Book notes: Value Stream Mapping

1. Make work visible.
2. Clear connection from every function to customer.
3. Holistic systems thinking view.
   • Help a restructuring and alignment to deliver customer value.
4. Simplification tool:
   • Easy to understand, easier to change.
5. Practical means to drive improvement.
6. Help onboarding.

• Margins erode.
• New competition or market share loss.
• Want to increase company's market value.
• Creating new products.
• To explore pro/cons of centralization and decentralization.

• Socialize: talk, explain, let people ask, discuss.

• How the manager believes it operates.
• How it is supposed to operate.
• How it really operates.
• How it could operate.

• Cross-training.
• Robust process management systems.

• Going to gemba.
• Tying improvements to business needs, strategy and annual goals.
• True collaboration aligned by a common goal amongst departments.
• Assessing performance using standard time and quality metrics.

1. Provide effective means to establish a strategic direction for making improvements:
   • Because you see the whole picture.
   • Avoid suboptimization.
   • Macro level processes, not detailed steps.
2. Cyclical view places the customer in the centre.
3. Deepens org understanding:
   • Distills complexity.
   • Can be understood by everybody.
   • Takes days to create, instead of weeks.
4. Data driven.

1. Make work visible.
2. Clear connection from every function to customer.
3. Holistic system-Thinking view.
   • Help a restructuring and alignment to deliver customer value.
4. Simplification tool:
   • Easy to understand, easier to change.
5. Practical means to drive improvement.
6. Help onboarding.

1. Using it only for improvement work.
2. Only for tactical improvements. Cues:
   • Value stream map has >30 steps.
   • Formatted in swim lanes.
   • Missing information flows.
3. Creating them during a Kaizen Event.
   • Should happen before.
4. Creating maps but taking no action.
5. Mapping with an inappropriate team or no team at all.
   • Team must have the authority to make changes.
6. No metrics.

• Start with Strategy Deployment:
  • Method for defining and gaining consensus about priorities needed to realize an organization's business goals.
  • The value stream to improve will be obvious.
  • Recommended books:
    • Getting the right things done.
    • Hoshin Kanri For The Lean Enterprise.
    • The Outstanding Organization.
• Value stream mapping when:
  • Margins erode.
  • New competition or market share loss.
  • Want to increase company's market value.
  • When solving a problem with A3 management, a workflow is needed.
  • Creating new products.
  • To explore pro/cons of centralization and decentralization.

Structure:

3 consecutive days: deep focus.

Prepare phase:

• Educate the mapping team and leaders on:
  • Lean principles.
  • Value stream mapping:
    • Purpose.
    • Benefits.
    • How is done.
    • Effect in org.
    • Daily briefing.
    • Roles.
• The degree of value stream mapping success is highly dependent on the amount of up front planning, reflected in a charter.
• Transforming a value stream often produces a fair amount of organizational disruption.

Charter:

• Download from TKMG website.
• Planning.
• Communicating.
• Aligning.
• Building consensus.

Charter sections:

1. Scope:
   • Specific conditions:
     • Proper scoping is critical when value stream mapping in knowledge work environments, because there is significant process variation exists within a single product family.
     • In many cases specific conditions may represent less than 25% of the value stream volume, but the future state design applies to 75% or more.
     • There is no much variation at the macro level as we think.
     • Dont be afraid to narrow your scope beyond your comfort level.
   • First/Last step:
     • Use verb-plus-noun.
   • Improvement time frame:
     • Recommendation: Fix deadline (3-6 months) and scope future state to fit it.
2. Current state problems and business needs:
   • Clarity is a significant lever for building consensus and driving change.
   • Reasons for change. Sales pitch.
   • Same for "Benefits to Customers" and "Benefits to Business".
3. Measurable Target Condition:
   • From X to Y.
   • Also the percentage improvement that they represent (is it a 5% improvement or a 100% one?).
4. Accountable Parties:
   • Mandatory: Executive sponsor + Facilitator.
   • Executive sponsor:
     • Mandatory.
     • Person who oversees the entire value stream.
     • Who is ultimately accountable for the results.
     • May not be on the team, but at minimum:
       • Active on development of charter.
       • Attend briefings.
       • Monitor progress on transformation plan.
   • Facilitator:
     • Mandatory
     • Key on the success.
     • Teacher, time keeper, change agent, provocateur.
     • Comfortable with conflict, good listener.
     • Should not oversee nor work in the value stream.
   • Briefing attendees:
     • Get buy-in from support functions.
5. Mapping team:
   • As small as possible, but all functions must be represented.
   • Typical 5-7 people, never more than 10.
   • Mostly leadership positions:
     • So they can influence/authorize future state.
     • Senior leaders understand the big picture better, which can lead to more innovative suggestions.

