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Value Stream Mapping:
  Strategy Before Tactics
       Karen Martin




         Webinar
      August 23, 2012
 Founder: Karen Martin & Associates, LLC (1993).
 Consultant / Coach: Lead Lean transformations & 
develop people in office, service and knowledge 
environments.
 Teacher: University of California, San Diego’s 
Lean Enterprise program.
 Author:


                                                     Karen Martin, 
                                                       Principal




  Just released!    2nd Edition 
                   October 2012!
Value Stream Mapping’s Roots




                       Mike Rother & John Shook, 1999             Beau Keyte & Drew Locher, 2004


                                    Whenever there is a product for a customer, 
                                            there is a value stream. 
                                         The challenge lies in seeing it.

                                         — Mike Rother & John Shook, Learning to See
© Karen Martin & Associates, LLC                                                                   3
Value Stream Defined
          Value Stream: All of the activities, required to fulfill a
          customer request from order to delivery (and beyond to
          cash received).

                                      Value Stream

                           Process      Process      Process


                                                                          Custom er




          Customer                                             Customer
           Request                                              Receipt


                                                                                      4
© Karen Martin & Associates, LLC
Why Value Stream Mapping?




© Karen Martin & Associates, LLC             5
Value Stream Mapping Benefit #1:
                      Seeing the Whole




                                   60,000 foot view; Rooftop view

© Karen Martin & Associates, LLC                                    6
VSM Promotes Systems Thinking




 System Efficiency = 
Optimal Value Stream 
    Performance 



                   Individual Efficiency =    
                     Sub‐optimization




                                                 7
Value Stream Mapping Benefit #1:
                      Seeing the Whole




                                   60,000 foot view; Rooftop view

© Karen Martin & Associates, LLC                                    8
Truth                        Value Stream Mapping 
        Truth                            Benefit #2
                Truth
                       Truth
                              Truth
                                     Truth
                                           Truth
  How are we really performing?                 Truth
  What’s our customer really experiencing?
© Karen Martin & Associates, LLC
                                                    Truth   9
Value Stream Maps Serve as Visual “Storyboards”




          Makes the disconnects                Shows the linkage 
          and obstacles to flow                between material and 
          visible at a macro level             information flow


                                                                  10
© Karen Martin & Associates, LLC
AMBIGUITY

            11
Problems Nearly Always Extend Outside the
                    Functional Silos in Which They’re Discovered




© Karen Martin & Associates, LLC                                   12
Value Stream Mapping Benefit #3:
                    Consensus Building




© Karen Martin & Associates, LLC                 13
Value Stream Mapping Benefit #4:
                                             Metrics-Based




                  What are you 
                  going to do to 
                   change the 
                    numbers?

© Karen Martin & Associates, LLC                                      14
Outpatient Imaging Value Stream
                                   Projected Results
                                       Current             Projected                  %
               Metric                   State             Future State           Improvement
   Lead Time                           32.5 hrs               11.3 hrs                  65%
   Process Time                         56 mins               43 mins                   23%
   Percent Activity                       2.9%                  6.3%                    117%
   Rolled First
                                          29%                    40%                    38%
   Pass Yield
   # Macro Steps                            14                    11                    21%
   Tech turnover
                                         100%                    25%                    75%
   (annual)
                      Note: Freed capacity (PT reductions) allowed the organization to earn 
                            $500,000 additional annual revenue w/o increasing staff.
© Karen Martin & Associates, LLC                                                               15
Value Stream Mapping Benefit #5:
                          Strategy Before Tactics
     Where am I? 
    Where do I want 
        to go?
                                   ?
       Which route 
                                       ?
      should I take?                       ?

                 I‐80 option                   I‐40 option   I‐70 option




© Karen Martin & Associates, LLC                                           16
The Work We Do:
                                   Degrees of Granularity

    Rooftop                                         Value     Value Stream
      View                                                        Map
   (Strategic)                                      Stream


                                          Process   Process    Process



      In the                                                  Metrics-Based
     Weeds                         Step    Step      Step     Process Map
    (Tactical)


© Karen Martin & Associates, LLC                                             17
Value 
             Stream 
             Mapping
                                     Projects, 
                                   Kaizen Events, 
                                    Just‐Do‐Its




© Karen Martin & Associates, LLC                     18
Value Stream Mapping:
                               As Much Art as Science




© Karen Martin & Associates, LLC                        19
ABC Widget Value Stream
                                           Key VSM Components:                                 Current State Map 
                                                                                             Demand = 1,800/year  

                                               Manufacturing                                       08/08/2012     
                                                                                             Facilitator: Sally Parker
    Information Flow




                                                               Production 
                                SUPPLIER                         Control                     CUSTOMER
1
       Product Flow




                               Process 1    I      Process 2     I      Process 3    I         Process 4
2


                       Hours               Hours                Hours               Hours                            LT
       Timeline




3                              Minutes             Minutes               Minutes                 Minutes             PT

© Karen Martin & Associates, LLC
Key VSM Components:                       
                                                                             XYZ Value Stream
                                                                             Current State Map 
                                                                            Demand = 250/year  
       Information Flow
                                         Office / Service                       08/08/2012
                                                                          Facilitator: Robert Parker




                                                   CUSTOMER

  1
                                          I.T.         I.T.        I.T.
          Product Flow




                          Process 1        Process 2          Process 3   Process 4
  2
          Timeline




                                                                                                PT
  3
                                                                                                  LT

© Karen Martin & Associates, LLC
Current State Value Stream Map                                                                                                            Demand = 15 per day
                                                                                                       Outpatient Imaging Services
                                                                                                                                                                                                                                                  Customer Demand:
                                                                                                                                                                                                                                                   15 patients per Day
                                                                                                                                                                                                                                                (Takt Time 1920 seconds)
                                                                           Pre-register                                                                  Schedule                                                                                    8 hours per day
                                                                             Patient                                                                    Appointment
                                                                                                                                                                                                                   Referring
              Hospital
                                                                                                                                                                                                                   Physician
                     4                                                                                                                                                                                                        1
                                      Lead Time = 24 days                      5           3                 Lead Time = 990 mins.                       6         2             Lead Time = 12 mins.
                                                                      Cycle Time = 30 mins.                                                        Cycle Time = 11 mins.                                                      % C&A = 65 %
                                                                      Lead Time = 990 mins.                                                        Lead Time = 12 mins.
                                                                      % C&A = 100 %                                                                % C&A = 98 %



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



                         Symposium                    E Pay                        Excel                   ADS                 Meditech                      Internet                                         Fax Order                 PACS
                                                                                                                                                                                  Waiting Room                                                                                      Auto Fax 50%
                                                                                                                                                                                                              Solutions
                                                                                                                                                                                  Management                                                                                        Us Mail 25%
                                                                                                                                                                                    System
                                                                                                                                                                                                                                                                                    MD Mailbox 25%


                                                                                                                                                                                                                                                                                                   Rework Loop
                                                                                                                                                                                                                                                                                                   via Fax 25% of
                                                                                                                                                                                                                                                                                                   the time




                                                                                        Prep                       Complete                         Transmit                     Read/Dictate                    Transcribe                       Review                           Print                     Send
                 Check-in                         Check-in
                                                                                       Patient                       Exam                           Images                          Exam                          Report                         Draft/Sign                      Reports                    Reports
                  Patient                           Patient
                                                                                       (Tech)                       (Tech)                           (Tech)                      (Radiologist)                     (MDI)                        (Radiologist)                   (Imaging)                  (Imaging)
                (Admitting)                       (Imaging)
  5 mins.

