This document describes a case study of mapping the value stream for Jax Taxes, a CPA business providing tax preparation services. It includes a description of Jax Taxes' current tax preparation process, which involves multiple handoffs, delays, and errors. The document then provides an overview of value stream mapping concepts and tools to analyze Jax Taxes' current process, identify sources of waste, and develop a future state map to design a leaner workflow. Key aspects discussed include defining customer value, mapping the current state, identifying types of waste, determining root causes of problems, and using metrics to measure improvements.
Influencing policy (training slides from Fast Track Impact)
Jax Taxes VSM Case Study
1. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 1
Enterprise Value Stream
Mapping Case Study:
Jax Taxes
John Shook
TWI Network, Inc.
(jyshook@umich.edu)
2. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 2
Using the Value Stream Mapping Tool
Value Stream
Scope
Determine the Value
Stream to be improved
Understand how things
currently operate. This is the
foundation for the future state
Current State
Drawing
Implementation
Plan
Implementation of
Improved Plan
Design a lean flow through the
application of Lean principles
Future State
Drawing
PDCALoop
Develop a detailed plan of
implementation to support
objectives (what, who, when)
The aim of mapping!
3. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 3
Jax Taxes
Jack is a Certified Public Accountant in the United States.
His business consists of providing US federal income tax
(IRS) preparation services for individuals who work for
companies (salaried) and for self-employed people or
small business. U.S. tax forms must be filed with the
federal government on or before April 15 every year.
During the busy tax season, self-employed returns
require long hours because of the frequent waits, delays
and errors. Jack and his employees work long hours
during this period, and, as his business has grown in
recent years, more clients are losing satisfaction with the
timeliness and accuracy of his services.
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Jax Taxes
Generally, the sequence of work begins for each client sometime late
January with Jack’s assistant sending documents to clients for them to fill
out. Then, sometime before the first of April, the client must bring in all
necessary forms and receipts. Regular clients drop off or send their box of
receipts and tax forms from various income sources. Then, Ajck’s office
must sort the receipts and documents, and, unfortunately, most of the time,
there is something missing. The next step is to prepare worksheets for the
client in the Tax Software (TS) system. Once Jack starts filling out the
worksheets, he frequently needs to confirm deductions, such as what
expenses qualify as business-related and details regarding retirement or
insurance deductions.
Once Jack has completed the worksheet, his assistant actually prints and
collates the IRS forms. For self-employed clients, the assistant waits until
Thursday to print all returns that have accumulated during the week from the
TS system. Jack must review and sign each return. Finally, the process is
completed by packaging and mailing the IRS forms with the necessary
attachments to each client.
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Data Set
Send packet:
P/T =
FTQ =
Send Reminder:
P/T =
FTQ =
Sort receipts & documents:
P/T =
W/T =
FTQ =
Prepare Worksheet:
Technology used:
P/T =
W/T =
FTQ =
Confirm deductions:
P/T =
W/T =
FTQ =
Print and Collate IRS tax forms:
Technology used:
P/T =
W/T =
FTQ =
Review and sign forms:
P/T =
W/T =
FTQ =
Mail forms to client:
P/T =
W/T =
FTQ =
6. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 6
Important Definitions
• Process time:
– Time to actually conduct the work of the process step (may incl.
value and non-value added work)
• ex – actually completing a form
• Wait time:
– During the process step - Time when the step is not yet complete,
but is not being worked on by the operator
• ex – waiting for a call back from the customer
– Between process steps – Time between processes steps when the
product or service is not being worked on
• ex – queue time in an “inbox”
• Lead time = Process time + wait time
• First Time Quality (FTQ):
– The percentage of the time that the task is able to be completed,
accurately, the first time it is worked on
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Metric Current
Estimate
From Current
State Map
Target from
Future State
Map
Actual
(post
implementation)
Process
Time
Lead
Time
First
Time
Quality
Other(s)
Measurable Metrics & Performance
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Typical Steps for Current State Mapping
• Document customer information & need
• Who is it? What do they need? When do they need it?
