the complete lean enterprise: value stream mapping for office and services

Change Management Associates

The Complete Lean Enterprise Value Stream Mapping for Office & Services


§  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?


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


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


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.


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


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?


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


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


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


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


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


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


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?....”


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?


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)


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’


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


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”?


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


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)


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


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?


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


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


Cross Train

Sales Check-list Office

Cell

Establish FIFO Lanes

Standard Work

Where to begin?!?!

Achieving the Future State


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


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


Contact Information

Ø Website: www.cma4results.com Ø Email: [email protected] Ø Twitter: @DrewLocher

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.