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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 offic...
Value Stream Mapping’s Roots                       Mike Rother & John Shook, 1999             Beau Keyte & Drew Locher, 20...
Value Stream Defined          Value Stream: All of the activities, required to fulfill a          customer request from or...
Why Value Stream Mapping?© Karen Martin & Associates, LLC             5
Value Stream Mapping Benefit #1:                      Seeing the Whole                                   60,000 foot view;...
VSM Promotes Systems Thinking System Efficiency = Optimal Value Stream     Performance                    Individual Effic...
Value Stream Mapping Benefit #1:                      Seeing the Whole                                   60,000 foot view;...
Truth                        Value Stream Mapping         Truth                            Benefit #2                Truth...
Value Stream Maps Serve as Visual “Storyboards”          Makes the disconnects                Shows the linkage           ...
AMBIGUITY            11
Problems Nearly Always Extend Outside the                    Functional Silos in Which They’re Discovered© Karen Martin & ...
Value Stream Mapping Benefit #3:                    Consensus Building© Karen Martin & Associates, LLC                 13
Value Stream Mapping Benefit #4:                                             Metrics-Based                  What are you  ...
Outpatient Imaging Value Stream                                   Projected Results                                       ...
Value Stream Mapping Benefit #5:                          Strategy Before Tactics     Where am I?     Where do I want     ...
The Work We Do:                                   Degrees of Granularity    Rooftop                                       ...
Value              Stream              Mapping                                     Projects,                              ...
Value Stream Mapping:                               As Much Art as Science© Karen Martin & Associates, LLC                ...
ABC Widget Value Stream                                           Key VSM Components:                                 Curr...
Key VSM Components:                                                                                                    XYZ...
Current State Value Stream Map                                                                                            ...
Value Stream Mapping Process               Define                   Products (good or services) with           Product Fam...
Value Stream Mapping Charter                           Event Scope                                            Leadership /...
Team-Based Improvement Activities                Rules of Engagement1. The team starts and ends the day together; begin an...
Step 1 – Label Map        • Label your map in upper right corner:                – Value stream name                – Curr...
Takt Time:                                                    The Key to Continuous Flow                                  ...
Step 2 – Define Process Blocks     • Identify all blocks in the process (target 5-15 blocks)             – Each block (pos...
Step 3 – Define I.T. Systems      • Identify all I.T. systems used in the process and        information flow             ...
Current State Value Stream Map Outpatient                                                                                 ...
Step 4 – Number the Process Blocks        • Number the process blocks        • Connect the customer and supplier,         ...
Step 5 – Add Data        • Add key metrics for all process blocks                – Process Time (PT)                – Lead...
Key Metrics: Time     • Process time (PT)             – The time it takes to actually perform the work, if one is able to ...
Key Metrics: Time                                        Scenario 1                                          Lead Time (LT...
Key Metrics: Time                                         Scenario 2                                          Lead Time (L...
3 Types of Work-in-Process (WIP)                                    Waiting                  Completed,                   ...
Current State Value Stream Map                                                Purchasing — Non‐repetitive purchases less t...
Key Metrics: Quality      • %Complete and Accurate (%C&A)              – % of incoming work that’s “usable as is”; the    ...
Post‐it Conventions                                                          Process #           Process          (Verb/No...
Step 6 – Create Timeline        • Create timeline        • Calculate summary metrics                – Timeline PT Sum     ...
Concurrent Work / Parallel Flows                               Process             Process                              LT...
Summary Metrics: Time     • Percent Activity (%Act)             – Also referred to as Activity Ratio             – The per...
Summary Metrics: Quality• Rolled First Pass Yield (RFPY)  – The percent of value stream output that passes through    the ...
Summary Metrics: Labor Requirements      • Total PT              – Sum of all activities, not just critical path      • La...
What do you do with freed capacity? •     If expanding market, absorb add’l work without increasing staff •     If flat ma...
Step 7 – Determine VA & N Steps        • Identify all value-adding (VA) and          necessary non-value-adding (N) steps ...
Customer-Defined Value     • Value-Adding (VA) - any operation or activity       your external customers value and are (or...
Typical Current State Findings                                   Unnecessary            Necessary NVA                     ...
Current State Typical Findings:                                   Work Effort as Defined by the                           ...
Value Stream Mapping Process               Define                   Products (good or services) with           Product Fam...
Future State Design        • Goal: Eliminate all obstacles to flow (“the          thing” should never stop)               ...
Eight Wastes (Muda)          •     Overproduction               • Motion (people)          •     Inventory                ...
Eight Questions for                                    Future State VSM        1. What are the customer requirements? What...
Future State Design Considerations     •     Eliminate steps / handoffs        • Implement pull     •     Combine steps   ...
Future State Value Stream Map Outpatient                                                                                  ...
Value Stream Mapping Process               Define                   Products (good or services) with           Product Fam...
PACE Prioritization Matrix                                                                                                ...
Downloadable Excel Prioritization Chart                        www.ksmartin.com/the‐outstanding‐organization              ...
Future State Implementation Plan                                                 Value Stream Outpatient Imaging          ...
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    ...
For Further Questions        Karen Martin, Principal       7770 Regents Road #635         San Diego, CA 92122            8...
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Current State Value Stream Map Purchasing — Non‐repetitive purchases less than $5,000 WIP only noted at the 3  Inititate Value Stream Mapping - Strategy Before Tactics

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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 62 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

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