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The Complete Lean Enterprise Value Stream Mapping for Office & Services
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§ Quoting § Order Processing § Purchasing § Hiring § Shipping
“Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.“ (Womack, Jones) Physical Transformation - Manufacturing Problem Solving - Engineering Information Management
§ Accounts Receivable § Accounts Payable § Inventory Management § Invoicing § Receiving
What is a Value Stream?
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Purpose of Value Stream Mapping
v Two ‘types’ of improvement Ø Incremental, process level (‘kaizen’) Ø Radical, system level (‘kaikaku’)
v Several improvement methodologies exist Ø All are variations of ‘P-D-C-A’ (A3, VSM, etc.) Ø Each have different ‘social’ implications
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Purpose of Value Stream Mapping
v Visualize work as a “system” Ø Activities, Pathways, Linkages (the “DNA” of Lean)
v Point to problems (from a system perspective) v Focus direction (so the system benefits as a
whole) v Not to examine a specific function or
department, but the information process that cuts across functions or departments
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Initial Customer Contact
PROCESS
VALUE STREAM
Customer (Internal or External)
PROCESS PROCESS Sales
Value-Stream Improvement vs. Process Improvement
Order Entry Process
PROCESS Customer Service Engineering Purchasing
Value Stream = ALL steps, both value-added and non value-added, required to complete a product and/or a service from beginning to end.
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How Does “Office & Service” Differ?
v Many office & service value streams are not well defined, nor does much data exist
v Many office & service functions support several value streams without clear boundaries
v Harder to identify customer, product or service, and customer value
v Waste in office & service processes is much harder to see - more entrenched and hidden
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What to Map? Mapping to Meet Business Objectives
v What is the strategic direction & key objectives of the organization?
v What systems, business processes, or value streams impact the ability of the organization to meet its objectives?
v What specific performance goals or targets must be met?
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What to Map? Product/Service Families
Product/ Service
Design Quote Enter Order
Create Docs
Standard X X
Custom X X X X
Determine product or service families based on similar processing steps
Process Steps
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Preparation
Current State
Future State
Planning
Agreeing on what process/service to study, how to map it, who will participate, planning logistics, collecting data
Agreeing on a well understood map of the current situation
Agreeing on a shared vision of a Lean future state
Agreeing on how to implement the future state vision
The VSM Process
2 – 4days
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Customers
S/U Customer BillReview
OrderInstall& Test
DispatchTechnician
MakeAppointment
ScheduleService
ININ IN
SrvcReq
SrvcOrder
SrvcOrder
SrvcOrder Srvc
Order
BillRequest forInstallation
P/T=15mC&A=100
% 4 Techs
CS DispatchDispatchDispatch
Dispatch CS
P/T=15mC&A=90%
2 d
BizSys
P/T=10mL/T=1d
C&A=95%
P/T=30mC&A=100%
1-5 d
P/T=4hL/T=1d
C&A=80%
P/T=15mC&A=90%
1 d 1 d P/T=15mC&A=100%
Demand = 8 requests per dayLead Time = <=5 daysBilling Disputes = 20%
15m 15m 10m 30m 240m 15m 15m
2d 1d 1-5d 1d 1d 1d
Cabbie’s Cable ServiceCurrent State Map – June 2008
Total Request to Install L/T = 5 - 9 daysOverall L/T = 7 - 11 days
Total “Office” P/T = 100m/requestOverall P/T = 340m/request
First Pass Yield = 49%
SS SS
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Mapping Icons
Electronic Information Flow
In Box (Queue)
IN Wait-Time
Information Flow
Data Box
P/T L/T %C&A
Supermarket
XOXO Load Leveling
F I F O First-In
First-Out Flow Standard Work
Kaizen Lightning
Burst
Iterations
Process Box
Technology Used
Receive Order
Fax Outside Resource
(Customers, Suppliers)
Worker
Weekly Schedule
Information
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Tips for Current State Mapping
v Determining the appropriate level of detail Ø Creating ‘eyes for flow’ and ‘eyes for waste’, but…..
v Ranges in the data are acceptable Ø Just watch for ‘outliers’
v Map together as a team Ø It’s about the learning
v ‘Show and tell’ Ø ‘Go see’, engage more senses
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Designing the Future State
v Is guided by pre-determined business goals and objectives
v Is a thoughtful re-design of the current system based on the key lean concepts
v Is not a ‘waste war’ and should not result in ‘drive-by’ kaizen
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Designing the Future State
v Must be achievable in a ‘reasonable’ timeframe Ø Elements within 3 months, 3-6 months, 6-9
months…. Ø Fully within one-year Ø Uncertainty is OK
l “Do you have a 70% chance to implement that idea in the next 3 months? 3 – 6?....”