• Identify main processes (in order)
• Select data attributes
• P/T, W/T and FTQ
• Perform “value stream walk” and fill in data boxes (how the
process really works)
• Pretend that you are the work / document / item being produced
• Establish how each process knows what to process next (how
work is prioritized) and document information flow
• Calculate process time, wait time, lead time, first time quality,
and any other metrics necessary to evaluate your Value Stream
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Icons
Electronic Information Flow
Weekly
Schedule
Worker
In Box
(Queue)
INMRP
Wait-Time
Conversation Information Flow
Data Box
P/T
W/T
FTQ
Movement by Push
Supermarket
Movement of “physical” property
Reminder post-card
Customer
Process Box
Technology Used
MRP
Iterations
Withdrawal (Pull)
Changeover
Kaizen
Lightning
Burst
XOXO
Leveling, Mix
and/or
Volume
F I F O
First-In
First-Out
Flow
10. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 10
Tips for Identifying Waste
Following are things to look for to help identify waste in a
value stream:
• Low FTQ
• Long wait times as compared to process times
• Process steps requiring multiple iterations/reviews &
rework
• Excessive handoffs between people/organizations
• Multiple systems/computer tools used – may point to
redundant data entry & “translations”
• Starting too early – Does the process start earlier than it
needs to, with preliminary data, driving multiple
updates/reworks as “real” data becomes available?
• Look at the “system” level for opportunities to make bold
moves
– Look for potential to eliminate entire process steps before focusing
on eliminating waste from unnecessary processes
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Metric Current
Estimate
From Current
State Map
Target from
Future State
Map
Actual
(post
implementation)
Process
Time
Lead
Time
First
Time
Quality
Other(s)
Measurable Metrics & Performance
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Now, with our completed Current
State Map, we have a new lens to the
Value Stream.
The next challenge is to analyze the
current state to create a vision for a
better future state.
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The Core Value Streams
•Fulfillment from order to delivery
•Product development from concept to launch
•Maintenance and service from delivery
through the life cycle of a product
(These processes create value directly for
an external customer)
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Support Process Examples:
•Hiring employees
•Checking customer credit
•Collecting receivables
•Closing the accounting books
•Building prototypes
•Identifying new suppliers
(These processes only create value for internal
customers, but are currently necessary to run the
business.)
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TOYOTA PRODUCTION SYSTEM
Eliminate Waste cost and profit
What is Value?
What is Waste ?
Anything that adds cost without adding value
Defined by the customer
16. The Three M’s
• Muri – Waste of unreasonableness or overburden to
a person or a machine
• Mura – Waste of inconsistency; Waste of
unevenness
• Muda – The seven types of waste
Employee on temporary
leave or special
assignment causing
someone else to do two
jobs
- End of month deadline causing overtime
- All projects scheduled in 1Q with none in 2Q
- Process Variation
COMMWIP
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CATEGORIESCATEGORIES OFOF ACTIONACTION
Waste
“Non-Value
Creating Work”
Value
Creating
Work
“Secondary” processes
•Credit check
•Hiring employees
•Developing budgets
Action
“Primary” processes
•Design products
•Enter orders
•Service products
Examples:
•Reviews
•Waiting
•Rework
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Waste
Points to Remember About Waste:
• It is important to consider waste in the context of the value
that the process provides to the customer
• Waste is really a symptom rather than a root cause of the
problem
• Waste points to problems within the system
• We need to find and address causes of waste to improve
flow
• In non-manufacturing processes, waste is often most
prevalent in the information flow
• A rule of thumb is to expect that 40% of what we do adds no
value
Any element of production, processing, or distribution
that adds no value to the final product:
waste only adds cost & time
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TYPESTYPES
OFOF
WASTEWASTE
II
CC
OO
MMWW
PP
MM
Conventional
Thinking
•WASTE NOT DEFINED, NOT EASY TO SEE
•REACTIVE IMPROVEMENT
•CAN’T DISCERN SOURCES OF WASTE
•PROBLEMS REPEAT
More useful
Thinking
CorrectionCorrection
Over
Production
Over
Production
MotionMotion
Material
Movement
Material
Movement
WaitingWaiting
InventoryInventory
ProcessingProcessing
•WASTE IS "TANGIBLE"
•IDENTIFY MANY SMALL OPPORTUNITIES
•LEADS TO LARGE OVERALL CHANGE
•CONTINUOUS IMPROVEMENT
Learning to See Waste
WASTEWASTE
Unreasonable
-ness
Unreasonable
-ness
UnevennessUnevenness
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DO IT AGAIN!!
