metrics-based process mapping

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Lean Webinar Series: Metrics-Based Process Mapping

November 10, 2011

Welcome!

To new friends and old across the U.S.

(28 states)

To our global friends in:

Australia

Brazil

Canada

Hong Kong

Romania

The Netherlands

Uruguay

Schedule & Materials

Schedule

Content – 11:00 a.m.-12:00 p.m. PT

Q&A – 12:00-12:30 p.m. PT

Link to slides (pdf format)

www.ksmartin.com/files/webinarmaterials/11-

10-2011_slides.pdf (full slides)

www.ksmartin.com/files/webinarmaterials/11-

10-2011_handout.pdf (2 slides per page)

Announcements

Final webinars of 2011

A3 Problem-Solving – Tuesday, Dec 6 (Part 1 of 2)

A3 Problem-Solving – Wednesday, Dec 7 (Part 2 of 2)

Learning needs for Jan-Mar 2012? Email: ksm@ksmartin.com

Resources & tips

Newsletter – www.ksmartin.com/subscribe

Social Media

www.facebook.com/karenmartinassoc

www.twitter.com/karenmartinopex

www.linkedin.com/in/karenmartinassoc

www.slideshare.net/karenmartin2

www.vimeo.com/karenmartinassoc - Recorded webinars & 3-part MBPM series

When you leave the webinar, please click “File – Exit” vs. exiting

your browser.

Two Ways to Listen

If the control panel

indicates that you’re in

“listen only” mode, you

haven’t entered your

audio pin.

Computer speakers Telephone

Two Ways to Ask Questions

1. Raise your hand – you

will be un-muted and

can ask verbally.

2. Type your question

into the question log.

Learning Objectives

Participants will learn:

Key time and quality metrics for effective improvement

in office, service, and knowledge work settings.

Step-by-step process for creating current and future

state maps.

How to use MBPM to document the new standard work

and monitor process performance.

The Work We Do:

Degrees of Granularity

Stream

Process Process Process

Step Step Step

Value Stream

View (Tactical;

frontline

involvement)

View (Strategic;

leadership

involvement)

Metrics-Based

Process Map

Source Refrigeration & HVAC, Inc.

Current State Value Stream Map

Serv ice Deliv ery

Created February 11, 2009

CONFIDENTIAL

Customer

Receive

customer call

Call Center

PT = 2 mins.

%C&A = 60%

Review &

Post Invoices

Posting Admin

PT = 3 mins.

%C&A = 98%

Batch: 1x/day

0.0833

2 minutes

2 hours

5 minutes

90 minutes

1.25 hours

75 minutes

2 hours

120 minutes

4 hours

5 minutes

10 minutes

25 minutes

4 hours

3 minutes

10 minutes

2 hours

4 minutes

hours Lead Time = 572 hours

Process Time = 349 minutes

Select &

Dispatch Tech

Dispatcher &

Service

Manager

PT = 5 mins.

%C&A = 60%

Make Repair;

Call to raise

the NTE

PT = 120 mins.

%C&A = 40%

Complete Call

Dispatcher

PT = 5 mins.

%C&A = 80%

Review

Service Call

Service

Manager

PT = 10 mins.

%C&A = 50%

Batch: 2x/day

Review Open

Ticket Report

Billing Admin

PT = 25 mins.

%C&A = 75%

Upload time

PT = 0 mins.

%C&A = 70%

Batch: 1x/day

Close call in

Verisae

Account

Manager

(West)

PT = 1 mins.

%C&A = 90%

Batch: 1x/day

Process Time

Payroll Admin

PT = 10 mins.

%C&A = 90%

Batch: 1x/day

Process A/P

A/P Admin

PT = 15 mins.

%C&A = 85%

Batch: 1x/day

Assess

Problem

PT = 90 mins.

%C&A = 90%

Special Order

Pick up Part

at Parts Store

PT = 75 mins.

%C&A = 95%

Get Part from

PT = 0 mins.

120 m.

