAppointment

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 Lead Time = 12 mins.Lead Time = 990 mins.Lead Time = 24 days1234

% C&A = 98 %% C&A = 100 %

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

E Pay Excel ADSSymposium InternetWaiting RoomM t

Fax OrderSolutions

PACSMeditech Auto Fax 50%

ManagementSystem

Us Mail 25%MD Mailbox 25%

Rework Loop via Fax 25% of the time

Check-in Patient

(Admitting)

Send Reports

(Imaging)

6

5 mins.

PrepPatient(Tech)

2

Check-inPatient

(Imaging)

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.5 mins5 6 7 8 9 10 11 12 13 14Cycle Time = 2 mins.% C&A = 90 %

5Cycle Time = 3 mins.% C&A = 90 %

6

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%

Cycle Time = 10 mins.% C&A = 100 %

2

Cycle Time = 1 mins.% C&A = 98 %

3Cycle Time = 15 mins.% C&A = 90 %

2

Cycle Time = 3 mins.% C&A = 100 %

2

Cycle Time = 15 mins.% C&A = 95 %

2

Cycle Time = 5 mins.% C&A = 75 %

6

Cycle Time = 1 mins.% C&A = 95 %

2

Cycle Time = 1 mins.% C&A = 99 %

245 mins.5 mins.5 6 7 8 9 10 11 12 13 14

Rolled First Pass

VSM Champion: Paul Scanner Created: July 17, 2007

yield = 29%

Page 27: Value stream mapping for non manufacturing environments

Future State Value Stream Map Outpatient Imaging Services

Demand = 15 per day

Referring Physician

% C&A = 85 %

Hospital

Schedule apptPre-register

Cycle Time = 11 mins.Lead Time = 45 mins

6 Lead Time = 45 mins.Lead Time = 15 days

Co-locate

StandardWork

Work Balance

Customer Demand:15 patients per Day

(Takt Time 1920 seconds)8 hours per day

123

Lead Time = 45 mins.% C&A = 98 %

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

E Pay ExcelSymposium InternetWaiting Room

Fax OrderSolutions

PACS Auto Fax 80%

Risk Reduction

(Joint Commision)

Meditech

a g ooManagement

System

Solutions

Remove Check in

and ReduceSystem Access

Work B l i

Pull System(Supplies Kanban)

VisualBatch

R d ti

5S

Value StreamAlignment

Us Mail 15%MD Mailbox 5%

Rework Loop via Fax 10% of the time

Send Reports

(Imaging)

6

PrepPatient(Tech)

2

Check-inPatient

(Imaging)

3

CompleteExam(Tech)

2

TransmitImages(Tech)

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.5 mins.

Set-upReduction

System Access

Balancing

StandardWork

VisualWorkplace

Voice Recognition

Reductions

ContinuousFlow

4 5 6 7 8 9 10 11

Cycle Time = 3 mins.% C&A = 90 %

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%

Cycle Time = 10 mins.% C&A = 100 %

Cycle Time = 1 mins.% C&A = 98 %

3Cycle Time = 10 mins.% C&A = 90 %

Cycle Time = 2 mins.% C&A = 100 %

Cycle Time = 15 mins.% C&A = 95 %

Cycle Time = 1 mins.% C&A = 95 %

Cycle Time = 1 mins.% C&A = 99 %

Rolled First Pass yield = 40%

VSM Champion: Paul Scanner Created: July 18, 2007

Page 28: Value stream mapping for non manufacturing environments

Outpatient ImagingProjected Results

MetricCurrent

StateProjected

Future State%

ImprovementMetric State Future State ImprovementLead Time 32.5 hrs 11.3 hrs 65%Process Time 56 mins 43 mins 23%Process Time 56 mins 43 mins 23%Percent Activity 2.9% 6.3% 117% Rolled First % % %Rolled First Pass Yield 29% 40% 38%

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

N t F d it (PT d ti ) ll d th i ti t

© 2010 Karen Martin & Associates 28

Note: Freed capacity (PT reductions) allowed the organization to earn $500,000 additional annual revenue with no additional headcount

Page 29: Value stream mapping for non manufacturing environments

Value Stream Mapping ProcessD fiDefine

Product Family

F d ti (th b i ) f th

Products (good or services) withcommon process steps

Document Current State

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

Design Future State 3 Day

Event

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

Rep

ea

Create Include accountability andti f f l ti

Th l f i !

