Pamela D. Gladwell – Chapter Seventeen

Pamela D. Gladwell

CHAPTER SEVENTEEN:
Value Stream Mapping: Learning to See Transactional Processes

Overview

Manufacturing processes have been reaping the benefits of various Lean tools, including Value Stream Mapping, for over 20 years. It has been only within the past several years, however, that transactional process areas have begun to apply the same beneficial techniques. Part of the difficulty in improving these types of processes is their inherent variability. Unlike manufacturing, transactional processes are not made up of machines, automation, robots or standardized parts. Transactional processes include things such as new product designs, patients, insurance renewals, purchase orders, new employees, help-desk tickets and software systems. In place of automated operation, transactional processes have people at the very heart of the systems – people who typically resist documenting and using standardized processes and procedures, and whose performance varies from operator to operator with no way to calibrate human performance to a set standard.

To make matters more complex, information also flows through these processes, which is often times critical to every step within the process itself. Transactional processes run across multiple departments with people who may or may not communicate well with one another, creating the potential for numerous holes in the system.

Given this scenario of managing processes in a transactional environment, it becomes apparent that we need a very powerful tool to help us drive improvements for these types of processes. This is where Value Stream Mapping comes to the rescue. Application of Value Stream Mapping will ultimately lead to reduced costs and improved customer satisfaction, while improving employee satisfaction and retention.

This chapter will help you to:

  • Understand the basic Lean principles required for creating a Value Stream Map.
  • Understand and apply the basic concepts of value-added vs. nonvalue added process step analysis.
  • Understand how to calculate process efficiency.
  • Create a Value Stream Map.

Basic Lean Principles Required for Value Steam Mapping

You don’t have to be an expert in Lean to create a Value Stream Map. However, there are a few basic Lean principles you must understand in order to effectively begin using this tool. James Womack and Daniel T. Jones have done an excellent job of boiling Lean down into its most basic principles in their book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation.1 Womack and Jones summarized Lean into

  • Value – Precisely Specify Value by Specific Product
  • Value Stream – Identify the Value Stream for each Product
  • Flow – Make Value Flow without Interruption
  • Pull – Let the Customer pull value from the producer
  • Perfection – Pursue to Perfection

Through reviewing the details of these five basic principles, we gain an understanding of the Lean basics, which enables us to analyze our own processes during Value Stream Mapping activities.

Value – Precisely Specify Value by Specific Product

Specifying value accurately is a critical first step in any Lean Six Sigma project, as well as a necessary part of creating and analyzing a Value Steam Map. If we don’t understand what our customers value, we simply cannot do any type of meaningful process analysis. We must know and understand what the customer needs. Without this information, we can’t define customer Critical-to-Quality (CTQ) requirements, which are the key measurable characteristics of our product or process. Without CTQs, we cannot set performance standards or specification limits that must be met in order to satisfy our customers. Clearly, without this information, we cannot measure process effectiveness and efficiency.

For various reasons, value is very hard for some businesses to accurately define. Some organizations get caught in the trap of thinking they already know what is best for their customers, so they create the CTQs themselves, with little or no input from their actual customers. People within these organizations are often heard saying things like, “Our customers just don’t get it,” or “Since our customers don’t understand what they really need, we must define it for them.” Another symptom of not truly focusing on what customers value is being too technology focused. These organizations often can be identified by their creation of complex, customized designs with sophisticated processing technologies favored by their company engineers. All too often, the resulting products are too expensive, contain features that are irrelevant and ultimately do not meet customers’ needs.

The first step in creating a Value Stream Map is to obtain good customer (internal or external) data. (See Chapter 16 on Voice of the Customer for a discussion of gathering external customer data). Once we have established we have good customer value data, we can analyze the value of the steps that take place within the process under scrutiny. Be prepared to have some debate with respect to what is “valuable” as you analyze each process step. Something that amazes me every time I work with a team to create a Value Stream Map is the shock on their faces as they see the final map. I commonly hear statements like, “That is how we do this process?” or “I had no idea that was what is happening.”

The tendency over time is the number of steps in a process increases as does the complexity, due to improper management. As a new problem or issue arises in the organization, processes are often times not carefully studied before extra steps are thrown in as ad hoc solutions to address the concern. So as things like new requirements, increased regulations and organizational structure changes, steps are added into processes without much thought or study of how they will impact the entire value stream. Over time, we wonder why we can’t seem to keep up with customer demand or why our processes are so confusing and frustrating. As we analyze our value stream through the mapping process, our goal is to search out and eliminate any process step that doesn’t add value to the customer. One technique that has been very effective in helping me to rid processes of steps that don’t add value to the customer is to ask the following three questions for every process step.

  1. Does the customer care?
    • Would the customer be willing to pay for this step to be done?
  2. Was it done right the first time?
    • Steps like testing, reviewing, checking, revising, etc., are all classified as rework.
  3. Was there a physical change?
    • Has the item that is flowing through the process actually physically changed? Is it different in some way?

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