Value Stream Mapping:

Theory & Cases

Professor Peter Hines

Value Stream Mapping 1

© Professor Peter Hines, 2005
Lean Enterprise Research Centre
Cardiff Business School

„ Formed in 1994 by Prof Dan Jones &

Prof Peter Hines
– 30 staff now

“Researching,
“Researching, applying,
applying,
&
& communicating
communicating
lean
lean thinking”
thinking”

Value Stream Mapping 2

© Professor Peter Hines, 2005
 Overview
„ Value Stream Mapping Background
„ Some of the Value Stream Maps
„ Cases and Examples

Value Stream Mapping 3

© Professor Peter Hines, 2005
Value Stream Mapping

Background

Value Stream Mapping 4

© Professor Peter Hines, 2005
 My Involvement with VSM
1993-1997 Supply Chain Development Programme
* Process Activity Mapping
* Brown Paper Mapping
1997 Paper: The Seven Value Stream Mapping Tools
* Codified Mapping Approach
1997 First Rother & Shook publication
* Big Picture Mapping
1999 Corus-Forge-Volvo Transmission VSM work
2000 Going Lean publication
* see www.leanenterprise.org.uk
2002 Lean Profit Potential
* see www.leanenterprise.org.uk

Value Stream Mapping 5

© Professor Peter Hines, 2005
 What Have I Learned?
„ Don’t be a ‘happy mapper’
„ Start by understanding what you are trying to
achieve
– Can anyone tell me the 4 Lean Principles?
– And what about a link to Strategy?
„ Involve the recipients in the mapping
– Don’t ‘do mapping’ to people
„ Don’t Just Map Internally
„ Don’t Just Map Order Fulfilment
„ No one map will do the job
– Chose the right maps

Value Stream Mapping 6

© Professor Peter Hines, 2005
 Relation of Value, Cost &
Waste
Cost-Value
Customer Equilibrium
Perceived
Value 2
x
1 Creating
CreatingLean
LeanSolutions:
Solutions:
1.
1.Reduce
ReduceInternal
InternalWaste
Waste
2.
2.Develop
DevelopCustomer
CustomerValue
Value

Waste/Cost

7
© Professor Peter Hines, 2005
 We need to find the waste first
PROCESS SUPPLY BIG FOUR DEMAND DECISION PHYSICAL
ACTIVITY CHAIN PICTURE FIELDS AMPLIF- POINT STRUCTURE
MAPPING RESPONSE MAPPING MAPPING ICATION ANALYSIS VOLUME
MATRIX MAPPING VALUE
Over L M L M M
Production

Waiting H H L H M M
Transportation H H L
Inappropriate H M M L
Processing

Unnecessary M H M L H M L
Inventory

Unnecessary H L M
Motion

Defects L H H

H = Highly useful, M = Medium, L = Low

Value Stream Mapping 8

© Professor Peter Hines, 2005
 Awareness Stage: 1980-1990
Theme Shop Floor Practice
Focus JIT Techniques, Tools
Business Process Shop Floor Manufacturing

Industry Sector Automotive Assembly

Gaps Outside Shop Floor
Outside Single Firm
Narrow Focus
Value Stream Mapping 9
© Professor Peter Hines, 2005
Quality Stage: 1990-mid 1990s
Theme Best Practice Benchmarking

Focus Cost, Quality, Reengineer

Business Process Manufacturing & Mat. Mgt

Industry Sector Automotive Ass./ Supply

Gaps Human Element
Supply Chain
Systems Perspective
Value Stream Mapping 10
© Professor Peter Hines, 2005
 Quality, Cost, Delivery Stage:
Mid 1990s-2000
Theme Lean Enterprise
Focus Cost / Process QCD
Business Process Order Fulfilment: Val. Str.

Industry Sector (Repetitive) Manufacture

Gaps (Other) Process Integrate
Relationships
Integrating Industries
Value Stream Mapping 11
© Professor Peter Hines, 2005
 Value System: 2000+
Theme System Capability
Focus Value & Cost
Business Process Integrated Processes

Industry Sector All Manufacturing/Service

Gaps Low Volume Manufacture
Strategic Integration
Total Systems Capability
Value Stream Mapping 12
© Professor Peter Hines, 2005
 Lean Network Systems
Demand
Variability High
Stranger
Variety/Complexity
Avoid? Stock?