Implementation Plan timeframes for completion

Implement! The goal of mapping!

Page 30: Value stream mapping for non manufacturing environments

Scoping: One VSM per “Product Family”

Group Product Families by similar downstream processes, steps or equipment.

Process Steps & Equipment

Step A Step B Step C Step D Step E Step F

Product X X X X XVol.

50ABC X X X X XProduct

XYZ X X X X X

5073

2Products

Product IBM X X X

Product AWR X X X X

2

5Product ACC X X X

Product X X X

15

12

© 2010 Karen Martin & Associates

SUB X X XProduct

IDR X X X X X X30

12

1

Page 31: Value stream mapping for non manufacturing environments

Narrowing the Scope: Selected Specific Conditions

Non-Exempt

Replacements

Non ExemptStaff

HiringProcess

Exempt Staff

ProcessNew

PositionsNon-Exempt

Staff

Exempt Staff

© 2010 Karen Martin & Associates 31

Staff

Page 32: Value stream mapping for non manufacturing environments

Narrowing the Scope: Selected Specific Conditions

C bl

Units

Domestic

Service Parts

Consumables

Non-

Warranty

Order Fulfillment

Process

Non-Warranty

Process

I t ti l C bl

Units

International

Service Parts

Consumables

Non

Warranty

© 2010 Karen Martin & Associates 32

Non-Warranty

Page 33: Value stream mapping for non manufacturing environments

Value Stream Mapping ProcessD fiDefine

Product Family

F d ti (th b i ) f th

Products (good or services) withcommon process steps

Document Current State

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

Design Future State 3 Day

Event

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

Rep

ea

Create Include accountability andti f f l ti

Th l f i !

Implementation Plan timeframes for completion

Implement! The goal of mapping!

Page 34: Value stream mapping for non manufacturing environments

Value Stream Mapping Activity

3-day activity; three deliverables Day 1 – Document and analyze the current statey y

Go to the Gemba! Day 2 – Design the future state (3-6 months out) Day 3 – Create the implementation plan Day 3 – Create the implementation plan

Sequestered team composed primarily of those who can authorize change Typically manager and above The team goes to the gemba to obtain the metrics from the

frontlines doing the work.

Leadership learning and development is a powerful side benefit.

K f t i t i b i fi t i t d

© 2010 Karen Martin & Associates

Key success factor - interim briefings to communicate and achieve consensus.

34

Page 35: Value stream mapping for non manufacturing environments

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?y j y Challenge policies and paradigms

Day 3 – “Here’s how we’re going to execute ”Day 3 Here s how we re going to execute. Priorities, approach, timeframes, accountability Obtain full commitment right then and there

© 2010 Karen Martin & Associates 35

Obtain full commitment right then and there.

Page 36: Value stream mapping for non manufacturing environments

Value Stream Mapping

Planning Your Activity:A ll d l d h t id iA well-developed charter aids in

communication, consensus building and planning

© 2010 Karen Martin & Associates 36

Page 37: Value stream mapping for non manufacturing environments

3 days typically; sequential is bestEvent Date(s)Engineering design, ED patient f low , Credit processing, etc.

Executive SponsorValue Stream

Value Stream Mapping CharterEvent Scope Leadership / Coordination Schedule

VP or C-level

6 hrs minimum; 7 or 8 is best

LocationFacilitatorCustomer Demand

Trigger

How many times is this done per wk, mo, or yr.?What need does the value stream address?

Team Lead Not always needed

Skilled person leading the activity

Meals Provided?

If needed - often Director or Manager level

Specific Conditions

What circumstances you're including and excluding?

Value Stream Champion

Last Step Task on last process blockFirst Step Task on first process block

Start/End Times

Always a nice touch; keeps the team from wandering.

Need ample wall space

Interim Briefing(s)

Aid in consensus building and organizational learning.

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

Last Step p

Event Drivers Mapping Team

List required attendees; others are optional

Briefing Attendees

Boundaries & Limitations

FS Implementation Timeframe

Wh d i thi ?

What is the team NOT authorized to change?

