These are my notes on Karen Martin and Mike Osterling's Value Stream Mapping.

The book explains the benefits of Value Stream Mapping and goes in detail about how to run it.

If you can't describe what you are doing as a process, you don't know what you're doing.
Edwards Deming

Key Insights

• Value Stream Mapping: most powerful organization transformation tool.
• Benefits of value stream mapping:
  1. Make work visible.
  2. Clear connection from every function to customer.
  3. Holistic systems thinking view.
     • Help a restructuring and alignment to deliver customer value.
  4. Simplification tool:
     • Easy to understand, easier to change.
  5. Practical means to drive improvement.
  6. Help onboarding.
• The process of value mapping (as opposed to the product) is what carries the power to instill transformational mindsets.
• Value stream mapping when:
  • Margins erode.
  • New competition or market share loss.
  • Want to increase company's market value.
  • Creating new products.
  • To explore pro/cons of centralization and decentralization.
• 3 consecutive days: deep focus.
• Transforming a value stream often produces a fair amount of organizational disruption.
• Must socialize the current state, future state and transformation plans.
  • Socialize: talk, explain, let people ask, discuss.
• 4 different versions of a process:
  • How the manager believes it operates.
  • How it is supposed to operate.
  • How it really operates.
  • How it could operate.
• In heavily siloed orgs, steepest lead time reductions are achieved by reducing hand offs. It requires:
  • Cross-training.
  • Robust process management systems.
• Don't improve a value stream that delivers a product your customers dont want.
• Focusing on Lead Time reduction forces problems to surface.
• Designing an improved future state map needs thick skin, intestinal fortitude, and a hefty dose of courage.
• The authority for determining how the improvement will be designed and implemented is given to the people who does the work being improved.
• Use the word "countermeasures" instead of "solution": improvements are temporary countermeasures, not permanent solutions.
• In mature continuous improvement orgs, the value steam owner is responsible for the P&L, often the value stream is structured as a business unit, that borrows, leases or purchases shared services from other parts of the org.
• VSM is underutilized to align people, visualize problems, prioritize improvements, increase performance.
• VSM helps build into the leadership team the habits:
  • Going to gemba.
  • Tying improvements to business needs, strategy and annual goals.
  • True collaboration aligned by a common goal amongst departments.
  • Assessing performance using standard time and quality metrics.

TOC

• Chapter 1 - Value Stream Management
• Chapter 2 - Setting the Stage and Enabling Success
• Chapter 3 - Understanding the Current State
• Chapter 4 - Designing the Future State
• Chapter 5 - Developing the Transformation Plan
• Chapter 6 - Achieving and Sustaining Transformation

Chapter 1 - Value Stream Management

• Value Stream: sequence of activities an org undertakes to deliver on a customer request.
• Includes activities done by outside parties or the customer itself.
• Most value streams are highly cross-functional.
• Extended value stream: includes activities before the customer order and after the delivery.
• Support value stream: when the customer is internal.
• Value Stream Mapping: most powerful organization transformation tool.
• From Toyota.
• Difference with process maps:
  1. Provide effective means to establish a strategic direction for making improvements:
     • Because you see the whole picture.
     • Avoid suboptimization.
     • Macro level processes, not detailed steps.
  2. Cyclical view places the customer in the centre.
  3. Deepens org understanding:
     • Distills complexity.
     • Can be understood by everybody.
     • Takes days to create, instead of weeks.
  4. Data driven.
• Benefits of value stream mapping:
  1. Make work visible.
  2. Clear connection from every function to customer.
  3. Holistic system-Thinking view.
     • Help a restructuring and alignment to deliver customer value.
  4. Simplification tool:
     • Easy to understand, easier to change.
  5. Practical means to drive improvement.
  6. Help onboarding.

If you can't describe what you are doing as a process, you don't know what you're doing.
Edwards Deming

• The process of value mapping (as opposed to the product) is what carries the power to instill transformational mindsets.
• Common failings:
  1. Using it only for improvement work.
  2. Only for tactical improvements. Cues:
     • Value stream map has >30 steps.
     • Formatted in swim lanes.
     • Missing information flows.
  3. Creating them during a Kaizen Event.
     • Should happen before.
  4. Creating maps but taking no action.
  5. Mapping with an inappropriate team or no team at all.
     • Team must have the authority to make changes.
  6. No metrics.
• Where to begin?
  • Start with Strategy Deployment:
    • Method for defining and gaining consensus about priorities needed to realize an organization's business goals.
    • The value stream to improve will be obvious.
    • Recommended books:
      • Getting the right things done.
      • Hoshin Kanri For The Lean Enterprise.
      • The Outstanding Organization.
  • Value stream mapping when:
    • Margins erode.
    • New competition or market share loss.
    • Want to increase company's market value.
    • When solving a problem with A3 management, a workflow is needed.
    • Creating new products.
    • To explore pro/cons of centralization and decentralization.

