Get Lean - Value Stream

Mapping for Office and Service

Karen Martin

Kim Scott

President
The Karen Martin Group, Inc.

iGrafx Senior Consultant,

Lean Six Sigma Black Belt

What will you learn?

Value Stream Mapping helps you
understand and improve your Office
and Service processes.
Digitalizing VSMs is easy and makes
sharing a snap.

Introducing Karen Martin

Founder: The Karen Martin Group, Inc. (1993)

Consultant / Coach: Lead Lean transformations

& develop people in office, service and
knowledge environments.

Teacher: University of California, San Diegos

Lean Enterprise program.

Author:

Winner - 2013
Shingo Research Prize

Introducing Karen Martin

www.ksmartin.com/subscribe

Value Stream Mappings Roots

Mike Rother & John Shook, 1999

Beau Keyte & Drew Locher, 2004

Whenever there is a product for a customer,

there is a value stream.
The challenge lies in seeing it.
Mike Rother & John Shook, Learning to See
5

Value Stream Defined

Value Stream: All of the activities, required to fulfill a
customer request from order to delivery (and beyond to
cash received).
Value Stream
Process

Process

Process

Custom er

Customer
Request

Customer
Receipt

The Work We Do:

Degrees of Granularity
Macro View
Strategic;
heavy leadership
involvement

Process

Value
Stream

Value Stream
Map

Process

Process

Step

Metrics-Based
Process Map

Micro View
Tactical; heavy
frontline
involvement

Step

Step

Office/Service Value Stream Examples:

By Industry

Repair/maintenance Customer request to revenue received

Financial services Mortgage application
Law Litigation value stream
Healthcare Patient care; revenue cycle
Technology Software development
Government Permitting
Construction Large equipment installation
Law enforcement Arrest processing
Engineering/architecture Design development
Oil & Gas Fossil fuel exploration & production
8

Support (Value-enabling) Value Streams

Estimating / RFQ response

Hiring Recruitment to 1st (or 90th) day
New product development
Business plan development
Annual sales meeting planning & execution
Contract development & execution
And more

Value Stream Mapping Benefit:

Seeing the Whole

60,000 foot view; Rooftop view

10

VSM Promotes Systems Thinking

System Efficiency =
Optimal Value Stream
Performance

Individual Efficiency =
Sub-optimization

11

Truth
How are we
really performing?
Truth
Truth
Truth
Truth
Truth
Truth
Whats our customer
really experiencing?
Truth
Truth

CLARITY

12

Value Stream Mapping:

As Much Art as Science

13

Create a Value Stream Storyboard with

Paper & Post-Its (Team-Based)

14

Basic Value Stream Map

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

Information
Flow

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

Material &
Data Flow

Dept A
5

Timeline

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Value Stream Mapping Charter

Event Scope

Leadership / Coordination

Value Stream Contract processing, rebate processing, etc.

Specific What circumstances you're including and
Conditions excluding? (type of cust, time of year, etc.)

Value Stream If needed - often Director or

Champion Manager level

Customer Demand How many times is this done per wk, qtr, mo, or yr.?

Start/End
6 hrs minimum; 7 or 8 is best
Times

Facilitator Skilled person leading the activity

Trigger What need does the value stream address?

First Step Task on first process block

Boundaries &
What is the team NOT authorized to change?
Limitations

The person arranging logistics

Coordinator (reserving the room, ordering food,
sending meeting notices, etc.)

FS Implementation
Typically 90-120 days
Timeframe

Event Drivers

Location Need ample wall space

Meals Always a nice touch; keeps
Provided? the team from wandering.

Team Lead Not always needed

Last Step Task on last process block

Interim Aid in consensus building and

Briefing(s) organizational learning.
Briefing List required attendees; others
Attendees are optional

Mapping Team

1 Why are you doing this? What are the current state issues?

Function

1 Leadership-heavy

Schedule
3 days typically; sequential is
Event Date(s)
best

Executive
VP or C-level
Sponsor

Name

Contact Information

Goals & Measureable Objectives

1 Aim for objectives w/ measurable targets (from X to X).

10

Planned Deliverables

On-Call Support

1 Current state VSM

Function

2 Future state VSM

1 SMEs that may not be needed full time

3 Implementation Plan

Name

Contact Information

Potential Obstacles
1 to the team's success with the mapping activity.

Approvals
Executive Sponsor

Value Stream Champion

Facilitator

2
3
4

Signature:
Date:

Signature:
Date:

Signature:
Date:

16

Value Stream Mapping Process

Define
Product Family

Document
Current State

Design
Future State

Create
Transformation Plan

Execute!