Typically 90-120 days

g

1 Contact Information2 13 24 35 4

5

NameWhy are you doing this? FunctionLeadership-heavy

Goals & Measureable Objectives1 62 73 84 95 10

Aim for objectives w/ measurable targets (from X to X).j

Planned Deliverables On Call Support1 Contact Information2 13 24 35 4

Planned Deliverables On-Call SupportName

Implementation Plan

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

37

1234 Date: Date:

FacilitatorValue Stream Champion

Signature: Signature:

Executive Sponsor

Signature:Date:

Potential Obstacles ApprovalsTo the team's success with the mapping activity.

Page 38: Value stream mapping for non manufacturing environments

Value Stream Mapping Facilitator Range of Necessary Traits

Skills / Knowledge Lean philosophy

Personality / Energy Naturally curiousea p osop y

Improvement tools Project & time management Mediation; consensus

b ildi

atu a y cu ous Challenging, yet supportive Positive, upbeat, energetic Pushy without irritating

building People effectiveness – from

front line workers to execs Authority / Respect

Thinks fast on one’s feet Objectivity / Fairness

No attachment to the work b i i d Authority / Respect

Recognized change agent / influence leader

Trustworthy

being improved

y Comfortable removing

obstacles & reaching out to senior leadership

© 2010 Karen Martin & Associates 38

Page 39: Value stream mapping for non manufacturing environments

Value Stream Mapping ProcessD fiDefine

Product Family

F d ti (th b i ) f th

Products (good or services) withcommon process steps

Document Current State

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

Design Future State 3 Day

Event

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

Rep

ea

Create Include accountability andti f f l ti

Th l f i !

Implementation Plan timeframes for completion

Implement! The goal of mapping!

Page 40: Value stream mapping for non manufacturing environments

The timeline is the most important of the three defining characteristics of a

VSM:1) information flow

2) product flow3) timeline

If your map doesn’t include a timeline, it is not a VSM. If your map has swim

© 2010 Karen Martin & Associates

y planes, it’s not a VSM.

40

Page 41: Value stream mapping for non manufacturing environments

Typical VSM Components -Manufacturing

Order Initiation Current State Map Demand = XXXX

May 8, 2008 g

SUPPLIER CUSTOMERProduction

Controln Fl

ow

Robert Parker

SUPPLIER CUSTOMERControl

form

atio

n

1

Process 1 Process 2 Process 3 Process 4

Inf

ow Process 1 Process 2 Process 3 Process 4

rodu

ct F

lo

2I I I

Pr

Hours Hours Hours

line

3LT

PT

Hours

Minutes Minutes Minutes Minutes

Tim

e3 PT

Page 42: Value stream mapping for non manufacturing environments

Typical VSM Components -Office / Service

ABC Value Stream Current State Map Demand = XXXX/yr

Date

CUSTOMER

n Fl

ow

Key Contact

form

atio

n

1

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

Process 3 Process 4

Inf

ow Process 1 Process 2 Process 3 Process 4

rodu

ct F

lo

2Process 1 Process 2

Pr

Minutes Minutes Minutes Minutes

Hours Hours Hours

elin

e

3LT

PTMinutes Minutes Minutes Minutes

Tim

e3 PT

Page 43: Value stream mapping for non manufacturing environments

Concurrent Work / Parallel Flows

Process Process

LT = 8 hrs

Process Process Process

LT = 4 hrs

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

© 2010 Karen Martin & Associates 43

Page 44: Value stream mapping for non manufacturing environments

Common Differences - Manufacturing vs. Office VSMsManufacturing Office

Customer icon Upper right CenterSupplier icon Upper left None“The thing” we’re Raw material sub- Paper verbal andThe thing we re following

Raw material, subassemblies, finished goods

Paper, verbal, and electronic Information

Information Flow More structured / formalized I.T. systems

Multiple I.T. systems and work-aroundsy

Schedule notification Multiple points across VSM Work not scheduled

Material flow (via Y S ti(hollow arrow) Yes Sometimes

WIP icon Inventory triangle In-bin (if preferred)

Q lit M t i Fi t P Yi ld (FPY) Percent Complete &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

Page 45: Value stream mapping for non manufacturing environments

Preparing to Map

Schedule time to go to the Gemba Prepare frontlines for questions the team will ask;

establish a safe haven for them to communicate the true current state (no matter how ugly it is) to hightrue current state (no matter how ugly it is) to high level leaders they may not usually interface with.

