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Value Stream Mapping:
What to do before you dive in
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Value Stream Mapping:
What to do before you dive in
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Value Stream Mapping:
What to Do Before you Dive in
Webinar hosted by 5S Supply
January 28, 2014

 Coach / Facilitator / Consultant / Trainer:
Lean transformation & business performance
improvement in all industries.
 Teacher: University of California, San Diego
 Author & Speaker:
Karen Martin, President
The Karen Martin Group, Inc.
www.ksmartin.com
Just released!
2013 Shingo
Prize winner!
www.ksmartin.com/subscribe
7

Topics will include:
• Leadership – what is their role?
• Scoping – how “big” should you go?
• Team formation – who are the right people to
include
• Facilitator selection – what traits and skills are
needed
• Charter development and socialization – it’s far more
than a planning tool!
• Logistics and communication – how do you make
sure everyone is prepared?
© 2014 The Karen Martin Group, Inc.
8

Value Stream Defined
Value Stream: All of the activities required to
transform a customer request into a good or service.
Value Stream
Process
Customer
Request
Process
Process
Customer
Receipt
First defined in The Machine That Changed the World,
James Womack, Daniel Jones, & Daniel Roos, 1990.
© 2014 The Karen Martin Group, Inc.
9

Value Stream Mapping Benefit:
Seeing the Whole
Value Stream Mapping enables a
mapping team to get ABOVE the work
© 2014 The Karen Martin Group, Inc.
10 10

Work: Degrees of Granularity
Value
Stream
Macro
Perspective
•
•
•
Define strategic
direction (“what”)
Heavy leadership
involvement
Value Stream
Mapping
Process
Process
Micro
Perspective
Process
•
•
Step
© 2014 The Karen Martin Group, Inc.
Step
Step
•
Identify the
tactical “how”
Heavy frontline
involvement
Metrics‐Based
Process Mapping
11

VSM Enables Systems Thinking
Individual Efficiency = Sub‐optimization
System Efficiency = Optimal Value Stream Performance
© 2014 The Karen Martin Group, Inc.
12

Value Stream Maps:
Strategy Before Tactics
Where am I?
Where do I want
to go?
Which route
should I take?
I‐80 option
© 2014 The Karen Martin Group, Inc.
?
?
?
I‐40 option
I‐70 option
13

Value Stream Mapping Benefit:
Reaching Leadership Consensus
© 2014 The Karen Martin Group, Inc.
14

Basic Current State Value Stream Map:
3 Sections
1
2
3
© 2014 The Karen Martin Group, Inc.
15

Basic Value Stream Map: Future State
1
Customer
IT interface
Standard
work
Error
proof
IT-1
Crosstrain
Modified
approvals
2
Process 1
3
Crosstrain
Process 2
Function A
1 items
IT-2
LT = 1 days
PT = 10 mins.
%C&A = 99%
Process 3
Function C
5 items
5
4
Standard
work
Function E
10 items
3
LT = 2 days
PT = 120 mins.
%C&A = 95%
4
LT = 0.5 days
PT = 30 mins.
%C&A = 95%
1 days
2 days
0.5 days
Total LT = 3.5 days
10 mins.
120 mins.
30 mins.
Total PT = 160 mins.
Activity Ratio = 9.5%
Rolled %C&A = 89.3%
© 2014 The Karen Martin Group, Inc.
16

Basic Value Stream
Future State Performance Metrics
Current State
Projected
Future State
Projected
% Improvement
9.5 days
3.5 days
63.2%
180 minutes
160 minutes
11.1%
Activity Ratio
3.9%
9.5%
143.6%
Rolled % Complete &
Accurate
30.0%
89.3%
197.7%
Metric
Total Lead Time
Total Process Time
User defined
User defined
© 2014 The Karen Martin Group, Inc.
17