Chapter 2 - Setting the Stage and Enabling Success

• Structure:
  
  

• 3 consecutive days: deep focus.

• Prepare phase:

  • Educate the mapping team and leaders on:
    • Lean principles.
    • Value stream mapping:
      • Purpose.
      • Benefits.
      • How is done.
      • Effect in org.
      • Daily briefing.
      • Roles.
  • The degree of value stream mapping success is highly dependent on the amount of up front planning, reflected in a charter.
  • Transforming a value stream often produces a fair amount of organizational disruption.

• Charter:

  • Download from TKMG website.
  • Planning.
  • Communicating.
  • Aligning.
  • Building consensus.

• Charter sections:

  1. Scope:
     • Specific conditions:
       • Proper scoping is critical when value stream mapping in knowledge work environments, because there is significant process variation exists within a single product family.
       • In many cases specific conditions may represent less than 25% of the value stream volume, but the future state design applies to 75% or more.
       • There is no much variation at the macro level as we think.
       • Dont be afraid to narrow your scope beyond your comfort level.
     • First/Last step:
       • Use verb-plus-noun.
     • Improvement time frame:
       • Recommendation: Fix deadline (3-6 months) and scope future state to fit it.
  2. Current state problems and business needs:
     • Clarity is a significant lever for building consensus and driving change.
     • Reasons for change. Sales pitch.
     • Same for "Benefits to Customers" and "Benefits to Business".
  3. Measurable Target Condition:
     • From X to Y.
     • Also the percentage improvement that they represent (is it a 5% improvement or a 100% one?).
  4. Accountable Parties:
     • Mandatory: Executive sponsor + Facilitator.
     • Executive sponsor:
       • Mandatory.
       • Person who oversees the entire value stream.
       • Who is ultimately accountable for the results.
       • May not be on the team, but at minimum:
         • Active on development of charter.
         • Attend briefings.
         • Monitor progress on transformation plan.
     • Facilitator:
       • Mandatory
       • Key on the success.
       • Teacher, time keeper, change agent, provocateur.
       • Comfortable with conflict, good listener.
       • Should not oversee nor work in the value stream.
     • Briefing attendees:
       • Get buy-in from support functions.
  5. Mapping team:
     • As small as possible, but all functions must be represented.
     • Typical 5-7 people, never more than 10.
     • Mostly leadership positions:
       • So they can influence/authorize future state.
       • Senior leaders understand the big picture better, which can lead to more innovative suggestions.

• Not communicate but socialize the value stream mapping charter:

  • Affected leadership.
  • Mapping team.
  • Workers in are that will be included:
    • Need a safe environment to be honest about current state.

• Data to collect:

  • Current and forecasted customer demand (1-2 years).
  • Quality reports.