Correction: Rework – work done because of errors in the previous process
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Overproduction: Making more than is necessary or making
things faster than necessary, working ahead
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Motion: Unnecessary people motions, travel, walking, searching
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M&I Movement:
Unnecessary or ineffective handoffs, transfers of
material or information (communication)
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Waiting: People waiting for machines or M&I;
Machines waiting for people or M&I
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Inventory: Information or material waiting
unnecessarily in queue
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Processing: Redundant or unnecessary processing,
work that provides the customer more than he/she requires or is
willing to pay for
Long
Report
# 100
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Tips for Identifying Waste
Following are things to look for to help identify waste in a
value stream:
• Low FTQ
• Long wait times as compared to process times
• Process steps requiring multiple iterations/reviews &
rework
• Excessive handoffs between people/organizations
• Multiple systems/computer tools used – may point to
redundant data entry & “translations”
• Starting too early – Does the process start earlier than it
needs to, with preliminary data, driving multiple
updates/reworks as “real” data becomes available?
• Look at the “system” level for opportunities to make bold
moves
– Look for potential to eliminate entire process steps before focusing
on eliminating waste from unnecessary processes
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Root Cause Identification for
Effective Problem Solving
Waste is a symptom
• We need to identify the root causes of waste
• We must get to actionable, measurable,
processes in the future state that:
– Eliminate root causes of waste/problems
– Prevent similar problems from reoccurring
– Make future reoccurrences visible
29. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 29
Waste & Root Cause Exercise
• Document WASTE on Jax Taxes current state map
– COMMWIP
• Determine the root cause for one identified Waste
Area
– Use the Problem Definition Tree and “5 Whys” to
determine the root cause of the waste
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The Power Behind
Value Stream Mapping
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Philosophy
Process Thinking at Toyota
“Brilliant process management is our
strategy…”
“We get brilliant results from average people
managing brilliant processes while our
competitors often get average (or worse)
results from brilliant people managing broken
processes.”
33. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 33
Individual Efficiency vs.
System Efficiency
Philosophy
Individual Efficiency vs. System Efficiency
34. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 34
Using the Value Stream Mapping Tool
Value Stream
Scope
Determine the Value
Stream to be improved
Understand how things
currently operate. This is the
foundation for the future state
Current State
Drawing
Implementation
Plan
Implementation of
Improved Plan
Future State
Drawing
PDCALoop
Design a lean flow through the
application of Lean principles
Develop a detailed plan of
implementation to support
objectives (what, who, when)
The goal of mapping!
36. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 36
Future State Questions for the Office
• What are the customer requirements?
• How will you make work flow smoothly?
• Where and how will you trigger or sequence work?
• How will you establish rhythm or milestones to pace
the work and surface problems?
• How will you make work progress and delays visible?
• What process improvements are necessary to achieve
your Value Stream vision?
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– How can we ensure that the customer gets
what they need, when they need it?
– Can the timing of the customer requirements
be used to establish a pace of work (takt time)
for the value stream?
What are the customer requirements?
38. Right
Product
Right Time!
Understanding Customer Requirements
Right Price!!
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
TWI Neetwork, Inc. all rights reserved Jax Taxes p. 38
39. TAKT TIME
•Defines the process step duration within which standardized
work must be completed to meet customer demand
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
Available Time
Takt Time =
Customer Requirement or Demand
Synchronizes Pace of Production
to Match Pace of Demand
Rate for producing a product,
and its components, based on rate of delivery.
