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Being lean isn’t just reserved for Manufacturing processes - information-intensive operations such as Service and Knowledge processes have the ability to be lean too – let us show you how! Get the scoop on applying Value Stream Mapping, a critical tool in Lean transformation, in Office and Service environments.
What's covered:
- The key differences between Manufacturing and Office/Service Value Stream Maps
- The process of Value Stream Mapping in Office and Service environments
- Common wastes in Office and Service environments and goals for future state planning
- Digitally capturing, sharing, and storing Value Stream Maps
1. Get Lean - Value Stream
Mapping for Office and Service
Karen Martin Kim Scott
President iGrafx Senior Consultant,
The Karen Martin Group, Inc. Lean Six Sigma Black Belt
2. What will you learn?
Value Stream Mapping helps you
understand and improve your Office
and Service processes.
Digitalizing VSMs is easy and makes
sharing a snap.
3. Introducing Karen Martin
• Founder: The Karen Martin Group, Inc. (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:
Winner - 2013
Shingo Research Prize
5. 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
5
6. 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
6
7. The Work We Do:
Degrees of Granularity
Macro View
Strategic; Value Value Stream
heavy leadership Map
involvement Stream
Process Process Process
Micro View Metrics-Based
Tactical; heavy Step Step Step Process Map
frontline
involvement
7
8. Office/Service Value Stream Examples:
By Industry
• Repair/maintenance – Customer request to revenue received
• Financial services – Mortgage application
• Law – Litigation value stream
• Healthcare – Patient care; revenue cycle
• Technology – Software development
• Government – Permitting
• Construction – Large equipment installation
• Law enforcement – Arrest processing
• Engineering/architecture – Design development
• Oil & Gas – Fossil fuel exploration & production
8
9. Support (Value-enabling) Value Streams
• Estimating / RFQ response
• Hiring – Recruitment to 1st (or 90th) day
• New product development
• Business plan development
• Annual sales meeting planning & execution
• Contract development & execution
• And more…
9
10. Value Stream Mapping Benefit:
Seeing the Whole
60,000 foot view; Rooftop view
10
11. VSM Promotes Systems Thinking
System Efficiency =
Optimal Value Stream
Performance
Individual Efficiency =
Sub-optimization
11
12. Truth How are we
really performing?
Truth
Truth
Truth
CLARITY Truth
Truth
What’s our customer Truth
really experiencing? Truth
Truth 12
14. Create a Value Stream “Storyboard” with
Paper & Post-Its (Team-Based)
14
15. Basic Value Stream Map
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
Information
Flow IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Material &
Dept A Dept B Dept C Dept D Dept E
Data Flow
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
Timeline 480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
16. 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:
16
17. Value Stream Mapping Process
Define
Product Family
Document
Current State
Design
Future State 3 Day
Event
Create
Transformation Plan
Execute!
18. The Office Version of Product Families
Units
Domestic Consumables
Warranty
Service Parts
Non-Warranty
Order
Fulfillment
Process
Units
International Consumables
Warranty
Service Parts
Non-Warranty
19. Value Stream Mapping Process
Define
Product Family
Document
Current State
Design
Future State 3 Day
Event
Create
Transformation Plan
Execute!
20. Step 1 – Define Process Blocks
• Identify all process blocks in the value stream
(target 5-15 blocks)
– Each process 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 to another function)
– Activity format is verb/noun – what happens to what
– WALK THE VALUE STREAM!
20
21. Value Stream Mapping Components
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Dept A Dept B Dept C Dept D Dept E
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
22. Step 2 – Define I.T. Systems
• Identify all I.T. systems used in the process
and information flow
– Note any scheduling that occurs (calendar,
system, etc.)
– Who tells whom to do what? How do they tell
them?
22
23. Value Stream Mapping Components
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Dept A Dept B Dept C Dept D Dept E
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
24. Step 3 – Add Data
• Key metrics for all process blocks
– Process Time (PT)
– Lead Time (LT)
– Percent Complete & Accurate (%C&A)
• Work-in-process (WIP) at every step.
• Significant barriers to flow (e.g. batching,
shared resources, system downtime, etc.)
24
25. Post-it Conventions
Block #
Process
(Verb/Noun)
Function
# Staff (if
relevant)
Significant
Barriers to Flow
Process Time
%C&A
Lead Time
26. Value Stream Mapping Components
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Dept A Dept B Dept C Dept D Dept E
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
27. Key Metrics: Time
Scenario 1
Lead Time (LT)
Work Process Time (PT)
Work passed to
Received next step
LT = PT + Waiting / Delays
27
28. Key Metrics: Time
Scenario 2
Lead Time (LT)
Process Time
Work Work passed to
Received next step
LT = PT + Waiting / Delays
28
29. 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 do rework:
• 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.
