Value Stream Mapping: Get To Know Your Process

Posted on28. Apr, 2009 by carolesf.

Q:  When you start a project of business process improvement, what’s one of your most useful and versatile tools? 
A:  Value Stream Mapping. 

Value Stream Mapping

is a tool of Lean Thinking which enables you to identify the activities of a business process and their associated costs.  VSM is a great way to create and communicate process changes, and hence is a key component of any change management strategy.  Mapping the current process is usually applied during the “Measure” phase of DMAIC in Lean Six Sigma.  Mapping the desired future process is part of the “Improve” phase. 

The most basic philosophy of Lean Thinking is “Add only value — that the customer is willing to pay for.”  To achieve this, one of the most important activities you can undertake is to map out your process and discover which steps waste time and/or money.  In Value Stream Mapping, you’ll identify every activity currently required to produce your company’s product or service to the customer.  Each activity must then be assessed as to which of the following categories it falls into: 

(1) Value-add:  Activities which are required to produce what your customer wants to buy.  These are activities which the customer would gladly pay for, if they knew you were doing them behind the scenes.  By all means try to control these costs, but never at the risk of reducing the product’s value in the eyes of the customer.

(2) Non-Value-add:  These are activities which the customer would not want to pay for, but which are required for legal, regulatory, or business reasons.  These also include supporting administrative functions such as HR and Accounting.  They may not directly lead to your customer’s desired product, but just try to run your business without them!  Certainly try to reduce these costs, but you will not be able to eliminate them outright.

(3) Waste:  These are activities which the customer would not want to pay for, and no one else should either.  In Lean Thinking Generates Value — And Profits, I give examples of the “Seven Deadly Wastes”.  Eliminate these immediately if not sooner. 

Makes a lot of sense, but if it were easy, everyone would do it, right?  So how is Value Stream Mapping done?

(1) Start by mapping the existing process.  Map not only materials flow, but also paper flow and information flow.  Such maps often seem complicated and even intimidating at first glance, but once you get to know what the different symbols mean, it will start to make a lot of sense. 

(2) Assess the current process in terms of Value-add, Non-value-add, and Waste activities.  (In some cases, Non-value-add and Waste are binned together.)

(3) Develop a map of the streamlined future process, eliminating wasteful activities.  This is where the art and science come in, and a Lean Six Sigma Black Belt can help.  Takt time, kaizen, kanban, and all those other concepts and techniques of Lean can be used individually or in combination to help you achieve this step. 

(4) Implement the future map. 

Value Stream Mapping is one of the key inputs to assessing how to streamline a given process.  Often once you have identified the costs and binned them into Value-add, Non-value-add, and Waste categories, the necessary process changes can seem to leap right off your computer monitor.  If you know the cost of the original process, and the cost of the streamlined process, the difference is the cost savings directly attributable to your project team’s efforts.

And that makes Value Stream Mapping a highly “valuable” tool for your career, too.

Welcome back to Lean Six Sigma Source! Thanks for your continued support.

Continue Reading

Lean Office: The Next Frontier

Posted on26. Apr, 2009 by carolesf.

Okay, you get the whole Lean Manufacturing thing.  But what the heck is Lean Office? 

The Lean Office Concept

Lean Manufacturing is starting to make sense to you.  Though a part of you really wants to hang onto that safety margin of inventory “just in case,” your data-driven brain accepts that Inventory Equals Waste.  Fine.  You understand the value of Lean Thinking as it relates directly to what you sell, even if that’s a service and not a widget.

But can you really apply Lean Thinking to your company’s administrative functions?  HR?  Accounts Payable?  IT? 

None of these departments are directly related to producing what your customers want to buy, yet it’s difficult to imagine how a modern company could operate without them.  It’s even more challenging to imagine how to observe, map, and quantify the value streams associated with them.  And changing these departments will be more difficult still, since these areas are even more strongly influenced by local company culture and “the human factor” than is the manufacturing environment.

So how does Lean Office work?  First of all, let’s be clear that Lean Office is not about cutting people or departments.  It’s about getting the most value out of the people and departments you have. 

The main idea is the same as in all Lean efforts:  Cutting out wasted effort or time. 

In the office environment, that could be the time files or other work items spend sitting around waiting for someone to work on them.  That’s the entire process of getting useless rubber-stamp signatures for some routine purchase.  It’s having a staff meeting on Wednesday mornings just because there’s always been a staff meeting on Wednesday mornings — even though half the time no agenda is prepared, the boss is late, and there aren’t even any doughnuts. 

Lean Office follows the same principles as Lean Manufacturing, but you may have to get a little creative to figure out what some of these terms mean in the office environment.

For instance, in an Accounts Payable office, the “customer” could actually be seen as the supplier who is waiting to be paid, the “product” is invoices, and the goal of “going Lean” would be to reduce the number of days an invoice goes unpaid. 

In an HR department, the “customers” are other departments internal to the company; the “product” is willing and qualified workers; and the metric for success of your Lean efforts might be to reduce the number of days an open position goes unfilled.

To succeed at Lean Office, you need to map the current process in terms of flow.  How does paper flow (or the equivalent in electronic forms)?   How does information flow, and is it the same as the paper flow or not?  (If not, think hard about the value of some of those forms.)  Map the value-add and non-value-add costs. 

Once again, the Lean principles are:

(1) Specify value — as the customer sees it, however the customer is defined for your function.

(2) Map the value stream, identifying value-add and non-value-add costs — and minimize the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Don’t do work until someone has asked for it.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

Now look around your workspace.  Can you put your hands on any piece of information you need in under one minute?  Could somebody else walking into your office find the needed info in under one minute if you weren’t there?  

If not, then we apply the 5S process to HQ: Sort, Straighten, Sweep, Standardize, and Sustain.  The goal is, “A place for everything and everything in its place.”  

The fact is, if you’ve already achieved Lean production (whether of a service or a widget), there’s no need to let flabby practices in the office keep you from world domination.  You owe it to yourself to give Lean Office your best shot.

Continue Reading