TWI Neetwork, Inc. all rights reserved Jax Taxes p. 39
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Rule of Thumb for
Takt Time
• In order to meet deadlines and help balance
workloads, calculate takt time to establish the pace of
work
• Determining takt time allows you to see the waste of
overproduction, as well as delays
• Note: Determining takt time will also highlight that
many current state processes are incapable of
meeting the takt time (customer demand)
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
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How will you make work
flow smoothly?
– How can we get information to the customer with few/no
handoffs?
– How can we get information to the customer with no
correction or rework required?
– How will multiple or parallel flows be synchronized?
– Is there backflow (repeat or rework) loops that can be
eliminated?
– Can a person complete the activity in one sitting?
– Can you touch each piece of paper only once, or go to each
screen only once, for each activity?
– What steps could be combined or eliminated to simplify
flow?
42. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 42
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
Rule of Thumb for Flow
• Look at the possibility of combining processes where there
are long wait times between short process times
• Look for the presence of numerous information arrows/loops.
These could indicate correction, rework and interrupted flow.
43. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 43
Simple Process Flow
All process steps
occur in tight
sequence
(continuous flow),
with little or no
waiting
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
45. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 45
gas station
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
Then
1. Park at Pump
2. Walk in to Store
3. Wait in Line
4. Leave Credit Card
5. Walk Back to Pump
6. Fill Your Tank
7. Walk Back in to Store
8. Get Receipt and Credit Card
9. Walk Back to Car
10. Drive Off
Now
1. Park at Pump
2. Insert Credit Card in Pump
3. Fill Your Tank
4. Take Receipt
5. Drive Off
46. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 46
Where and how will you trigger or
sequence work?
– Can you have one trigger point with
uninterrupted process flow?
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Rule of Thumb for
Triggering Work
• Where you have interrupted process
flow, use supermarkets/buffers or
otherwise organize handoffs to create
“internal pull”
• Where you have smooth continuous
flow, establish one trigger point at the
point where continuous flow begins
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
48. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 48
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
ONCE YOU TRIGGER,
FLOW WHERE YOU CAN, PULL WHERE YOU CAN’T
Supermarket
Interrupted Process Flow
Continuous Flow
PullPullPull
Trigger
FLOW
Trigger
FLOW
49. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 49
How will you establish rhythm or
milestones to pace the overall flow of
work and surface problems?
– How will you use milestones to create an internal
pull to establish cadence/rhythm?
– What can be done to level the workload and
eliminate the frustrating “peaks” and “valleys”?
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Rule of Thumb for
Rhythm & Milestones
• Use milestones to create internal pull and
establish cadence
• Level demand at each process so that
variation is removed from flow
• Establish “Heijunka” – using a Heijunka Box
or Leveling In-Box – to levelize imbalance
between parallel processes
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
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• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
Leveling
Jax Taxes Example
Schedule
Monday…….3 Self Employed, 3 Personal
Tuesday……2 Self Employed, 4 Personal
Wednesday.. 8 Personal
Thursday…. .5 Small Business
Friday……….5 Small Business
Weekly Batch
Daily:
1 Self Employed, 3 Personal, 2 Small Business
Daily: Every Type Every Day
Level: Every Type Every “Ship Window” (AM & PM)
1 Self Employed, 1 Personal, 0 Self Employed, 2 Personal,
1 Small Business 1 Small Business
52. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 52
How will you make work
progress and delays visible?
• How will you be sure that you know the
progress of the work?
• What visual management tools will you
use to make progress & delays visible?
53. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 53
Rule of Thumb for
Making Progress & Delays Visible
• Establish checks for quality, timing, and
output to make progress and problems visible
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
54. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 54
Management Time Frame:
With what frequency do you know your
performance to customer requirements?