Not communicate but socialize the value stream mapping charter:

• Affected leadership.
• Mapping team.
• Workers in are that will be included:
  • Need a safe environment to be honest about current state.

Data to collect:

• Current and forecasted customer demand (1-2 years).
• Quality reports.

1. How work flows.
2. Who does the work.
3. How the value stream is performing on the day the map is created.

• How the manager believes it operates.
• How it is supposed to operate.
• How it really operates.
• How it could operate.

• Everybody introduces themselves where they stand in the map and state their internal/external providers/customers.
• Ensure expectations are aligned with charter.
• Charter is not open for debate.
• Rules of engagement.

• Going to the gemba.
• Objective:
  • See, feel, hear, smell the current condition.
  • Understand physical separation between producer and consumer.
  • Workers more open, comfortable, and honest in their own environment.
  • Show respect for workers.
• Do it twice the same day.
• Second time do it backwards:
  • Different perspective.
  • Easier to see "pull" design opportunities.
• The whole team together.

1. Value adding.
2. Necessary non-value-adding.
3. Unnecessary non-value-adding.

1. Walk the Value Stream:
   • Write improvement ideas in a list and avoid discussing them.
2. Map Layout:
   • Focus on basic:
     • What is done.
     • Who does it.
     • What order.
3. Walk the Value Stream (again):
   • Performance of value stream.
   • Find barriers to flow.
4. Add Map details.
5. Summarize the map.

• Customer Post-it in top center.
• If there is an external supplier, place the customer on top right and supplier in top left.
• Agree on process blocks of the value stream:
  • Between 5-15.
  • Less than 5: not enough details.
  • More than 15: too detailed (likely) or value stream mapping too broad.
  • New process block when work stops flowing, usually due to:
    • Handoff.
    • Work accumulates.
    • Work is only processed at predetermined time intervals.
• Process should have:
• Branching is ok if there is just one/two process difference.
• Parallel work is also ok.
• Number the process blocks sequentially for easy reference.

• Process time (PT):
  • Time to do one unit of work.
  • If work is batched, one batch.
  • Includes:
    • "Talk time" -- meetings.
    • Read and think time.
  • Record separately "machine time" if it is significant.
  • Do not include waiting or delays.
  • It is the time it would take to do the work if the process workers could work on one item uninterrupted.
  • If PT varies wildly use median, not mean.
  • Opt for accuracy over precision.
• Lead Time (LT):
  • Queue time + delays + PT.
  • Use business hours (typically 8 hours per day).
• Percent Complete and Accurate (%CA):
  • Quality.
  • Incorrect, incomplete or unclear information from upstream.
  • Ask downstream process and place metric in upstream one.

• WIP:
  • In-box + In-process + Out-box.
  • Make note of oldest item in queue.
• Number of people.
• Number of hours worked.
• Process effectiveness.
• Work volume/demand rate.
• Work trigger.

• Actions or conditions that inhibit the uninterrupted progression of work.
• Do not include high LT or low %CA.
• Examples:
  • Batching:
    • Note size and frequency.
    • Not all batching is bad.
  • System downtime.
  • Shared resources:
    • % of time staff is not available.
  • Task switching and interruptions.
  • Prioritization rules:
    • Conflicting or differing rules.

• Place WIP to the left of the process block. Use inbox icon.
• Connect processes with dashed push arrows or pull withdraw arrows.
• Add IT Systems that connect the processes:
  • Use lightning blot if an automated process that push information to person or other IT System.

• In parallel processes, pick up the one with the longest lead time.
• Summary metrics:
  • Total LT.
  • Total PT.
  • Activity Ratio (AR):
    • Degree of flow.
    • Total PT / Total LT * 100.
    • 2-5% is not uncommon.
  • Rolled Percent Complete and Accurate:
    • (%C&A) process 1 * (%C&A) process 2 * ...
    • 1-10% is not uncommon.
    • In parallel paths, include the %C&A of all processes.
  • Total Label Effort:
    • Sum of PT, including all parallel processes.
    • Expressed as either:
      • Total hours.
      • Equivalent FTE (Full time employee).
      • Labor dollars.
    • FTE formula: Total labor PT * # occurrences per year / # available hours per employee per year.