                           5       5 mins.                    6     45 mins.                     7    30 mins.             8         5 mins.                   9    248 mins.             10      365 mins.               11       960 mins.              12     110 mins.              13    120 mins.             14
                 5                                3                                   2                            2                                2                               2                             6                               2                             2                          6

            Cycle Time = 2 mins.             Cycle Time = 1 mins.          Cycle Time = 10 mins.             Cycle Time = 15 mins.             Cycle Time = 3 mins.         Cycle Time = 15 mins.         Cycle Time = 5 mins.             Cycle Time = 1 mins.          Cycle Time = 1 mins.         Cycle Time = 3 mins.
            % C&A = 90 %                     % C&A = 98 %                  % C&A = 100 %                     % C&A = 90 %                      % C&A = 100 %                % C&A = 95 %                  % C&A = 75 %                     % C&A = 95 %                  % C&A = 99 %                 % C&A = 90 %


 5 minutes                                                        45 minutes                         30 minutes                 5 minutes                          248 minutes                   365 minutes                      960 minutes                   110 minutes                  120 minutes                     L/T = 13464 minutes
                 2 minutes         11520          1 minutes                          10 minutes                   15 minutes                        3 minutes                     15 minutes                      5 minutes                      1 minutes                      1 minutes                  3 minutes         VA/T = 11576 minutes
                                   minutes

                                                                                                                                                                                                                                                                                                                              Rolled First Pass
                                                                                                                                                                                                                                                                                                                                yield = 29%




© Karen Martin & Associates, LLC
Value Stream Mapping Process
               Define                   Products (good or services) with
           Product Family               common process steps

                                        Foundation (the basis) for the 
          Document Current              future state; 70‐80% accurate is
               State                    acceptable (directionally correct)

                                        Create flow by eliminating waste 
           Design Future                (now obvious from your
                               3 Day 
               State                    current state map); typically 3‐6
Repeat




                               Event    months out

               Create                   Include accountability and
         Implementation Plan            timeframes for completion




           Implement!                   The goal of mapping!
Value Stream Mapping Charter
                           Event Scope                                            Leadership / Coordination                                        Schedule
                                                                                 Executive                                                      3 days typically; sequential is
     Value Stream Contract processing, rebate processing, etc.                             VP or C-level                          Event Date(s)
                                                                                  Sponsor                                                       best

           Specific What circumstances you're including and                  Value Stream If needed - often Director or                Start/End
                                                                                                                                                 6 hrs minimum; 7 or 8 is best
         Conditions excluding? (type of cust, time of year, etc.)               Champion Manager level                                    Times
Customer Demand How many times is this done per wk, qtr, mo, or yr.?
                                                                                Facilitator Skilled person leading the activity        Location Need ample wall space
            Trigger What need does the value stream address?
          First Step Task on first process block                                                                                          Meals Always a nice touch; keeps
                                                                               Team Lead Not always needed
          Last Step Task on last process block                                                                                        Provided? the team from wandering.
      Boundaries &                                                                                                                       Interim Aid in consensus building and
                    What is the team NOT authorized to change?                             The person arranging logistics
        Limitations                                                                                                                   Briefing(s) organizational learning.
                                                                               Coordinator (reserving the room, ordering food,
FS Implementation                                                                          sending meeting notices, etc.)               Briefing List required attendees; others
                  Typically 90-120 days
       Timeframe                                                                                                                      Attendees are optional
                           Event Drivers                                                                              Mapping Team
 1 Why are you doing this? What are the current state issues?                Function                              Name                          Contact Information
 2                                                                       1 Leadership-heavy
 3                                                                       2
 4                                                                       3
 5                                                                       4
               Goals & Measureable Objectives                            5
 1 Aim for objectives w/ measurable targets (from X to X).               6
 2                                                                       7
 3                                                                       8
 4                                                                       9
 5                                                                      10
                       Planned Deliverables                                                                           On-Call Support
 1 Current state VSM                                                         Function                              Name                          Contact Information
 2 Future state VSM                                                      1 SMEs that may not be needed full time
 3 Implementation Plan                                                   2
 4                                                                       3
 5                                                                       4
                       Potential Obstacles                                                                                Approvals
 1 …to the team's success with the mapping activity.                           Executive Sponsor                      Value Stream Champion                Facilitator
 2
 3                                                                     Signature:                                  Signature:                    Signature:
 4                                                                     Date:                                       Date:                         Date:

                                                                                                                                                                                   24
Team-Based Improvement Activities
                Rules of Engagement
1. The team starts and ends the day together; begin and end breaks
    together.
2. No interruptions or distractions – 100% focus; phones on silent; no
    email; no texting.
3. Rank has no privilege.
4. Seek the wisdom of ten instead of the knowledge of one.
5. Use creativity before capital (in designing improvements).
6. Finger-pointing and blame has no place: “It is what it is.”
7. Respectful disagreement is encouraged. (It’s OK to disagree; it’s not
    OK to be disagreeable.)
8. No veto power from outside the team.
9. No silent objectors; don’t leave in silent disagreement.
10. One conversation at a time; no side bars.
11. What’s said in the room stays in the room.
12. Ask Why? Why not? What if?
13. Ban “Can’t” and “No, because…” from your vocabulary. Think/say:
    “Yes, if…”
14. Ban internal, silo’d thinking; think externally (customer); value stream.
                                                                           25
Step 1 – Label Map
        • Label your map in upper right corner:
                – Value stream name
                – Current or future state
                – Customer demand (volume of work per time
                  period)
                – Takt time (if relevant)
                – Date
                – Facilitator’s name (and/or team)



© Karen Martin & Associates, LLC                             26
Takt Time:                 
                                   The Key to Continuous Flow
                                         Available work time
    Takt time = 
                                         Customer demand
                       480 minutes/day
    Takt time =                                         = 10.7 mins
                    45 new accounts/day

                                 “Touch Down”
                                       OR…
                  Time Available divided by what Kustomer Takes

                                                                         27
© Karen Martin & Associates, LLC
Step 2 – Define Process Blocks

     • Identify all blocks in the process (target 5-15 blocks)
             – Each block (post-it) contains an activity or group of activities that
               occurs before a significant break in the timeline occurs (typically
               build up of WIP or handoff)
             – 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
             – Activity format is verb/noun – what happens to what
             – Include the function who performs the task
             – If relevant, include number of workers who perform the task
             – Include any major barriers to flow – batches, shared/inaccessible
               resources, system downtime, etc.
             – When possible, walk the process!

© Karen Martin & Associates, LLC                                                           28
Step 3 – Define I.T. Systems

      • 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.
              – Note any scheduling that occurs (calendar, system, etc.)
              – Who tells whom to do what? How do they tell them?




© Karen Martin & Associates, LLC                                           29
Current State Value Stream Map Outpatient                                                                                                                                                            Demand = 15 per day
                                                                           Imaging Services
                                                                                                                                                                                                                                                  Customer Demand:
                                                                                                                                                                                                                                                   15 patients per Day
                                                                                                                                                                                                                                                (Takt Time 1920 seconds)
                                                                           Pre-register                                                                  Schedule                                                                                    8 hours per day
                                                                             Patient                                                                    Appointment
                                                                                                                                                                                                                   Referring
              Hospital
                                                                                                                                                                                                                   Physician
                     4                                                                                                                                                                                                        1
                                      Lead Time = 24 days                      5           3                 Lead Time = 990 mins.                       6         2             Lead Time = 12 mins.
                                                                      Cycle Time = 30 mins.                                                        Cycle Time = 11 mins.                                                      % C&A = 65 %
                                                                      Lead Time = 990 mins.                                                        Lead Time = 12 mins.
                                                                      % C&A = 100 %                                                                % C&A = 98 %



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



                         Symposium                    E Pay                        Excel                   ADS                 Meditech                      Internet                                         Fax Order                 PACS
                                                                                                                                                                                  Waiting Room                                                                                      Auto Fax 50%
                                                                                                                                                                                                              Solutions
                                                                                                                                                                                  Management                                                                                        Us Mail 25%
                                                                                                                                                                                    System
                                                                                                                                                                                                                                                                                    MD Mailbox 25%


                                                                                                                                                                                                                                                                                                   Rework Loop
                                                                                                                                                                                                                                                                                                   via Fax 25% of
                                                                                                                                                                                                                                                                                                   the time




                                                                                        Prep                       Complete                         Transmit                     Read/Dictate                    Transcribe                       Review                           Print                     Send
                 Check-in                         Check-in
                                                                                       Patient                       Exam                           Images                          Exam                          Report                         Draft/Sign                      Reports                    Reports
                  Patient                           Patient
                                                                                       (Tech)                       (Tech)                           (Tech)                      (Radiologist)                     (MDI)                        (Radiologist)                   (Imaging)                  (Imaging)
                (Admitting)                       (Imaging)
  5 mins.