No written procedures allowed – creates bias toward i ti h t h ld h th th h tcommunicating what should happen rather than what

does happen.

© 2010 Karen Martin & Associates 45

Page 46: Value stream mapping for non manufacturing environments

Preparing to Map (continued)

Draw map manually! 11 x 17” paper Or 36” wide plotter paper and 3 x 6” post-its for

process blocks (my preference)process blocks (my preference)Only convert to electronic medium if absolutely

necessary (e-distribution, training, etc.)necessary (e distribution, training, etc.) iGrafx FlowCharter (my preference) Systems2Win – Excel-basedy Minitab e-VSM

© 2010 Karen Martin & Associates

Others

46

Page 47: Value stream mapping for non manufacturing environments

Step 1

Label your map (draw manually or use 36” wide plotter paper and 3 x 6” post-its) Value stream name Current or future state Customer demand (volume of work per time ( p

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

© 2010 Karen Martin & Associates

( )

47

Page 48: Value stream mapping for non manufacturing environments

Takt Time: The Key to Continuous Flow

Available work timeT kt ti “T h d ”Takt time =

Customer demand“Touch down”

480 minutes/dayTakt time = = 10.6 mins

45 new accounts45 new accounts

OR…Time Available divided by what Kustomer Takes

© 2010 Karen Martin & Associates 48

Page 49: Value stream mapping for non manufacturing environments

Step 2

Identify all blocks in the process (target 5-15 blocks) Customer icon is placed in upper right or middle 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 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 a handoff to another function/work teamanother function/work team.

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.

© 2010 Karen Martin & Associates

Consider walking the process

49

Page 50: Value stream mapping for non manufacturing environments

Post-it Conventions

Process (Verb/Noun)( )

Function

# Staff (if relevant)

Barriers to flowBarriers to flow

Page 51: Value stream mapping for non manufacturing environments

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.N t h d li th t ( i Note any scheduling that occurs (rare in current state)Wh t ll h t d h t?

© 2010 Karen Martin & Associates

Who tells whom to do what?

51

Page 52: Value stream mapping for non manufacturing environments

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

Originator

Inititate Req.

PT = 10 mins.C&A = 10%

31

Hard CopySupplies

1

Form File

File Maker

ERP

Quicken

Vendor Website

Excel

Hard Copy

Data Entry

Finance

Review Budget

PT 5 i

6

Corp Purchasing Manager

Approve in ERP

PT 5 i

1Supervisor

Review Req.

PT 5 i

2

Sys Engineer

Review Requisition

1IS Manager

Review Requisition

PT 5 i

1Financial Mgr

Review Requisition

PT 10 i

1

Admin Asst

Enter Requisition

PT 15 i

1

20 ReqsExternal Supplier

PT 20 i

Corp Purchasing

Submit PO to Supplier

6

10 Reqs 63 Reqs2 3 4 5 6 7 8 9 10

PT = 5 mins.C&A = 60%

PT = 5 mins.C&A = 90%

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%

PT = 5 mins.C&A = 95%

PT = 5 mins.C&A = 90%

PT = 5 mins.C&A = 100%

PT = 10 mins.C&A = 95%

PT = 15 mins.C&A = 98%

4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.2 hrs. 4 hrs. PT = 20 mins.PT = 15 mins.C&A = 98%

RFPY = 4.2%

PT = Process Time LT = Lead Time

80 hrs.

Customer Demand:615 requisitions per y ear

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

Page 53: Value stream mapping for non manufacturing environments

Step 4

Number the process blocks from left to right. If parallel processes exist, use alpha modifiers

– e.g. 8A, 8B, etc.Connect the customer, supplier (if present)

and process blocks “Striped” arrow for push systemsp p y Hollow arrow for material flow

Connect and I T systems

© 2010 Karen Martin & Associates

Connect and I.T. systems

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Page 54: Value stream mapping for non manufacturing environments

Post-it Conventions

Process (Verb/Noun)

Process Block #

( )

Function

# Staff (if relevant)

Barriers to flowBarriers to flow

PT (process time)(p )

LT (Lead time)% Complete & Accurate

Page 55: Value stream mapping for non manufacturing environments

Depicting e-Information Flow

I.T.Application

Arrow pointing to I T li ti

I.T.Application

Two-headed arrow: St ff b th i d

ProcessBlock

I.T. application: Staff enters data

ProcessBlock

Staff both views and enters data

I.T.Application

Arrow pointing from

#1 I.T.Application

#2 I.T.Application

ProcessBlock

Arrow pointing fromI.T. application: Staff views data Lightning bolt arrow:

Application #1 auto-populates application #2

55

application #2

Page 56: Value stream mapping for non manufacturing environments

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

Originator

Inititate Req.

