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Management is Essential

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Presentation on theme: "Management is Essential"— Presentation transcript:

1 Management is Essential
Value Stream Mapping Management is Essential

2 The lean transformation should provide:
Growth with improved margins Growth with minimal capital Growth without more employees

3 What are our main stumbling blocks?
Years of bad habits Financial focus with limited cost understanding A lack of system thinking and incentives Metrics supporting a legacy model Limited customer focus Absence of effective operating strategies

4 How have these stumbling blocks been addressed?
Programs of the month (band aids) Meetings, meetings, meetings, meetings

5 If we could just start over…..with
Activities aligned with our business strategy Efforts focused on NET improvements for the company Metrics supportive of fundamental change Simple, constant communication of our plans and achievements as an enterprise

6 Why not take the value stream perspective?
“Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.” 3 enterprise value streams: Raw Materials to Customer – Manufacturing Concept to Launch – Engineerin Order to Cash - Administrative Functions

7 A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

8 Value Stream Improvement vs. Process Improvement
Customer Assembly Cell Stamping Welding Raw Material Finished Product

9 Value Stream Mapping Follow a “product” or “service” from beginning to end, and draw a visual representation of every process in the material & information flow Then, draw (using icons) a “future state” map of how value should flow


11 Levels of a Value Stream
process level single plant (door to door) Start Here multiple plants across companies

12 Value Stream Managers Kaizen Process 1 Process 2 Process 3 “Customer”
The Value Stream Manager

13 Using the Value Stream Mapping Tool
Product/Service “Family” current state drawing Understanding how things currently operate. Our Baseline! future state drawing Designing a lean flow. Our vision! plan and implementation The Goal of Mapping

14 Current State Mapping Completed in a day
Performed by a cross functional team of middle managers responsible for implementing new ideas Resulting in a picture (and team observations) of what we “see” when following the product

15 Future State Mapping Completed in a day with the same team Focused on:
Creating a flexible, reactive system that quickly adapts to changing customer needs Eliminating waste Creating flow Producing on demand

16 Current State Value Stream Map

17 Future State Value Stream Map

18 Planning and Implementing
Don’t Wait! You need a plan! Tie it to your business objectives Make a VS Plan: What to do by when Establish an appropriate review frequency Conduct VS Reviews walking the flow

19 Remember the other two value streams?
Administrative activities are often a major percentage of the total throughput time Goal: 400% improvement in productivity over 10 years Modest opportunities on the plant floor; Untapped opportunities off the plant floor

20 Enterprise Perspective
Engineer to Order Configure to Order Capital equipment manufacturers Small companies (<500 employees) Service Firms

21 We might begin in… Processes directly impacting the part production
Engineering Quoting Or, in value streams with direct customer contact Order entry Invoicing

22 Value Stream Mapping Helps you visualize more than the single process level Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniques

23 Value Stream Management
The map is just a picture of ideas! The fundamental change is in how we choose to manage the value stream as an integrated system of decisions and tasks

24 Value Stream Management
Use your strategic plan as a guide Find the gaps in necessary performance Improve value streams to meet the performance Create new metrics to support new ways of thinking and acting Understand true product family costs Manage operations by the value stream data Always have a future state

25 Critical Success Factors
Management must understand, embrace, and lead the organization into lean thinking Value stream managers must be empowered and enabled to manage implementations Improvements must be planned in detail with the cross functional Kaizen teams Successes must be translated to the bottom line and/or market share

26 Putting it to Work! Continuously improving fundamentally flawed processes will yield limited results. Simply automating existing manual processes can also yield limited results. Seriously challenging old practices will provide the dramatic results desired.

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