Medium
Repeater
Variety/Complexity
Make To Order

Low Variability/
Complexity
Runner
Kanban

Adapted from: Fisher, 1997 Volume

 Inventory Profile of the
UK Automotive Supply Chain
First Tier Inbound Vehicle Outbound Distribution
100 Suppliers Logistics Manufacturers Logistics & Retail

90 Max
80 Average
Days of Inventory

70 Min
60

50

40

30

20

10

Customer
Outbound
Pre-Assembly

Loading &
Components

On-site Part

Marketplace
Despatch
Assembly WIP
In-house built

Production WIP
Bought-out Parts
Raw Material

Inbound Transit

Transit
Finished

(VM)
Parts

Vehicle
WIP

Source: Holweg (2002)

Value Stream Mapping 14
© Professor Peter Hines, 2005
Some of the Maps

Big Picture Level

Value Stream Mapping 15

© Professor Peter Hines, 2005
 Spaghetti Diagram
In-Servicing Vehicle Storage Valeting Area
Customer Car Park

Customer
Delivering
Car
Back Office Area
Used Car Storage Area Parts Service Workshop
Store
Technician
& Valeter
Sales Staff Desks Activity

Customer
Service Desks Collecting
New Car Storage Area Coffee Car
Area New Car Showroom
 Big Picture Map: Current State
Blocks R Us Planning 30 round
Forecast Lean Ltd.
Random Operator
Supply 30 pieces
15s Order per 7.5 min
1 every 15 sec
Numerous Variety
Batches Manager’s Schedule Variety = 3
1 piece per time

Operation 1 Operation 2 Operation 3 Operation 4

I I I I I

Red 2 blocks
Blocks C/T = 5 sec 5 blocks C/T = 7 sec 4 blocks C/T = 7 sec 4 blocks C/T = 5 sec
510 sec Uptime = Uptime = Uptime = Uptime =
100% 100% 100% 100%
450 sec av 450 sec av 450 sec av 450 sec av
Batch = 10 Batch = 7 Batch = 9 Batch = 1
Variety = 3 Variety = 3 Variety = 3 Variety = 3
Prodn Lead Time =
510 sec 75 sec 60 sec 60 sec 30 sec 735 sec

5 sec 7 sec 7 sec 5 sec VA Time = 24 sec

 Big Picture Map: Future State
Planning 30 round
Forecast Forecast Lean Ltd.
Blocks R Us
Supply to 10s Order TAKT =
Pull 15 sec
Order
Daily Order
Standard Number Variety = 3
1 1 piece per time
Changeover
Milk
Round

1 1 1 1
Operation 1 Operation 2 Operation 3 Operation 4
R
Y
Waste G
Red Batch Elimination
Cycle C/T = 5 sec
Blocks C/T = 5 sec C/T = 5 sec
Time Uptime =
C/T = 5 sec
Uptime = Uptime = Uptime =
White 100% 100% 100% 100%
Blocks 300 sec av 300 sec av 300 sec av 300 sec av
Batch = 1 Batch = 1 Batch = 1 Batch = 1
Prodn Lead Time =
Variety = 1 Variety = 1 Variety = 1 Variety = 3 60 sec 160 sec
20 sec 20 sec 20 sec 20 sec
5 sec 5 sec 5 sec 5 sec VA Time = 20 sec
Some of the Maps

Detailed Level

Value Stream Mapping 19

© Professor Peter Hines, 2005
 Process Activity Map
Step Flow VA % Area Dist Time People C/T Up/T Avail. T Batch Var

Value Stream Mapping 20

© Professor Peter Hines, 2005
 Quality Filter Map
„ Identifies where quality problems exist in
the supply chain
„ 3 types of quality defect
– Product defects - defects in goods that are not caught
by in-line or end-of-line inspection and are therefore
passed on to customers
– Service defects - problems given to a customer not
directly related to the product but to the level of service
– Internal scrap - defects produced in a company that
have been caught by in-line or end-of-line inspection