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Future State Questions
v What does the customer really need? v Which steps create value and which are waste? v How can we flow work with fewer interruptions? v How will interruptions in the flow be controlled? v How will work load and/or activities be leveled? v How will we manage the new process? v What process improvements will be necessary?
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What Does the Customer Really Need?
v What “service level” does the customer need? Ø Desired response or turnaround time Ø Expected quality level of the output
v What is the demand for the process? Ø Expected demand rate Ø Expected variation in the demand rate Ø Required resources to meet demand rate(s)
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What Steps Create Value and Which are Waste?
v Consider the objective(s) for the value stream re-design & the response to the first question Ø Focus on the key wastes that are obstacles to
those objectives – don’t focus on all the wastes
It’s about selecting the ‘right’ wastes to address “Quality not quantity”
Focused improvement rather than ‘drive by’
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IN
Process 1 Process 2 IN
Process 3 Processes 1,2 & 3 versus
How Can We Flow Work with Few Interruptions?
IN
Process 1 Process 2 IN
Process 3 Processes 1,2 & 3 versus
‘Concurrent’ or ‘parallel’ processing is another approach to flow
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Important: Eliminate all reasons to “batch”!
Discipline to flexible processing!
No Good
Better: Every Type Every Day
Paperwork Processing
Monday 40 A Tuesday 10 A, 30 B Wednesday 20 B, 20 C Thursday 40 C Friday 20 C, 20 A
Monday: 14 A, 10 B, 16 C
Smaller Batches of Work = Doing Things More Frequently
Even Better: Every Type Every Hour
8AM: 3A, 2B, 3C 9AM: 4A, 2B, 2C
Why such a “routine”?
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How Will Interruptions in the Flow be Controlled?
INProcess A / B / C Process D / E / F
Ø Elements of every Pull System l Visibility of a queue of work l Limits defined for a queue (standard work-in-
process) l Defined rules for the queue when the limits are met l Use of visual signals that are worker managed
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How Will Interruptions in the Flow be Controlled?
v How will work be prioritized? Ø Examples:
l Enhanced decision making tools (e.g. governing the release of work)
l Define desired sequence (e.g. FIFO, due date)
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How Will Workload and/or Activities be Leveled?
v Does the “volume” (e.g. demand variation) impact the system in any way? Ø Example: Month-end phenomena
v Does the “mix” (e.g. order type) impact the ability of the system to flow, or impact the responsiveness of particular steps in any way? Ø Example: Rush vs. Standard Orders
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How will we manage the new process?
v Changing the workflow is insufficient, the manner by which we manage it must also change Ø What frequency will we review performance of the
process? Ø By what visual means will performance be
monitored? Ø How will we engage team members in the
management and improvement of the process?
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What Process Improvements Will Be Necessary?
v Identify all process improvements that will be necessary to implement the future state
Standard Work
Paperwork Redesign
Change Authority Levels
Eliminate Hand-offs
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Achieving the Future State
v Learning your way to the future state Ø The future state is not ‘cast in stone’ Ø Achieving the future state represents a series of
‘experiments’ and PDCA cycles Ø Based on what has been learned, the future state
and the implementation plan will be revised accordingly
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Cross Train
Sales Check-list Office
Cell
Establish FIFO Lanes
Standard Work
Where to begin?!?!
Achieving the Future State
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Prioritizing Office & Service Kaizens
v Eliminate NVA steps first that don’t require new IT efforts
v Address information quality issues first v Establish standard work to reduce variability v Implement flow (e.g. reduce hand-offs) v Simplify steps that require minimal IT effort (e.g.
minimize transactions entering and within the Value Stream)
v Implement IT solutions (e.g. e-business) v Identify “loops”, as appropriate
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v Value Stream Mapping when properly used is a powerful improvement methodology Ø Is an ‘enabling’ tool (to apply Lean Thinking) Ø Is an excellent collaboration tool Ø Can provide breakthrough results
Summary
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Contact Information
Ø Website: www.cma4results.com Ø Email: [email protected] Ø Twitter: @DrewLocher
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For more about lean and value stream mapping, be sure to check out the 2017 AME International Conference in Boston this fall! For more information, visit the #AMEBoston website, www.ame.org/boston.