1 Lean Office - Value Streams

2 Outline What are Value Streams? What are Value Streams? History - Toyota History - Toyota Identifying the Value Streams Identifying the Value Streams Value Stream Mapping Value Stream Mapping The Current State The Current State The Future State The Future State Unique Situations Unique Situations Enhancing the Future State Enhancing the Future State Implementing Change Implementing Change Roadblocks Roadblocks

3 Value Stream Map Dan Jones and Jim Womack define VSM as “the simple process of directly observing the flows of information and materials as they now occur, summarizing them visually, and then envisioning a future state with much better performance” (Voelkel & Chapman, 2003) Dan Jones and Jim Womack define VSM as “the simple process of directly observing the flows of information and materials as they now occur, summarizing them visually, and then envisioning a future state with much better performance” (Voelkel & Chapman, 2003) Pictures are worth thousand words! Pictures are worth thousand words!

4 History of Value Streams - Toyota Toyota is one of the most efficient manufacturers in the world Toyota is one of the most efficient manufacturers in the world Building 2 million cars a year outside Japan Building 2 million cars a year outside Japan Aiming to become No 1 globally by 2010! Aiming to become No 1 globally by 2010! Not because of brilliant products – but because of a brilliant production system Not because of brilliant products – but because of a brilliant production system Called Lean Production or Lean Thinking Called Lean Production or Lean Thinking

5 Eight Service Industry Wastes 1. Errors in documents 2. Transport of documents 3. Doing unnecessary work not requested 4. Waiting for the next process step 5. Process of getting approvals 6. Unnecessary motions 7. Backlog in work queues 8. Underutilized employees

6 Examples of Office Process Waste Too many signature levels Unclear job descriptions Obsolete databases/files/folders Purchase Orders not matching quotation Errors – typo’s, misspelling, wrong data Waiting – for information, at meetings, etc. Poor office layout Unnecessary s

7 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

8 The Current State Typical Steps to Complete a Current State Drawing Document customer information Document customer information Complete a quick walk through to identify the main processes (i.e., how many process boxes) Complete a quick walk through to identify the main processes (i.e., how many process boxes) Fill in data boxes, draw inventory triangles, and count inventory Fill in data boxes, draw inventory triangles, and count inventory Document supplier information Document supplier information Establish information flow: how does each process know what to make next? Establish information flow: how does each process know what to make next? Identify where material is being pushed Identify where material is being pushed Quantify lead time vs. processing time Quantify lead time vs. processing time

9 The Future State Activities aligned with our business strategy Activities aligned with our business strategy Efforts focused on NET improvements for the company Efforts focused on NET improvements for the company Metrics supportive of fundamental change Metrics supportive of fundamental change Simple, constant communication of our plans and achievements as an enterprise Simple, constant communication of our plans and achievements as an enterprise

10 The Future State What is the rhythm (takt time) for each facility needed to meet demand? What is the rhythm (takt time) for each facility needed to meet demand? How can orders be passed upstream more frequently with minimum delays? How can orders be passed upstream more frequently with minimum delays? Where and how will you level the mix and volume at each facility? Where and how will you level the mix and volume at each facility? Where can you you introduce transport milk rounds? Where can you you introduce transport milk rounds? Additional issue: Who should organize these loops – suppliers or customers? What steps can you leave out completely? What steps can you leave out completely?

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

12 Roadblocks 75 years of bad habits 75 years of bad habits Financial focus with limited cost understanding Financial focus with limited cost understanding A lack of system thinking and incentives A lack of system thinking and incentives Metrics supporting a 75 year old model Metrics supporting a 75 year old model Limited customer focus Limited customer focus Absence of effective operating strategies Absence of effective operating strategies