Plains

Verisae

(Customer)

Review

Invoices;

Close in

Verisae (Pac)

Account

Manager

PT = 10 mins.

%C&A = 85%

Batch: 3-5x per wk

Enter Invoices

into Verisae &

Excel; Mail

Invoices

Billing Admin

PT = 4 mins.

%C&A = 95%

Batch: 1x/week

Spreadsheet

(Customer)

Receive

Cash; Post

Payment

Collections

75 m. 120 m. 240 m. 640 m. 6 days 240 mins. 640 m. 120 m. 60 days90 m.5 m.

Supplier

%C&A %Complete and Accurate

AR Activity Ratio

FTE Full Time Equivalent

LT Lead Time

PT Process Time

RFPY Rolled First Pass Yield

Acronym Key

Lead Time to invoice = 86.2 hrs

Process Time =5.9 hrs.

NOTE: Business hours

Activity Ratio = 6.8%

RFPY = 1.1%

Lead time to cash = ? days

Service Value Stream

Current State

1 – Information Flow

2 – Material Flow (physical or electronic)

3 – Timeline

Dispatch Repair Billing

Traditional Mapping Method:

Process Flow Chart

How is this process performing?

Look up Customer

in Eclipse

Customer?

Enter Order

Print Ship Ticket

Load Trucks

SHIPPING

Enter Customer

Information

Perform Credit

FINANCE

Notify Sales COD

Only; Notify Admin

to update

Customer Profile

FINANCE

YesProduct in

Stock?

Order Material

PURCHASING

Receive Material

RECEIVING

How do we know what to improve?

Traditional Swim Lane Process Maps

What is a Metrics-Based

Process Map?

A visual process analysis tool, which integrates:

Functional orientation of traditional swim lane

process maps

Key Lean time and quality metrics

Highlights the disconnects / wastes / delays in a

process.

Keeps the improvement focus properly directed

Serves as standard work for workforce training

and process monitoring.

Metrics-Based Process Mapping

(MBPM)

When is the MBPM Used?

For current state analysis and future state

design during an office/service-based

Kaizen Event.

For complex processes, it consumes 1-2 days

As a standalone improvement tool.

Mapping Preparation (if not part of a Kaizen Event)

Select a skilled, objective facilitator.

Scope the process being mapped

Opt for narrow current state focus so you can explore deeply and minimize

variation.

No decision trees in MBPM (interferes w/ timeline); loopbacks are linearized.

Select a cross-functional team of no more than 10.

Process workers (30-50% of the team)

Upstream suppliers

Downstream customers

Subject matter experts (e.g. I.T., legal, etc.)

Outside eyes

Draw 6” wide swim lanes on the 36” paper.

Pre-drawn lines – template available:

www.ksmartin.com/files/tools/MBPM_swimlanes.pdf

Chalk line

Manually draw

Supplies Needed

36” wide white paper

Scissors & masking tape

3 x 6” post-its (multiple colors)

2 x 2” post-its (green and yellow)

Sharpie markers

A red or other brightly colored marker

Calculators

Step 1: Label the map

Process Name

Included/Excluded Conditions

Current State MBPM

Facilitator and/or Team Names

Step 2: List functions involved in process.

Process Name

Included/Excluded Conditions

Current State MBPM

Facilitator and/or Team Names

Function A

Function B

Function C

Function D

Function E

Function F

Include external functions, if appropriate (e.g. customers, suppliers/contractors, etc.)

Step 1

Step 2

Parallel Steps (concurrent activities)

Ticking clock

Step 3: Document all activities (steps) on

3 x 6” post-its; place sequentially.

Document the Current State

Step 3 – Document all activities/steps

on 3 x 6” post-its.

Use verb/noun format; clear and concise.

Include function.

Separate tasks that have different quality

outputs or timeframes; combine tasks

otherwise.

Place post-its in appropriate swim lane,

sequentially (according to the ticking clock).

Be “the thing.”

Step 3: Document task & function

Activity

(Verb / Noun) Function that

performs the

Step #

Step 4: Number the Activities

Note: For parallel

activities, use

alpha modifiers --

e.g. 8A, 8B, etc.