Enterprise‐Wide Value Stream
© 2013 The Karen Martin Group, Inc.
18

Value Stream Maps ≠ Process Flow Charts
© 2014 The Karen Martin Group, Inc.
19

Value Stream Maps ≠ Swim Lane Process Maps
Current State Metrics-Based Process Map
0
PT Units
1
0
Seconds
Hours
Minutes
Days
LT Units
15
6
-1
0
Seconds
Hours
Minutes
Days
1 Customer
Diane O'Shea
Sean Michaels
Sam Parks
Sally Dampier
Michael Prichard
Specific Conditions Domestic orders through sales force
Occurrences per Year 37,500
Hours Worked per Day 8
Date Mapped 25-Jun-08
Step # ►
Function /
Department
Mapping Team
Process Details
Process Name Order Fulfillment
1
2
Activity
PT
LT
%C&A
Fax PO to Sales
Rep
0
0
Ryan Austin
Mary Townsend
Facilitator
Dave Morgan
3
4
45%
PT
LT
%C&A
Activity
PT
LT
%C&A
Review PO;
clarify with
customer as
needed
20
2
90%
Fax PO to
warehouse
10
4
Activity
PT
LT
%C&A
Activity
PT
LT
%C&A
Check inventory
levels; notify
Sales Rep re:
status
2 Sales Rep
Activity
5
90%
5
4
95%
Fax PO to Sales
Rep
5
0.33
90%
5 Finance
6
Warehouse /
Shipping
Critical Path PT
Critical Path LT
Rolled %C&A
Total PT
0
20
0
45%
0
10
2
90%
20
5
4
90%
10
5
4
0.33
95%
5
90%
5
Metrics‐Based Process Mapping is used to improve tactically & define standard work
© 2014 The Karen Martin Group, Inc.
20

Value Stream
Mapping
Executing
Transformation
Plan
Making
Specific
Improvements
© 2014 The Karen Martin Group, Inc.
21

Value Stream Mapping Activity
Phases and Timing
Repeat
Prepare
4 Weeks Prior
to Mapping
© 2013 The Karen Martin Group, Inc.
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Three Consecutive Days
Execute
Transformation
Plan
Following
Mapping
22

Activity Preparation
Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
1. Engage executive sponsor
2. Draft charter
3. Socialize charter
4. Plan logistics (including Gemba walk)
5. Gather data
6. Deliver VSM overview
© 2014 The Karen Martin Group, Inc.
23

Accountable Parties
• Executive Sponsor
– Typically VP or higher
– Authority over significant portion of value stream (or strong
relationship w/ peer group)
– Ultimately accountable for results
– Must attend briefings
• Value Stream Champion
– Oversee significant portion of the value stream
– Heavily engaged in entire value stream transformation (own the
transformation plan)
– Member of mapping team
– In small companies or those just starting out, the VS Champion
and Exec Sponsor could be the same person.
• Facilitator
– Objective; no “skin in the game”
– Skilled in both mapping/improvement mechanics, and high‐level
team dynamics.
© 2014 The Karen Martin Group, Inc.
24

Facilitator Skills & Traits
• Technical knowledge & skills
– Value stream mapping mechanics
– Key metrics
– Countermeasures
• Psychology
– Team dynamics (especially leadership level)
– Countering resistance to change
• Other
– Time management
– Action Plan development
© 2014 The Karen Martin Group, Inc.
25

Charter: Critical planning, communication, and consensus‐building tool
Value Stream Mapping Charter
Scope
Accountable Parties
Logistics
Executive
Required: typically VP or C-level
Sponsor
Value Stream Value stream being improved
Value Stream If needed—often director or
Champion manager level
Specific What circumstances are included and excluded?
Conditions (e.g., type of customer, geographic location, etc.)
Demand Rate How many times is this done per wk, qtr, mo, or yr?
Facilitator
Trigger What initiates the process?
First Step Task on first process block
Required: skilled, objective person
leading the activity
3 days typically; consecutive
Event Dates
is best; 6 hrs per day
& Times
minimum; 7 or 8 hrs is best
Base-camp On-site, ample wall space,
Location quiet/private location
Logistics
Not always needed
Coordinator
Last Step Task on last process block
Boundaries &
What is the team NOT authorized to change?
Limitations
Meals Always a nice touch; keeps
Provided the team from wandering
Briefing List the the people that are
Attendees required to attend the briefings (**)
** required and those whose attendance is
*optional optional (*).
Improvement Time
Typically 3-6 months
Frame
Current State Problems & Business Needs
Aids in consensus building
Briefing
and organizational learning.
Dates &
Typically the last hour of the
Times
day.
Mapping Team
Function
1 What's driving the need for improvement?
2
3
Contact Information
2
4
Name
1 Leadership-heavy
3
5
4
Measurable Target Condition
5
1 Reduce <defined metric> from X to Y (Z% improvement).
6
2 Increase <defined metric> from X to Y (Z% improvement).
7
3
8
4
9
5
10
Benefits to Customers & Business
On-Call Support
Function
1 How will the business, internal and external customers, and
2 internal and external suppliers benefit from value stream improvement?
3
Contact Information
2
4
Name
1 SMEs that may not be needed full time
3
5
4
Relevant Data
Agreement
Executive Sponsor
1 What data is required to understand relevant current state isues.
Value Stream Champion
Facilitator
2 Examples: work volume & volume variation, process quality &
3 effectiveness, market trends, customer satisfaction, employee
Signature:
Signature:
Signature:
4 engagement, financials, lead time, safety records, etc.
Date:
Date:
Date:
© 2014 The Karen Martin Group, Inc.
26

