lci san diego cop value stream mapping 01-21-16
TRANSCRIPT
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Value Stream Mapping
January 21, 2016
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Value Stream
A system of interconnected people, equipment, and entities.
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Wherever there is a request and a deliverable,
there is a value stream.
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What is a Value Stream?
CUSTOMER
1 3 42
All of the activities required to transform a customer request into a good or service.
3B
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Value Stream – New (Custom) Home
FrameLay
Found.Elect & Plumb
Dry Wall
CUSTOMER
Design
ORDER DELIVERY
Interior finishes
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Types of Value Streams• Transformation (customer facing)
• Transforming customer request into good or service
• Product Development / Design• Concept to manufacturability or service ready
• Value Enabling• Support processes (e.g., new hire process,
procuring new equipment, technology requests)
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HoustonWe have a problem
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HoustonWe have a problemsV
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Poor Customer
Experience
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UnnecessaryExpense
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Silo’d thinking; Silo’d behavior
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The Customer Doesn’t Benefit from Functional Efficiency
Functional Efficiency ≠ Optimal Value Stream Performance12
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Lack of Leadership Alignment
About Improvement
Needs or Priorities
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Hidden Problems & Murky Understanding
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Value Stream Maps Serve as Visual “Storyboards”
Makes the disconnects and obstacles to flow visible at a macro level
Shows the linkage between material and information flow
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© 2015 The Karen Martin Group, Inc. 16
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Value Stream Maps Help Visualize Problems
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VSM Helps Break Down Functional SilosFunction FunctionFunctionFunction
Core Value Streams
Support Value Streams
ExternalCustomer
Internal Customer
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Creates Leadership Alignment, Which
Accelerates Improvement
Cycles
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Value Stream Mapping Helps Build Strong Sense of Supplier-Customer Relationships
Customer
Supplier CustomerSupplier Customer
CustomerSupplier
Supplier
Process 1
Process 2
Process 3
Process 4
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Where is your focus?
Helps Build External Focus: What Does the Customer Truly Value?
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Proper Value Stream Mapping & Management Generates Significant Business Results
System Efficiency = Optimal Value Stream Performance
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Work: Degrees of Granularity
Value Stream
Process Process Process
Step StepStep
Macro Perspective
• Define strategic direction (“what”)
• Heavy leadership involvement
• Value Stream Mapping
Micro Perspective
• Identify the tactical “how”
• Heavy frontline involvement
• Metrics-Based Process Mapping
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Customer
1
Process 5
Function E
LT = 1 daysPT = 15 mins.%C&A = 95%
4
6
10 mins.480 mins.
5 mins.240 mins.
120 mins.5 days
30 mins.2 days
15 mins.480 mins. Total LT = 9.5 days
Total PT = 180 mins.Activ ity Ratio = 3.9%Rolled %C&A = 30.0%
Process 3
Function C
LT = 5 daysPT = 120 mins.%C&A = 85%
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4
Process 4
Function D
LT = 2 daysPT = 30 mins.%C&A = 99%
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5
ABC Technology, Inc.Current State Value Stream Map
Name of Value Stream Being MappedDemand Rate = XX / Year
Name of Value Stream ChampionMapping Date
IT-1 IT-2
45 items
Process 2
Function B
LT = 0.5 daysPT = 5 mins.%C&A = 75%
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3
Process 1
Function A
LT = 1 daysPT = 10 mins.%C&A = 50%
5
2
1 items
Information Flow
WorkFlow
Timeline
10 items
Basic Current State Value Stream Map
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Customer
1
Process 3
Function E
LT = 0.5 daysPT = 30 mins.%C&A = 95%
4
4
10 mins.1 days
120 mins.2 days
30 mins.0.5 days Total LT = 3.5 days
Total PT = 160 mins.Activity Ratio = 9.5%Rolled %C&A = 89.3%
Process 2
Function C
LT = 2 daysPT = 120 mins.%C&A = 95%
3
3
ABC Technology, Inc.Future State Value Stream Map
Name of Value Stream Being MappedDemand Rate = XX / Year
Name of Value Stream ChampionMapping Date
IT-1 IT-2
5 items
Process 1
Function A
LT = 1 daysPT = 10 mins.%C&A = 99%
5
2
1 items 10 items
Standard work
Modified approvals
IT interface
Cross-train
Cross-train
Standard workError
proof
Basic Future State Value Stream Map
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Basic Value Stream – Current vs. Projected Future State Performance Metrics
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Where to start?
