Value Stream Mapping FAQ

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Value Stream Mapping FAQ

1. 2. 3. 4. 5. 6. How do you recognize a value stream when you see one? What is the first most important step in value stream mapping? What is the difference between value stream mapping and process mapping? How is value stream mapping different for the office? What is meant by current and future state value streams? Why create value stream maps of a future state not an ideal state?

1. How do you recognize a value stream when you see one?

The Agile & Lean Glossary defines a value stream as a holistic collection of value added and non-value added activities that chain together to create a customer product or service. A solid definition, but unless you already had an idea of what a value stream looked like, you'd probably not be able to use this definition to find one. If you've ever had the chance to see how an automobile made in a factory; that is a classic example of a value stream. The pieces and parts that make up the automobile enter on one end of the factory and the completed car exits out the other end. It is literally that simple. As the automobile moves along the production line, activities are performed that add part after part. Each time a part is added, the value of the automobile increases. The production line is a stream of value adding activities. Hence the name value stream. The same definition of value stream holds true for the office just as it does for the automobile factory. Although in an office it is much harder to see. The easiest value streams to see in an office environment are the ones that are triggered by a piece of paper. Office value streams are started on receipt of a request for quote, sales order, invoice, job application, benefit claim, procurement request, etc. You can then follow the progress of that piece of paper just like you could follow the progress of an automobile being made in a factory. Each activity that occurs in the processing of that piece of paper adds (or subtracts) value just like adding a part to an automobile. For example, processing a job application can have the following activities: Screening the application for fit to open requisitions

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Scheduling a phone interview with applicant Conducting a phone interview with applicant Scheduling a person-to-person interview with applicant Conducting a person-to-person interview with applicant Making a hiring decision about the applicant Each activity occurs in a new hire value stream that produces value in the form of hired employees. Each has a specific order in which it must occur. The application screening and phone interviews add incremental value because they assist to improve the quality of candidates selected for the person-to-person interviews. There are hundreds if not thousands of value streams within any office environment. Some are aligned with the flow of paper, others are not. Launching a new product development effort or marketing program are examples of value streams that do not have structured paper flows, but they are value streams none-the-less. In these examples the value streams are associated with the flow of an information from one activity to the next, as each activity adds substance and form to the information. Top

2. What is the first most important step in value stream mapping?

Although it may seem obvious, the first most important step in value stream mapping is to determine the customer value produced by the value stream. Often the various customers of a value stream share different priorities for what customer value should be created. It's easy to imagine how the engineering, sales, and finance organizations could each have a different view of the highest priority value produced by a value stream. Take as an example a Request for Proposal (RFP) response value stream. This is a value stream that develops a proposal for products or services at the request of a customer. What is the most important value created by our RFP response value stream? The innovative solution to the customer's problem that no competitor can match? Establishing a price for products and services? A risk assessment of the organization's ability to perform the work at a profit? Depending on which of the above is the highest priority; the activities that make up the RFP response value stream could be optimized in different ways. Each being perfectly acceptable, but each driving the process a different way. It is when the value priorities of each stakeholder are not aligned that causes of much of the friction and waste within a value stream. Creating clear system-wide value priorities is a step that must be completed prior to starting a value stream map. These value priorities then set the bar for whether an activity of the value stream adds value or not. If the value priorities of a value stream are ambiguous; the result of the value stream mapping analysis will be ambiguous as well. Top

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What is the difference between value stream

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Value Stream Mapping FAQ

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mapping and process mapping?

The focus of value stream mapping is on discovering the positive values provided by the activities of the organization, enhancing those values and removing any performance robbing waste. The focus of process mapping is on discovering the current processes of an organization, establishing the root cause problems with those processes, and looking for solutions. Process mapping is used to find a problem and then find a solution. Then find the next problem and find the next solution. While improvements can be made using this approach, it is difficult to align the problem/solution pairs so that each cycle of problem/solution implementation builds towards a strategic objective. Value stream mapping focuses on the value produced by the value stream and continuously strive to increase that value. Value can be increased by either adding an enhancement a customer is willing to pay for, or removing a waste that no one would pay for. The idea is to look at every activity (even those that arent causing problems) and find ways for that activity to increase customer value and reduce waste. A small value increase or waste reduction in every activity performed, times a lot of activities, leads to greatly increased performance and reduced costs. The result of processing mapping is improved processes. The result of value stream mapping is improved customer value. As has been proven time and time again, it is possible to improve processes without increasing customer value. Process improvement maintains an internal focus. Value stream mapping maintains a focus on both internal and internal customers; the ones paying the bills. Top

4. How is value stream mapping different for the office?

The key to value stream mapping in an office environment is what you actually map. The biggest mistake people tend to make is to just map out static activities or tasks. This approach works in manufacturing because typically the labor content is relatively low and alternate flows tend to be relatively restricted. The recommended approach for the office is to map out the flows most likely to lead to the next incremental increase in value or decrease in waste. The four flows of any office process are responsiblity, information, work, and progress. Using value stream maps to map each of these four flows increases visibility of the interactions and management control points from four different perspectives of a single process. By creating value stream maps for all four types of process flows the impacts of changes made to one perspective can be easily seen for the other three. Top

5. What is meant by current and future state value streams?

The Agile & Lean Glossary defines state as a snapshot picture of the situation. A current state value stream is a snapshot of a value stream as it exists at the time of observation. A future state value stream is a snapshot

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of a value stream as it might appear at some point in the future. Some organizations attempt to skip mapping a current state and move directly to the future state. They say they don't want to waste time on something they know is broken. However, the current state should be clearly understood prior to looking for future areas of improvement. Organizations are complex systems. Without a current state view to use as a baseline it is sometimes difficult to tell if a change actually is an improvement. Or if the change made to improve one area has been made at the sacrifice of the performance of another. Also having a current state map helps to create an accurate transition plan from the current to the future state. Developing a future state value stream, as part of the implementation planning process, helps to insure that the planned changes will produce the desired improvements. It helps to enforce a discipline of thinking through the impacts of any change. The butterfly flapping its wings in China may have an impact on the rainfall in Seattle. But it is more likely that changing how a sales order is entered will impact on how orders are taken. Top

6. Why create value stream maps of a future state not an ideal state?
There is sometimes a tendency to build future state value stream maps to be the ideal, nearly perfect, end objective. Under this scenario a current state model is developed to establish where the organization is. Sometimes called the as-is model. Then a future state model is developed as the ideal future goal. This is sometimes called the to-be model. Then a gap analysis is performed between the two. The gap or difference of the two models forms the basis for a project to reach this perfect future state. The truth of the matter is there is no such thing as an ideal future state. Even if it did exist for an instant, an instant later the ideal state would change - because of a new customer, a new competitor, a new employee, etc. All organizations are in a constant flux of change over time, whether they recognize it or not. Adopting a culture of continuous improvement is the only effective choice for maintaining a high performance organization. This is not to say that future state mapping should not be conducted. The Agile & Lean approach is to: Map the current state Look for incremental opportunities to improve Map how the future state would look with these incremental changes Make the incremental improvements Rename the future state map to the current state map Let the system quiet down to a new equilibrium to be able to measure the true impacts of change Then start the cycle again and look for incremental opportunities to improve After a couple of cycles, improvements that would have been impossible to achieve when starting from the original current state map, will present themselves as viable alternatives. Innovations that would not have been considered using a single big bang project approach. Top
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