PT = 10 mins.C&A = 10%

31

Hard CopySupplies

1

Form File

File Maker

ERP

Quicken

Vendor Website

Excel

Hard Copy

Material flow

Data Entry

ERP auto-populates

P.O.

Finance

Review Budget

PT 5 i

6

Corp Purchasing Manager

Approve in ERP

PT 5 i

1Supervisor

Review Req.

PT 5 i

2

Sys Engineer

Review Requisition

1IS Manager

Review Requisition

PT 5 i

1Financial Mgr

Review Requisition

PT 10 i

1

Admin Asst

Enter Requisition

PT 15 i

1

20 ReqsExternal Supplier

PT 20 i

Corp Purchasing

Submit PO to Supplier

6

10 Reqs 63 Reqs2 3 4 5 6 7 8 9 10

PT = 5 mins.C&A = 60%

PT = 5 mins.C&A = 90%

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%

PT = 5 mins.C&A = 95%

PT = 5 mins.C&A = 90%

PT = 5 mins.C&A = 100%

PT = 10 mins.C&A = 95%

PT = 15 mins.C&A = 98%

4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.2 hrs. 4 hrs. PT = 20 mins.PT = 15 mins.C&A = 98%

RFPY = 4.2%

PT = Process Time LT = Lead Time

80 hrs.

Push A Customer Demand:

615 requisitions per y ear C&A = % Complete & Accurate AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield

Arrow

Page 57: Value stream mapping for non manufacturing environments

Step 5

Add key metrics for all process blocks Process Time (PT) Lead Time (LT)

P t C l t & A t (%C&A) Percent Complete & Accurate (%C&A)Add additional obstacles to flow if any are

id tifi d ( b t h h didentified (e.g. batches, shared resources system availability/speed, etc.)Add th WIP ( k i ) f llAdd the WIP (work-in-process) for all

process blocks.

© 2010 Karen Martin & Associates 57

Page 58: Value stream mapping for non manufacturing environments

Post-it Conventions

Process (Verb/Noun)

Process Block #

( )

Function

# Staff (if relevant)

Barriers to flowBarriers to flow

PT (process time)(p )

LT (Lead time)% Complete & Accurate

Page 59: Value stream mapping for non manufacturing environments

Three Places WIP Accumulates

Before the process block – work not yet begun.Within the process block – work currently being

performed.After the process block Work that’s completeAfter the process block – Work that’s complete,

but hasn’t been passed onWIP WIP

WIP

WIP WIP

Step 1 Step 2 Step 3WIP

© 2010 Karen Martin & Associates 59

Page 60: Value stream mapping for non manufacturing environments

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

Originator

Inititate Req.

PT = 10 mins.C&A = 10%

31

Hard CopySupplies

1

Form File

File Maker

ERP

Quicken

Vendor Website

Excel

Hard Copy

Data Entry

Finance

Review Budget

PT 5 i

6

Corp Purchasing Manager

Approve in ERP

PT 5 i

1Supervisor

Review Req.

PT 5 i

2

Sys Engineer

Review Requisition

1IS Manager

Review Requisition

PT 5 i

1Financial Mgr

Review Requisition

PT 10 i

1

Admin Asst

Enter Requisition

PT 15 i

1

20 ReqsExternal Supplier

PT 20 i

Corp Purchasing

Submit PO to Supplier

6

10 Reqs 63 Reqs2 3 4 5 6 7 8 9 10

PT = 5 mins.C&A = 60%

PT = 5 mins.C&A = 90%

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%

PT = 5 mins.C&A = 95%

PT = 5 mins.C&A = 90%

PT = 5 mins.C&A = 100%

PT = 10 mins.C&A = 95%

PT = 15 mins.C&A = 98%

4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.2 hrs. 4 hrs. PT = 20 mins.PT = 15 mins.C&A = 98%

RFPY = 4.2%

PT = Process Time LT = Lead Time

80 hrs.