29
30. Value Stream Mapping Components
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Dept A Dept B Dept C Dept D Dept E
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
31. Step 4 – Create Timeline
• Create timeline
• Calculate summary metrics
– Timeline PT Sum
– Timeline LT Sum
– Activity Ratio (AR)
– Rolled %C&A
31
32. Summary Metrics: Time
• Activity Ratio
– The percentage of time anything is being done
to the work passing through the system (whether
value-adding or non-value-adding)
– (∑PT ÷ ∑LT) × 100
– Common current state finding in office/service =
1-10% (across entire value stream)
32
33. Summary Metrics: Quality
• Rolled % C&A
– The percent of value stream output that passes
through the process “clean,” with no “hiccups,”
no rework required.
– (%C&A x %C&A x %C&A…) x 100
– Common current state finding in office/service
= 0-15%
33
34. Value Stream Mapping Components
ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year
Custom er
IT-1 IT-2
1 2 3 4 5
Process 1 Process 2 Process 3 Process 4 Process 5
`
Dept A Dept B Dept C Dept D Dept E
5 2 45 pcs 3 10 pcs 2 4
LT = 1 days LT = 0.5 days LT = 2 days LT = 0.5 days LT = 1 days
PT = 10 mins. PT = 5 mins. PT = 3 mins. PT = 5 mins. PT = 15 mins.
%C&A = 99% %C&A = 75% %C&A = 99% %C&A = 99% %C&A = 95%
480 mins. 240 mins. 2 days 240 mins. 480 mins. Total LT = 5 days
10 mins. 5 mins. 3 mins. 5 mins. 15 mins. Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%
35. 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 5 mins.
3
6 45 mins. 2 7 30 mins.
2 8 5 mins.
2 9 248 mins.
2 10 365 mins.
6 11 960 mins.
2 12 110 mins.
2 13 120 mins.
6 14
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%
36. Outpatient Imaging Value Stream
Current State Findings
Current Projected %
Metric
State Future State Improvement
Lead Time 32.5 hrs
Process Time 56 mins
Activity Ratio 2.9%
Rolled %C&A 29%
36
37. Step 5 – 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
37
38. Customer-Defined Value
• Value-Adding (VA) - any operation or activity
your external customers value, are (or would
be) willing to pay for, or it’s a requirement of
doing business with them.
• 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
38
40. Typical Current State Findings
Unnecessary Necessary NVA
NVA
Work is idle
Order Delivery
Value Add
Islands of activity (process times) within long lead times.
40
41. Value Stream Mapping Process
Define
Product Family
Document
Current State
Design
Future State 3 Day
Event
Create
Transformation Plan
Execute!
42. Future State Design
• Goal: Eliminate all redundancies and
barriers to flow (the work should never
stop)
– Batches
– Rework
– Bottlenecks & WIP
– Handoffs
– Setup / changeover
– Physical layout
– Motion & transportation
42
43. Future State Value Stream Map Outpatient Demand = 15 per day
Imaging Services
Standard Customer Demand:
Work Co-locate
Work 15 patients perDay
Balance (Takt Time1920 seconds)
Schedule appt
8 hours per day
Pre-register
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 Fax Order PACS Auto Fax 80%
Waiting Room
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. 5 20 mins. 6 5 mins. 7 120 mins. 8 420 mins. 9 2 mins. 10 30 mins. 11
3 4 2 2 2 2 2 2 6
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
44. Outpatient Imaging Value Stream
Projected Future State Results
Current Projected %
Metric
State Future State Improvement
Lead Time 32.5 hrs 11.3 hrs 65%
Process Time 56 mins 43 mins 23%
Activity Ratio 2.9% 6.3% 117%
Rolled %C&A 29% 40% 38%
44
45. Value Stream Mapping Process
Define
Product Family
Document
Current State
Design
Future State 3 Day
Event
Create
Transformation Plan
Execute!
46. 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:
47. Value Stream Mapping Process
Define
Product Family
Document
Current State
Design
Future State 3 Day
REPEAT
Event
Create
Transformation Plan
Execute!
48. Common Differences - Manufacturing vs. Office VSMs
Manufacturing Office
Customer icon Upper right Center
Supplier icon Upper left None
Raw material, sub-assemblies, Paper, verbal, and electronic
“The thing” we’re following
finished goods Information
More structured / formalized I.T. Multiple I.T. systems and
Information Flow
systems work-arounds
Schedule notification Multiple points across VSM Work not scheduled
Material flow (via hollow
Yes Sometimes
arrow)
WIP icon Inventory triangle In-bin (if preferred)
Based on the time to process all of
LT determination for each Based on a single item passing
the accumulated WIP between
block through the value stream
process blocks
Hands-on time to do the
Cycle Time Process Time
work
Percent Complete & Accurate
Quality Metric First Pass Yield (FPY)
(%C&A)
Applicable in areas with dedicated
Takt Time Typically can be applied
resources
49. How can we help?
Karen Martin, President
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Twitter: @karenmartinopex
Blog & newsletter: www.ksmartin.com/subscribe
50. How can we help?
• www.igrafx.com/lean
• Custom Demonstration
• Process Program Assessments
www.igrafx.com/contact
503-404-6050