# Staff

(if relevant)

Barriers to Flow

(if relevant)

• Batching

• Shared

resources

• System

downtime

• Etc.

PT (Process Time)

LT (Lead Time) % Complete &

Accurate

Step 5: Add step-specific information

Key Lean Metrics: Time

Process time (PT)

The time it takes to actually perform the work, if one is

able to work on it uninterrupted

Includes task-specific doing, talking, and thinking

aka “touch time,” work time, cycle time

Lead time (LT)

The elapsed time from the time work is made available

until it’s completed and passed on to the next person or

department in the chain

aka throughput time, turnaround time, elapsed time

Includes Process Time

Step-Specific Lead Time vs.

Process Time

Lead Time

Received

Work passed

to next step

Process Time

LT = PT + Waiting / Delays

Key Lean Metrics: Quality

%Complete and Accurate (%C&A)

% time downstream customer can perform task without

having to “CAC” the incoming work:

Correct information or material that was supplied

Add information that should have been supplied

Clarify information that should or could have been clear

This output metric is measured by the immediate

downstream customer and all subsequent downstream

customers.

If workers further downstream deem the output from a

particular step to be less than 100%, multiply their

assessment of quality with the previous assessments.

Metrics Reminders

Typically obtained via interview; questions must be high quality

PT & LT You can “chunk” these metrics for a series of post-its

when necessary

When wide variation, do one of three things: Narrow your scope (pick a specific circumstance)

Use the median

Indicate the variation, but use the median for the timeline

%C&A Determined by immediate downstream customer and

all subsequent downstream customers

Response is placed on the post-it for the output step

0% at a particular step is not rare

Dealing with high variation

metrics

Map the rule (80%), not the exceptions

(20%).

For metrics with ranges, use the median.

Continue to add conditions to your

scope if you need to.

To minimize “it depends” answers.

Metrics-Based Process Mapping:

Three-Part Series

Part 1: Document the current state

Part 2: Analyze the current state; design

and implement the future state

Part 3: Document the improved process

Step 6: Define the “Timeline Critical Path”

For parallel activities: Chose the longest LT unless a

“dead-end” activity

Complex Process with Many Concurrent

Activities (Parallel Steps)

Step 7: Create the Timeline

Timeline for Concurrent Work /

Parallel Flows

PT = 5 min

LT = 8 hrs

Close file

PT = 1 min

LT = 4 hrs

Sign P.O. Sign

Contract

Email packet

to Supplier

Bring longest lead time (and its associated PT)

to the timeline, unless it’s a “dead end step.”

Step 8 – Calculate Summary

Metrics

Timeline PT Sum

Timeline LT Sum

% Activity

(PT Sum/Total LT Sum) x 100

Rolled First Pass Yield (RFPY)

%C&A x %C&A x %C&A…

Include ALL post-its, not just critical path

Labor requirements (next slide)

Summary Metrics: Labor

Requirements

Total PT

Sum of all activities, not just timeline

Labor Requirements

Total PT (in hrs) X # occurrences/year

# FTEs* Available work hrs/year/employee**

* FTE = Full-Time Equivalent (2 half-time employees = 1 FTE)

**Available work hrs/yr/emp = # full-time hrs – paid holidays, vacation & sick time.

Full time is typically 2,080 hrs per year.

Metric Current State Projected

Future State

Projected %

Improvement

Timeline PT 110 mins

Timeline LT 7 days

% Activity 3.3%

Rolled First

Pass Yield 9.2%

Total Process

Time 170 mins

requirements 106 FTEs

Freed capacity

Metrics-Based Process Mapping

Summary Metrics

Analyzing the Current State

Step 9 – Identify the value-adding (VA)

and necessary non-value-adding (N)

activities

This is the first of two “bridge steps” between

current state documentation and future state

design.

Use small colored post-its labeled with “VA” or

“N”.

All unlabelled post-its represent waste.