Value Stream Mapping 21

© Professor Peter Hines, 2005
 Quality Filter Chart
1000000

900000

800000

700000
Parts Per Million

600000
Product Defects
500000 Service Defects
Scrap
400000

300000

200000

100000

0
Blanking Pressing Assembly Paint Despatch

Value Stream Mapping 22

© Professor Peter Hines, 2005
Product Variety Funnel
YARN KNIT PIECE PART CUT
COLOUR PACK
GAUGE SIZE (SIZING)

GREY PIECE
FABRIC PARTS

YARN PACKED
KNIT DYE CUT PRODUCT
SEW
PRODUCT
(FGS)
COLOURED
FABRIC

VARIANT
FLEXIBILITY
LEAD TIME

(TUBE) PACK
SIZE
COLOUR
GAUGE

Value Stream Mapping 23

© Professor Peter Hines, 2005
 Value Analysis Time Profile
2.5

cost
r e d u c t io n
2.0
o p p o r t u n it y

1.5 A s s e m b ly
H o r iz o n ta l p la te a u s h o w o p e r a tio n s
o p p o r tu n itie s fo r P o s t- A s s e m b ly
W IP s to r e d e c a n tin g , in s p e c tin g
1.0 le a d - tim e r e d u c tio n e tc

0.5
P r e s s o p e r a tio n s cum cost total
re c e iv e s to r e g o o d s in
g o o d s in cum cost val add
0.0
0 100 200 300
50 150 250 350
Time (hours)

RS Components Course
© Professor Peter Hines, 2005
 Value Analysis Time Profile
2.5

2.0

£ 2 .2 9 T o ta l
*
1.5 £ 2 .0 1 V A
3 3 7 h rs
*
1.0

* *
0.5 * *
cum cost total
cum cost val add
0.0
0 100 200 300
50 150 250 350
Time (hours)

RS Components Course
© Professor Peter Hines, 2005
 Value Analysis Time Profile
2.5

2.0
£ 2 .0 3 T o ta l
£ 1 .9 6 V A
1.5 2 2 5 h rs

1.0

cum cost total

cum cost val add
0.5
0 100 200 300
50 150 250 350
Time (hours)

RS Components Course
© Professor Peter Hines, 2005
 Customer Finance Charge C/W Non Charge Filing Reception Senior Time Reso- Standards & Comments
Service Team C/W Finance C/W urce

Monica’s 2 - 7.5 2 hrs Variance depends on Case

Table hrs Worker, variable location of sort

No Legal/Means
Finance
Phase 2
Yes

No
Four Field Map:
Finance Phase 2A

Charge

Yes Current State 2 hrs

Non 1 wk - Backlog calculated using oldest

Charge
Charge 34 wks 1 hr date (worst case scenario)

Not FIFO
Tag 1 hr
Reception Tag & Filing

All file requests dealt with at the

same time
Pull 0.25 hr
Need Yes 3–9
File Get File hrs Assume 1 person processing post
No

No No 0.1 –2
4 Senior
Skills Skills hrs
Case Work’ Unable to quantify referral time
Yes Yes
Process Process 1 wk 0.5 hr
Post Post

Post Post Post

Bucket Bucket Bucket

13 to 3:20 to
248 5:15 Total 27
Value Stream Mapping days hrs
© Professor Peter Hines, 2005
 Charge Non Charge Filing Senior Time Reso- Standards & Comments
Case Worker urce

Charge Non Charge Training needed / cultural issues

with files With files to be addressed

Read Read
Four Fields Map: Charge post is sent to C/W with
10 – 15 10 – 15 File (no need to pull file at later
stage)
Future State
Letter Letter mins mins

No No Referral process: Matter would

Finance Phase 2A

Skills Skills Referral always be passed back to C/W

after the Senior C/W has
Yes Yes considered it, either with a work
solution or guidance notes. This
Need No Need No
box to be emptied once daily
File File 5 mins 5 mins (allocation rota)
Yes Yes

Get File Get File

Pull File 2 hrs if Non Charge post, where file

5 mins needed, files to be supplied by
rqrd
filing 4 times daily (2 am, 2 pm)
10 mins10 mins from a tray in each pod. This
Process Process Process activity is a priority
– –
2 hrs 2 hrs

