Value Stream Mapping

Ganesh Botcha, Ajoy Chatterjee

17 Aug ‘15

Agenda# Topic Speaker Minutes

1 What is Value Ganesh B 2

2 What is Value Stream Ganesh B 3

3 Value Stream Mapping Ganesh B 5

4 Purpose Ganesh B 5

5 Measurements Ganesh B 5

6 SDLC Process Ganesh B 5

7 Little’s Law and Visualization Ajoy C 5

8 Waste and sub-optimization Ajoy C 4

9 VSM Metrics Ajoy C 4

10 VSM Event and Participants Ajoy C 3

11 How does VSM Look Like Ajoy C 3

12 Guiding Principle Ajoy C 2

13 Considerations for Future State Ajoy C 4

14 Q&A 10

"There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else."

Samuel M. WaltonWal-Mart Stores, Inc.Chairman & Chief Executive Officer

“Value” is something that the customer would be willing to pay for.

“Value” varies from customer to customer.

Examples of Value Features/Specifications Availability when needed/Timely Delivery Price/Cost Customer Service/Support Politeness Relationship

Use “Value” as your starting point

Align business to customer demands

What is Value?

OR

Photo Source: Wikimedia Commons

What is Value Stream? Value Stream is the set of all actions performed to bring a

Product or Service into the hands of customer along which the information or material flows.

Some of the Value Streams Portfolio Management

Identifying, prioritizing, authorizing business cases, governance and compliance to achieve strategic business objectives

Projects and Programs Management Initiation, planning, execution, monitoring and control and closure

processes

Software Development Life Cycle Requirements, Design, Development, Testing, Deployment processes

Operations Support Management Production Support, Upgrades, Incident Management, etc.,

Service Management Catalog, SLAs, Capability, Availability Management, etc.,

Value Stream Mapping (VSM)

Value stream mapping visually maps the flow of materials and information through all processes until the Product or Service reaches the Customer. It is a tool that helps us to visually see and

understand the flow of material and information as a product or service makes its way through the value stream. The steps are laid out from left to right and top to bottom, with specific shapes used to denote the process components.

Identifies Value and Waste Used to analyze the current state and design

the future state At Toyota, it is known as "material and

information flow mapping"

Purpose of VSM

Current State

Future State

Purpose of value stream mapping is to identify the Waste (lead time/wait time, duplicates, non value added, and improper sequence of activities) in the current state so that they can later be improved or eliminated in future.

VSM Measurements

Takt TimeAvailable Production Time / Number of

Units the Customers need (Demand)

Cycle Time

Lead Time

• Rate at which the organization needs to produce in order to meet its customers’ demands

• Time it takes to complete an activity or process

• Time elapsed from work is made available until it’s completed and passed on to next person or department in the chain

Taktzeit or Meter

Also, Process Time

Cycle Time and Lead Time are not the same.

SDLC Example

Unit Test Cases

Acceptance Test

System Test

Integration Test

Unit Test

Business Requirements

System Requirements

Component Design

Program Specs

Code

Integration Test Cases

UA Test Cases

System Test Cases

3 weeks

4 weeks

3 weeks

2 weeks

1 week

2 weeks

2 weeks

2 weeks

1 week

3 weeks

4 weeks

1 week

1 week

1 week

2 weeks

2 weeks

2 weeks

2 weeks

12 weeks1 week

1 week

Cycle Time = 42 weeks, Wait Time = 10 weeks

Lead Time = 42 weeks + 10 weeks = 52 weeks

Deep Dive into Business Requirements Process

Types of Requirements

● Business Requirements Why the product is needed and its benefits

for both customers and the business

● User Functional Requirements The tasks or business processes a user will be able to perform with

this product

● Non-Functional Requirements, Quality attributes such as Reliability,

Performance, Availability, Maintainability, etc.,

Business Requirements Process

Schedule Meetings

Elicit Requirements

Document BRD

Review Requirements

Identify Stakeholders

Baseline Requirements

1 Day

2 Days

1 Day

4 Days

3 Days

1 Day

1 Day

1 Day

2 Days

2 Days

2 Days

Cycle Time = 12 Days, Wait Time = 8 DaysLead Time = 12 Days + 8 Days = 20 Days (4 weeks)

Deep Dive into Suppliers, Inputs, Process Steps, Outputs, Customers, Responsible Roles, How long it takes for the Responsible persons to perform their activities (Cycle Time), How long those persons wait before starting their activity, Reasons for waiting (Wait Time), Lead Time, etc., and identify the improvements needed for future state.