3 Day
Event

The Office Version of Product Families

Units
Domestic

Consumables
Service Parts

Warranty
Non-Warranty

Order
Fulfillment
Process
Units
International

Consumables
Warranty
Service Parts

Non-Warranty

Value Stream Mapping Process

Define
Product Family

Document
Current State

Design
Future State

Create
Transformation Plan

Execute!

3 Day
Event

Step 1 Define Process Blocks

Identify all process blocks in the value stream
(target 5-15 blocks)
Each process block (post-it) contains an activity or
group of activities that occurs before a significant
break in the timeline occurs (typically build up of WIP
or handoff to another function)
Activity format is verb/noun what happens to what
WALK THE VALUE STREAM!

20

Value Stream Mapping Components

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

`
Dept A
5

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Step 2 Define I.T. Systems

Identify all I.T. systems used in the process
and information flow
Note any scheduling that occurs (calendar,
system, etc.)
Who tells whom to do what? How do they tell
them?

22

Value Stream Mapping Components

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

`
Dept A
5

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Step 3 Add Data

Key metrics for all process blocks
Process Time (PT)
Lead Time (LT)
Percent Complete & Accurate (%C&A)

Work-in-process (WIP) at every step.

Significant barriers to flow (e.g. batching,
shared resources, system downtime, etc.)

24

Post-it Conventions
Block #
Process
(Verb/Noun)
Function
# Staff (if
relevant)
Significant
Barriers to Flow

Process Time
%C&A

Lead Time

Value Stream Mapping Components

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

`
Dept A
5

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Key Metrics: Time

Scenario 1
Lead Time (LT)

Work
Received

Process Time (PT)

Work passed to
next step

LT = PT + Waiting / Delays
27

Key Metrics: Time

Scenario 2
Lead Time (LT)

Process Time
Work passed to
next step

Work
Received

LT = PT + Waiting / Delays
28

Key Metrics: Quality

%Complete and Accurate (%C&A)
% of incoming work thats usable as is: the
downstream customer can perform task
without having to do rework:
Correct information or material that was supplied
Add information that should have been supplied
Clarify information that should have or could have
been clearer

Determined by the person receiving the input;

metric goes on the output block.

29

Value Stream Mapping Components

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

`
Dept A
5

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Step 4 Create Timeline

Create timeline
Calculate summary metrics
Timeline PT Sum
Timeline LT Sum
Activity Ratio (AR)
Rolled %C&A

31

Summary Metrics: Time

Activity Ratio
The percentage of time anything is being done
to the work passing through the system (whether
value-adding or non-value-adding)
(PT LT) 100
Common current state finding in office/service =
1-10% (across entire value stream)

32

Summary Metrics: Quality

Rolled % C&A
The percent of value stream output that passes
through the process clean, with no hiccups,
no rework required.
(%C&A x %C&A x %C&A) x 100
Common current state finding in office/service
= 0-15%

33

Value Stream Mapping Components

ABC Technology, Inc.
Current State Value Stream Map
Softw are Upgrade Order Fulfillment
Customer Demand = 500/year

Custom er

IT-1

IT-2

1
Process 1

Process 2

Process 3

Process 4

Dept B

Dept C

Dept D

5
Process 5

Dept E

`
Dept A
5

45 pcs

10 pcs

LT = 1 days
PT = 10 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 75%

LT = 2 days
PT = 3 mins.
%C&A = 99%

LT = 0.5 days
PT = 5 mins.
%C&A = 99%

LT = 1 days
PT = 15 mins.
%C&A = 95%

480 mins.

240 mins.

2 days

240 mins.

480 mins.

Total LT = 5 days

10 mins.

5 mins.

3 mins.

5 mins.

15 mins.

Total PT = 38 mins.
Activity Ratio = 1.6%
Rolled %C&A = 69.1%

Current State Value Stream Map

Outpatient Imaging Services
Pre-register
Patient

Customer Demand:
15 patients per Day
(Takt Time 1920 seconds)
8 hours per day

Schedule
Appointment

Referring
Physician

Hospital

Lead Time = 24 days

Lead Time = 990 mins.

Cycle Time = 30 mins.

Lead Time = 990 mins.
% C&A = 100 %

Demand = 15 per day

Lead Time = 12 mins.

Cycle Time = 11 mins.

