Presented by:

Beau Keyte, LEI Faculty

APICS Greater Jacksonville SeminarDecember 5, 2002

Value Stream Mapping and Management

Agenda

1. How We Got Here

2. Value Stream Mapping

3. Value Stream Management

The lean transformation should provide:

Growth with improved margins

Growth with minimal capital

Growth without more employees

What are our main stumbling blocks?75 years of bad habits

Financial focus with limited cost understanding

A lack of system thinking and incentives

Metrics supporting a 75 year old model

Limited customer focus

Absence of effective operating strategies

How have we elected to address these stumbling blocks?

Programs of the month (band aids)

Meetings, meetings, meetings, meetings

Silo optimization

What’s the impact of “silo” improvements?

“Plant to plant” key players

Purchasing Transportation

Material Control

Slide courtesy of HLS, Inc.

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 - ManufacturingConcept to Launch - EngineeringOrder 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 ImprovementValue Stream Improvement vs. Process Improvement

RawMaterial

Finished Product

Stamping

Process

Welding

Process

AssemblyCell

ProcessCustomer

Value Stream

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.

Value Stream Map

Levels of a Value Stream

process level

single plant(door to door)

multiple plants

across companies

Start Here

Value Stream ManagersEach Value Stream needs a Value Stream Manager

The conductor of implementation:

•Focused on system wins

•Reports to the top dog

Process 1 Process 2 Process 3

“Customer”

The ValueStream Manager

Kaizen

Using the Value Stream Mapping Tool

Understanding how things currently operate. Our Baseline!

Product/Service “Family”

plan and implementation

Designing a lean flow. Our Vision!

current state drawing

future state drawing

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

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.

Planning and Implementing

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 PerspectiveEngineer 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

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 Mapping

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

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.

Putting it to Work!Putting it to Work!