Wednesday, January 9, 2008

Step 2 - Value Stream Mapping.

In Step 1 we defined and prioritized specific focus areas to give major breakthrough using a road map. In Step 2, we start to change and improve each of these areas identified along the route. It’s necessary to ask more questions.

  • How can we change this area?
  • Which activity do we improve first?
  • What resources do we need?

Until you can answer these three questions, you can’t be sure you’re improving things to deliver the best results. Many organizations use a shot gun approach when deciding what to improve first. They don’t back up their decision making with data, instead they use opinion. When you’re taking employees away from their jobs to be involved in an improvement project, it’s very important to know their time is value added and not being wasted. The process we use to identify and prioritize any opportunities for improvement is “Value Stream Mapping”. It’s a process for demonstrating graphically how materials, products and information flow between suppliers, through your business operations and your customers.

Value Stream Mapping allows you to view an organization from several vantage points. It’s like looking down at the business from high up i.e. 10,000 feet. As look down at the structures, you notice some problems areas, so you move down to 5,000 feet to get a closer look. Then you move down to 1,000 feet, and so on. As you drop down lower you lose the big picture view but see a smaller part of the organization and in more detail.

  1. Choose processes identified and prioritized in the Strategy Deployment Plan. Start by drawing a high level map of your company processes. Show the main departments and their activities. Try to define as many value and non-value activities with supporting data as possible. Identify any constraints throughout the process and prioritize them based on the level of impact to achieve breakthrough.
  2. Draw a Current State Map of the process showing details of all value and non-value added activities. Collect process data to show inputs and outputs for each step of the operation. Typical types of data collected are; number of people, process quality, production throughput, inventory levels, and equipment uptime.
  3. Using the 8 wastes as a guide, identify all non-value added activities. List all of the potential opportunities for improvement and prioritize them based on cost to implement, impact to the bottom line and the level of effort required to implement them. Start with the easy changes first, then slowly work up to the more difficult ones as you gain more experience. Next, you will convert your Current State Map into a Future State Map by making all the changes necessary to improve the process.
  4. Create a Value Stream implementation plan. Determine the specific actions required to implement any of these improvements and determine who is responsible for each of these actions and the date they will be completed.

Remember, Value Stream Mapping is a journey of discovery, it is never ending. You must be open to change and willing to remain objective when uncovering the hidden waste as you work through this process.
"A good traveler has no fixed plans and is not intent on arriving. A journey of a thousand miles must begin with a single step." - Lao Tzu

Step 1 - Strategy Deployment:

An explanation of Strategy Deployment is to think of your company as being on a journey toward a specific destination. When its founders created the company they had a certain vision in mind. Their vision defined how the company would be organized, who would manage it, what type of customers it would serve and where they would take the business in the future. Hopefully it’s heading in the same direction they wanted it to go. Strategy Deployment helps to define the destination and how to get there! We start the process by creating a road map to chart the journey, clearly identify any potential problems and define the best route for your business to reach its destination.

Everyone in the organization needs to understand the task at hand and what’s expected of them. It’s of the utmost importance to have total alignment between all sectors of an organization. You will start the process by asking questions. Where does the company need to be in the next 3 to 5 years? Where does your company need to focus first to achieve major breakthrough? Answer these questions and you’ll discover a pot of gold. Yes, that’s right, gold, and its hidden away deep inside your business processes. I know what question you’re asking at this point. How can I know this for sure? Well, because I have experienced it many times. It’s really simple, if your business paradigm had allowed you to see the amount of money that’s wasted by maintaining non-value activities hidden inside your business model, you would have removed them long ago. You need to breakthrough your current business paradigm and create a new one that embraces positive change.

Strategy Deployment is a great tool to help you create and manage change by strategically aligning your Continuous Process Improvement process with your business goals and objectives. By doing this you give a clear message, purpose and create leverage for all levels of management to get fully engaged in the change process. If a CPI implementation is not aligned with business goals and objectives it will be very difficult to sustain it.

Leadership has five obligations to manage effectively:

  1. To clearly define goals and expectations to all employees.
  2. To make available the necessary resources for everyone to do their job. People can only become successful at work, when they are given the best training, right equipment, and are allocated the correct amount of time to perform a task, etc.
  3. To remove barriers, allowing employees to stay focused on the task at hand. It’s not value added for employees to get embroiled in political or personal agendas which forces them to take time away from their job or involvement in the improvement process.
  4. To create and maintain a system for tracking and trending critical process data.
  5. To create a system for reporting Key Performance Metrics (KPM’s) to give feedback to all employees.

If any one of these five obligations is not followed, then Strategy Deployment or Lean Implementation will be a much more difficult process.
Strategy Deployment utilizes the Deming or PDCA Cycle ( Plan. Do, Check, Act). This is very helpful to ensure all necessary aspects have been incorporated into the Strategy Deployment process. The model itself is a relatively simple concept; however it’s much more difficult in its application:

Plan: Identify focus areas, prioritize improvements, create an implementation plan
Do: Implement the plan. Follow the requirements of the plan.
Check: Gather feedback/data from the process to determine if the plan is working.
Act: Plan not working. Identify corrective action and change the plan.

The cycle is repeated over and over to improve, standardize and sustain a process.

“If you don’t know where you’re going, any road will take you there.” – Lewis Carroll, Alice in Wonderland.