Chapter 3 - Understanding the Current State

• Purpose of value stream map: consensus building to accelerate improvements.
• Represents:
  1. How work flows.
  2. Who does the work.
  3. How the value stream is performing on the day the map is created.
• If value stream has high variations, make note of variations.
• 4 different versions:
  • How the manager believes it operates.
  • How it is supposed to operate.
  • How it really operates.
  • How it could operate.
• Activity Kickoff - Page 52.
  • Everybody introduces themselves where they stand in the map and state their internal/external providers/customers.
  • Ensure expectations are aligned with charter.
  • Charter is not open for debate.
  • Rules of engagement.
• Value stream walks:
  • Going to the gemba.
  • Objective:
    • See, feel, hear, smell the current condition.
    • Understand physical separation between producer and consumer.
    • Workers more open, comfortable, and honest in their own environment.
    • Show respect for workers.
  • Do it twice the same day.
  • Second time do it backwards:
    • Different perspective.
    • Easier to see "pull" design opportunities.
  • The whole team together.
• Types of work:
  1. Value adding.
  2. Necessary non-value-adding.
  3. Unnecessary non-value-adding.
• Documenting Current State. Steps:
  1. Walk the Value Stream:
     • Write improvement ideas in a list and avoid discussing them.
  2. Map Layout:
     • Focus on basic:
       • What is done.
       • Who does it.
       • What order.
  3. Walk the Value Stream (again):
     • Performance of value stream.
     • Find barriers to flow.
  4. Add Map details.
  5. Summarize the map.
• Map Layout:
  • Customer Post-it in top center.
  • If there is an external supplier, place the customer on top right and supplier in top left.
  • Agree on process blocks of the value stream:
    • Between 5-15.
    • Less than 5: not enough details.
    • More than 15: too detailed (likely) or value stream mapping too broad.
    • New process block when work stops flowing, usually due to:
      • Handoff.
      • Work accumulates.
      • Work is only processed at predetermined time intervals.
  • Process should have:
  • Branching is ok if there is just one/two process difference.
  • Parallel work is also ok.
  • Number the process blocks sequentially for easy reference.
• Key performance metrics for each process block:
  • Process time (PT):
    • Time to do one unit of work.
    • If work is batched, one batch.
    • Includes:
      • "Talk time" -- meetings.
      • Read and think time.
    • Record separately "machine time" if it is significant.
    • Do not include waiting or delays.
    • It is the time it would take to do the work if the process workers could work on one item uninterrupted.
    • If PT varies wildly use median, not mean.
    • Opt for accuracy over precision.
  • Lead Time (LT):
    • Queue time + delays + PT.
    • Use business hours (typically 8 hours per day).
  • Percent Complete and Accurate (%CA):
    • Quality.
    • Incorrect, incomplete or unclear information from upstream.
    • Ask downstream process and place metric in upstream one.
• Additional information in each process block:
  • WIP:
    • In-box + In-process + Out-box.
    • Make note of oldest item in queue.
  • Number of people.
  • Number of hours worked.
  • Process effectiveness.
  • Work volume/demand rate.
  • Work trigger.
• Barriers to Flow:
  • Actions or conditions that inhibit the uninterrupted progression of work.
  • Do not include high LT or low %CA.
  • Examples:
    • Batching:
      • Note size and frequency.
      • Not all batching is bad.
    • System downtime.
    • Shared resources:
      • % of time staff is not available.
    • Task switching and interruptions.
    • Prioritization rules:
      • Conflicting or differing rules.
• Map Details:
  • Place WIP to the left of the process block. Use inbox icon.
  • Connect processes with dashed push arrows or pull withdraw arrows.
  • Add IT Systems that connect the processes:
    • Use lightning blot if an automated process that push information to person or other IT System.
• Timeline and Map summary:
  • In parallel processes, pick up the one with the longest lead time.
  • Summary metrics:
    • Total LT.
    • Total PT.
    • Activity Ratio (AR):
      • Degree of flow.
      • Total PT / Total LT * 100.
      • 2-5% is not uncommon.
    • Rolled Percent Complete and Accurate:
      • (%C&A) process 1 * (%C&A) process 2 * ...
      • 1-10% is not uncommon.
      • In parallel paths, include the %C&A of all processes.
    • Total Label Effort:
      • Sum of PT, including all parallel processes.
      • Expressed as either:
        • Total hours.
        • Equivalent FTE (Full time employee).
        • Labor dollars.
      • FTE formula: Total labor PT * # occurrences per year / # available hours per employee per year.
• When you want to include pre-service in the value stream map, then use the layout:
• Common process findings:
  • Loopbacks.
  • Unnecessary hand-offs.
  • Rework due to errors and lack of clarity.
  • Batching.
  • Functions missing or getting involved too early or too late in the process.
  • Redundant activities.
  • High variation in how work is performed.
  • No documented standard work.
  • Excessive inspection (reviews, approval, audits).
  • Overspecialization of staff.
  • Existing technology not fully leveraged.
  • Underutilization of skills.
  • Compliance overkill.
  • Delays due to juggling multiple responsibilities.
  • Push and overburden.