Little’s Law

In a stable system,

L = λ W

L – Average number of customers in the storeλ – average customer arrival rateW – average time a customer stays in the store

Example,In a stable system, i.e. arrival rate and departure rate being same, if 20 customers arrive per hour and stays for 15 min on an average, we should find 5 customers at any given time

Little’s Law makes the basis of queue management in Lean process

WIP = T L

WIP – average number of items/ activities/ process in progress or Work in Progress T – average departure rate, i.e. Throughput or inverse of Cycle TimeL – average time an item/ activity/ process spends in the system or Lead Time

Visualizing the Chain

Process Time

Lead Time

Work Made Available

Work Passed to Next Step

Lead Time = ∑ Process Time + ∑ Essential non-value added Time + ∑ Unnecessary non-value added Time + ∑ Waste/ Delay

×Muda

×Mura

Type 1 Type 2

×Muri

√Kata

√Poka-yoke

√Kaizen

Process nProcess n

+1Process

n - 1

Types of Waste

Sub-Optimization

“Sub-optimization is when everyone is for himself. Optimization is when everyone is working to help the company"

Edwards DemingManagement Consultant and Author

• Similarity, not difference focused approach• Collaboration• Optimization of the Value Stream will

increase performance of the system. Sub-optimization may lead to wastage

Example: Chundan Vallam

VSM Metrics

Activity Ratio = ∑ Process Time / ∑ Lead Time 1 – Activity Ratio = Idle Ratio

% Complete and Accurate (%C&A) Percentage of input in a process that is deemed usable as-is by

the resources doing the work Measured by the immediate downstream customer or process

owner Similar to first pass yield in manufacturing (=Output/Input)

Rolled First Pass Yield (RFPY) = ∑ (%C&A)n

Freed Capacity = Current State FTE – Future State FTE

VSM EventWho should participate Value Stream Mapping?

Leaders and Process stakeholders up in the chain who can authorize an innovative change on current state

Is it not a Team Activity?

It is always a team activity. The team obtains current state metrics from the Gemba

How long usually is a VSM event?

Usually 3 days

What is the future state definition?

The state, 3-6 months down the line

Define Product Family

Document Current State

Design Future State

Create Implementation

Plan

Implement

3 daysRepe

at

VSM RolesSt

rate

gic

Tacti

cal

Who What How

Middle Management

Executive Leadership

• What are the wastes and non-value added spends?

• What change has to happen?

Value Stream Mapping

Workforce• How changes can be

executed? Projects, Kaizen

How does it look like?

Some of the Symbols used in VSM

What is not a Value Stream Map

A VSM must have timelines, i.e. at least lead time and process time. If it does not have timelines, it is not a VSM

A map without any metric is not a VSM If the map diagram has swim-lanes, it is not a VSM A VSM is not an ‘Optimum Process Flow’ diagram A VSM is not a Kanban board A VSM does not comprise of Kaizen. It may be means to implement future state

of a VSM

VSM Guiding Principles

PERFECTION

PULL FLOW

VALUE STREAM

VALUE

Define the value from end customer’s standpoint

Identify the value stream for each product family

Make the product flow

So the customer can pull

As you manage toward perfection

Considerations for Future State Map Eliminate steps/ handoffs Combine steps Create parallel paths Alter sequence Alter timing Implement pull systems Optimize batches Improve quality Reduce manual error monitoring/ automate Create an organized workplace Make handshaking seamless Eliminate motion and transportation Standardize work Reduce/ Eliminate unnecessary NVA immediately Co-locate functions Create cells of cross-functional staffs Balance work to meet Takt time

References

Bibliography: Learning to See by Mike Rother and John Shook, Lean Enterprise Institute, 2003 Value Stream Mapping by Karen Martin and Mike Osterling, McGraw-Hill, 2013 Lean Thinking by Jim Womack and Daniel Jones, Simon and Schuster, 2013Others: Value Streams as Release Trains in SAFe http://www.scaledagileframework.com/value-streams/ How and why to create Value Stream Maps for software engineering projectshttp://www.ibm.com/developerworks/rational/library/10/howandwhytocreatevaluestreammapsforswengineerprojects/ Using Value Stream Maps in Information Technologyhttp://it.toolbox.com/blogs/integrate-my-jde/using-value-stream-maps-in-information-technology-49414 Improving the Value of the IT Service Delivery Processhttp://www.isixsigma.com/industries/software-it/improving-value-it-service-delivery-process/ Best Practices for Using Value Stream Mapping as a Continuous Improvement Toolhttp://www.industryweek.com/value-stream-mapping%20 Value Stream Mappinghttps://en.wikipedia.org/wiki/Value_stream_mapping

Questions?