© 2016 The Karen Martin Group, Inc. 29
1. Define your core and support value streams.2. Map the value stream.
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Where to start?
© 2016 The Karen Martin Group, Inc. 30
1. Define your core and support value streams.2. Map the value stream.
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Activity: Identifying & Scoping Value StreamsName of Core Value Stream:
_______________________________________________________________________________
Customer Trigger First Process (verb/noun) Last Process (verb/noun) Final Deliverable
________________________________________________________________________________________
Customer – who initiates the request and receives good or service?Trigger – what signal initiates the value stream?First Process – the first activity that takes place (what does the trigger initiate?)Last Process – the ending point of the value stream; the last activityFinal Deliverable – what is the “finished product” that the customer receives?
Name of Support Value Stream:
_______________________________________________________________________________
Customer Trigger First Process (verb/noun) Last Process (verb/noun) Final Deliverable
________________________________________________________________________________________
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Where to start?
© 2016 The Karen Martin Group, Inc. 32
1. Define your core and support value streams.2. Map the value stream.
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Activity: Step 1
CustomerDefine who the internal or external customer is for the value stream you’ve chosen
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Customer
Process 1
Process 2
Activity: Step 2
Process 3
Process 4
Define the first four processes (handoffs) in the value stream you chose.
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Key Performance Metrics
Review Contract
% Complete & Accurate
Process Time15 mins2 days
80%
Finance & Legal
Lead Time
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Key Metric: Percent Complete & Accurate (%C&A)
Customer
Process 1
Process 2
Process 3
Process 4
80% 50%95%
75%
90%
%C&A = % of incoming work that’s “usable as is”; no need for rework:• Correcting information or material that was supplied• Adding information that should have been supplied• Clarifying information that should have or could have been clearer
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Customer
Process 1
Process 2
Activity: Step 3
Process 3
Process 4
Add Process Time, Lead Time, and %Complete & Accurate to the process blocks.
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From Current State to Future State Design
© 2015 The Karen Martin Group, Inc. 38
• Common current state findings• Disconnected processes• Incomplete & unclear information• Uneven workloads• Wasteful activities• Long delays• Ineffective outcomes• Excessive costs• Poor customer experience
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From Current State to Future State Design
© 2015 The Karen Martin Group, Inc. 39
• Future state design – minimum necessary for maximum outcomes• Eliminate delays• Increase information quality• Involve the right people at the right time• Improve effectiveness of outcomes• Improve customer experience
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Prepare Understand Current State
DesignFuture State
Develop Transformation
Plan
Execute Transformation
Plan
Three Consecutive Days4 Weeks Prior
to MappingFollowing Mapping
Repeat
Value Stream Mapping ActivityPhases and Timing
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12 13 24 35 4
51 62 73 84 95 10
12 13 24 35 4
1234
Specific Conditions
Engineer to order, requires both hardware & software customization
Value Stream Champion Nancy Little
Demand Rate 1,000 per yearFacilitator Dave Parks
Value Stream Mapping CharterScope Accountable Parties Logistics
Value Stream Capital equipmentExecutive
Sponsor Allen WardEvent Dates
& TimesJuly 24-26, 20138:00 am - 5:00 pm
Last Step Production ships product
Boundaries & Limitations
No new software; only minor changes to existing IT systems; no additional staff; no budget changes
Briefing Attendees
** required *optional
** Allen W (COO), Joe M (CIO), Sal T (VP Sales)* Bruce R (VP Ops), Carlos P (HR), Su T (CFO), Bill M (VP CS)
Base-camp Location Surf's Up - Room A
Trigger Customer submits RFQFirst Step Sales reviews the RFQ Logistics
Coordinator Dave ParksMeals
Provided Continential breakfast & lunch
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title Name Contact InformationForecasted growth of 15% for next fiscal year. Sales, Director Sean Michaels
Briefing Dates &
Times
July 24, 25, & 264:00-5:00 pmImprovement Time
FrameFuture state design is fully realized by December 31, 2013.