                           5       5 mins.                    6     45 mins.                     7    30 mins.             8         5 mins.                   9    248 mins.             10      365 mins.               11       960 mins.              12     110 mins.              13    120 mins.             14
                 5                                3                                   2                            2                                2                               2                             6                               2                             2                          6

            Cycle Time = 2 mins.             Cycle Time = 1 mins.          Cycle Time = 10 mins.             Cycle Time = 15 mins.             Cycle Time = 3 mins.         Cycle Time = 15 mins.         Cycle Time = 5 mins.             Cycle Time = 1 mins.          Cycle Time = 1 mins.         Cycle Time = 3 mins.
            % C&A = 90 %                     % C&A = 98 %                  % C&A = 100 %                     % C&A = 90 %                      % C&A = 100 %                % C&A = 95 %                  % C&A = 75 %                     % C&A = 95 %                  % C&A = 99 %                 % C&A = 90 %


 5 minutes                                                        45 minutes                         30 minutes                 5 minutes                          248 minutes                   365 minutes                      960 minutes                   110 minutes                  120 minutes                     L/T = 13464 minutes
                 2 minutes         11520          1 minutes                          10 minutes                   15 minutes                        3 minutes                     15 minutes                      5 minutes                      1 minutes                      1 minutes                  3 minutes         VA/T = 11576 minutes
                                   minutes

                                                                                                                                                                                                                                                                                                                              Rolled First Pass
                                                                                                                                                                                                                                                                                                                                yield = 29%




                                                                                                                                                                                                                                                                VSM Champion:  Paul Scanner Created:  
                                                                                                                                                                                                                                                                July 17, 2007
© Karen Martin & Associates, LLC
Step 4 – Number the Process Blocks
        • Number the process blocks
        • Connect the customer and supplier,
          process blocks and I.T. systems
                – “Lightning bolt” arrow for electronic/automatic
                  information flow
                – Regular arrow for push systems
                – “Hollow” arrow for product flow
        • If parallel processes exist, use alpha
          modifiers – e.g. 8A, 8B, etc.


© Karen Martin & Associates, LLC                                    31
Step 5 – Add Data
        • Add key metrics for all process blocks
                – Process Time (PT)
                – Lead Time (LT)
                – Percent Complete & Accurate (%C&A)
        • Add work-in-process (WIP) at every step.




© Karen Martin & Associates, LLC                       32
Key Metrics: Time

     • Process time (PT)
             – 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
             – 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 department in
               the chain
             – aka throughput time, turnaround time, elapsed time
             – Includes Process Time, not merely waiting time.




© Karen Martin & Associates, LLC                                                   33
Key Metrics: Time
                                        Scenario 1

                                          Lead Time (LT) 




         Work                           Process Time (PT)
                                                                Work passed to 
        Received                                                  next step



                                   LT = PT + Waiting / Delays

© Karen Martin & Associates, LLC                                             34
Key Metrics: Time
                                         Scenario 2

                                          Lead Time (LT) 




                                             Process Time
         Work                                                   Work passed to 
        Received                                                  next step



                                   LT = PT + Waiting / Delays
© Karen Martin & Associates, LLC                                             35
3 Types of Work-in-Process (WIP)
                                    Waiting                  Completed, 
                                     to be       Currently   but not yet 
                                   processed    in process    passed on


                                                  WIP

                                    WIP                         WIP
                 Process 1                     Process 2                    Process 3




                                           Step 2’s WIP
                                                                                        36
© Karen Martin & Associates, LLC
Current State Value Stream Map
                                                Purchasing — Non‐repetitive purchases less than $5,000
                                                                                                                                                                                                                            WIP only noted at the 3 
                                                                                                                                         Inititate Req.    1
                                                                                                                                                                                                                              steps where it has 
                                                                                                                                              Originator
                                                                                                                                         31
                                                                                                                                         PT = 10 mins.
                                                                                                                                                                                                                                accumulated.
                                                                                                                                         C&A = 10%
                                                                                                                                                                                                                                           Supplies
                            Hard Copy




                                                                                                                                                                              Vendor
                       Form File                               File Maker                               Quicken                                   Excel                                                          ERP
                                                                                                                                                                              Website




                                                                                                                  Data Entry




                                                                             Review        4                                                                                    Enter        7                Approve in    8                    Submit PO
                  Review     2                             3                                                  Review 5                              Review 6                                                                                                   9                              10
                                            Review Req.           20 Reqs                                                                                                     Requisition        10 Reqs        ERP             63 Reqs          to Supplier
                  Budget                                                    Requisition                      Requisition                           Requisition
                                                                                                                                                                                                                                                                                   External
                                                                                                                                                                                                            Corp Purchasing                                                        Supplier
                                                                            Sys Engineer                                                                                      Admin Asst                                                    Corp Purchasing
                  Finance                    Supervisor                                                      IS Manager                           Financial Mgr                                                 Manager
              6                              2                               1                                1                                    1                           1                             1
                                                                                                                                                                                                                                             6
2 hrs.       PT = 5 mins.        4 hrs.     PT = 5 mins.          40 hrs.   PT = 5 mins.       8 hrs.       PT = 5 mins.        8 hrs.           PT = 10 mins.    4 hrs.     PT = 15 mins.        24 hrs.    PT = 5 mins.        56 hrs.                           80 hrs.     PT = 20 mins.
                                                                                                                                                                                                                                            PT = 15 mins.
             C&A = 60%                      C&A = 95%                       C&A = 90%                       C&A = 100%                           C&A = 95%                   C&A = 98%                       C&A = 90%
                                                                                                                                                                                                                                            C&A = 98%


 0.25 days                       0.5 days                         5 days                       1 days                            1 days                           0.5 days                        3 days                         7 days                                      10 days               LT = 28.4 days
                  5 mins.                     5 mins.                            5 mins.                          5 mins.                            10 mins.                  15 mins.                         5 mins.                           15 mins.                                         PT = 65 mins.
                                                                                                                                                                                                                                                                                                   AR = 0.477%

                                                                                                                                                                                                                                                                                                   RFPY = 4.2%
                                                                                                                                                                                                     PT = Process Time
                                                                                                                                                                                                     LT = Lead Time
                                                                                                                                 Customer Demand:                                                    C&A = % Complete & Accurate
                                                                                                                               615 requisitions per y ear                                            AR = Activ ity Ratio (PT/LT x 100)
                                                                                                                                                                                                     RFPY = Rolled First Pass Y ield




© Karen Martin & Associates, LLC
Key Metrics: Quality

      • %Complete and Accurate (%C&A)
              – % of incoming work that’s “usable as is”; 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
              – Determined by the person receiving the input; metric
                goes on the output block.
              – Measured by the immediate downstream customer
                and all subsequent downstream customers.
              – Similar to first pass yield in manufacturing.

© Karen Martin & Associates, LLC                                                  38
Post‐it Conventions
                                                          Process #
           Process 
         (Verb/Noun)

            Function

           # Staff  (if 
           relevant)

                                                           Significant  
                                                         Barriers to flow




                                                         Process Time
                 %C&A
                                                          Lead Time

© Karen Martin & Associates, LLC
Step 6 – Create Timeline

        • Create timeline
        • Calculate summary metrics
                – Timeline PT Sum
                – Timeline LT Sum
                – % Activity Ratio (AR)
                – Rolled First Pass Yield (RFPY)




© Karen Martin & Associates, LLC                              40
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.”

                                                                                41
© Karen Martin & Associates, LLC
Summary Metrics: Time

     • Percent Activity (%Act)
             – Also referred to as Activity Ratio
             – The percentage of time anything is being done to the
               work passing through the system (whether value-adding
               or non-value-adding)
             – %Act = (∑PT ÷ ∑LT) × 100
             – 100 – %Act = % Time Work is Idle
             – Common current state finding = 1-10% (across value
               stream)
             – Could also calculate %VA to show proportion of value-
               adding time (often significantly lower than % Act).