Post Post Post 5 mins 5 mins

Bucket Bucket Bucket Calculated per piece of post
Post split into 1st, 2nd, Dx

30 mins 30 mins
to 4 hrs to 2 hrs Total 28
Value Stream Mapping 25 mins 30 mins
© Professor Peter Hines, 2005
Cases and Examples

#1 Internal: Main Motors

Value Stream Mapping 29

© Professor Peter Hines, 2005
 The Research Model

Strategic Level Operational Level

Business Strategy Customer

Formation and Understanding
Policy Deployment
Process Activity
Business Strategy Understanding
Validation and
Action Planning Process Costing
Understanding

Value Stream Mapping 30

© Professor Peter Hines, 2005
 Critical Success Factors
„ Continue to grow markets share in the 3 channels

„ Recruitment, development and retention of skilled &

motivated workforce

„ External influenced innovation

„ Developing the right balance between the 3 channels

„ Close existing & new customer relationships

„ Keep the franchise

„ Long term focus & profitability

„ Continuing to develop brand presence

Value Stream Mapping 31

© Professor Peter Hines, 2005
 Key Business Targets
Vision
KPIs Unit Now Year 1 Year 2 Year 3 Year 4 Year 5
Gross Profit/New Car % 2.0% 2.3% 2.6% 2.9% 3.2% 3.5%
Gross Profit/Used Car % 7.0% 7.6% 8.2% 8.8% 9.4% 10.0%
Finance Penetration New Cars % 23.0% 23.0% 23.0% 23.0% 23.0% 23.0%
Finance Penetration Used Cars % 16.0% 17.8% 19.6% 21.4% 23.2% 25.0%
Admin Expenses % 0.9% 1.0% 1.1% 1.0% 0.9% 0.9%
Market Share: Region vs Nation % 6.8/6.8 7.0/7.0 7.3/7.3 7.5/7.5 7.8/7.8 8.0/8.0
Retention New: First Service % 80% 80% 80% 80% 80% 80%
Retention New: 3 years % 30% 36% 42% 48% 54% 60%
Retention Used: First Service % 25% 26% 27% 28% 29% 30%
Return on Total Turnover % 1.4% 1.9% 2.4% 3.0% 3.5% 4.0%
Volumes: New Cars # 550 580 610 640 670 700
Volumes: Used Cars # 270 296 322 348 374 400
Service Parts Absorption % 60% 68% 76% 84% 92% 100%
Stock Turn: Used Cars # 8 8 8 8 8 8
Stock Turn: Parts # 7.9 8 8 8 8 8
OCE: New Cars % 39.5% 41.0% 42.5% 44.0% 45.5% 47.0%
OCE: Used Cars % 38.4% 45.6% 52.8% 60.0% 67.2% 74.5%
OCE: Service % 51.1% 55.2% 59.3% 63.4% 67.4% 71.5%32
Value Stream Mapping
ILU skills/competency % 45.20% 65% 75% 85% 95% 100%
© Professor Peter Hines, 2005
New Car Value Attributes Importance vs Satisfaction
5.00
4.50
4.00
3.50
3.00
Importance
2.50
Satisfaction
2.00
1.50
1.00
0.50
0.00
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Value Stream Mapping 33

© Professor Peter Hines, 2005
 The Service Process
Process Activity Mapping Example
Process Activity: Car collection & Work division

ACTIVITY AREA DIST MTS TIME MIN PEOPLE

FLOW
(FVA/VA/SA
(O/T/I/D/D')
/W)

Customer comes through the door

Customer arrives to Service desk and sits T SA Showroom 20 0.25 1
Customer waits D W' Showroom 0 2 1
Identify the customer I SA Showroom 0 0.5 2
Control if job card information are correct I W Showroom 0 2 2
Customer signs O SA Showroom 0 0.1 2
Collect customer's keys O SA Showroom 0 0.1 2
Arrangement to return car I SA Showroom 0 1 2
Write arrangement on job card O SA Showroom 0 0.25 1
Find a place for job card D W Showroom 3 0.5 1
Waits for workshop controller D W' Showroom 0 120 0
. .
. .
Ian checks job cards I W Showroom 0 0.5 1
Ian informs Darren who is going to do the service O SA Showroom 0 0.1 2
Darren up-dates Time Sheet O W Showroom 0 0.1 1
Ian hands out work between technicians T SA Showroom/Workshop 20 2 2