Current State Problems & Business Needs Mapping Team
Competition's RFQ LT is 1 wk; PO to delivery is 4 wks Scrum Master Ryan Austin Goals & Measurable Target Conditions Engineering, Vice President Nancy Little
Unclear & incorrect information flowing through value stream. IT, Director Diana MarieRFQ lead time = 2 weeks; PO to software dev lead time = 5 weeks Finance, Controller Dave Gerald
Improve quality of information flowing throughout value stream. Customer (contract manufacturer) JR Hunt
Reduce RFQ LT from 2 weeks to 3 days (70% improvement). Manufacturing, Director Ambreen MotiwalaReduce PO to software dev LT from 5 wks to 3 wks (40% improvement) Customer Service, Manager Danny Tran
Faster delivery; less hassle; less cost. Function Name Contact InformationBetter working relationships between sales, estimating & engineering. Planning / Purchasing, Planner Lourdes Dwyer
Benefits to Customers & Business On-Call Support
Relevant Data Agreement
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor Tom St. James
Operational: LT in segments (RFQ to quote; PO to development). Signature: Signature: Signature:
Sales effectiveness: RFQ conversion rate. Executive Sponsor Value Stream Champion FacilitatorFinancial: Estimate-to-actual cost comparison.
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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.
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Prepare Understand Current State
DesignFuture State
Develop Transformation
Plan
Execute Transformation
Plan
Three Consecutive Days4 Weeks Prior
to MappingFollowing Mapping
Repeat
Value Stream Mapping ActivityPhases and Timing
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Daily Leadership Briefings
#1 – Reduce resistance#2 – Build consensus#3 – Gain commitment
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J F M A M J J A S O N D
1 PROJ Steve 0%
2 PROJ Steve 100%
3 KE Bruce 50%
4 KE Bruce 50%
5 PROJ Jessie 100%
6 PROJ Sally 100%
7 KE Jessie 0%
8 PROJ Mike 100%
9 JDI Jessie 50%
10 PROJ Steve 80%
11 PROJ Steve 10%
12 PROJ Bob 0%
13 JDI Jessie 100%
14 PROJ Marcia 25%
15 PROJ Tom 30%
16 KE Marcia 50%
17 PROJ Sally 50%
Value Stream Champion Sally BrooksValue Stream Mapping Facilitator Karen Martin
Value Stream Transformation PlanValue Stream Product Y Scheduled Review Dates
Executive Sponsor Jim McMahon 2/10 + bi-weekly Thu 10 am
Socialize new criteria for engineering, quality, & purchasing involvement.
Date Created 1/5/2014Kaizen Burst # Improvement Objective / Hypothesis Proposed Countermeasure Exec.
Method * OwnerPlanned Timeline for Execution
Status
Create procedure/train GS service engineers to properly feedback suggestions to engineering.
Create bulletin re: standardized headplate design to eliminate flange orientation.
Create visual "milestone" timeline to educate customers.
Define technical info needed from customer and when.
Signature: Signature: Signature:
Revise standard Ts & Cs to incorporate time limit for customer approval for f inal payment.
Error proof P.O. info (correct specs, ship to, etc.); notify customer re missing info and drop dead date.
Create criteria for LOI acceptance.
Add initial project release in SF.
Resocialize existing customer-requested CO procedure.
One piece engineering flow
Agreement
Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator
* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)
Move to one release (pump & systems)
Date: Date: Date:
Create commodity management team & supplier SLAs.
Standardize WPS/PQR from suppliers.
Revise proposal template to limit time to 4 revisions.
Create pull signal for invoicing.
Create trigger to release (BOMs) for purchase.
Conf
iden
tial C
onte
nt R
emov
ed
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Key Success Factors for Value Stream Improvement & Ongoing Management
• Frequent review of transformation plan progress (& obstacle removal when necessary)
• Clear value stream manager/owner/champion• Defined value stream KPIs (key performance
indicators)• Frequent KPI review & continuous improvement
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