© Karen Martin & Associates, LLC                                       42
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
    required.
  – RFPY = (%C&A x %C&A x %C&A…) x 100
  – Example: (0.80 x 0.50 x 0.99 x 0.75) x 100 = 29.7%
  – Common current state finding = 0-15%




                                                             43
Summary Metrics: Labor Requirements

      • Total PT
              – Sum of all activities, not just critical path
      • Labor Requirements
                                       Total PT (in hrs) X # occurrences/year
                      # FTEs       =
                                              Available work hrs/year
                    Freed 
                                   = Current State FTEs – Future State FTEs
                    Capacity

                 * FTE = Full‐time Equivalent (2 half time employees = 1 FTE)



© Karen Martin & Associates, LLC                                                44
What do you do with freed capacity?
 •     If expanding market, absorb add’l work without increasing staff
 •     If flat market, reduce payroll through natural attrition
 •     Reduce paid overtime
 •     In-source
 •     Better work/life balance
 •     Slow down & think
 •     Innovate – create new revenue streams
 •     Conduct ongoing continuous improvement activities
 •     Do a better job with fewer errors and higher safety
 •     Get to know your customers better; build stronger supplier
       relationships
 •     Mentor staff to create career growth opportunities
 •     Provide additional workforce development; cross-training
 •     Do the things you haven’t been able to get to; get caught up
 •     Collaborate with other areas
© Karen Martin & Associates, LLC                                    45
Step 7 – Determine VA & N Steps
        • Identify all value-adding (VA) and
          necessary non-value-adding (N) steps
                – Add “VA” or “N” smaller post-it to relevant
                  process blocks
                – All unnecessary non-value-adding blocks
                  remain unlabelled




© Karen Martin & Associates, LLC                                46
Customer-Defined Value

     • Value-Adding (VA) - any operation or activity
       your external customers value and are (or
       would be) willing to pay for.
     • Non-Value-Adding (NVA) - any operation or
       activity that consumes time and/or resources but
       does not add value to the product (good or
       service) the customer receives.
             – Necessary – support processes, regulatory
               requirements, etc.; also referred to as “essential” or
               “value-enabling.”
             – Unnecessary – everything else - WASTE


© Karen Martin & Associates, LLC                                        47
Typical Current State Findings

                                   Unnecessary            Necessary NVA
                                      NVA




        Order                                                                  Delivery
                                              Value Add



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



                                                                                    48
© Karen Martin & Associates, LLC
Current State Typical Findings:
                                   Work Effort as Defined by the 
                                       External Customer




                                                              Unnecessary non-value
                                                              adding
                                                              Necessary non-value-
                                                              adding
                                                              Value-adding




© Karen Martin & Associates, LLC
Value Stream Mapping Process
               Define                   Products (good or services) with
           Product Family               common process steps

                                        Foundation (the basis) for the 
          Document Current              future state; 70‐80% accurate is
               State                    acceptable (directionally correct)

                                        Create flow by eliminating waste 
           Design Future                (now obvious from your
                               3 Day 
               State                    current state map); typically 3‐6
Repeat




                               Event    months out

               Create                   Include accountability and
         Implementation Plan            timeframes for completion




           Implement!                   The goal of mapping!
Future State Design

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

© Karen Martin & Associates, LLC                         51
Eight Wastes (Muda)

          •     Overproduction               • Motion (people)
          •     Inventory                    • Transportation 
          •     Waiting                        (material/data)

          •     Over‐Processing              • Underutilized 
                                               people
          •     Errors




                                                                 52
© Karen Martin & Associates, LLC
Eight Questions for
                                    Future State VSM
        1. What are the customer requirements? What’s the takt
           time?
        2. Will we produce to order or to finished goods
           inventory? (In office/service sector, you’re almost
           always producing to order.)
        3. Where can continuous flow be put in place?
        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?
        7. What should the management time frame be?
        8. What process improvements are necessary to achieve
           the future state?
                                           ‐‐ Rother & Shook, Learning to See
© Karen Martin & Associates, LLC
Future State Design Considerations
     •     Eliminate steps / handoffs        • Implement pull
     •     Combine steps                     • Create an organized, visual 
     •     Create parallel paths               workplace
     •     Alter task sequencing and/or      • Reduce setup & 
           timing                              changeover
     •     Improve quality (error‐proof)     • Eliminate motion & 
     •     Eliminate unnecessary               transportation
           approvals / authorizations        • Co‐locate functions based 
     •     Stop performing non‐value           on flow; create cells 
           adding (NVA) tasks                  (teams of cross‐functional 
                                               staff)
     •     Standardize work
                                             • Balance work to meet takt 
     •     Reduce / eliminate batches          time requirements

                                                                         54
© Karen Martin & Associates, LLC
Future State Value Stream Map Outpatient                                                                                                                                                   Demand = 15 per day
                                                                                                   Imaging Services


                                                                              Standard
                        Work                                                                                                     Co-locate                                                                                                     Customer Demand:
                                                                                Work                                                                                                                                                            15 patients perDay
                       Balance                                                                                                                                                                                                               (Takt Time1920 seconds)
                                                                                                    Schedule appt
                                                                                                     Pre-register                                                                                                                                 8 hours per day
                                                                                                                                                                                                          Referring
    Hospital
                                                                                                                                                                                                          Physician
           3                                                                                                                                                                                                          1
                            Lead Time = 15 days                                                       6         2                                    Lead Time = 45 mins.
                                                                                              Cycle Time = 11 mins.                                                                                               % C&A = 85 %
                                                                                              Lead Time = 45 mins.
                                                                                              % C&A = 98 %
                                                                                                                                                                           Risk
                                                                                                                                                                         Reduction
                                                                                                                                                                           (Joint                                                                                      CT=Cycle Time
                                                                                                                                                                        Commision)                                                                                     LT=Lead Time
                                                                                                                                                                                                                                                                       %C&A=% Complete & Accurate



               Symposium                   E Pay                    Excel                                                Meditech                 Internet
                                                                                                                                                                          Waiting Room
                                                                                                                                                                                                    Fax Order                  PACS                                             Auto Fax 80%
                                                                                                                                                                                                    Solutions
                                                                                                                                                                          Management                                                                                            Us Mail 15%
                                                                                                                                                                            System                                                                                              MD Mailbox 5%


                                                                                      Pull System                                                                                          Value Stream                                             5S                                             Rework Loop
                                                                                       (Supplies                                                                                            Alignment                                                                                              via Fax 10% of
                                                                                        Kanban)                                                                                                                                                                                                    the time
                   Remove
                    Check in
                  and Reduce                                                                                                               Work                                                                                                                   Batch
                 System Access                                                                                                            Balancing                       Visual                                                                                Reductions
                                                             Standard                                                                                                    Workplace                                          Voice
                                                               Work                                        Set-up                                                                               Continuous                Recognition
                                                                                                          Reduction                                                                               Flow


                                                                         Prep                          Complete                           Transmit                        Read/Dictate                                                   Review                              Print                            Send
                                      Check-in
                                                                        Patient                         Exam                              Images                             Exam                                                       Draft/Sign                         Reports                           Reports
                                        Patient
                                                                        (Tech)                          (Tech)                             (Tech)                         (Radiologist)                                                (Radiologist)                      (Imaging)                         (Imaging)
                                      (Imaging)


                       5 mins.                          35 mins.       2
                                                                                  5     20 mins.
                                                                                                          2
                                                                                                                     6     5 mins.
                                                                                                                                          2
                                                                                                                                                     7    120 mins.
                                                                                                                                                                            2
                                                                                                                                                                                       8                                  420 mins.
                                                                                                                                                                                                                                         2
                                                                                                                                                                                                                                                    9      2 mins.
                                                                                                                                                                                                                                                                           2
                                                                                                                                                                                                                                                                                     10     30 mins.
                                                                                                                                                                                                                                                                                                             6
                                                                                                                                                                                                                                                                                                                       11
                                       3           4
                                 Cycle Time = 1 mins.           Cycle Time = 10 mins.           Cycle Time = 10 mins.                Cycle Time = 2 mins.             Cycle Time = 15 mins.                                         Cycle Time = 1 mins.             Cycle Time = 1 mins.              Cycle Time = 3 mins.
                                 % C&A = 98 %                   % C&A = 100 %                   % C&A = 90 %                         % C&A = 100 %                    % C&A = 95 %                                                  % C&A = 95 %                     % C&A = 99 %                      % C&A = 90 %


                      0.0833 hrs.                      0.583 hrs.                      0.333 hrs.                         0.0833 hrs.                        2 hrs.                                                        7 hrs.                        0.0333 hrs.                        0.5 hrs.                          LT = 11.3 hrs.
                                       1 mins.                         10 mins.                           10 mins.                         2 mins.                          15 mins.                                                      1 mins.                          1 mins.                           3 mins.          CT = 43 mins.
                                                                                                                                                                                                                                                                                                                              CT/LT Ratio = 6.32%

                                                                                                                                                                                                                                                                                                                               Rolled First Pass
                                                                                                                                                                                                                                                                                                                                 yield = 40%




    Note: Process Time (PT) is referred to as Cycle 
    Time (CT) on this map


© Karen Martin & Associates, LLC
Value Stream Mapping Process
               Define                   Products (good or services) with
           Product Family               common process steps

