1. Value Stream Mapping: From Tool to Management Practice Webinar with Gemba Academy April 23, 2014

2. Housekeeping Questions/Polls – Please ask them! – Use Webinar Panel Question Box, or – Email to ron@gembaacademy.comron@gembaacademy.com Slides & Audio – Enlarge screen as desired – Master volume on computer – Slides: Recorded Version – This webinar will be available online within 3 days – Presentation notes will be shared in PDF format – An email will be sent once it’s ready Tweet your questions and comments with #GembaWebinar

3. About Gemba Academy Producers of Online & DVD Based Lean & Six Sigma Training 500+ Videos (and growing) Subscriptions available for Individuals & Organizations

4. © 2014 The Karen Martin Group, Inc. Wherever there is a request and a deliverable, there is a value stream.

5.  Coach / Facilitator / Consultant / Trainer: Lean transformation & business performance improvement in all industries.  Teacher: University of California, San Diego  Author & Speaker: Karen Martin, President The Karen Martin Group, Inc. 5 www.ksmartin.com/subscribe 2013 Shingo Prize winner!

6. www.ksmartin.com/VSM

7. You will learn… Use value stream mapping as an organizational transformation tool Properly scope and plan for a value stream mapping activity Obtain leadership consensus about the future state design Create and execute a highly effective Value Stream Transformation Plan

8. Value Stream Defined Value Stream: All of the activities required to transform a customer request into a good or service. 8 First defined in The Machine That Changed the World,The Machine That Changed the World James Womack, Daniel Jones, & Daniel Roos, 1990. Process Customer Request Customer Receipt

9. Value Stream Mapping’s Roots Value Value Stream Flow Pull Perfection 1996

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

11. Why We Wrote the Book Too many organizations use VSM solely as a work design exercise Too many organizations use VSM to make tactical vs. strategic decisions Too many organizations map with an inappropriate team—or no team at all Too many maps are process maps or contain no metrics Too many organization miss out on the behavior and culture shifting benefits of value stream mapping

12. Which do you prefer? OR

13. 13 Basic Current State Value Stream Map: 3 Sections 1 2 3 © 2014 The Karen Martin Group, Inc.

14. 14 Visualize the entire cycle of value delivery on a single sheet of paper © 2014 The Karen Martin Group, Inc. 14

15. Value Stream Performance Projected Results MetricCurrent State Projected Future State Projected % Improvement Lead Time (PO to shipping) 17 months7.5 months56% Process Time600 hours450 hours25% (22 FTEs) Rolled % Complete & Accurate 0%21%> 2,000% On-time delivery13%90%592% # Internally-produced Change Orders 25/project12/project52% Freed Cash flow$25M per year

16. Common Failing: Approaching VSM Mechanistically

17. Proper Value Stream Mapping Builds Your Organizational Muscles

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

19. 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? ? ? ?

20. © 2014 The Karen Martin Group, Inc. 20 Executing Transformation Plan Value Stream Mapping Making Specific Improvements

21. © 2014 The Karen Martin Group, Inc. 21 Value Stream Mapping Benefit: Seeing the Whole 21 Value Stream Mapping enables a mapping team to get ABOVE the work

22. VSM Aids in Developing Systems Thinking 22 System Efficiency = Optimal Value Stream Performance Individual Efficiency = Sub-optimization

23. © 2014 The Karen Martin Group, Inc. VSM Helps Break Down Functional Silos 23 Function Core Value Stream Support Value Stream Customer

24. Work: Degrees of Granularity Value Stream Process Step 24 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

25. Three Consecutive Days 4 Weeks Prior to Mapping Following Mapping And Repeat Value Stream Mapping Activity Phases and Timing 25

26. What & Why? Who? When? Charter: Critical planning, communication, and consensus-building tool Available at www.ksmartin.com/downloads

27. Accountable Parties Executive Sponsor – Typically VP or higher – Authority over significant portion of value stream (or strong relationship w/ peer group) – Ultimately accountable for results – Must attend briefings Value Stream Champion – Oversee significant portion of the value stream – Heavily engaged in entire value stream transformation (own the transformation plan) – Member of mapping team – In small companies or those just starting out, the VS Champion and Exec Sponsor could be the same person. Facilitator – Objective; no “skin in the game” – Skilled in both mapping/improvement mechanics, and high-level team dynamics.

28. Where should the “fenceposts” be? FunctionActivity MarketingGenerates sales leads SalesCalls on and qualifies customers CustomerSubmits RFQ to sales SalesReviews RFQ EstimatingGenerates quote SalesApprove quote CustomerAccepts quote; submits a PO SalesApproves PO Customer serviceCreates SO; compiles spec package EE/ME designDesigns product; generates BOM CustomerApproves design EE/ME designForwards design to SW dev Software DevWrites code Purchasing/PlanningReleases WO; schedules production Supplier (external)Delivers materials ProductionManufactures & ships product CustomerInstalls equipment Field serviceConducts 90-day follow-up

29. Value Stream Scoping Diagram Defining Specific Conditions 29

30. © 2014 The Karen Martin Group, Inc. 30 Who should be on the team, be on call, and attend briefings?

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. Socializing the Charter Conversation, not merely an email attachment. To the entire workforce who will be affected by change. Adjust the charter if new discoveries or concerns surface.

35. © 2014 The Karen Martin Group, Inc. 35 Basic Value Stream Map: Future State

36. Value Stream Performance Improvement Projected Results MetricCurrent State Projected Future State Projected % Improvement Lead Time (PO to shipping) 17 months7.5 months56% Process Time600 hours450 hours25% (22 FTEs) Rolled % Complete & Accurate 0%21%> 2,000% On-time delivery13%90%592% # Internally-produced Change Orders 25/project12/project52% Freed Cash flow$25M per year

37. Confidential Content Removed

38. Who?AccountabilityTool Sr. Leaders“What has to happen”Hoshin Plan, A3, Value Stream Mapping Frontlines“How it will happen”Kaizen Events, Just-do-its, and Projects Improvement Roles Strategic Tactical Middle Management Tactical

39. Physically Post the Future State Map Physically Post the Transformation Plan

40. And Repeat…

41. Who Owns the Value Stream? 41

42. Karen Martin, President 858.677.6799 ksm@ksmartin.com For Further Questions Blog & newsletter: www.ksmartin.com/subscribe www.bitly.com/VSMbk www.ksmartin.com/VSM