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Step by Step guide to Value Stream Mapping Part two

Value Stream Mapping guide: Part 1

Step 4 - Collect data and produce current state map

One of the key foundations of VSM is that it utilises and analyses business data - this includes process times, inventory or materials information, customer (or demand) requirements. Do not underestimate the time required to capture reliable data – remember that future state maps will be developed using information captured here so it’s imperative you have a correct understanding of the business.

When mapping your current state, use icons/graphics to represent each step – the material flow, the information flow, the supplier and customer.

As part of the map calculate the total time taken including both waiting and processing time.

Scenario Step 4
The VSM team map the current process – they approach the task by taping together large pieces of paper which is used to transcribe the map on. They work through the production process from the initial work request to the final output analysing carefully the steps at each stage. At each stage they:

• Measure how long the particular process takes
• They capture the current materials or inventory
• Capture the resources (e.g. Staff) at each stage
• Problems that commonly occur
• Current Key Performance Measures
Using a set of icons they then transcribed the process

Click here for larger image

Step 5 - Critique Current state

Go mad - work with the rule that no idea is a bad idea - use post-it notes or labels to place ideas and possible solutions over your current state map - encourage everyone to play a part - analyse the data and encourage your team to make suggestions as to how the process could be improved - challenge the current thinking. Comments will usually take the form of suggested improvements, risks or fixed elements which cannot (e.g. for legal reasons) be altered. Above all, look for areas of waste.

Scenario Step 5
The current state map is then placed on the wall of the project room – John encourages his team over a couple of days to review the map and critique it.

The team make their contributions and the map is soon populated with many post it notes. They find that:
• The machine shop waste valuable time collating parts into kits that can be machined when parts could be collated into Kits by the stores dept.
• They find that only one member of staff undertakes quality tests on completed items – there is a large backlog of items at this point and the staff member is under great pressure to speed up – he admits that due to pressure he often makes mistakes.
• The retail outlets do not attempt to forecast demand they merely pass data on daily sales – this is then used by Procurement to order raw materials for the production line – the quantity of raw materials is often out of proportion to demand
• There are not enough supplier deliveries so Purchasing over order to compensate.
• There are significant wait times between process steps

John then organises a review meeting for the team to talk through and analyse their findings

The big thing is before moving on to the Future state - you and your team must know the process inside out (that's why your Value Stream Mapping!) – check, check and recheck the process

Step 6 - Map Future State

Taking both the current state map and the critiques that you have obtained from the previous stages - compile a future state map - this should incorporate:
* Aligning Output and demand at each stage
* Adequate review of process criticisms from Step 3 has taken place
* Deployment of Key Performance Indicators

When designing the future state pay close attention to ensure that the process considers the customer requirements. The Future state map should aim for a steady state production - ensuring that there is no surplus materials and maximum productivity. Ensure that the map takes the following into account, Customer, Supplier, Material Flow, Information Flow

Your Future state map will normally fall into either a Push situation where goods are produced irrespective of demand or a pull situation where goods are produced specifically to demand patterns.

Key Performance Indicators are an important part of the Future State, and if they are not already in place you should consider what measures are applicable.

Remember that mapping the future state does not change the existing process – it is merely a method of graphically representing changes that could be made.

Scenario Step 6
John’s team maps the future state Click for larger image
John sees that the Future State map offers a number of improvements including:
• Consignment stock provided by suppliers negates the need to raise multiple purchase orders and own high cost stock
• Combine the Assemble and Test phase – re-train the staff so that more can test
• Retail stores to provide forecast sales – this data is shared with suppliers to ensure correct stock is held
• More deliveries to retail outlets established
They utilise a logging system to capture and review the critiques made in step 3. As part of the process they suggest Key Performance Indicators covering Stock Turn, Production cost, Total Production time, Manpower Productivity.

Step 7 - Create Action Plan and deploy

Taking the Future State map consider an action plan that could be implemented to change the current process to the future state. This could be done in a number of ways e.g. it could be staged in that elements are introduced sequentially (this works well if there is a series of easy to introduce changes that can leverage immediate benefits. Another method is a “Big Bang” approach – for example – the production plant in our scenario could close down on the Friday and all the changes required to implement the future state are implemented over the weekend and the production team start up the new process in it’s entirety on the Monday morning. There are various options and you should consider your business to get the best method.

Scenario step 7
John creates a delineated project plan choosing to tackle the change sequentially – choosing participants from the VSM team he distributes actions and targets against a timeline.

Step 8 - Measure benefits

After the future state has been deployed after a period of time a review should be undertaken where you check to ensure that the benefits expected have been obtained – review each change made and analyse benefits – Utilise the KPI’s deployed at Step 4 to provide insight

Scenario Step 8
Four months after the Future state process was deployed John holds a review meeting where they analyse the KPI’s that were put in place. John establishes a team which will meet periodically to review the performance and report on issues and risks to the management team.


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