Value Stream MappingManagement is Essential

The lean transformation should provide:Growth with improved marginsGrowth with minimal capitalGrowth without more employees

What are our main stumbling blocks?Years of bad habitsFinancial focus with limited cost understandingA lack of system thinking and incentivesMetrics supporting a legacy modelLimited customer focusAbsence 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..withActivities aligned with our business strategyEfforts focused on NET improvements for the companyMetrics supportive of fundamental changeSimple, 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 ManufacturingConcept to Launch EngineerinOrder 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 ImprovementRaw MaterialFinished ProductStampingProcessWeldingProcessAssemblyCellProcessCustomerValue Stream

Value Stream MappingFollow 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 StreamStart Here

Value Stream ManagersCustomerThe ValueStream ManagerKaizen

Using the Value Stream Mapping ToolUnderstanding how things currently operate. Our Baseline!Product/Service Familyplan and implementationcurrent state drawingfuture state drawingDesigning a lean flow. Our vision!The Goal of Mapping

Current State MappingCompleted in a dayPerformed by a cross functional team of middle managers responsible for implementing new ideasResulting in a picture (and team observations) of what we see when following the product

Future State MappingCompleted in a day with the same teamFocused on:Creating a flexible, reactive system that quickly adapts to changing customer needsEliminating wasteCreating flowProducing on demand

Current State Value Stream Map

Future State Value Stream Map

Planning and ImplementingDont Wait!You need a plan!Tie it to your business objectives Make a VS Plan: What to do by when Establish an appropriate review frequencyConduct VS Reviews walking the flow

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

Enterprise PerspectiveEngineer to OrderConfigure to OrderCapital equipment manufacturersSmall companies (

We might begin inProcesses directly impacting the part productionEngineeringQuotingOr, in value streams with direct customer contactOrder entryInvoicing

Value Stream MappingHelps you visualize more than the single process level Links the material and information flowsProvides a common language Provides a blueprint for implementationMore useful than quantitative toolsTies together lean concepts and techniques

Value Stream ManagementThe 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 ManagementUse your strategic plan as a guideFind the gaps in necessary performanceImprove value streams to meet the performanceCreate new metrics to support new ways of thinking and actingUnderstand true product family costsManage operations by the value stream dataAlways have a future state

Critical Success FactorsManagement must understand, embrace, and lead the organization into lean thinkingValue stream managers must be empowered and enabled to manage implementationsImprovements must be planned in detail with the cross functional Kaizen teamsSuccesses 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.