1. How do you recognize a value stream when you see one?
2. What is the first most important step in value stream mapping?
3. What is the difference between value stream mapping and process mapping?
4. How is value stream mapping different for the office?
5. What is meant by current and future state value streams?
6. Why create value stream maps of a future state not an ideal state?
The
Agile & Lean Glossary defines a value stream as a
holistic collection of value added and non-value added
activities that chain together to create a customer product or
service. A solid definition, but unless you already had an idea
of what a value stream looked like, you'd probably not be able
to use this definition to find one.
If you've ever had the chance to see how an automobile made in a
factory; that is a classic example of a value stream. The pieces
and parts that make up the automobile enter on one end of the
factory and the completed car exits out the other end. It is
literally that simple. As the automobile moves along the
production line, activities are performed that add part after
part. Each time a part is added, the value of the automobile
increases. The production line is a stream of value adding
activities. Hence the name value stream.
The same definition of value stream holds true for the office
just as it does for the automobile factory. Although in an
office it is much harder to see. The easiest value streams to
see in an office environment are the ones that are triggered by
a piece of paper. Office value streams are started on receipt of
a request for quote, sales order, invoice, job application,
benefit claim, procurement request, etc. You can then follow the
progress of that piece of paper just like you could follow the
progress of an automobile being made in a factory.
Each activity that occurs in the processing of that piece of
paper adds (or subtracts) value just like adding a part to an
automobile. For example, processing a job application can have
the following activities:
Each activity occurs in a new hire value stream that produces
value in the form of hired employees. Each has a specific order
in which it must occur. The application screening and phone
interviews add incremental value because they assist to improve
the quality of candidates selected for the person-to-person
interviews.
There are hundreds if not thousands of value streams within any
office environment. Some are aligned with the flow of paper,
others are not. Launching a new product development effort or
marketing program are examples of value streams that do not have
structured paper flows, but they are value streams
none-the-less. In these examples the value streams are
associated with the flow of an information from one activity to
the next, as each activity adds substance and form to the
information.
Although it may seem obvious, the first most important step
in value stream mapping is to determine the customer value
produced by the value stream. Often the various customers of a
value stream share different priorities for what customer value
should be created. It's easy to imagine how the engineering,
sales, and finance organizations could each have a different
view of the highest priority value produced by a value stream.
Take as an example a Request for Proposal (RFP) response value
stream. This is a value stream that develops a proposal for
products or services at the request of a customer. What is the
most important value created by our RFP response value stream?
Depending on which of the above is the highest priority; the
activities that make up the RFP response value stream could be
optimized in different ways. Each being perfectly acceptable,
but each driving the process a different way.
It is when the value priorities of each stakeholder are not
aligned that causes of much of the friction and waste within a
value stream. Creating clear system-wide value priorities is a
step that must be completed prior to starting a value stream
map. These value priorities then set the bar for whether an
activity of the value stream adds value or not. If the value
priorities of a value stream are ambiguous; the result of the
value stream mapping analysis will be ambiguous as well.
The focus of value stream mapping is on discovering the
positive values provided by the activities of the organization,
enhancing those values and removing any performance robbing
waste.
The focus of process mapping is on discovering the current
processes of an organization, establishing the root cause
problems with those processes, and looking for solutions.
Process mapping is used to find a problem and then find a
solution. Then find the next problem and find the next solution.
While improvements can be made using this approach, it is
difficult to align the problem/solution pairs so that each cycle
of problem/solution implementation builds towards a strategic
objective.
Value stream mapping focuses on the value produced by the value
stream and continuously strive to increase that value. Value can
be increased by either adding an enhancement a customer is
willing to pay for, or removing a waste that no one would pay
for. The idea is to look at every activity (even those that
aren’t causing problems) and find ways for that activity to
increase customer value and reduce waste. A small value increase
or waste reduction in every activity performed, times a lot of
activities, leads to greatly increased performance and reduced
costs.
The result of processing mapping is improved processes. The
result of value stream mapping is improved customer value. As
has been proven time and time again, it is possible to improve
processes without increasing customer value. Process improvement
maintains an internal focus. Value stream mapping maintains a
focus on both internal and internal customers; the ones paying
the bills.
The key to value stream mapping in an office environment is
what you actually map. The biggest mistake people tend to make
is to just map out static activities or tasks. This approach
works in manufacturing because typically the labor content is
relatively low and alternate flows tend to be relatively
restricted.
The recommended approach for the office is to map out the flows
most likely to lead to the next incremental increase in value or
decrease in waste. The four flows of any office process are
responsiblity, information, work, and progress. Using value stream
maps to map each of these four flows increases visibility of the
interactions and management control points from four different
perspectives of a single process. By creating value stream maps
for all four types of process flows the impacts of changes made
to one perspective can be easily seen for the other three.
The
Agile & Lean Glossary defines state as a snapshot
picture of the situation. A current state value stream is a
snapshot of a value stream as it exists at the time of
observation. A future state value stream is a snapshot of a
value stream as it might appear at some point in the future.
Some organizations attempt to skip mapping a current state and
move directly to the future state. They say they don't
want to waste time on something they know is broken.
However, the current state should be clearly understood prior to
looking for future areas of improvement. Organizations are
complex systems. Without a current state view to use as a
baseline it is sometimes difficult to tell if a change actually
is an improvement. Or if the change made to improve one area has
been made at the sacrifice of the performance of another.
Also having a current state map helps to create an accurate
transition plan from the current to the future state.
Developing a future state value stream, as part of the
implementation planning process, helps to insure that the
planned changes will produce the desired improvements. It helps
to enforce a discipline of thinking through the impacts of any
change. The butterfly flapping its wings in China may have an
impact on the rainfall in Seattle. But it is more likely that
changing how a sales order is entered will impact on how orders
are taken.
There is sometimes a tendency to build future state value
stream maps to be the ideal, nearly perfect, end objective.
Under this scenario a current state model is developed to
establish where the organization is. Sometimes called the as-is
model. Then a future state model is developed as the ideal
future goal. This is sometimes called the to-be model. Then a
gap analysis is performed between the two. The gap or difference
of the two models forms the basis for a project to reach this
perfect future state.
The truth of the matter is there is no such thing as an ideal
future state. Even if it did exist for an instant, an instant
later the ideal state would change - because of a new customer,
a new competitor, a new employee, etc. All organizations are in
a constant flux of change over time, whether they recognize it
or not. Adopting a culture of continuous improvement is the only
effective choice for maintaining a high performance
organization.
This is not to say that future state mapping should not be
conducted. The Agile & Lean approach is to:
After a couple of cycles, improvements that would have been impossible to achieve when starting from the original current state map, will present themselves as viable alternatives. Innovations that would not have been considered using a single big bang project approach.