Value Stream Mapping Charter
Scope
Accountable Parties
Logistics
Executive
Required: typically VP or C-level
Sponsor
Value Stream Value stream being improved
Value Stream If needed—often director or
Champion manager level
Specific What circumstances are included and excluded?
Conditions (e.g., type of customer, geographic location, etc.)
Demand Rate How many times is this done per wk, qtr, mo, or yr?
Facilitator
Trigger What initiates the process?
First Step Task on first process block
Required: skilled, objective person
leading the activity
3 days typically; consecutive
Event Dates
is best; 6 hrs per day
& Times
minimum; 7 or 8 hrs is best
Base-camp On-site, ample wall space,
Location quiet/private location
Logistics
Not always needed
Coordinator
Last Step Task on last process block
Boundaries &
What is the team NOT authorized to change?
Limitations
Meals Always a nice touch; keeps
Provided the team from wandering
Briefing List the the people that are
Attendees required to attend the briefings (**)
** required and those whose attendance is
*optional optional (*).
Improvement Time
Typically 3-6 months
Frame
Current State Problems & Business Needs
Aids in consensus building
Briefing
and organizational learning.
Dates &
Typically the last hour of the
Times
day.
Mapping Team
Function
1 What's driving the need for improvement?
2
3
Contact Information
2
4
Name
1 Leadership-heavy
3
5
4
Measurable Target Condition
5
1 Reduce <defined metric> from X to Y (Z% improvement).
6
2 Increase <defined metric> from X to Y (Z% improvement).
7
3
8
4
9
5
10
Benefits to Customers & Business
On-Call Support
Function
1 How will the business, internal and external customers, and
2 internal and external suppliers benefit from value stream improvement?
3
Contact Information
2
4
Name
1 SMEs that may not be needed full time
3
5
4
Relevant Data
Agreement
Executive Sponsor
1 What data is required to understand relevant current state isues.
Value Stream Champion
Facilitator
2 Examples: work volume & volume variation, process quality &
3 effectiveness, market trends, customer satisfaction, employee
Signature:
Signature:
Signature:
4 engagement, financials, lead time, safety records, etc.
Date:
Date:
Date:
© 2014 The Karen Martin Group, Inc.
27

Value Stream Scoping Diagram
Defining Specific Conditions
Medical/Surgical
Inpatient
Intensive Care
Pediatric
Patient care
X‐Rays
Vaccine Clinic
CT Scans
Potential selection criteria:
• Highest volume?
• Highest margin?
• Most painful?
• Most supportive
leadership?
© 2013 The Karen Martin Group, Inc.
Outpatient
Imaging
MRI
OB/GYN
Services
Mammography
28

Value Stream Scoping Diagram
Defining Specific Conditions
Catalog
Configure
to order
Custom
hardware
Engineer
to order
Custom
software
Capital
Equipment
Golden State
Equipment, Inc.
New Product
Development
Both
Catalog
Spares &
subassemblies
Engineer to
order
© 2014 The Karen Martin Group, Inc.
29

Where should the “fenceposts” be?
Function
Activity
Marketing
Generates sales leads
Sales
Calls on and qualifies customers
Customer
Submits RFQ to sales
Sales
Reviews RFQ
Estimating
Generates quote
Sales
Approve quote
Customer
Accepts quote; submits a PO
Sales
Approves PO
Customer service
Creates SO; compiles spec package
EE/ME design
Designs product; generates BOM
Customer
Approves design
EE/ME design
Forwards design to SW dev
Software Dev
Writes code
Purchasing/Planning
Releases WO; schedules production
Supplier (external)
Delivers materials
Production
Manufactures & ships product
Customer
Installs equipment
Field service
Conducts 90‐day follow‐up
© 2014 The Karen Martin Group, Inc.
30

