Value Stream Analysis: Ideas and Options

1. Value Stream Analysis: Ideas and Options Presented to Delta LTMS Regulatory Technical Work Group Presented by Dr. Joshua Burnam and Mr. Steve Cappellino April 24, 2007

2. Overview of Presentation • What VSA is and is not • How we prepare for it • Logistics • What it looks like – options • Cost

3. What VSA is By-the-Book… • Lean Six Sigma is a statistical concept that measures a process in terms of defects, with the goal of reducing variability, decreasing defects and increasing efficiency using rigorous quantitative methods. • Value Stream Mapping and Analysis (VSA) is one application of the Lean method designed to reduce waste and inefficiency for both the process owner and customer by “mapping” a process flow and looking for areas that can be improved.

4. Specific Goals of our VSA • VSA in our potential application would be applied to the agency “web” for project approvals, and would look for ways to unify/improve the application process; reduce inefficiencies such as feedback loops and do-overs; and improve public perception. • We would essentially walk the “web” as an applicant. • The unified process map would be a starting point for an ad-hoc, or formal, DMMO; a consolidated permit application; or other process improvements for agencies. • It will help applicants know what the order of operations is; what the information they need is the first time through; what works and what does not. • Initial success would be defined by: • A process map • Agency recognition of their role in the larger web • Applicant recognition of their role in the process

5. Key Tenets of VSA • Reduce/eliminate time, waste, inefficiency • Include both “owners” and “customers” • Twelve total steps between defining the boundaries and assumptions; the current state; and the idealized future state.

6. Define the VSA Boundaries Process Inputs Outputs • Major Elements of the • Regulatory Process: • Public Notice • Endangered Species • Review of Completeness • Section 106 • Jurisdictional determination • Scope of Analysis • Alternatives Analysis • 404(b)(1) Guidelines • NEPA Analysis • Public Interest Determination • Develop the Package • 401 Certification • CZMA • Consultation with Indian Tribes • Public Hearings Suppliers: Permit Applicants Applicant Agents Interested Members of the Public Resource Agencies HQACE Local Gov’t. Customer: Permit Applicants What: Permit Decision What: Application Project Information Opinions Private Design Applicability of Rqmts Trigger: J.D. Request or Application Received Done: Permit Decision Issued

7. Define the Outcome 1. Business Case…Whyare We Here?? How will this Benefit us?? Efficiency must be increased to maintain the quality of permit decisions and improve public perception. 2. Key Requirements (Musts)…Requirements That Can’t Be Changed Existing Statutory and Regulatory Requirements 3. Value Statement…Total Value Stream Examined in This VSA Efficient entry into the process by applicants, and timely permit decisions that comply with State and Federal laws and regulations and, if a permit is issued, enables the applicant to proceed with a practicable project. 4. Key Measurements…2 to 3 Metrics which we will measure future success by • Turn-a-round Time – i.e. elapsed time from date a complete application is received by all agencies to issuance of final permits. Goal is 120 days. • First Pass Yield of Applicant Submittals – Percent complete and accurate the first time. Goal is to increase FPY to <90%

8. What are our Main Issues? • Examples: • Flat budgets • Increasing workload • Increased mandates • Perception/reputation of Agencies • Applicant knowledge/savvy • Confusing application order-of-operations

9. What VSA is not… • Cheap (depending on what we pick) • Easy (it is time consuming and has “homework”) • A silver bullet – it will give us maps of where are and where we can get, but we must then implement the process improvements

10. Who Should Attend / Participate • Not a delegated activity • Minimum requirement is “value stream” Leadership Team • KEY LEADERS • PM, PROCESS OWNER(s) • MANAGERS/SUPERVISORS of the PROCESS • SME’s • KEY STAKEHOLDERS • CUSTOMERS of the VALUE STREAM • SUPPLIERS to the VAULE STREAM • Limit attendance to no more than 20 people • Schedules are cleared for full-time participation (3.5 days) • Hang time - not an 8 to 5 activity - plan on long days

11. Data Collection • In our case – a Case Study • Performance metrics • CURRENT YEAR-TO-DATE • PREVIOUS FISCAL YEAR • Demand (historical and projected) • BY END-ITEM DELIVERABLE • $’s AND #’s • Voice of the customer • Key issues • Key Opportunities • Current organization chart • Facility block layout

12. Logistics • centrally located team room with lot’s of wall space • LDC projector • DVD player and TV • 2 paper flip charts on sturdy stands • colored markers (both wide tip and fine point) • roll of butcher paper • roll of masking tape • roll of scotch tape • post-it notes (various sizes and colors) • sticky dots (“nickel sized” red and green in color) • name tags (sticky paper-type are fine) • drinks and snacks

13. Value Stream Analysis – 4 Day Professional Facilitation

14. “Beginning your Lean Transformation” • Define (2-3) measures you want to impact by 10-50% in the next 12 months through the application of VSA • WHAT? HOW MUCH? BY WHEN? • GO NOWHERE, START NOTHING UNTIL EXPECTATIONS ARE CLEARLY DEFINED • MAKE SURE YOU AGREE WHAT YOU WANT FROM LEAN AND HOW TO MEASURE IT Step 1: Define “what” you want from Lean

15. TYPICAL 4 DAY AGENDA Value Stream Analysis

16. TYPICAL 4 DAY AGENDA Value Stream Analysis

17. Value Stream Analysis Charter

19. Current State Map Total Flow Time = 152 - 383 days Total Touch Time = 105 - 132 hours

20. Future State Map • Key Changes to Create Future State • Requirement on applicant is significantly greater • Applicant is to provide all required info up front • - Application is “complete” after application info is verified by PM • - Measure of throughput /turn-around time will include time from application received • Created one piece flow (uninterrupted concentration on task) • Reduced the amount of wait time • Placed permit decision and signature authority on PM • Included 15 day public notice versus 30 day standard • Reduced rework by improving the application submittal process • Corporate policy and regulation need to be re-visited • Process quality must be addressed • Abandon the “Current State” process • Command must support the new process including “turned back” applications (request for additional applicant info) • Must establish (mistake proof) guidelines for application submittals

21. Metric Regulatory *Projected Regulatory Lean Process Metrics

22. VSA Without Facilitator • “VSA Lite” - 2 Day Process led by SPD Expert Dr. Aaron Allen without consultant • First Day: 1. Introductions (30 minutes) 2. Brief Introduction to VSA (30 Minutes) 3. Define the Boundaries (2 Hours) 4. Walk the Process and Build Current State Map (4-6 hours) • Second Day 1. Complete Current State/Review Current State (30 minutes) 2. Develop Ideal State Map (1 hour) 3. Requirements for the Future State (1 hour) 4. Develop Future State (4 hours)

23. Differences from 4-Day • “Homework” still required • No computerized maps of the process (just hand-drawn) • No computerized metrics • Less time • Less cost

24. Costs • 4-Day Facilitated VSA was $31,500 including time and materials for the consultants (Anteon/Simpler) • 2-Day VSA lite may be free • Homework: • Prepare our case study, charter, and goals • Get room for 2-4 days • Deal with logistics of paying the consultant

25. Questions/Comments?