Customer-Defined Value

Value-Adding (VA) - any operation or activity your external customers value and are (or would be) willing to pay for.

Non-Value-Adding (NVA) - any operation or activity that consumes time and/or resources but does not add value to the product (good or service) the customer receives. Necessary – support processes, regulatory

requirements, etc.

Unnecessary – everything else - WASTE

Eight Wastes (Muda)

Overproduction

Inventory

Waiting

Over-Processing

Errors

Motion (people)

Transportation (material/data)

Underutilized

people

Step 9: Label the value-adding (VA) and

necessary non-value adding (N) activities

Document the Current State

Step 10 – Circle (with a red marker) the

step-specific metrics that indicate the

greatest opportunity for improvement.

Low step-specific %activity, low %C&A, etc.

This is the second “bridge step” between

current state documentation and future state

design

Step 10: Circle the data that indicates

the greatest need for improvement

Typical Current State Findings

Islands of value-adding activities

All other time is “waste.”

Adding Value

Rework

First Step Last Step

Future State Design: How can we progress from one

“VA” or “N” step to the next and eliminate all waste?

Future State Design

Goals Reduce overall LT & PT

Improve quality (increase RFPY)

Increase % activity

Improve LT, PT, and %C&A at individual steps

May need to perform root cause analysis before determining countermeasures to realize the future state

Mapping steps Clean sheet or modify current state map

Same steps as current state

Calculate projected metrics

The Right Process

Standardize work

Mistake proof work

Make problems visual

Fix problems immediately

Create continuous flow

Level demand

Balance work

Create pull systems

Future State Design Considerations

Eliminate steps / handoffs

Combine steps

Create parallel paths

Alter task sequencing and/or timing

Implement pull

Reduce / eliminate batches

Improve quality

Create an organized, visual workplace

Reduce changeover

Eliminate motion & transportation

Standardize work

Eliminate unnecessary approvals / authorizations

Stop performing non-value adding (NVA) tasks

Co-locate functions based on flow; create cells (teams of cross-functional staff)

Balance work to meet takt time requirements

Future State Projected Summary Metrics:

Labor Requirements

Total PT

Sum of all activities, not just timeline

Labor Requirements

Total PT (in hrs) X # occurrences/year

# FTEs Available work hrs/year/employee

Capacity = Current State FTEs – Future State FTEs

Document Projected

Future State Results

Metric Current State Projected

Future State

Projected %

Improvement

CP PT 110 mins 85 mins 23%

CP LT 7 days 4 days 43%

Activity Ratio 3.3% 4.4% 33%

RFPY 9.2% 50.4% 448%

Total PT 170 mins 140 mins

requirements* 1.7 FTEs 1.4 FTEs 18%

Freed capacity 600 hrs =

0.3 FTEs

*Demand = 1,200 per year

PACE Improvement Prioritization Grid

High Low Anticipated Benefit

Ease o

22 8 9

Value Stream

1 2 3 4 5 6 7 8 9 10 11 12

2 Improve quality of referral KE Sean O'Ryan

3, 4Reduce lead time beween schedulingand

preregistration stepsPROJ

Dianne

Prichard

5, 6Eliminate the need for two patient check-

Michael

O'Shea

6 Eliminate bottleneck in waiting area KEDianne

Prichard

9Eliminate lead time associated with

transcription stepPROJ Sam Parks

10 Eliminate batched reading KE Sam Parks

7Reduce inventory costs, regulatory risk

and storage needsKE

Michael

O'Shea

12 Reduce delay in report delivery PROJ Martha Allen

12 Reduce delay in report delivery KE Martha Allen

Implement voice recognition technology

Reduce setup required

Cross-train and colocate work teams

Implement additional fax ports

Collect copays in Imaging

Balance work / level demand

5S CT supplies area; implement kanban

Value Stream Mapping Facilitator

Increase percentage of physicians

receiving electronic delivery (rather than

hard copy)

Approvals

Executive Sponsor Value Stream Champion

Signature:

Date: Date: Date:

Signature: Signature:

#Goal / Objective Improvement Activity

Implement standard work for referral

process

Type OwnerImplementation Schedule (weeks) Date

Complete

Date Created

11/21/2007

Allen Ward

Sally McKinsey

Dave Parks 12/13/2007

10/18/2007 1/10/2008

Future State Implementation Plan

Executive Sponsor

Value Stream Champion

Value Stream Mapping Facilitator

Implementation Plan Review Dates

11/1/2007

Outpatient Imaging

Create an Action Plan: Who, What, When, Where, and How?

