10 Value Stream Mapping essentials
Value stream mapping has attracted huge interest from lean practitioners and business improvement specialists. For some it seems that it’s a dark and mysterious art – a panacea or cure all.
However, you’ll be pleased to know Value stream mapping is not rocket science – given some time and practice anyone can do it.
The big Value Stream Mapping secret: It’s easy!
Before we get to the list of must haves for Value Stream Mapping – let me explain what I mean when I say that it isn’t rocket science – like any methodology Value Stream Mapping has certain processes and steps to follow to produce the desired result – Information can be obtained such as this Value stream mapping guide or these Example Value stream maps - the most important thing to remember is that these steps can be learned.
To help you out on your Value stream mapping quest there are books, software and case studies that will be of use. Remember that you are not alone – there’s a heap of resources out there to help you.
Heres our list of Value stream mapping essential elements
1/ Information Flow – At the heart of VSM is the mapping of the flow of information
2/ Material Flow – As well as information the other crucial element is the flow of material.
3/ Customers – capture the customer and its interface
4/ Suppliers – Capture the suppliers and the flow of material from them
5/ Lead Time – Capture the lead time or waiting time between each process activity
6/ Value Add time – Capture the time spent adding value to the product by each step of the process
7/ Activity – capture each activity step in the process
8/ Materials – capture the levels of materials used/held at each activity stage.
9/ Resources – capture the resources used at each activity step
10/ Transportation – capture the movement of materials between steps, customers and suppliers.
What is Kanban
Kanban is a lean concept, which originated in the Japanese automotive industry (Toyota to be precise), and is often associated with just in time production methods.
At its heart Kanban is a signaling system used to signify the need for material. The system traditionally uses cards to signal need. (Kanban is not limited to using cards though and other items are sometimes used). A kanban often utilizes a multi-bin system where one bin is placed in the production line – one is placed in the stores and another placed at the supplier.
Kanbans work by using an item such as a Kanban card to trigger replenishment. Stock is placed in a storage area or bin. When stock runs out the card is sent to the store or warehouse acting as a replenishment request. In turn the card from the now empty store bin is forwarded to the supplier. Thus an effective Kanban system can keep a steady flow of materials providing the correct amount of stock when required.
Targeting excess inventory with lean
Inventory can be one of the major costs for many businesses and optimizing stock levels often becomes a primary objective. Business improvement initiatives such as lean or six sigma are often utilized in this task as their toolset is aligned with mitigating many of the causes such as:
• Variability in lead time
• Variability in demand
• Inaccurate forecasting
• Obsolesence
• Poor quality
Methodologies such as DMAIC are ideally suited to solving these problems as they encourage the business to be both analytical in their approach whilst looking for standardization.
Improvement programs in this are typically focus on internal processes and management and also the role of the supply chain.
The focus on internal activity is typically on improvements in forecasting (better understanding consumption rates and supplier lead time) this can facilitate more accurate stockholdings ensuring that they are more closely aligned with customer requirement.
Another common activity is to work with suppliers on root cause analysis on problems with lead time. All too often internal problems are then carried over into the supplier base causing lead time issues (for example providing inaccurate specifications or unrealistic delivery requirements).
Whilst improvement activity often interfaces with supply chain in a manufacturing environment (through the introduction of Kanbans for example), it also has a role to play where supply chain is the primary focus with many of the tools and methods being applicable.
10 reasons why balanced scorecards rock
A balanced scorecard forms part of a performance management system and consolidates key organizational KPI’s. Scorecards traditionally map four areas of business performance
• Financial
• Process
• Customers
• Learning and Growth
Working on the basis that financial measures are not sufficient in their own right to manage a business – scorecards aim to bridge the gap between an organizations strategy and operational performance. More than a jumble of metrics, measures are carefully selected to help define a businesses performance. Scorecards can radically improve the visibility of a businesses execution.