TOTALS 43 129.4 20

Value Stream Mapping 34

© Professor Peter Hines, 2005
 The Service Process
Big Picture Map
Car Prepare 2 days Understanding
Collection Service Job later Requirements Routine 75% Service at
90% customer Cards & Booking Regular service Dealer
brings the car 5 min - the day 90% phone call
10% car collected before service 10%personal visit
at home/work 5 min 25%
35 Check parts Concerns :break
cars & Pre -picking 5% down , warranty
Large Repair
= 1 day 3,5 min Investigation &
Paperwork
95%
Small Repair
Hot orders
PC Replenish Done immediatly
Work System
division
Lead
LeadTime
Time
24h - Local
Continue
cur storage center Automatic 3,6
3,6 days
days
scheduling rier 48h -From other replenishment
during day dealer
Accountant
(invoice
registr .)
Parts Found more Custom .collectio inv
the day after
storage repairs n & Payment oic
Valeting
30% Call customer 50% customers e
Mechanical Service Quality
come back later
Work 3 95% 22 min Feed -back
25% waits at dealer
5 operators 70% Final Road cars 5% 1,5 h Ring 3-5
15% pick up from
Test = 1 hValue2 Stream days later 35
valeters Mapping
city centre
1/1,5 hours 10% courtesy car © Professor Peter Hines, 2005
 The Costing Model

New Car Sales Process

Activities VA FVA SA W Activity cost %

Visit at Dealer & take order ?? 0.0% ?? 0.0% ?? 0.0% ?? 0.0% ??

Source car 0.0% 0.0% 0.0% 0.0%
Car arrival, Delivery arrang. & Service Booking 0.0% 0.0% 0.0% 0.0%
Invoice&AFRL 0.0% 0.0% 0.0% 0.0%
PDI - Mechanical Work&Road Testing 0.0% 0.0% 0.0% 0.0%
Valeting 0.0% 0.0% 0.0% 0.0%
Customer Collection 0.0% 0.0% 0.0% 0.0%

Totals - - - - -

Value Stream Mapping 36

© Professor Peter Hines, 2005
 The Process
Costing Perspective
ASC Area Source Finalise Deal Dealer Visit Decision
Storage Centre New Car & Take Order & Test Drive to Purchase

Sales DP - 3 Sales DP - 2 Sales DP - 1

10,081.24 19% 4,750.40 9% 6,577.48 13%

Other Dealer
Stock

Think &/or
Own Stock Factory Order
Visit Other Dealer

General
Invoice Emission
Stock & AFRL - Trigger
Mantaining VW Payment >> Sales DP General Costs 58,746.75
71,486.00 Administration DP - 1 >> Commission 26,632.86
2,840.40 5%

Car Arrival Delivery Customer

PDI Valeting
& Delivery Check Arrangement Collection
Sales DP - 5 Sales DP - 6 Mech.Service DP - 6 Mech.Service DP - 1 Sales DP - 4
7,125.60 13% 2,740.61 5% 5,899.91 15% 2,859.94 5% 8,404.55 16%

Value Stream Mapping 37

© Professor Peter Hines, 2005
 The Strategic Change
Programme
Value Creation Infrastructure

„ Used Car Loyalty Scheme „ Annualised Hours

„ Service Customer Care „ Measurement Scheme
„ Service Pricing incl. Courtesy Car „ Skills/Competency Scheme
„ Used Car Replacement Cycle

Waste Reduction External

„ Scheduling of Service Bay incl. PDI „ Improved Supplier New Car

OTD Cycle
„ Scheduling of Valeting
„ Right First Time Lean Servicing

Value Stream Mapping 38

© Professor Peter Hines, 2005
 The Profit Potential
(£ annually by end 2002)
Level 1 (Internal Waste Reduction) £ 49.6K
Level 2 (Customer Value Added) £ 62.5K
Level 3 (Multiplier Effects) £ 43.2K
Annual Profit Potential by end 2004 £155.3K

Equivalent to a 105%
increase in profitability

Value Stream Mapping 39

© Professor Peter Hines, 2005
Cases and Examples

#2 Supply Chain:
Corus - Automotive

Value Stream Mapping 40

© Professor Peter Hines, 2005
LEAP: Participating Companies
Steel Steel Service First Tier Component Automobile
Mill Centres Producers OEM’s

