Management is Essential Value Stream Mapping Management is Essential

The lean transformation should provide: Growth with improved margins Growth with minimal capital Growth without more employees

What are our main stumbling blocks? Years of bad habits Financial focus with limited cost understanding A lack of system thinking and incentives Metrics supporting a legacy model Limited customer focus Absence of effective operating strategies

How have these stumbling blocks been addressed? Programs of the month (band aids) Meetings, meetings, meetings, meetings

If we could just start over…..with Activities aligned with our business strategy Efforts focused on NET improvements for the company Metrics supportive of fundamental change Simple, constant communication of our plans and achievements as an enterprise

Why not take the value stream perspective? “Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.” 3 enterprise value streams: Raw Materials to Customer – Manufacturing Concept to Launch – Engineerin Order to Cash - Administrative Functions

A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

Value Stream Improvement vs. Process Improvement Customer Assembly Cell Stamping Welding Raw Material Finished Product

Value Stream Mapping Follow a “product” or “service” from beginning to end, and draw a visual representation of every process in the material & information flow Then, draw (using icons) a “future state” map of how value should flow

Levels of a Value Stream process level single plant (door to door) Start Here multiple plants across companies

Value Stream Managers Kaizen Process 1 Process 2 Process 3 “Customer” The Value Stream Manager

Using the Value Stream Mapping Tool Product/Service “Family” current state drawing Understanding how things currently operate. Our Baseline! future state drawing Designing a lean flow. Our vision! plan and implementation The Goal of Mapping

Current State Mapping Completed in a day Performed by a cross functional team of middle managers responsible for implementing new ideas Resulting in a picture (and team observations) of what we “see” when following the product

Future State Mapping Completed in a day with the same team Focused on: Creating a flexible, reactive system that quickly adapts to changing customer needs Eliminating waste Creating flow Producing on demand

Current State Value Stream Map

Future State Value Stream Map

Planning and Implementing Don’t Wait! You need a plan! Tie it to your business objectives Make a VS Plan: What to do by when Establish an appropriate review frequency Conduct VS Reviews walking the flow

Remember the other two value streams? Administrative activities are often a major percentage of the total throughput time Goal: 400% improvement in productivity over 10 years Modest opportunities on the plant floor; Untapped opportunities off the plant floor

Enterprise Perspective Engineer to Order Configure to Order Capital equipment manufacturers Small companies (<500 employees) Service Firms

We might begin in… Processes directly impacting the part production Engineering Quoting Or, in value streams with direct customer contact Order entry Invoicing

Value Stream Mapping Helps you visualize more than the single process level Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniques

Value Stream Management The map is just a picture of ideas! The fundamental change is in how we choose to manage the value stream as an integrated system of decisions and tasks

Value Stream Management Use your strategic plan as a guide Find the gaps in necessary performance Improve value streams to meet the performance Create new metrics to support new ways of thinking and acting Understand true product family costs Manage operations by the value stream data Always have a future state

Critical Success Factors Management must understand, embrace, and lead the organization into lean thinking Value stream managers must be empowered and enabled to manage implementations Improvements must be planned in detail with the cross functional Kaizen teams Successes must be translated to the bottom line and/or market share

Putting it to Work! Continuously improving fundamentally flawed processes will yield limited results. Simply automating existing manual processes can also yield limited results. Seriously challenging old practices will provide the dramatic results desired.