A correctly constructed balanced scorecard can:
1/ Help align strategy with the organization
2/ Drive improvement through highlighting areas of inefficiency and waste
3/ Ensure strategy and decision making are supported with fact
4/ Facilitate the ongoing monitoring of business initiatives.
5/ Link financial results with operational performance
6/ Bring together short and long term objectives
7/ Prioritize issues and associated decision making
8/ Show the relationship between employee performance and business success
9/ Underpins accountability of operational management
10/ Provides feedback to executives that strategy is working
What is a balanced scorecard
A balanced scorecard is a combination of measures into a consolidated view of business performance. This consolidated view is then used to measure performance against business objectives.
Balanced scorecards have been around since the early 1990’s and have become an increasingly popular form of performance indicator. They can take various guises and whilst there are no hard and fast rules they generally contain measures covering
• Financials
• Customers
• Processes
• Growth
Within each section a number of measures can be included, these depend on the prevailing issues within the business. The scorecard is then graphically portrayed on one “report”.
A number of software packages are available to facilitate the creation of business scorecards and business intelligence systems increasingly include support for scorecards or consolidated views (see www.xcelsius.com for example).
6 tips for first time Value stream mapping success
Value stream mapping is a process mapping tool used for capturing and mapping the flows of information and materials through an organization. It’s a great tool for right at the start of an improvement project when your trying to get to grips with the current business situation. While value stream mapping can be a little daunting for first timers improvement guru’s can follow our top ten list of tips to make life a little easier. Got some you’d like to share – use the comments below! Here’s the tips:-
1/ Map using pencil and paper
These days there are lots of value stream mapping software available but for first timers who may not be familiar with the software its just one extra thing to learn – remember excellent results can be obtained through traditional pencil and paper, just remember to stick with a “house style” and traditional value stream mapping icons.
2/ Don’t forget the data
Unlike other types of process mapping – value stream mapping is quite data intensive – don’t forget that you’ll need to capture process data along the way such as inventory, cycle time etc, make sure that you consider how you’ll capture your data – for example you may want to consider a data collection plan – or nominating a member of your team for the task.
3/ Take your time
There is a lot to think about when undertaking value stream mapping for the first time so be sure not to rush – create a check list of items that should be included in the map and cross them off as you go along – check out Value stream mapping guide for more information on how to run a VSM program.
4/ Don’t be shy – visit the workplace
A key element of Value stream mapping is accuracy – an incorrect VSM can lead to wrong conclusions being drawn and can waste valuable time of improvement teams. Spend time at the workface to ensure that what you map is accurate.
5/ Validate
When you think you’ve got your map complete – validate it with your stakeholders – ensure its representative of what actually happens – use this to iron out any problems with the map. Don’t take this stage for granted – get it wrong and you can find your improvement suggestions shot down in flames as stakeholders rubbish your map!
6/ Produce the as is then focus on the to be
Don’t be tempted to produce the “as is” and “to be” maps at the same time – we can all see improvements but capture them (perhaps in a list) and go back to producing your “as is” map. Remember that you may not have the whole picture until the “as is” is complete.
5 Lean tips to superpower your business
Businesses can be complex things – lets face it no business ever runs completely smoothly and problems can come in all shapes and sizes from defects caused by manufacturing failures to inefficient business processes resulting in higher costs and lower margins.
The good news is that improving your business doesn’t have to be complicated, there’s a variety of simple lean tools and concepts that are both accessible and easy to implement – all of which can contribute to improving your businesses
In the list below we list 5 top tips from the world of lean which can help your business thrive - got more - add your tips in our comments section below.
1. Capture your processes with Value Stream Mapping
Value stream mapping is a process mapping tool that can be used to evaluate and understand the flow of information and materials within your organization. Its equally suited to manufacturing and service organizations and through its use of data can provide an accurate picture of the state of your business, showing you the good and the bad - an ideal start point for any lean programme.
