These are the slides for the talk I gave on Tuesday, May 6, 2014 to the Omaha Lean User Group on my new book, Value Stream Mapping (http://www.bitly.com/VSMbk).

1. Value Stream Mapping:
From Tool to Management Practice
Omaha Lean User Group
May 6, 2014

2.  Consultant / Facilitator / Coach: Lean
transformation & business performance
improvement in all industries.
 Teacher: University of California, San Diego
 Author & Speaker:
Karen Martin, President
2
www.ksmartin.com/subscribe
2013 Shingo
Prize winner!

3. © 2014 The Karen Martin Group, Inc.
Wherever there is a request
and a deliverable,
there is a value stream.

4. Value Stream Defined
Value Stream: All of the activities required to transform
a customer request into a good or service.
4
First defined in The Machine That Changed the World,
James Womack, Daniel Jones, & Daniel Roos, 1990.
Process ProcessProcess
Customer
Request
Customer
Receipt

5. Value Stream Mapping’s Roots
• Value
• Value Stream
• Flow
• Pull
• Perfection
1996

6. Work: Degrees of Granularity
Value
Stream
Process Process Process
Step StepStep
6
Macro
Perspective
• Define strategic
direction (“what”)
• Heavy leadership
involvement
• Value Stream
Mapping
Micro
Perspective
• Identify the
tactical “how”
• Heavy frontline
involvement
• Metrics-Based
Process Mapping

7. Value Stream Mapping Progression
Mike Rother &
John Shook, 1999
Beau Keyte &
Drew Locher, 2004
Karen Martin &
Mike Osterling, 2014

8. 8
1
Information
Flow
2
Work Flow
3
Timeline
Basic Current State Value Stream Map: 3 Sections

9. © 2014 The Karen Martin Group, Inc. 9
Customer
1
Process 3
Function E
LT = 0.5 days
PT = 30 mins.
%C&A = 95%
4
4
10 mins.
1 days
120 mins.
2 days
30 mins.
0.5 days Total LT = 3.5 days
Total PT = 160 mins.
Activity Ratio = 9.5%
Rolled %C&A = 89.3%
Process 2
Function C
LT = 2 days
PT = 120 mins.
%C&A = 95%
3
3
ABC Technology, Inc.
Future State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
IT-1 IT-2
5 items
Process 1
Function A
LT = 1 days
PT = 10 mins.
%C&A = 99%
5
2
1 items 10 items
Standard
work
Modified
approvals
IT interface
Cross-
train
Cross-
train
Standard
work
Error
proof
Basic Value Stream Map: Future State

10. Which do you prefer?
OR

11. Example of Value Stream Improvement:
You Can Achieve HUGE Gains
Metric Current State
Projected
Future State
Projected %
Improvement
Lead Time
(PO to shipping)
17 months 7.5 months 56%
Process Time 600 hours 450 hours 25% (22 FTEs)
Rolled % Complete &
Accurate
0% 21% > 2,000%
On-time delivery 13% 90% 592%
# Internally-produced
Change Orders
25/project 12/project 52%
Freed cash flow $25M per year

12. Proper Value Stream Mapping
Builds Organizational Muscles

13. © 2014 The Karen Martin Group, Inc. 13
Common Failing:
Approaching VSM Mechanistically

14. Value Stream Maps:
Strategy Before Tactics
Where am I?
Where do I want
to go?
I-80 option I-40 option I-70 option
Which route
should I take?
? ?
?

15. Value Stream
Mapping is a Strategic,
Leadership-Heavy
Activity

16. Who? Accountability Practice / Tool
Sr. Leaders “What has to happen” Hoshin Planning,
Value Stream
Mapping
Frontlines “How it will happen” Kaizen Events,
Just-do-its,
and Projects
Improvement RolesStrategicTactical
Middle
Management

17. © 2014 The Karen Martin Group, Inc. 17
Value Stream Mapping Benefit:
Seeing the Whole
17
Value Stream Mapping enables a
mapping team to get ABOVE the work