• Loopbacks.
• Unnecessary hand-offs.
• Rework due to errors and lack of clarity.
• Batching.
• Functions missing or getting involved too early or too late in the process.
• Redundant activities.
• High variation in how work is performed.
• No documented standard work.
• Excessive inspection (reviews, approval, audits).
• Overspecialization of staff.
• Existing technology not fully leveraged.
• Underutilization of skills.
• Compliance overkill.
• Delays due to juggling multiple responsibilities.
• Push and overburden.

1. What work should be done.
   • Two ways of eliminating waste:
     1. Eliminate work.
        1. Remove unnecessary non-value-adding activities.
        2. Reduce effort for necessary non-value-adding activities.
        3. Reduce effort on value-adding activities.
        4. In heavily siloed orgs, steepest lead time reductions are achieved by reducing hand offs.
     2. Adding work:
        • When overall process time and lead time are reduced.
        • Temporarily add inspection step to prevent defects reaching customers.
2. Making that work flow.
   • Key question: what is preventing the lead time from being the same as the process time for each and every process blog?
   • Focusing on Lead Time reduction forces problems to surface.
   • Examples:
     • Apply classic lean countermeasures and improvement work.
     • Address root cause of batches.
     • Shift sequential process to parallel.
     • Combine tasks to reduce hand-offs.
     • Resequence work.
3. Managing the work to achieve continuously improved performance:
   • How will you determine if the value stream is performing as intended?
   • Who will monitor and mange value stream performance?
   • Each value stream needs 2-5 KPIs.
     • Typical: Quality, cost, delivery, safety, morale.
   • Many process blocks will benefit from their own KPIs.
   • KPIs must be actively managed by the value stream manager.

• Firing people is disrespectful/not lean.
• Remaining people will have no further interest in improving.

1. Review charter.
2. Review the current state findings.
3. Introduce relevant counter measures:
   • Standardizing the work.
   • Build quality at the source.
   • Installing visual management.
   • Pull systems.
   • Batch reduction.
   • Level loading.
   • Work balancing to takt time.
   • Cells and collocation.
   • Work segmentation.
   • Cross-training.
   • Automation.
4. Avoid advanced techniques until the basics are working.
5. Most office and service value streams will require more than one value stream map.

• Blank sheet that is 30% shorter than the current value map.
• Place current value map on top of it.
• Design usually happens organically.
  • Page 116 list some design question to help.
• Start with what should be done, not how.
  • Include only the process description.
• Decide which functions will perform the work at each process, and the metrics.
• Calculate summary metrics and create a table to compare current vs future VSM.
• Note in the future state the improvements required:
  • Use "kaizen bursts":
    • What, not how.
  • Improvements will need to go through the PDSA cycles.
• Brief the relevant leadership and key stakeholders.

• Measurable target.
• Proposed countermeasures:
  • Kaizen bursts.
  • The authority for determining how the improvement will be designed and implemented is given to the people who do the work being improved.
  • Use the word "countermeasures" (instead of "solution") to reflect fluidity.
  • Improvements are temporary countermeasures, not permanent solutions.
• Execution method:
  • Just-do-its:
    • Small, low risk, easy to test, cheap.
  • Kaizen Event:
    • 2-5 days.
    • Significant planning and careful scoping.
  • Projects:
    • More complex or expensive.

• Socialize: talk, explain, let people ask, discuss.

• Attendees:
  • Executive sponsor.
  • Value stream champion.
  • Few owners of the improvements.
• Purpose:
  • Assess progress.
  • Ensure robust PDSA is being used.
  • Address obstacles.
  • Consider shift in plan if new information or condition warrants it.
• Agenda suggestion in page 143.
• Sustaining improvement is easy:
  • Plan well.
  • Build consensus.
  • Follow PDSA to the letter.
  • Have strong management system:
    • One person that owns the whole value stream and has the authority to affect it.
    • In mature continuous improvement orgs, this person is responsible for the P&L, often the value stream is structured as a business unit, that borrows, leases or purchases shared services from other parts of the org.

• Going to gemba.
• Tying improvements to business needs, strategy and annual goals.
• True collaboration aligned by a common goal amongst departments.
• Assessing performance using standard time and quality metrics.