Value Stream Mapping

1. Value Stream Mapping Management is Essential

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

3. What are our main stumbling blocks? • Years of bad habits • Financial focus with limited cost understanding • A lack of system thinking and incentives • Metrics supporting a legacy model • Limited customer focus • Absence of effective operating strategies

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

5. 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

6. Why not take the value stream perspective? • “Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.” • 3 enterprise value streams: • Raw Materials to Customer – Manufacturing • Concept to Launch – Engineerin • Order to Cash - Administrative Functions

7. 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.

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

9. 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

11. process level single plant (door to door) multiple plants across companies Levels of a Value Stream Start Here

12. Process 1 Process 2 Process 3 Value Stream Managers “Customer” Kaizen The Value Stream Manager

13. 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

14. 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

15. 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

16. Current State Value Stream Map

17. Future State Value Stream Map

18. Planning and Implementing • Don’t Wait! • You need a plan! • Tie it to your business objectives • Make a VS Plan: What to do by when • Establish an appropriate review frequency • Conduct VS Reviews walking the flow

19. 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

20. Enterprise Perspective • Engineer to Order • Configure to Order • Capital equipment manufacturers • Small companies (<500 employees) • Service Firms

21. We might begin in… • Processes directly impacting the part production • Engineering • Quoting • Or, in value streams with direct customer contact • Order entry • Invoicing

22. 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

23. 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

24. 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

25. 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

26. 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.