• 1 WEEK
• 1 DAY
• 1 SHIFT
• 1 HOUR
• 1 PITCH
• 1 TAKT
55. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 55
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
Heijunka Box Example
Current Day
This Heijunka box:
•Allows management to check work in progress & ensure that teams are not overburdened
•Guides management in assigning future projects to teams not fully utilized
•Serves to level the customer demand based on available resources
-The customer’s requirements/due dates drive the entire work process
Work In process
Days of the Month
Work Teams
56. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 56
What process improvements are necessary to
achieve your Value Stream Vision?
• Are resources adequate?
• Standardized Work
• Human Resources - # People, Skills, Knowledge Level
• Other – Computers, Software, Outsourced Resources
• Is quality produced at each step? (FTQ)
• Is quality defined and measured?
• Is there a process to identify and respond to quality
problems?
• Are resources available?
• Are resources working on other (the wrong?) jobs?
• Are resources waiting at times and too busy at other
times?
57. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 57
Rule of Thumb for
Process Improvements
• To Improve the Performance of a Value Stream, plan at the “System
Level” and implement at the “Process Step Level”
• Ensure adequate and available resources to implement
improvements in the future state Value Stream
• Process improvements must be standardized and documented to
“take hold” in the organization
• Customer requirements?
• Work flow smoothly?
• Trigger & sequence work?
• Rhythm (leveling)?
• Progress & delays visible?
• Process improvements?
58. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 58
Future State Questions – Supplemental Questions
• What are the customer requirements?
– How can we ensure that the customer gets what they need, when they need it?
– Can the timing of the customer requirements be used to establish a pace of work (takt time) for the value
stream?
• How will you make work flow smoothly?
– How can we get information to the customer with few/no handoffs?
– How can we get information to the customer with no correction or rework required?
– How will multiple or parallel flows be synchronized?
– Is there backflow (repeat or rework) loops that can be eliminated?
– Can a person complete the activity in one sitting?
– Can you touch each piece of paper only once, or go to each screen only once, for each activity?
– What steps could be combined or eliminated to simplify flow?
• Where and how will you trigger or sequence work?
– Can you have one trigger point with uninterrupted process flow?
• How will you establish rhythm or milestones to pace the work and surface problems?
– How will you use milestones to create an internal pull to establish cadence / rhythm?
– What can be done to level the workload and eliminate the frustrating “peaks” and “valleys”?
• How will you make work progress and delays visible?
– What visual management tools will you use to make progress & delays visible?
– How will you be sure you know the progress of the work?
• What process improvements are necessary to achieve your Value Stream vision?
– How will you ensure adequate and available resources to improve First Time Quality at each process step in the
value stream?
59. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 59
Icons
Electronic Information Flow
Weekly
Schedule
Worker
In Box
(Queue)
INMRP
Wait-Time
Conversation Information Flow
Data Box
P/T
W/T
FTQ
Movement by Push
Supermarket
Movement of “physical” property
Reminder post-card
Customer
Process Box
Technology Used
MRP
Iterations
Withdrawal (Pull)
Changeover
Kaizen
Lightning
Burst
XOXO
Leveling, Mix
and/or
Volume
F I F O
First-In
First-Out
Flow
60. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 60
Metric Current
Estimate
From Current
State Map
Target from
Future State
Map
Actual
(post
implementation)
Process
Time
Lead
Time
First
Time
Quality
Other(s)
Measurable Metrics & Performance
61. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 61
Using the Value Stream Mapping Tool
Value Stream
Scope
Determine the Value
Stream to be improved
Understand how things
currently operate. This is the
foundation for the future state
Current State
Drawing
Implementation
Plan
Implementation of
Improved Plan
Design a lean flow through the
application of Lean principles
Future State
Drawing
PDCALoop
Develop a detailed plan of
implementation to support
objectives (what, who, when)
The aim of mapping!
62. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 62
Value of Value-Stream Mapping
• Helps you visualize more than the single
process level
• Links work flow with “control information”
flow
• Enables “System Kaizen”, a focus on lead
time and total system optimization
• Provides a new, common, language
• Provides a blueprint for change
• Ties together Lean concepts and tools
63. TWI Neetwork, Inc. all rights reserved Jax Taxes p. 63
Leadership is the Key!