Albion Pressed Metal

Steel &
Alloy
Tallent Engineering

Corus LDV

GKN Sankey

British Steel
Distribution Krupp Camford

Wagon Group

© Professor Peter Hines, 2005

Specific Improvement Targets
British Steel Steel Service Metal Total for the
Improvement Area Strip Products Centres Processing Three Tiers
Customers
1. Lead Time Reduction 40% 40% 40% 40%

2. Time to Market 30% 30% 30% 30%

Reduction
3. Stock Reduction 10% 20% 20% 15%

4. Quality Improvement 50% 20% 50% 45%

5. Productivity 5% per annum 5% per annum 5% per annum 15% over 3

Improvement years
6. Increased Mutual 30% 30% 30% 30%
Business

Value Stream Mapping 42

© Professor Peter Hines, 2005
 Demand Amplification

35000
Blanking plan
30000 Blanking Actual
Pressing Plan
25000
Quantity

20000

15000

10000

5000

0
35 36 37 38 39 40 41 42 43 44 45 46 47 48
Week number

RS Components Course
© Professor Peter Hines, 2005
 Demand Amplification

Tonnes
200

150
Enduser Demand

Wide coil orders

100
BSSP Deliveries

50

RS Components Course
© Professor Peter Hines, 2005
Current State Map for a Larger part of of Value Stream
Check vs Check vs
Production Plan Sales Plan

Order (3 Vehicle
months in
Steel 3 Month PRODN. 5 Month Assembler
COMMERCIAL Service
advance) Forecast CONTROL Forecast
STEEL MILL Centre
SCHEDULING
Weekly Daily 12,000 pcs/mo
Promise Order Order
(Negotiation) Coils With
Fax Time Tray = 14 off
Call off weekly Revision slots
or by day
2 shifts 2 shifts

Revisions to
Shipping
Missed
Weekly Weekly Schedule
Deliveries
Schedule Schedule
& Revisions by Day
Individual 1x
Iron & Steel Schedules hours
Making
Coils
3
Days

Hot roll Pickle Pack Dispatch Slit Dispatch Blanking Pressing Assembly Paint Assembly Dispatch

I I I I I I I I I I I

C/T = 120 hrs C/T = 15 min C/T = C/T = 1 sec C/T = 1 sec C/T = 13 min C/T = 1 hour C/T = 9 min
(includes C/O = 10 min 4min/coil C/O = 20 min C/O = 30 min C/O = 0 min C/O = C/O = 0 min
cooling) C/O = 45 min Uptime = 70% Uptime = 70% Uptime = 85% Uptime = 65% Uptime = 85%
Uptime = 55% 27,000 secav 27,000 secav 2 shifts 2 shifts 2 Shifts
2 shifts EPE 10 Days EPE 10 Days 27,000 secav 27,000 secav 27,000 secav
27,000 secav

Lead Time
10 Days
2 Days 2 Days 3 Days1 Day 16 Days 3 Days 2 Days 6 Days 0.6 Days 0.27 Days 1.2 Days = 47 to 69
to 32 Days days
VA Time =
7262 sec
1200 Sec. 900 Sec. 240 Sec. 1 Sec. 1 Sec. 780 Sec. 3600 Sec. 540 Sec. (121 min)
Future State Map for a Larger part of of Value Stream
Forecast
Transmission
(Supply Chain
Syvchronisation) Steel Vehicle
Service
Centre PRODN. 5 Month Assembler
CONTROL Forecast
STEEL MILL Orders Daily
SCHEDULING
Order
Coils Daily 12,000 pcs/mo
Order
With
2 shifts Time Tray = 14 off
slots
2 shifts
Coil Coil
600 600 OXOX

600 14
coil

coil
Iron & Steel

600
Making

600 14
14 1x
hours
Batch Batch
600 600 tote tote 14 14
Assembly
Hot roll Pickle Pack Dispatch Slit Dispatch Blanking Pressing & Paint
Dispatch