Customer Demand:615 requisitions per y ear

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

WIP

Page 61: Value stream mapping for non manufacturing environments

Step 6

Create timeline & calculate summary metrics Timeline PT Sum Timeline PT Sum Timeline LT Sum

A ti it R ti Activity Ratio Rolled First Pass Yield (RFPY)

© 2010 Karen Martin & Associates 61

Page 62: Value stream mapping for non manufacturing environments

How to Treat Lead Time in Office/Service Environments

Lead Time

Process 2Process 1

Process Time

LT LT

PT 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.

© 2010 Karen Martin & Associates 62

• Represents total throughput time, including process time; not merely wait time.

Page 63: Value stream mapping for non manufacturing environments

Value Stream MappingProjected Resultsj

Metric Current State ProjectedFuture State

Projected % Improvement

Ti li L dTimeline Lead TimeTimeline Process Time

Activity Ratio

R ll d Fi tRolled First Pass YieldTotal Process

( )Time (all blocks)

Labor Effort

63

Others, as relevant

Page 64: Value stream mapping for non manufacturing environments

Typical Current State Findings

Necessary NVA

Unnecessary NVA NVANVA

Value AddAvailable

to work onAvailable to

next step

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

© 2010 Karen Martin & Associates 64

Page 65: Value stream mapping for non manufacturing environments

Step 7

Identify all value-adding (VA) and necessary l ddi (N) tnon-value-adding (N) steps

Add “VA” or “N” smaller post-it to relevant process blocksblocks

All unnecessary non-value-adding blocks remain unlabelled

Enter Order

Check Credit

Approve Order

Customer Rep Sales RepFinance

VA N Unnecessary

© 2010 Karen Martin & Associates 65

Value-adding Non-Value-AddingNecessary Non-Value-Adding

Page 66: Value stream mapping for non manufacturing environments

Customer-Defined Value

Value-Adding (VA) - any operation or ti it t l t lactivity your external customers value

and are (or would be) willing to pay for.N V l Addi (NVA) tiNon-Value-Adding (NVA) - any operation

or activity that consumes time and/or resources but does not add value to theresources but does not add value to the product (good or service) the customer receivesreceives. Necessary – support processes, regulatory

requirements, etc.

© 2010 Karen Martin & Associates

Unnecessary – everything else - WASTE66

Page 67: Value stream mapping for non manufacturing environments

Work Effort as Defined by the External CustomerExternal Customer

U NUnnecessary Non-value addingNecessary non-value-addingaddingValue-adding

Page 68: Value stream mapping for non manufacturing environments

Value Stream Mapping ProcessD fiDefine

Product Family

F d ti (th b i ) f th

Products (good or services) withcommon process steps

Document Current State

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

Design Future State 3 Day

Event

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

Rep

ea

Create Include accountability andti f f l ti

Th l f i !

Implementation Plan timeframes for completion

Implement! The goal of mapping!

Page 69: Value stream mapping for non manufacturing environments

Designing the Future State Value Stream

Target All Waste!

© 2010 Karen Martin & Associates 69

Page 70: Value stream mapping for non manufacturing environments

Eight Wastes (Muda)

OverproductionInventory

Motion (people)Transportation y

WaitingOver Processing

p(material/data)UnderutilizedOver-Processing

Errors

Underutilized people

© 2010 Karen Martin & Associates 70

Page 71: Value stream mapping for non manufacturing environments

Future State Design

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

© 2010 Karen Martin & Associates

Motion & transportation

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Page 72: Value stream mapping for non manufacturing environments

Eight Questions for Future State VSM

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

2. With goods, will we produce to order or to finished goods inventory? (With services, you’re almost always g y ( y yproducing to order.)

