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Value Stream Mapping
Last time we discussed how to get started implementing lean thinking. It all started with a first pass assessment to begin to understand your metrics, flows, and constraints to flow. The critical document to the first pass assessment was producing a rough Value Stream Map to document what you saw in order to communicate it to others. Now we are going to use it in the second pass assessment, where we perform a more detailed analysis of the metrics, flows, and constraints.
Why is a second pass needed? It is like peeling away the layers of an onion. We want to uncover each layer one at a time so we don’t miss anything. Go too fast and we may not understand what we are looking at. I like to use the concept of continual improvement over delayed perfection. We need to keep things moving and not get caught up in analysis paralysis.
The important thing is to work at the speed of the employees and not of the lean expert. The employees need to experience the change and they need to want to change. All too often you might have a lean expert come in and want to turn the whole organization upside-down too fast. The result is a quiet or sometimes loud revolt and then things start to go back the way they were before – to status quo.
Second Pass Analysis
The deliverables in the second pass include:
- Adding detail to the Current State Value Stream Map
- Creating a Visual Space Analysis
- Drawing a Material Flow Analysis
- Producing a Future State Value Stream Map
- Ranking the Improvement Opportunities
Detailed Current State Value Stream Map
The first pass collected high level data. Now we want low level data. One technique that works real well is to gather representatives that do the work into a large room. Next, hand out medium sized post-it notes and ask each person to write down their tasks involved in processing an order into a shipped product.
Post all the notes on the wall in the process order. The steps can be broken down into sales, order entry, scheduling, purchasing, manufacturing, staging, shipping, and billing at a high level or you could focus on the manufacturing piece and break it into the manufacturing steps. It all depends on the scope of the improvement.
What you will end up with is a pretty, multi-colored description of your process. Now add process times to each note to indicate how long each step takes. And then discuss the value-added for each note.
Value Add vs. Non-Value Add
One of the most critical steps in the value stream creation process is understanding your waste, which is also known as value-add and non-value add tasks. The definition of value-add we are using is based on whether or not the task transforms the product. Another way many look at it is whether the customer will pay for it or not, but this can be confusing.
We want to evaluate each task to see if the task transforms the product. If it does we put a green dot on it to indicate value-add. If it does not then we use a red dot to indicate non-value add. And finally if we do not think it adds value but we have to do it anyway (i.e. for compliance reasons) then it gets a black dot.
When we are done we will have a lot of post-it notes on the wall, one for each task. Each note will have a task time and a colored dot indicating its value add. The wall should look something like this diagram. (You may use different colored post-it notes).
Now count the dots. In and total the times. In this example we have 51 tasks. 8 tasks add value, 37 are non-value-add and 6 steps are indicated as required non-value-add. In our 51 tasks only 16% are value-added tasks. I have seen operations with hundreds of tasks with less than 5% value added.
What the participants will start to realize at this point is that their jobs consist mostly of non-value added activities. They may even start to think their job is not too secure either. This is all part of getting buy-in that change is needed and improvement opportunities do exist. But be careful, if we do not balance revenue growth with the improvement opportunity in front of us then according to the Iron Law of Layoffs, some people will lose their jobs.
We now have everyone’s attention and their thinking is beginning to change to lean thinking. They can now see the waste on the wall in front of them. Ask them if they think they can improve this process and most will say yes. If you ask them that earlier the answers would be mostly no or maybe.
This week we discussed detailed data collection for a Value Stream Map, value-add, and non-value-add work. Next week we will complete the rest of the second pass analysis including:
- Creating a Visual Space Analysis
- Drawing a Material Flow Analysis
- Producing a Future State Value Stream Map
- Ranking the Improvement Opportunities
Learn more about developing policies, procedures and processes, or improving your organization by attending the next How to create well-defined processes, How to Implement Lean Thinking, or ISO 9000 Lead Auditor training classes.
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