Lead Time = 12 mins.
% C&A = 98 %

% C&A = 65 %

CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate

Symposium

E Pay

Excel

ADS

Internet

Meditech

Fax Order
Solutions

Waiting Room
Management
System

PACS

Auto Fax 50%

Us Mail 25%
MD Mailbox 25%
Rework Loop
via Fax 25% of
the time

Check-in
Patient
(Admitting)

Prep
Patient
(Tech)

Check-in
Patient
(Imaging)

Complete
Exam
(Tech)

Transmit
Images
(Tech)

Read/Dictate
Exam
(Radiologist)

Transcribe
Report
(MDI)

Review
Draft/Sign
(Radiologist)

Print
Reports
(Imaging)

Send
Reports
(Imaging)

5 mins.
5

5 mins.

Cycle Time = 2 mins.

% C&A = 90 %

45 mins.

Cycle Time = 1 mins.

% C&A = 98 %

5 minutes

45 minutes
2 minutes

11520
minutes

1 minutes

30 mins.

Cycle Time = 10 mins.

% C&A = 100 %

30 minutes
10 minutes

5 mins.

Cycle Time = 15 mins.

% C&A = 90 %

5 minutes
15 minutes

248 mins.

Cycle Time = 3 mins.

% C&A = 100 %

10

248 minutes
3 minutes

365 mins.

Cycle Time = 15 mins.

% C&A = 95 %

11

365 minutes
15 minutes

960 mins.

Cycle Time = 5 mins.

% C&A = 75 %

12

960 minutes
5 minutes

110 mins.

Cycle Time = 1 mins.

% C&A = 95 %

13

110 minutes
1 minutes

120 mins.

Cycle Time = 1 mins.

% C&A = 99 %

14

Cycle Time = 3 mins.

% C&A = 90 %

120 minutes
1 minutes

L/T = 13464 minutes

3 minutes

VA/T = 11576 minutes

Rolled First Pass

yield = 29%

Outpatient Imaging Value Stream

Current State Findings

Metric

Current
State

Lead Time

32.5 hrs

Process Time

56 mins

Activity Ratio

2.9%

Rolled %C&A

29%

Projected
Future State

%
Improvement

36

Step 5 Determine VA & N Steps

Identify all value-adding (VA) and
necessary non-value-adding (N) steps
Add VA or N smaller post-it to relevant
process blocks
All unnecessary non-value-adding blocks
remain unlabelled

37

Customer-Defined Value
Value-Adding (VA) - any operation or activity
your external customers value, are (or would
be) willing to pay for, or its a requirement of
doing business with them.
Non-Value-Adding (NVA) - any operation or
activity that consumes time and/or resources but
does not add value to the product (good or
service) the customer receives.
Necessary support processes, regulatory
requirements, etc.; also referred to as essential or
value-enabling.
Unnecessary everything else - WASTE
38

Eight Wastes (Muda)

Overproduction Motion (people)

Inventory
Transportation
(material/data)
Waiting

Underutilized
Over-Processing
people
Errors

39

Typical Current State Findings

Unnecessary
NVA

Necessary NVA

Work is idle

Order

Delivery
Value Add

Islands of activity (process times) within long lead times.

40

Value Stream Mapping Process

Define
Product Family

Document
Current State

Design
Future State

Create
Transformation Plan

Execute!

3 Day
Event

Future State Design

Goal: Eliminate all redundancies and
barriers to flow (the work should never
stop)
Batches
Rework
Bottlenecks & WIP
Handoffs
Setup / changeover
Physical layout
Motion & transportation
42

Future State Value Stream Map Outpatient

Imaging Services

Standard
Work

Work
Balance

Customer Demand:
15 patients perDay
(Takt Time1920 seconds)
8 hours per day

Co-locate
Schedule appt
Pre-register

Referring
Physician

Hospital

3
Lead Time = 15 days

Demand = 15 per day

Lead Time = 45 mins.

Cycle Time = 11 mins.

Lead Time = 45 mins.
% C&A = 98 %

% C&A = 85 %

Risk
Reduction
(Joint
Commision)

Symposium

E Pay

Excel

Internet

Waiting Room
Management
System

Work
Balancing

Standard
Work

35 mins.

Cycle Time = 1 mins.

% C&A = 98 %
0.0833 hrs.

Complete
Exam
(Tech)

20 mins.

Cycle Time = 10 mins.

% C&A = 100 %

0.583 hrs.
1 mins.

Transmit
Images
(Tech)

5 mins.

Cycle Time = 10 mins.

% C&A = 90 %

0.333 hrs.
10 mins.

Visual
Workplace

Set-up
Reduction

Prep
Patient
(Tech)

Check-in
Patient
(Imaging)

Fax Order
Solutions

Auto Fax 80%

Us Mail 15%
MD Mailbox 5%

PACS

5S

Value Stream
Alignment

Pull System
(Supplies
Kanban)

Remove
Check in
and Reduce
System Access

5 mins.