2. Reduce the 7 Wastes
The seven wastes are a concept of categorizing business inefficiencies. By analyzing your business processes and targeting reduction within each category of waste, efficiency gains can be achieved and your business streamlined.
3. Utilize Poka Yoke
Eradicating errors is crucial to any business. Errors cost money and impact customer satisfaction. By introducing simple measures to trap and stop errors organizations can not only save costs but also become more efficient. Poka Yoke is the concept of error proofing through using visual aids – and whats more its quick and easy to implement.
4. 5S
With the premise that everything in the workplace has it’s place – 5S is a business tool that aims to install and maintain a clean and standardized workplace, ensuring that only when things are required are they bought into the workarea. By improving the workspace the business lays a foundation for future improvement programs.
5. Implement a Pull System
Pull systems such as Kanbans help reduce the number of items in work in progress. The various stages of the production process aim to pull resources along the production line so for example as inventory is consumed just enough inventory is reprovisioned to meet the task in hand. Pull systems also aim to eliminate variation in lead times and batch sizes.
What is Kano Analysis
Kano Analysis is an analytical method used for segmenting customer requirements according to various rules and expectations.
Kano Analysis was developed by Professor Noriaki Kano in the 1980’s and classifies customer preferences into the following catagories
• Attractive
• One-Dimensional
• Must-Be
• Indifferent
• Reverse
Customer preferences can be analyzed and segmented according to the customers are either dissatisfied, satisfied or delighted. Results can then be charted into Kano Model
Using Kano analysis to unlock customer requirements
Understanding customer behavior and requirements can be challenging however when undertaking business improvement projects listening too and understanding the voice of the customer is a must.
Luckily there are a number of methodologies out there that can help you in this task – one of those is Kano Analysis. Kano analysis is a methodology used to measure which customer requirements are important to customer behavior and customer satisfaction, and it can help you understand how and why your customers value your product.
Customer satisfaction surveys, workshops and interviews may generate large amounts of data about your organization – however not all customer requirements are equal, indeed some may apply to certain populations or have different importance. The Kano model focuses on differentiating product features, classifying customer requirements into categories based on 3 themes
• Basic requirements – these are expected, if these are absent from your product the customer will be dissatisfied
• Performance levels – variables that can impact customer satisfaction (e.g. price, ease of use).
• Excitement needs – latent customer requirements which may or may not be currently in the product but if present would wow the customer.
Perhaps the hardest category is that of Excitement needs – by their very nature they may not currently be in the product but may represent a crucial proposition if included – study voice of customer data carefully for any areas that may fall into this category.
Ultimately Kano Analysis is an excellent method for formulating ideas on customer needs. The three themes can help decipher customer requirements, formulate critical requirements and help prioritize needs and business outputs.
How to write a Project Charter
When commencing a project its important for the project team to establish a mandate for the project that they are instigating – by articulating the information around the project they can communicate to key stakeholders that they have clear objectives, a mandate from senior management and have thought through issues and constraints.
A Project Charter provides an ideal vessel for capturing and storing this information whilst acting as a medium for communicating to stakeholders.
What is a Project Charter
A project charter provides a start point for the project – demonstrating to senior managers and key stakeholders the nature of the project, its goals and objectives. It should be distributed to applicable senior stakeholders and should be approved (or written by) the Project sponsor.
A Project charter helps establish the framework for the project methodology and acts a point to capture key information and controls. Whilst the project charter is a one off document that is started at the outset, and precedes other documentation, it may be updated at various stages within the project to take account for new information.
What should go in a Project Charter?
Whilst there is no hard and fast rule – the following should be considered
- Problem statement – What is the problem that the project will fix.
- Goals – What will the project acheive
- Project Scope – What are the boundaries that the project will operate within
- High Level Business Case
- Risk Analysis
- Constraints and assumptions
- Key Stakeholders
- Project Organization
- High level Project plan