                                        Foundation (the basis) for the 
          Document Current              future state; 70‐80% accurate is
               State                    acceptable (directionally correct)

                                        Create flow by eliminating waste 
           Design Future                it is now obvious from your
                               3 Day 
               State                    current state map); typically 3‐6
Repeat




                               Event    months out

               Create                   Include accountability and
         Implementation Plan            timeframes for completion




           Implement!                   The goal of mapping!
PACE Prioritization Matrix
                                                                                                Policy
                                     21    5                               10
                                                                                                I.T.
                                           6                          15
                         Easy                               13                                  Process
Ease of Implementation




                                           2                   20
                                                                                14
                                     23                18 17     25
                                           7
                                      9
                                                               26
                                     16        1        8
                                                                           12
                                     22
                                                                      24             19
                                      27           4
                         Difficult




                                                                 11
                                                   3




                                          High                                            Low
                                                            Anticipated Benefit                   57
Downloadable Excel Prioritization Chart
                        www.ksmartin.com/the‐outstanding‐organization

                                                               The Outstanding Organization: Achieving Focus

 Chart Title                 Prioritization Chart                                To use this Template:
                                                                                  1) Enter the title of the chart in Cell B2
 Number of Items                     5                                            2) Enter the number of items (e.g. projects, improvement activities, etc.) in cell B4
                         4                                                        3) Enter the item name and ranking information into A8-D8 and so on.
                              Organizational                         Degree of
            Item Name            Benefit            Execution Ease   Urgency*
 Item   1                           9                     1              1                                            Prioritization  Chart
 Item   2                           7                     3              2
                                                                                                     10
 Item   3                           5                     5              3
 Item   4                           3                     7              4                           9
 Item   5                           1                     9              5                           8
                                                                                                     7




                                                                                    Execution Ease
                                                                                                     6
                                                                                                     5
                                                                                                     4
                                                                                                     3
                                                                                                     2
                                                                                                     1
                                                                                                     0
                                                                                                          0   1   2    3     4       5       6      7       8       9     10
                                                                                                                           Organizational Benefit


                                                                                 * Degree of urgency is indicated by bubble size.




                                                                                                                                                                          58
© Karen Martin & Associates, LLC
Future State Implementation Plan
                                                 Value Stream Outpatient Imaging                                                                 Implementation Plan Review Dates
                                        Executive Sponsor Allen Ward                                                                           11/1/2007
                                 Value Stream Champion Sally McKinsey                                                                          11/21/2007
                      Value Stream Mapping Facilitator Dave Parks                                                                              12/13/2007
                                                 Date Created 10/18/2007                                                                       1/10/2008
        Block                                                                                                                              Implementation Schedule (weeks)             Date
                               Goal / Objective                         Improvement Activity                Type     Owner
          #                                                                                                                        1      2 3 4 5 6 7 8 9 10 11 12                   Complete
                                                               Implement standard work for referral
          2        Improve quality of referral                                                               KE    Sean O'Ryan
                                                               process

                   Reduce lead time beween schedulingand                                                             Dianne
         3, 4                                            Cross-train and colocate work teams                PROJ
                   preregistration steps                                                                             Prichard

                   Eliminate the need for two patient check-                                                         Michael
         5, 6                                                  Collect copays in Imaging                     KE
                   ins                                                                                               O'Shea

                                                                                                                     Dianne
          6        Eliminate bottleneck in waiting area        Balance work / level demand                   KE
                                                                                                                     Prichard

                   Eliminate lead time associated with
          9                                                    Implement voice recognition technology       PROJ   Sam Parks
                   transcription step


          10       Eliminate batched reading                   Reduce setup required                         KE    Sam Parks


                   Reduce inventory costs, regulatory risk                                                           Michael
          7                                                    5S CT supplies area; implement kanban         KE
                   and storage needs                                                                                 O'Shea


          12       Reduce delay in report delivery             Implement additional fax ports               PROJ   Martha Allen

                                                               Increase percentage of physicians
          12       Reduce delay in report delivery             receiving electronic delivery (rather than    KE    Martha Allen
                                                               hard copy)




                                                                                                      Approvals
                           Executive Sponsor                                            Value Stream Champion                                     Value Stream Mapping Facilitator
      Signature:                                                      Signature:                                                  Signature:

      Date:                                                           Date:                                                       Date:



© Karen Martin & Associates, LLC
Where Should We Start?




© Karen Martin & Associates, LLC         60
What’s the Problem?




© Karen Martin & Associates, LLC                61
Which comes first? A3 or VSM?

                                                       “We need to 
            “We have a 
              MAJOR 
             problem.”
        e.g., losing market share
                                     A3    VSM         improve our 
                                                       entire value 
                                                         stream.”
                                                    e.g., new construction




         “Let’s look at                              “Let’s explore 
           the entire 
        value stream.”               VSM   A3        this problem 
                                                      in the value 
                                                        stream.”
        e.g., to look at overall 
       product quality and the                  e.g., why plans are so far off in 
     reason(s) for long lead times              terms of construction logistics 




© Karen Martin & Associates, LLC                                                     62
For Further Questions


        Karen Martin, Principal
       7770 Regents Road #635
         San Diego, CA 92122
            858.677.6799


          ksm@ksmartin.com
      Twitter: @karenmartinopex
Subscribe: www.ksmartin.com/subscribe




                                        63

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Value Stream Mapping - Strategy Before Tactics