Meditech

CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate

120 mins.

Cycle Time = 2 mins.

% C&A = 100 %

Review
Draft/Sign
(Radiologist)
420 mins.

Cycle Time = 15 mins.

% C&A = 95 %

2 hrs.
2 mins.

Batch
Reductions

Voice
Recognition

Read/Dictate
Exam
(Radiologist)

0.0833 hrs.
10 mins.

Continuous
Flow

Print
Reports
(Imaging)

2 mins.

Cycle Time = 1 mins.

% C&A = 95 %

7 hrs.
15 mins.

Rework Loop
via Fax 10% of
the time

30 mins.

Cycle Time = 1 mins.

% C&A = 99 %

0.0333 hrs.
1 mins.

10

Send
Reports
(Imaging)

0.5 hrs.
1 mins.

11

Cycle Time = 3 mins.

% C&A = 90 %

LT = 11.3 hrs.
3 mins.

CT = 43 mins.
CT/LT Ratio = 6.32%
Rolled First Pass
yield = 40%

Note: Process Time (PT) is referred to as

Cycle Time (CT) on this map

Outpatient Imaging Value Stream

Projected Future State Results
Current
State

Projected
Future State

%
Improvement

Lead Time

32.5 hrs

11.3 hrs

65%

Process Time

56 mins

43 mins

23%

Activity Ratio

2.9%

6.3%

117%

Rolled %C&A

29%

40%

38%

Metric

44

Value Stream Mapping Process

Define
Product Family

Document
Current State

Design
Future State

Create
Transformation Plan

Execute!

3 Day
Event

Future State Implementation Plan

Implementation Plan Review Dates

Value Stream Outpatient Imaging

Executive Sponsor Allen Ward

11/1/2007

Value Stream Champion Sally McKinsey

11/21/2007

Value Stream Mapping Facilitator Dave Parks

12/13/2007

Date Created 10/18/2007

Block
#
2

Goal / Objective
Improve quality of referral

Improvement Activity
Implement standard work for referral
process

Type

Owner

KE

Sean O'Ryan

PROJ

Dianne
Prichard

3, 4

Reduce lead time beween schedulingand

Cross-train and colocate work teams
preregistration steps

5, 6

Eliminate the need for two patient checkins

Collect copays in Imaging

KE

Michael
O'Shea

Eliminate bottleneck in waiting area

Balance work / level demand

KE

Dianne
Prichard

Eliminate lead time associated with

transcription step

Implement voice recognition technology

PROJ

Sam Parks

10

Eliminate batched reading

Reduce setup required

KE

Sam Parks

Reduce inventory costs, regulatory risk

and storage needs

5S CT supplies area; implement kanban

KE

Michael
O'Shea

12

Reduce delay in report delivery

Implement additional fax ports

PROJ

Martha Allen

12

Reduce delay in report delivery

Increase percentage of physicians

receiving electronic delivery (rather than
hard copy)

KE

Martha Allen

1/10/2008
Implementation Schedule (weeks)
2 3 4 5 6 7 8 9 10 11 12

Approvals
Executive Sponsor

Value Stream Champion

Value Stream Mapping Facilitator

Signature:

Signature:

Signature:

Date:

Date:

Date:

Date
Complete

Value Stream Mapping Process

Define
Product Family

REPEAT

Document
Current State

Design
Future State

Create
Transformation Plan

Execute!

3 Day
Event

Common Differences - Manufacturing vs. Office VSMs

Manufacturing

Office

Upper right

Center

Upper left

None

The thing were following

Raw material, sub-assemblies,

finished goods

Paper, verbal, and electronic

Information

Information Flow

More structured / formalized I.T.

systems

Multiple I.T. systems and

work-arounds

Multiple points across VSM

Work not scheduled

Yes

Sometimes

Inventory triangle

In-bin (if preferred)

Based on the time to process all of

the accumulated WIP between
process blocks

Based on a single item passing

through the value stream

Cycle Time

Process Time

First Pass Yield (FPY)

Percent Complete & Accurate

(%C&A)

Typically can be applied

Applicable in areas with dedicated

resources

Customer icon
Supplier icon

Schedule notification
Material flow (via hollow
arrow)
WIP icon
LT determination for each
block
Hands-on time to do the
work
Quality Metric
Takt Time

How can we help?

Karen Martin, President

7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Twitter: @karenmartinopex
Blog & newsletter: www.ksmartin.com/subscribe

How can we help?

www.igrafx.com/lean
Custom Demonstration
Process Program Assessments
www.igrafx.com/contact
503-404-6050

Thanks!