Example from Value Stream Mapping in Office and Service:

Chapter 4 - Designing the Future State

• Facilitator has to shift from "what is" (uncover and analyze) to "what could" (innovate).
• Don't improve a value stream that delivers a product your customers dont want.
• Lean is all about creating flow.
• 3 Overall considerations:
  1. What work should be done.
     • Two ways of eliminating waste:
       1. Eliminate work.
          1. Remove unnecessary non-value-adding activities.
          2. Reduce effort for necessary non-value-adding activities.
          3. Reduce effort on value-adding activities.
          4. In heavily siloed orgs, steepest lead time reductions are achieved by reducing hand offs.
       2. Adding work:
          • When overall process time and lead time are reduced.
          • Temporarily add inspection step to prevent defects reaching customers.
  2. Making that work flow.
     • Key question: what is preventing the lead time from being the same as the process time for each and every process blog?
     • Focusing on Lead Time reduction forces problems to surface.
     • Examples:
       • Apply classic lean countermeasures and improvement work.
       • Address root cause of batches.
       • Shift sequential process to parallel.
       • Combine tasks to reduce hand-offs.
       • Resequence work.
  3. Managing the work to achieve continuously improved performance:
     • How will you determine if the value stream is performing as intended?
     • Who will monitor and mange value stream performance?
     • Each value stream needs 2-5 KPIs.
       • Typical: Quality, cost, delivery, safety, morale.
     • Many process blocks will benefit from their own KPIs.
     • KPIs must be actively managed by the value stream manager.
• Embracing value stream thinking is a mark of an organization that has shifted from siloed thinking (me and my team) to holistic thinking (customer and company).
• Reducing process time will free capacity:
  • Firing people is disrespectful/not lean.
  • Remaining people will have no further interest in improving.
• Future state design kickoff:
  1. Review charter.
  2. Review the current state findings.
  3. Introduce relevant counter measures:
     • Standardizing the work.
     • Build quality at the source.
     • Installing visual management.
     • Pull systems.
     • Batch reduction.
     • Level loading.
     • Work balancing to takt time.
     • Cells and collocation.
     • Work segmentation.
     • Cross-training.
     • Automation.
  4. Avoid advanced techniques until the basics are working.
  5. Most office and service value streams will require more than one value stream map.
• Creating the future state value stream map:
  • Blank sheet that is 30% shorter than the current value map.
  • Place current value map on top of it.
  • Design usually happens organically.
    • Page 116 list some design question to help.
  • Start with what should be done, not how.
    • Include only the process description.
  • Decide which functions will perform the work at each process, and the metrics.
  • Calculate summary metrics and create a table to compare current vs future VSM.
  • Note in the future state the improvements required:
    • Use "kaizen bursts":
      • What, not how.
    • Improvements will need to go through the PDSA cycles.
  • Brief the relevant leadership and key stakeholders.
• Designing an improved state also needs thick skin, intestinal fortitude, and a hefty dose of courage.

Chapter 5 - Developing the Transformation Plan

• Download XLS from TKMG website.
• Living document.
• Near future state so teams are encouraged by its progress.
• To be reviewed regularly.
• Monthly status meeting are not enough for driving execution and making adjustments.
• Elements:
  • Measurable target.
  • Proposed countermeasures:
    • Kaizen bursts.
    • The authority for determining how the improvement will be designed and implemented is given to the people who do the work being improved.
    • Use the word "countermeasures" (instead of "solution") to reflect fluidity.
    • Improvements are temporary countermeasures, not permanent solutions.
  • Execution method:
    • Just-do-its:
      • Small, low risk, easy to test, cheap.
    • Kaizen Event:
      • 2-5 days.
      • Significant planning and careful scoping.
    • Projects:
      • More complex or expensive.
• Owned by the value stream champion.

Chapter 6 - Achieving and Sustaining Transformation

• Must socialize the current state, future state and transformation plans.
  • Socialize: talk, explain, let people ask, discuss.
• Transformation plan reviews:
  • Attendees:
    • Executive sponsor.
    • Value stream champion.
    • Few owners of the improvements.
  • Purpose:
    • Assess progress.
    • Ensure robust PDSA is being used.
    • Address obstacles.
    • Consider shift in plan if new information or condition warrants it.
  • Agenda suggestion in page 143.
  • Sustaining improvement is easy:
    • Plan well.
    • Build consensus.
    • Follow PDSA to the letter.
    • Have strong management system:
      • One person that owns the whole value stream and has the authority to affect it.
      • In mature continuous improvement orgs, this person is responsible for the P&L, often the value stream is structured as a business unit, that borrows, leases or purchases shared services from other parts of the org.
• Recommended one VSM per year for key value streams.
• VSM is underutilized to align people, visualize problems, prioritize improvements, increase performance.
• VSM helps build into the leadership team the habits:
  • Going to gemba.
  • Tying improvements to business needs, strategy and annual goals.
  • True collaboration aligned by a common goal amongst departments.
  • Assessing performance using standard time and quality metrics.