  • 1. Value Stream Mapping: Strategy Before Tactics Karen Martin Webinar August 23, 2012
  • 2.  Founder: Karen Martin & Associates, LLC (1993).  Consultant / Coach: Lead Lean transformations &  develop people in office, service and knowledge  environments.  Teacher: University of California, San Diego’s  Lean Enterprise program.  Author: Karen Martin,  Principal Just released! 2nd Edition  October 2012!
  • 3. Value Stream Mapping’s Roots Mike Rother & John Shook, 1999 Beau Keyte & Drew Locher, 2004 Whenever there is a product for a customer,  there is a value stream.  The challenge lies in seeing it. — Mike Rother & John Shook, Learning to See © Karen Martin & Associates, LLC 3
  • 4. Value Stream Defined Value Stream: All of the activities, required to fulfill a customer request from order to delivery (and beyond to cash received). Value Stream Process Process Process Custom er Customer Customer Request Receipt 4 © Karen Martin & Associates, LLC
  • 5. Why Value Stream Mapping? © Karen Martin & Associates, LLC 5
  • 6. Value Stream Mapping Benefit #1: Seeing the Whole 60,000 foot view; Rooftop view © Karen Martin & Associates, LLC 6
  • 7. VSM Promotes Systems Thinking System Efficiency =  Optimal Value Stream  Performance  Individual Efficiency =     Sub‐optimization 7
  • 8. Value Stream Mapping Benefit #1: Seeing the Whole 60,000 foot view; Rooftop view © Karen Martin & Associates, LLC 8
  • 9. Truth Value Stream Mapping  Truth Benefit #2 Truth Truth Truth Truth Truth How are we really performing? Truth What’s our customer really experiencing? © Karen Martin & Associates, LLC Truth 9
  • 10. Value Stream Maps Serve as Visual “Storyboards” Makes the disconnects  Shows the linkage  and obstacles to flow  between material and  visible at a macro level information flow 10 © Karen Martin & Associates, LLC
  • 11. AMBIGUITY 11
  • 12. Problems Nearly Always Extend Outside the Functional Silos in Which They’re Discovered © Karen Martin & Associates, LLC 12
  • 13. Value Stream Mapping Benefit #3: Consensus Building © Karen Martin & Associates, LLC 13
  • 14. Value Stream Mapping Benefit #4: Metrics-Based What are you  going to do to  change the  numbers? © Karen Martin & Associates, LLC 14
  • 15. Outpatient Imaging Value Stream Projected Results Current Projected % Metric State Future State Improvement Lead Time 32.5 hrs 11.3 hrs 65% Process Time 56 mins 43 mins 23% Percent Activity 2.9% 6.3% 117% Rolled First 29% 40% 38% Pass Yield # Macro Steps 14 11 21% Tech turnover 100% 25% 75% (annual) Note: Freed capacity (PT reductions) allowed the organization to earn  $500,000 additional annual revenue w/o increasing staff. © Karen Martin & Associates, LLC 15
  • 16. Value Stream Mapping Benefit #5: Strategy Before Tactics Where am I?  Where do I want  to go? ? Which route  ? should I take? ? I‐80 option I‐40 option I‐70 option © Karen Martin & Associates, LLC 16
  • 17. The Work We Do: Degrees of Granularity Rooftop Value Value Stream View Map (Strategic) Stream Process Process Process In the Metrics-Based Weeds Step Step Step Process Map (Tactical) © Karen Martin & Associates, LLC 17
  • 18. Value  Stream  Mapping Projects,  Kaizen Events,  Just‐Do‐Its © Karen Martin & Associates, LLC 18
  • 19. Value Stream Mapping: As Much Art as Science © Karen Martin & Associates, LLC 19
  • 20. ABC Widget Value Stream Key VSM Components: Current State Map  Demand = 1,800/year   Manufacturing 08/08/2012      Facilitator: Sally Parker Information Flow Production  SUPPLIER Control CUSTOMER 1 Product Flow Process 1 I Process 2 I Process 3 I Process 4 2 Hours Hours Hours Hours LT Timeline 3 Minutes Minutes Minutes Minutes PT © Karen Martin & Associates, LLC
  • 21. Key VSM Components:                        XYZ Value Stream Current State Map  Demand = 250/year   Information Flow Office / Service 08/08/2012 Facilitator: Robert Parker CUSTOMER 1 I.T. I.T. I.T. Product Flow Process 1 Process 2 Process 3 Process 4 2 Timeline PT 3 LT © Karen Martin & Associates, LLC
  • 22. Current State Value Stream Map  Demand = 15 per day Outpatient Imaging Services Customer Demand: 15 patients per Day (Takt Time 1920 seconds) Pre-register Schedule 8 hours per day Patient Appointment Referring Hospital Physician 4 1 Lead Time = 24 days 5 3 Lead Time = 990 mins. 6 2 Lead Time = 12 mins. Cycle Time = 30 mins. Cycle Time = 11 mins. % C&A = 65 % Lead Time = 990 mins. Lead Time = 12 mins. % C&A = 100 % % C&A = 98 % CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel ADS Meditech Internet Fax Order PACS Waiting Room Auto Fax 50% Solutions Management Us Mail 25% System MD Mailbox 25% Rework Loop via Fax 25% of the time Prep Complete Transmit Read/Dictate Transcribe Review Print Send Check-in Check-in Patient Exam Images Exam Report Draft/Sign Reports Reports Patient Patient (Tech) (Tech) (Tech) (Radiologist) (MDI) (Radiologist) (Imaging) (Imaging) (Admitting) (Imaging) 5 mins. 5 5 mins. 6 45 mins. 7 30 mins. 8 5 mins. 9 248 mins. 10 365 mins. 11 960 mins. 12 110 mins. 13 120 mins. 14 5 3 2 2 2 2 6 2 2 6 Cycle Time = 2 mins. Cycle Time = 1 mins. Cycle Time = 10 mins. Cycle Time = 15 mins. Cycle Time = 3 mins. Cycle Time = 15 mins. Cycle Time = 5 mins. Cycle Time = 1 mins. Cycle Time = 1 mins. Cycle Time = 3 mins. % C&A = 90 % % C&A = 98 % % C&A = 100 % % C&A = 90 % % C&A = 100 % % C&A = 95 % % C&A = 75 % % C&A = 95 % % C&A = 99 % % C&A = 90 % 5 minutes 45 minutes 30 minutes 5 minutes 248 minutes 365 minutes 960 minutes 110 minutes 120 minutes L/T = 13464 minutes 2 minutes 11520 1 minutes 10 minutes 15 minutes 3 minutes 15 minutes 5 minutes 1 minutes 1 minutes 3 minutes VA/T = 11576 minutes minutes Rolled First Pass yield = 29% © Karen Martin & Associates, LLC
  • 23. Value Stream Mapping Process Define Products (good or services) with Product Family common process steps Foundation (the basis) for the  Document Current  future state; 70‐80% accurate is State acceptable (directionally correct) Create flow by eliminating waste  Design Future  (now obvious from your 3 Day  State current state map); typically 3‐6 Repeat Event months out Create  Include accountability and Implementation Plan timeframes for completion Implement! The goal of mapping!
  • 24. Value Stream Mapping Charter Event Scope Leadership / Coordination Schedule Executive 3 days typically; sequential is Value Stream Contract processing, rebate processing, etc. VP or C-level Event Date(s) Sponsor best Specific What circumstances you're including and Value Stream If needed - often Director or Start/End 6 hrs minimum; 7 or 8 is best Conditions excluding? (type of cust, time of year, etc.) Champion Manager level Times Customer Demand How many times is this done per wk, qtr, mo, or yr.? Facilitator Skilled person leading the activity Location Need ample wall space Trigger What need does the value stream address? First Step Task on first process block Meals Always a nice touch; keeps Team Lead Not always needed Last Step Task on last process block Provided? the team from wandering. Boundaries & Interim Aid in consensus building and What is the team NOT authorized to change? The person arranging logistics Limitations Briefing(s) organizational learning. Coordinator (reserving the room, ordering food, FS Implementation sending meeting notices, etc.) Briefing List required attendees; others Typically 90-120 days Timeframe Attendees are optional Event Drivers Mapping Team 1 Why are you doing this? What are the current state issues? Function Name Contact Information 2 1 Leadership-heavy 3 2 4 3 5 4 Goals & Measureable Objectives 5 1 Aim for objectives w/ measurable targets (from X to X). 6 2 7 3 8 4 9 5 10 Planned Deliverables On-Call Support 1 Current state VSM Function Name Contact Information 2 Future state VSM 1 SMEs that may not be needed full time 3 Implementation Plan 2 4 3 5 4 Potential Obstacles Approvals 1 …to the team's success with the mapping activity. Executive Sponsor Value Stream Champion Facilitator 2 3 Signature: Signature: Signature: 4 Date: Date: Date: 24
  • 25. Team-Based Improvement Activities Rules of Engagement 1. The team starts and ends the day together; begin and end breaks together. 2. No interruptions or distractions – 100% focus; phones on silent; no email; no texting. 3. Rank has no privilege. 4. Seek the wisdom of ten instead of the knowledge of one. 5. Use creativity before capital (in designing improvements). 6. Finger-pointing and blame has no place: “It is what it is.” 7. Respectful disagreement is encouraged. (It’s OK to disagree; it’s not OK to be disagreeable.) 8. No veto power from outside the team. 9. No silent objectors; don’t leave in silent disagreement. 10. One conversation at a time; no side bars. 11. What’s said in the room stays in the room. 12. Ask Why? Why not? What if? 13. Ban “Can’t” and “No, because…” from your vocabulary. Think/say: “Yes, if…” 14. Ban internal, silo’d thinking; think externally (customer); value stream. 25