Value Stream Mapping Charter
Scope
Accountable Parties
Logistics
Executive
Required: typically VP or C-level
Sponsor
Value Stream Value stream being improved
Value Stream If needed—often director or
Champion manager level
Specific What circumstances are included and excluded?
Conditions (e.g., type of customer, geographic location, etc.)
Demand Rate How many times is this done per wk, qtr, mo, or yr?
Facilitator
Trigger What initiates the process?
First Step Task on first process block
Required: skilled, objective person
leading the activity
3 days typically; consecutive
Event Dates
is best; 6 hrs per day
& Times
minimum; 7 or 8 hrs is best
Base-camp On-site, ample wall space,
Location quiet/private location
Logistics
Not always needed
Coordinator
Last Step Task on last process block
Boundaries &
What is the team NOT authorized to change?
Limitations
Meals Always a nice touch; keeps
Provided the team from wandering
Briefing List the the people that are
Attendees required to attend the briefings (**)
** required and those whose attendance is
*optional optional (*).
Improvement Time
Typically 3-6 months
Frame
Current State Problems & Business Needs
Aids in consensus building
Briefing
and organizational learning.
Dates &
Typically the last hour of the
Times
day.
Mapping Team
Function
1 What's driving the need for improvement?
2
3
Contact Information
2
4
Name
1 Leadership-heavy
3
5
4
Measurable Target Condition
5
1 Reduce <defined metric> from X to Y (Z% improvement).
6
2 Increase <defined metric> from X to Y (Z% improvement).
7
3
8
4
9
5
10
Benefits to Customers & Business
On-Call Support
Function
1 How will the business, internal and external customers, and
2 internal and external suppliers benefit from value stream improvement?
3
Contact Information
2
4
Name
1 SMEs that may not be needed full time
3
5
4
Relevant Data
Agreement
Executive Sponsor
1 What data is required to understand relevant current state isues.
Value Stream Champion
Facilitator
2 Examples: work volume & volume variation, process quality &
3 effectiveness, market trends, customer satisfaction, employee
Signature:
Signature:
Signature:
4 engagement, financials, lead time, safety records, etc.
Date:
Date:
Date:
© 2014 The Karen Martin Group, Inc.
31

Who should represent the processes
in the value stream?
Function
Activity
Marketing
Generates sales leads
Sales
Calls on and qualifies customers
Customer
Submits RFQ to sales
Sales
Reviews RFQ
Estimating
Generates quote
Sales
Approve quote
Customer
Accepts quote; submits a PO
Sales
Approves PO
Customer service
Creates SO; compiles spec package
EE/ME design
Designs product; generates BOM
Customer
Approves design
EE/ME design
Forwards design to SW dev
Software Dev
Writes code
Purchasing/Planning
Releases WO; schedules production
Supplier (external)
Delivers materials
Production
Manufactures & ships product
Customer
Installs equipment
Field service
Conducts 90‐day follow‐up
© 2014 The Karen Martin Group, Inc.
32

Who should be on the team, be on call,
and attend briefings?
CEO
COO
VP Quality
VP Operations
Director,
Manufacturing
Manager, Plant
Operations (x3)
Supervisor,
Production (x6)
VP Engineering
Director, Supply
Chain
Manager,
Planning (x3)
Planner (x3)
Manager,
Quality (x3)
Director, Product
Development
Manager,
Purchasing (x3)
Buyer (x8)
Team Lead (x12)
Manager,
Mechanical
Engineering
Mechanical
Engineers
Manager,
Electrical
Engineering
Electrical
Engineers
CFO
Controller (x3)
Manager,
Application
Engineering
Manager,
Finance (x3)
CIO
VP, Human
Resources
Manager,
Human
Resources (x3)
VP, Sales
VP, Information
Systems
VP, Customer
Service
Director, Sales
Director, IT
Director,
Security
Director, Service
Centers (x2)
Manager,
Estimating
Manager,
Customer
Service
Manager, Sales
(x4)
Scrum Master
(x2)
Scrum Team
Mapping team
On call
Attend briefings
© 2014 The Karen Martin Group, Inc.
33

Briefing #1
Purpose: Reduce resistance to future state design
34

Briefing #2
Purpose: Build consensus around future state design
35

Briefing #3
Purpose: Gain commitment re: improvement priorities,
ownership, resources needed, and timeline.
36

Socializing the Charter
• Conversation, not merely an email attachment.
• To the entire workforce who will be affected by
change.
• Adjust the charter if new discoveries or concerns
surface.
© 2014 The Karen Martin Group, Inc.
37

Suggested VSM Overview Content
• What value streams and value stream maps are.
• Benefits of VSM and expected outcomes.
• What to expect from the activity
– Projected schedule
– “Rules of engagement.”
• Charter review.
© 2014 The Karen Martin Group, Inc.
38

For Further Questions
Karen Martin, President
ksm@ksmartin.com
858.677.6799
Blog & newsletter: www.ksmartin.com/subscribe
Charter: www.ksmartin.com/downloads
© 2014 The Karen Martin Group, Inc.
39
39

Your Questions?
© 2014 The Karen Martin Group, Inc.
40

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Thursday, March 13, 2014
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