Electronic Documentation?

Archive the team’s work

Distribute the maps to remote locations

Document the new standard work for the process Training/retraining staff

Monitoring process performance

Communicate the impact of Kaizen Events and other improvement activities

Excel product demo: www.vimeo.com/27016122 Fast forward to 8:00 to begin tool demo.

The Improved State Becomes Standard Work

0Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A

1Fax PO to Sales

Rep0 0 45%

Review PO;

clarify with

customer as

needed

20 2 90%Fax PO to

warehouse10 4 90%

Check inventory

levels; notify

Sales Rep re:

status

5 4 95%Fax PO to Sales

Rep5 0.33 90%

0 20 10 5 5

0 2 4 4 0.33

45% 90% 90% 95% 90%

0 20 10 5 5

Rolled %C&A

Critical Path LT

Total PT

Critical Path PT

5431 2

Mary Townsend

Hours Worked per Day Sally Dampier

Occurrences per Year Sam Parks

Current State Metrics-Based Process Map

Dave Morgan25-Jun-08

8 Facilitator

Process Details

Michael Prichard

Order FulfillmentProcess Name

Specific Conditions Domestic orders through sales force

37,500

Date Mapped

Sean Michaels

Sales Rep

Ryan AustinDiane O'Shea

Mapping Team

LT Units

Function /

Department

PT Units

Step # ►

Customer

Finance

Warehouse /

Shipping

Seconds

Minutes

Seconds

Minutes

Color-Coded Summary Metrics Sheet

The Excel mapping tool auto-calculates:

Summary time and quality metrics for before and after maps

Projected % improvement (color-coded for visual ease)

Staffing requirements

User-defined metrics

1. Label the map in upper right corner. Process name, date, facilitator and/or team members

2. List the functions involved in left column.

3. Document all activities/steps. Verb/noun; concise language; include function as well.

4. Number the activities. One number per column; concurrent activities are

labeled A, B, C, etc.

5. Add activity-specific metrics (PT, LT, %C&A), barriers to flow, and number of staff involved (if relevant). Include units of measure (mins, hrs, days, etc.)

Creating the Current State MBPM

Phase I

Creating the Current State MBPM

Phase II

6. Define the critical path. Longest LT unless “dead-end” step; use colored marker

7. Create the timeline.

8. Calculate the summary metrics CP PT Sum, CP LT Sum, AR, RFPY, Total PT, Labor

Required

9. Define the value-adding and necessary non-value-adding activities Use small colored post-it labeled with “VA” and “N.”

10. Circle the step-specific metrics that indicate the greatest opportunity for improvement. Use red marker.

Longest LTs, Low %C&As, High PTs, Low step-specific ARs

For Further Learning

Chapter 12 – Manual method www.vimeo.com/karenmartinassoc

3-part MBPM series (including

Excel tool demo)

Excel tool for

electronically archiving

Onsite workshops (8-24 participants) & facilitated mapping sessions

Public workshops:

Portland, Oregon – February 22, 2012 (ASQ)

Winnipeg, Manitoba, Canada – June 4, 2012 (CME)

Chicago, Illinois – October 15, 2012 (AME)

Learning Objectives

Participants will learn:

Key time and quality metrics for effective improvement

in office, service, and knowledge work settings.

Step-by-step process for creating current and future

state maps.

How to use MBPM to document the new standard work

and monitor process performance.

Karen Martin, Principal

7770 Regents Road #635

San Diego, CA 92122

858.677.6799

ksm@ksmartin.com

For Further Questions

Connect & learn

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