  • 26. Step 1 – Label Map • Label your map in upper right corner: – Value stream name – Current or future state – Customer demand (volume of work per time period) – Takt time (if relevant) – Date – Facilitator’s name (and/or team) © Karen Martin & Associates, LLC 26
  • 27. Takt Time:                  The Key to Continuous Flow Available work time Takt time =  Customer demand 480 minutes/day Takt time =                                         = 10.7 mins 45 new accounts/day “Touch Down” OR… Time Available divided by what Kustomer Takes 27 © Karen Martin & Associates, LLC
  • 28. Step 2 – Define Process Blocks • Identify all blocks in the process (target 5-15 blocks) – Each block (post-it) contains an activity or group of activities that occurs before a significant break in the timeline occurs (typically build up of WIP or handoff) – 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 – Activity format is verb/noun – what happens to what – Include the function who performs the task – If relevant, include number of workers who perform the task – Include any major barriers to flow – batches, shared/inaccessible resources, system downtime, etc. – When possible, walk the process! © Karen Martin & Associates, LLC 28
  • 29. Step 3 – Define I.T. Systems • 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. – Note any scheduling that occurs (calendar, system, etc.) – Who tells whom to do what? How do they tell them? © Karen Martin & Associates, LLC 29
  • 30. Current State Value Stream Map Outpatient  Demand = 15 per day Imaging Services Customer Demand: 15 patients per Day (Takt Time 1920 seconds) Pre-register Schedule 8 hours per day Patient Appointment Referring Hospital Physician 4 1 Lead Time = 24 days 5 3 Lead Time = 990 mins. 6 2 Lead Time = 12 mins. Cycle Time = 30 mins. Cycle Time = 11 mins. % C&A = 65 % Lead Time = 990 mins. Lead Time = 12 mins. % C&A = 100 % % C&A = 98 % CT=Cycle Time LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel ADS Meditech Internet Fax Order PACS Waiting Room Auto Fax 50% Solutions Management Us Mail 25% System MD Mailbox 25% Rework Loop via Fax 25% of the time Prep Complete Transmit Read/Dictate Transcribe Review Print Send Check-in Check-in Patient Exam Images Exam Report Draft/Sign Reports Reports Patient Patient (Tech) (Tech) (Tech) (Radiologist) (MDI) (Radiologist) (Imaging) (Imaging) (Admitting) (Imaging) 5 mins. 5 5 mins. 6 45 mins. 7 30 mins. 8 5 mins. 9 248 mins. 10 365 mins. 11 960 mins. 12 110 mins. 13 120 mins. 14 5 3 2 2 2 2 6 2 2 6 Cycle Time = 2 mins. Cycle Time = 1 mins. Cycle Time = 10 mins. Cycle Time = 15 mins. Cycle Time = 3 mins. Cycle Time = 15 mins. Cycle Time = 5 mins. Cycle Time = 1 mins. Cycle Time = 1 mins. Cycle Time = 3 mins. % C&A = 90 % % C&A = 98 % % C&A = 100 % % C&A = 90 % % C&A = 100 % % C&A = 95 % % C&A = 75 % % C&A = 95 % % C&A = 99 % % C&A = 90 % 5 minutes 45 minutes 30 minutes 5 minutes 248 minutes 365 minutes 960 minutes 110 minutes 120 minutes L/T = 13464 minutes 2 minutes 11520 1 minutes 10 minutes 15 minutes 3 minutes 15 minutes 5 minutes 1 minutes 1 minutes 3 minutes VA/T = 11576 minutes minutes Rolled First Pass yield = 29% VSM Champion:  Paul Scanner Created:   July 17, 2007 © Karen Martin & Associates, LLC
  • 31. Step 4 – Number the Process Blocks • Number the process blocks • Connect the customer and supplier, process blocks and I.T. systems – “Lightning bolt” arrow for electronic/automatic information flow – Regular arrow for push systems – “Hollow” arrow for product flow • If parallel processes exist, use alpha modifiers – e.g. 8A, 8B, etc. © Karen Martin & Associates, LLC 31
  • 32. Step 5 – Add Data • Add key metrics for all process blocks – Process Time (PT) – Lead Time (LT) – Percent Complete & Accurate (%C&A) • Add work-in-process (WIP) at every step. © Karen Martin & Associates, LLC 32
  • 33. Key Metrics: Time • Process time (PT) – 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 – 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 department in the chain – aka throughput time, turnaround time, elapsed time – Includes Process Time, not merely waiting time. © Karen Martin & Associates, LLC 33
  • 34. Key Metrics: Time Scenario 1 Lead Time (LT)  Work  Process Time (PT) Work passed to  Received next step LT = PT + Waiting / Delays © Karen Martin & Associates, LLC 34
  • 35. Key Metrics: Time Scenario 2 Lead Time (LT)  Process Time Work  Work passed to  Received next step LT = PT + Waiting / Delays © Karen Martin & Associates, LLC 35
  • 36. 3 Types of Work-in-Process (WIP) Waiting  Completed,  to be  Currently but not yet  processed in process passed on WIP WIP WIP Process 1 Process 2 Process 3 Step 2’s WIP 36 © Karen Martin & Associates, LLC
  • 37. Current State Value Stream Map Purchasing — Non‐repetitive purchases less than $5,000 WIP only noted at the 3  Inititate Req. 1 steps where it has  Originator 31 PT = 10 mins. accumulated. C&A = 10% Supplies Hard Copy Vendor Form File File Maker Quicken Excel ERP Website Data Entry Review 4 Enter 7 Approve in 8 Submit PO Review 2 3 Review 5 Review 6 9 10 Review Req. 20 Reqs Requisition 10 Reqs ERP 63 Reqs to Supplier Budget Requisition Requisition Requisition External Corp Purchasing Supplier Sys Engineer Admin Asst Corp Purchasing Finance Supervisor IS Manager Financial Mgr Manager 6 2 1 1 1 1 1 6 2 hrs. PT = 5 mins. 4 hrs. PT = 5 mins. 40 hrs. PT = 5 mins. 8 hrs. PT = 5 mins. 8 hrs. PT = 10 mins. 4 hrs. PT = 15 mins. 24 hrs. PT = 5 mins. 56 hrs. 80 hrs. PT = 20 mins. PT = 15 mins. C&A = 60% C&A = 95% C&A = 90% C&A = 100% C&A = 95% C&A = 98% C&A = 90% C&A = 98% 0.25 days 0.5 days 5 days 1 days 1 days 0.5 days 3 days 7 days 10 days LT = 28.4 days 5 mins. 5 mins. 5 mins. 5 mins. 10 mins. 15 mins. 5 mins. 15 mins. PT = 65 mins. AR = 0.477% RFPY = 4.2% PT = Process Time LT = Lead Time Customer Demand: C&A = % Complete & Accurate 615 requisitions per y ear AR = Activ ity Ratio (PT/LT x 100) RFPY = Rolled First Pass Y ield © Karen Martin & Associates, LLC
  • 38. Key Metrics: Quality • %Complete and Accurate (%C&A) – % of incoming work that’s “usable as is”; 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 – Determined by the person receiving the input; metric goes on the output block. – Measured by the immediate downstream customer and all subsequent downstream customers. – Similar to first pass yield in manufacturing. © Karen Martin & Associates, LLC 38
  • 39. Post‐it Conventions Process # Process  (Verb/Noun) Function # Staff  (if  relevant) Significant   Barriers to flow Process Time %C&A Lead Time © Karen Martin & Associates, LLC
  • 40. Step 6 – Create Timeline • Create timeline • Calculate summary metrics – Timeline PT Sum – Timeline LT Sum – % Activity Ratio (AR) – Rolled First Pass Yield (RFPY) © Karen Martin & Associates, LLC 40
  • 41. 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.” 41 © Karen Martin & Associates, LLC
  • 42. Summary Metrics: Time • Percent Activity (%Act) – Also referred to as Activity Ratio – The percentage of time anything is being done to the work passing through the system (whether value-adding or non-value-adding) – %Act = (∑PT ÷ ∑LT) × 100 – 100 – %Act = % Time Work is Idle – Common current state finding = 1-10% (across value stream) – Could also calculate %VA to show proportion of value- adding time (often significantly lower than % Act). © Karen Martin & Associates, LLC 42
  • 43. 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 required. – RFPY = (%C&A x %C&A x %C&A…) x 100 – Example: (0.80 x 0.50 x 0.99 x 0.75) x 100 = 29.7% – Common current state finding = 0-15% 43
  • 44. Summary Metrics: Labor Requirements • Total PT – Sum of all activities, not just critical path • Labor Requirements Total PT (in hrs) X # occurrences/year # FTEs = Available work hrs/year Freed  = Current State FTEs – Future State FTEs Capacity * FTE = Full‐time Equivalent (2 half time employees = 1 FTE) © Karen Martin & Associates, LLC 44
  • 45. What do you do with freed capacity? • If expanding market, absorb add’l work without increasing staff • If flat market, reduce payroll through natural attrition • Reduce paid overtime • In-source • Better work/life balance • Slow down & think • Innovate – create new revenue streams • Conduct ongoing continuous improvement activities • Do a better job with fewer errors and higher safety • Get to know your customers better; build stronger supplier relationships • Mentor staff to create career growth opportunities • Provide additional workforce development; cross-training • Do the things you haven’t been able to get to; get caught up • Collaborate with other areas © Karen Martin & Associates, LLC 45