18. 18
Work is More Similar Than Not…
…When
Viewed
from a
Macro
Perspective

19. VSM Aids in Developing Systems Thinking
19
System Efficiency = Optimal Value Stream Performance
Individual Efficiency = Sub-optimization

20. © 2014 The Karen Martin Group, Inc.
VSM Helps Break Down Functional Silos
20
Function FunctionFunctionFunction
Core Value Streams
Support Value Streams
Support Value Streams
Customer
Customer
Customer

21. 21

22. 22
Value Stream
Maps help
visualize
problems

23. Value Stream Maps Help Visualize Problems
23

24. 24
Visualize the entire cycle of value delivery
on a single sheet of paper
© 2014 The Karen Martin Group, Inc. 24

25. Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Three Consecutive Days
4-6 Weeks
Prior to Mapping
Following
Mapping
And Repeat
Value Stream Mapping Activity
Phases and Timing
25

26. Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Three Consecutive Days
4-6 Weeks
Prior to Mapping
Following
Mapping
And Repeat
Value Stream Mapping Activity
Phases and Timing
26

27. 1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:engagement, financials, lead time, safety records, etc.
effectiveness, market trends, customer satisfaction, employee Signature:
Date:
Relevant Data Agreement
Examples: work volume & volume variation, process quality &
Executive SponsorWhat data is required to understand relevant current state isues.
Signature: Signature:
How will the business, internal and external customers, and Function
internal and external suppliers benefit from value stream improvement? SMEs that may not be needed full time
Always a nice touch; keeps
the team from wandering
On-site, ample wall space,
quiet/private location
Benefits to Customers & Business On-Call Support
Increase <defined metric> from X to Y (Z% improvement).
Reduce <defined metric> from X to Y (Z% improvement).
Measurable Target Condition
What's driving the need for improvement? Function
Leadership-heavy
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
What is the team NOT authorized to change?
Typically 3-6 months
Last Step Task on last process block
Logistics
Coordinator
Not always needed
Aids in consensus building
and organizational learning.
Typically the last hour of the
day.
First Step Task on first process block
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
List the the people that are
required to attend the briefings (**)
and those whose attendance is
optional (*).
Demand Rate
Trigger
How many times is this done per wk, qtr, mo, or yr?
What initiates the process?
Value Stream Mapping Charter
Scope Accountable Parties Logistics
Required: typically VP or C-level
If needed—often director or
manager level
Specific
Conditions
What circumstances are included and excluded?
(e.g., type of customer, geographic location, etc.)
Value Stream
Champion
Value stream being improved
Executive
Sponsor
Value Stream
Event Dates
& Times
3 days typically; consecutive
is best; 6 hrs per day
minimum; 7 or 8 hrs is best
Required: skilled, objective person
leading the activity
Base-camp
Location
Facilitator
Name
Name
FacilitatorValue Stream Champion
Contact Information
Contact Information
Critical planning, communication, and consensus-building tool
Available at www.ksmartin.com/charter

28. Where should the “fenceposts” be?
Function Activity
Marketing Generates sales leads
Sales Calls on and qualifies customers
Customer Submits RFQ to sales
Sales Reviews RFQ
Estimating Generates quote
Sales Approve quote
Customer Accepts quote; submits a PO
Sales Approves PO
Customer service Creates SO; compiles spec package
EE/ME design Designs product; generates BOM
Customer Approves design
EE/ME design Forwards design to SW dev
Software Dev Writes code
Purchasing/Planning Releases WO; schedules production
Supplier (external) Delivers materials
Production Manufactures & ships product
Customer Installs equipment
Field service Conducts 90-day follow-up

29. Value Stream Scoping Diagram
Defining Specific Conditions
Golden State
Equipment, Inc.
Capital Equipment
Catalog
Configure to
order
Engineer to
order
Custom hardware
Custom software
Both
New Product
Development
Spares &
subassemblies
Catalog
Engineer to order
29

30. Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Three Consecutive Days
4-6 Weeks
Prior to Mapping
Following
Mapping
And Repeat
Value Stream Mapping Activity
Phases and Timing
30