3. Where can continuous flow be put in place?4 Wh h ld ll t b i l t d?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?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

© 2010 Karen Martin & Associates

8. What process improvements are necessary to achieve the future state? -- Rother & Shook, Learning to See

Page 73: Value stream mapping for non manufacturing environments

Future State Design Considerations

Error-proof (including incoming customer

Balance work to meet takt time requirementsincoming customer

requests) Standardize the work

takt time requirements Co-locate and cross-

train work teams Eliminate steps / handoffs Eliminate waste Combine steps

Implement pull Implement visual

management Combine steps Create parallel paths Alter task sequencing and/or

management Organize the workplace

so problems are visible R d htiming

Eliminate or reduce batches Level demand

Reduce changeover Eliminate motion &

transportation

© 2010 Karen Martin & Associates 73

Level demand p

Page 74: Value stream mapping for non manufacturing environments

Building a Lean Enterprise

Process Stabilization

ToolsTools

Page 75: Value stream mapping for non manufacturing environments

Building a Lean Enterprise

Flow Enabling Tools

Page 76: Value stream mapping for non manufacturing environments

Future State Icons

SupermarketWithdrawal

ProductionKanban

Withd lKanbanArriving

Combined Steps

WithdrawalKanban

Signal

Arrivingin Batches

Eliminated StepKanban

KanbanPost

First-InFirst-OutFIFO

Max 8 “things” Buffer Stock

OXOXLeveling,

Mi d/Kanban

Path

(max WIP defined)

OXOX Mix and/orVolume

Path

Kaizen Burst

Page 77: Value stream mapping for non manufacturing environments

Value Stream MappingProjected Resultsj

Metric Current State ProjectedFuture State

Projected % Improvement

Lead Time

Process Time

% Activity

Rolled First Pass YieldPass Yield

Labor Effort

77

Page 78: Value stream mapping for non manufacturing environments

Value Stream Mapping ProcessD fiDefine

Product Family

F d ti (th b i ) f th

Products (good or services) withcommon process steps

Document Current State

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

Design Future State 3 Day

Event

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

Rep

ea

Create Include accountability andti f f l ti

Th l f i !

Implementation Plan timeframes for completion

Implement! The goal of mapping!

Page 79: Value stream mapping for non manufacturing environments

Value Stream

11/21/2007Allen WardSally McKinseyDave Parks 12/13/2007

Future State Implementation PlanExecutive Sponsor

Value Stream ChampionValue Stream Mapping Facilitator

Implementation Plan Review Dates11/1/2007

Outpatient Imaging

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

2 Improve quality of referral KE Sean O'Ryan

Block# Goal / Objective Improvement Activity

Implement standard work for referral process

Type Owner Implementation Schedule (weeks) Date Complete

Date CreatedDave Parks 12/13/200710/18/2007 1/10/2008

Value Stream Mapping Facilitator

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 P i h d

Cross-train and colocate work teams

Collect copays in Imaging

Balance work / level demandg Prichard

9 Eliminate lead time associated with transcription step PROJ Sam Parks

10 Eliminate batched reading KE Sam Parks

Implement voice recognition technology

Reduce setup required

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 additional fax ports

5S CT supplies area; implement kanban

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

Value Stream Mapping Facilitator

Approvals

Executive Sponsor Value Stream Champion

Signature:

Date: Date: Date:

Signature: Signature:

Page 80: Value stream mapping for non manufacturing environments

PACE Prioritization Matrix5 1021

Policy

I Tio

n Easy

136 15

I.T.

Process

men

tati

723

214

1718

20

25

Im

ple

m

1 8

9

1612

26

Ease

of

t

4

22

192427

ED

iffic

ult

11

3

80High LowAnticipated Benefit

Page 81: Value stream mapping for non manufacturing environments

About Karen Martin

Early career as a scientist; migrated to quality & operations design in the mid 80’s& operations design in the mid-80 s.

Launched Karen Martin & Associates in 1993, focusing on operations design and Total Quality ManagementManagement.

Began applying “white collar” lean in 2001. Co-author of The Kaizen Event Planner:

A hi i R id I t i OffiAchieving Rapid Improvement in Office, Service, and Technical Environments; co-developer of Metrics-Based Process Mapping: An Excel Based Solution Karen Martin, PrincipalAn Excel-Based Solution.

University of California, San Diego Lean Enterprise program instructor.

F i f ti k ti

Karen Martin, PrincipalKaren Martin & Associates

© 2010 Karen Martin & Associates

For more information: www.ksmartin.com

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