  • 46. Step 7 – Determine VA & N Steps • Identify all value-adding (VA) and necessary non-value-adding (N) steps – Add “VA” or “N” smaller post-it to relevant process blocks – All unnecessary non-value-adding blocks remain unlabelled © Karen Martin & Associates, LLC 46
  • 47. Customer-Defined Value • Value-Adding (VA) - any operation or activity your external customers value and are (or would be) willing to pay for. • Non-Value-Adding (NVA) - any operation or activity that consumes time and/or resources but does not add value to the product (good or service) the customer receives. – Necessary – support processes, regulatory requirements, etc.; also referred to as “essential” or “value-enabling.” – Unnecessary – everything else - WASTE © Karen Martin & Associates, LLC 47
  • 48. Typical Current State Findings Unnecessary  Necessary NVA NVA Order Delivery Value Add Islands of activity (process times) within long lead times. 48 © Karen Martin & Associates, LLC
  • 49. Current State Typical Findings: Work Effort as Defined by the  External Customer Unnecessary non-value adding Necessary non-value- adding Value-adding © Karen Martin & Associates, LLC
  • 50. Value Stream Mapping Process Define Products (good or services) with Product Family common process steps Foundation (the basis) for the  Document Current  future state; 70‐80% accurate is State acceptable (directionally correct) Create flow by eliminating waste  Design Future  (now obvious from your 3 Day  State current state map); typically 3‐6 Repeat Event months out Create  Include accountability and Implementation Plan timeframes for completion Implement! The goal of mapping!
  • 51. Future State Design • Goal: Eliminate all obstacles to flow (“the thing” should never stop) – Batches – Rework – Bottlenecks & WIP – Handoffs – Setup / changeover – Physical layout – Motion & transportation © Karen Martin & Associates, LLC 51
  • 52. Eight Wastes (Muda) • Overproduction • Motion (people) • Inventory • Transportation  • Waiting (material/data) • Over‐Processing • Underutilized  people • Errors 52 © Karen Martin & Associates, LLC
  • 53. Eight Questions for Future State VSM 1. What are the customer requirements? What’s the takt time? 2. Will we produce to order or to finished goods inventory? (In office/service sector, you’re almost always producing to order.) 3. Where can continuous flow be put in place? 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? 7. What should the management time frame be? 8. What process improvements are necessary to achieve the future state? ‐‐ Rother & Shook, Learning to See © Karen Martin & Associates, LLC
  • 54. Future State Design Considerations • Eliminate steps / handoffs • Implement pull • Combine steps • Create an organized, visual  • Create parallel paths workplace • Alter task sequencing and/or  • Reduce setup &  timing changeover • Improve quality (error‐proof) • Eliminate motion &  • Eliminate unnecessary  transportation approvals / authorizations • Co‐locate functions based  • Stop performing non‐value  on flow; create cells  adding (NVA) tasks (teams of cross‐functional  staff) • Standardize work • Balance work to meet takt  • Reduce / eliminate batches time requirements 54 © Karen Martin & Associates, LLC
  • 55. Future State Value Stream Map Outpatient  Demand = 15 per day Imaging Services Standard Work Co-locate Customer Demand: Work 15 patients perDay Balance (Takt Time1920 seconds) Schedule appt Pre-register 8 hours per day Referring Hospital Physician 3 1 Lead Time = 15 days 6 2 Lead Time = 45 mins. Cycle Time = 11 mins. % C&A = 85 % Lead Time = 45 mins. % C&A = 98 % Risk Reduction (Joint CT=Cycle Time Commision) LT=Lead Time %C&A=% Complete & Accurate Symposium E Pay Excel Meditech Internet Waiting Room Fax Order PACS Auto Fax 80% Solutions Management Us Mail 15% System MD Mailbox 5% Pull System Value Stream 5S Rework Loop (Supplies Alignment via Fax 10% of Kanban) the time Remove Check in and Reduce Work Batch System Access Balancing Visual Reductions Standard Workplace Voice Work Set-up Continuous Recognition Reduction Flow Prep Complete Transmit Read/Dictate Review Print Send Check-in Patient Exam Images Exam Draft/Sign Reports Reports Patient (Tech) (Tech) (Tech) (Radiologist) (Radiologist) (Imaging) (Imaging) (Imaging) 5 mins. 35 mins. 2 5 20 mins. 2 6 5 mins. 2 7 120 mins. 2 8 420 mins. 2 9 2 mins. 2 10 30 mins. 6 11 3 4 Cycle Time = 1 mins. Cycle Time = 10 mins. Cycle Time = 10 mins. Cycle Time = 2 mins. Cycle Time = 15 mins. Cycle Time = 1 mins. Cycle Time = 1 mins. Cycle Time = 3 mins. % C&A = 98 % % C&A = 100 % % C&A = 90 % % C&A = 100 % % C&A = 95 % % C&A = 95 % % C&A = 99 % % C&A = 90 % 0.0833 hrs. 0.583 hrs. 0.333 hrs. 0.0833 hrs. 2 hrs. 7 hrs. 0.0333 hrs. 0.5 hrs. LT = 11.3 hrs. 1 mins. 10 mins. 10 mins. 2 mins. 15 mins. 1 mins. 1 mins. 3 mins. CT = 43 mins. CT/LT Ratio = 6.32% Rolled First Pass yield = 40% Note: Process Time (PT) is referred to as Cycle  Time (CT) on this map © Karen Martin & Associates, LLC
  • 56. Value Stream Mapping Process Define Products (good or services) with Product Family common process steps Foundation (the basis) for the  Document Current  future state; 70‐80% accurate is State acceptable (directionally correct) Create flow by eliminating waste  Design Future  it is now obvious from your 3 Day  State current state map); typically 3‐6 Repeat Event months out Create  Include accountability and Implementation Plan timeframes for completion Implement! The goal of mapping!
  • 57. PACE Prioritization Matrix Policy 21 5 10 I.T. 6 15 Easy 13 Process Ease of Implementation 2 20 14 23 18 17 25 7 9 26 16 1 8 12 22 24 19 27 4 Difficult 11 3 High Low Anticipated Benefit 57
  • 58. Downloadable Excel Prioritization Chart www.ksmartin.com/the‐outstanding‐organization The Outstanding Organization: Achieving Focus Chart Title Prioritization Chart To use this Template: 1) Enter the title of the chart in Cell B2 Number of Items 5 2) Enter the number of items (e.g. projects, improvement activities, etc.) in cell B4 4 3) Enter the item name and ranking information into A8-D8 and so on. Organizational Degree of Item Name Benefit Execution Ease Urgency* Item 1 9 1 1 Prioritization  Chart Item 2 7 3 2 10 Item 3 5 5 3 Item 4 3 7 4 9 Item 5 1 9 5 8 7 Execution Ease 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 Organizational Benefit * Degree of urgency is indicated by bubble size. 58 © Karen Martin & Associates, LLC
  • 59. Future State Implementation Plan Value Stream Outpatient Imaging Implementation Plan Review Dates Executive Sponsor Allen Ward 11/1/2007 Value Stream Champion Sally McKinsey 11/21/2007 Value Stream Mapping Facilitator Dave Parks 12/13/2007 Date Created 10/18/2007 1/10/2008 Block Implementation Schedule (weeks) Date Goal / Objective Improvement Activity Type Owner # 1 2 3 4 5 6 7 8 9 10 11 12 Complete Implement standard work for referral 2 Improve quality of referral KE Sean O'Ryan process Reduce lead time beween schedulingand Dianne 3, 4 Cross-train and colocate work teams PROJ preregistration steps Prichard Eliminate the need for two patient check- Michael 5, 6 Collect copays in Imaging KE ins O'Shea Dianne 6 Eliminate bottleneck in waiting area Balance work / level demand KE Prichard Eliminate lead time associated with 9 Implement voice recognition technology PROJ Sam Parks transcription step 10 Eliminate batched reading Reduce setup required KE Sam Parks Reduce inventory costs, regulatory risk Michael 7 5S CT supplies area; implement kanban KE and storage needs O'Shea 12 Reduce delay in report delivery Implement additional fax ports PROJ Martha Allen Increase percentage of physicians 12 Reduce delay in report delivery receiving electronic delivery (rather than KE Martha Allen hard copy) Approvals Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator Signature: Signature: Signature: Date: Date: Date: © Karen Martin & Associates, LLC
  • 62. Which comes first? A3 or VSM? “We need to  “We have a  MAJOR  problem.” e.g., losing market share A3 VSM improve our  entire value  stream.” e.g., new construction “Let’s look at  “Let’s explore  the entire  value stream.” VSM A3 this problem  in the value  stream.” e.g., to look at overall  product quality and the  e.g., why plans are so far off in  reason(s) for long lead times terms of construction logistics  © Karen Martin & Associates, LLC 62
  • 63. For Further Questions Karen Martin, Principal 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com Twitter: @karenmartinopex Subscribe: www.ksmartin.com/subscribe 63