31. Briefing #1
31
Purpose: Reduce resistance to future state design

32. Briefing #2
32
Purpose: Build consensus around future state design

33. Briefing #3
33
Purpose: Gain commitment re: improvement priorities,
ownership, resources needed, and timeline.

34. Always
Paper &
Post-its
First!

35. © 2014 The Karen Martin Group, Inc. 35
Customer
1
Process 3
Function E
LT = 0.5 days
PT = 30 mins.
%C&A = 95%
4
4
10 mins.
1 days
120 mins.
2 days
30 mins.
0.5 days Total LT = 3.5 days
Total PT = 160 mins.
Activity Ratio = 9.5%
Rolled %C&A = 89.3%
Process 2
Function C
LT = 2 days
PT = 120 mins.
%C&A = 95%
3
3
ABC Technology, Inc.
Future State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
IT-1 IT-2
5 items
Process 1
Function A
LT = 1 days
PT = 10 mins.
%C&A = 99%
5
2
1 items 10 items
Standard
work
Modified
approvals
IT interface
Cross-
train
Cross-
train
Standard
work
Error
proof
Basic Value Stream Map: Future State

36. J F M A M J J A S O N D
1 PROJ Steve 0%
2 PROJ Steve 100%
3 KE Bruce 50%
4 KE Bruce 50%
5 PROJ Jessie 100%
6 PROJ Sally 100%
7 KE Jessie 0%
8 PROJ Mike 100%
9 JDI Jessie 50%
10 PROJ Steve 80%
11 PROJ Steve 10%
12 PROJ Bob 0%
13 JDI Jessie 100%
14 PROJ Marcia 25%
15 PROJ Tom 30%
16 KE Marcia 50%
17 PROJ Sally 50%
Value Stream Champion Sally Brooks
Value Stream Mapping Facilitator Karen Martin
Value Stream Transformation Plan
Value Stream Product Y Scheduled Review Dates
Executive Sponsor Jim McMahon 2/10 + bi-weekly Thu 10 am
Socialize new criteria for engineering,
quality, & purchasing involvement.
Date Created 1/5/2014
Kaizen
Burst #
Improvement Objective / Hypothesis Proposed Countermeasure
Exec.
Method *
Owner
Planned Timeline for Execution
Status
Create procedure/train GS service engineers to
properly feedback suggestions to engineering.
Create bulletin re: standardized headplate
design to eliminate flange orientation.
Create visual "milestone" timeline to
educate customers.
Define technical info needed from
customer and when.
Signature: Signature: Signature:
Revise standard Ts & Cs to incorporate time limit
for customer approval for final payment.
Error proof P.O. info (correct specs, ship to,
etc.); notify customer re missing info and
drop dead date.
Create criteria for LOI acceptance.
Add initial project release in SF.
Resocialize existing customer-requested
CO procedure.
One piece engineering flow
Agreement
Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator
* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)
Move to one release (pump & systems)
Date: Date: Date:
Create commodity management team &
supplier SLAs.
Standardize WPS/PQR from suppliers.
Revise proposal template to limit time to 4
revisions.
Create pull signal for invoicing.
Create trigger to release (BOMs) for
purchase.
ConfidentialContentRemoved
Available at www.ksmartin.com/vsm-transformation-plan

37. Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Three Consecutive Days
4-6 Weeks
Prior to Mapping
Following
Mapping
And Repeat
Value Stream Mapping Activity
Phases and Timing
37

38. Outpatient CT Scans: Current State Value Stream Map

39. Outpatient CT Scans: Future State Value Stream Map

40. Outpatient Imaging Value Stream Improvement
Metric Current State
Projected
Future State
Projected
% Improvement
Timeline Lead Time 4.0 days 1.3 days 67.5%
Timeline Process Time 59 minutes 48 minutes 18.6%
Activity Ratio 3.1% 7.6% 145.2%
Rolled % Complete &
Accurate
30.5% 65.0% 113.1%

41. And Repeat…

42. But wait!
Who Owns the
Value Stream???
42

43. 43
Karen Martin, President
858.677.6799
@karenmartinopex
Blog & newsletter:
www.ksmartin.com/subscribe