FIFO

C/T = 120 hrs C/T = 15 min C/T = C/T = 1 sec C/T = 1 sec C/T = 60 min
(includes C/O = 10 min 4min/coil C/O = 5 min C/O = 5 min C/O = 0 min
cooling) C/O = 5 min Uptime = 85% Uptime = 85% Uptime = 65%
RFT = 85% Uptime = 85% 27,000 secav 27,000 secav 2 Shifts
2 shifts EPE Day EPE Day 27,000 secav
27,000 secav

Lead Time
1 Day 1 Day 7 Days 1 Day 1 Day 1 Day 4 Hours = 11.5
days
VA Time =
6902 sec
1200 Sec. 900 Sec. 1200 Sec. 1 Sec. 1 Sec. 3600 Sec.
 LEAP Targets & Results

Area Target Results

Lead Time 40% u 20-90% u
Stock Reduction 15% u 20-75% u
Quality 50% t 50 ppm
Productivity 15% t 8-33% t
Increased Business 30% t 40-50% t
Design Time 30% u 30% u

Value Stream Mapping 47

© Professor Peter Hines, 2005
 Cases and Examples

#3 An Information Based Process:

Insurance Company

Value Stream Mapping 48

© Professor Peter Hines, 2005
 The Twelve Phases Map
1. Planning Mapped at the ‘point of activity’
2. Pre-audit
3. Initial visit
4. Billing
5. Cert. production
6. Tech. Cert. review
7. Outsourcing
8. Cert. completion
9. Visit cycle
10. Billing Amf
11. Visit 1
12. Strategic review

Value Stream Mapping © S A Partners, 1993-2005 49

© Professor Peter Hines, 2005
Completing the Flow

Current
State
Maps

Paper
work
flow

Value Stream Mapping © S A Partners, 1993-2005 50

© Professor Peter Hines, 2005
 Current state map

Start

Value Stream Mapping © S A Partners, 1993-2005 51

© Professor Peter Hines, 2005
Current state map
Finish

Value Stream Mapping © S A Partners, 1993-2005 52

© Professor Peter Hines, 2005
 Current State
Phases – Time Line (calendar days) Resource
Minimum Maximum Minimum Maximum
Days Hours Days Hours Hours Mins Hours Mins
1. Planning process 2 10 25 1

2. Pre-audit 3 30 20 40

3. Initial audit 3 30 20 40

4. Billing 2 8 10 30

5. Cert. Production & proof reading 1 10 32 2 40

6. Tech. cert. review 17.5 47.5 1 9 3 1

7. Outsourcing 14 14 4 4

8. Cert. completion 2.5 3 21 26

9. Visit cycle 0.5 6 27 55

10. Billing AMF 1 7 12 12

11. Visit 1 2 31 2 15 4 15

12. Strategic review 9 26 2 50 10 50

Total of process 42.5 201.5 8 49 24 57

Value Stream Mapping © S A Partners, 1993-2005 53

© Professor Peter Hines, 2005
 Phase 1 – Resource Planning
Root Cause Opportunities

Major Wastes Process Culture Process Culture

Print of email (sales brief) Comfort factor Read electronically

Validation of data Information not right Lack of trust Review format of data –
sales brief and sales
application checklist.
Planning to fail (brief
may say 6-8 months)
Ownership from sales –
resp/training to get it
right
Single point of contact (1st time) Planning to fail Always done it this Obtain alternative
way contacts from client
(education of client re:
status of registration)
Use of planning spreadsheet/correspondence Current systems do Comfort/lack of trust Investigate system
log not allow for capability
monitoring as per s/s
Readiness of client Sales target driven. Always done it this Modules for clients.
Communications/Edu way Education of client.
cation of client. Staff training (pick up on
Information not right buying signals/leads etc).
Opportunity to influence
ass via financial
incentives etc

[1]
© S A Partners 2004

Value Stream Mapping © S A Partners, 1993-2005 54

© Professor Peter Hines, 2005
 Future State
Phases – Time Line (calendar days) Resource
Minimum Maximum Minimum Maximum
Days Hour Days Hour Hour Min Hour Min
s s s s
Planning 1 5 35 1 35

Pre-Audit visit and Reports 1 3 10 15

Visits and reports 3 15 3 10 13 30

Post visit support service 0 9 0 3 6

Total 4 32 3 55 18 26

85% reduction in time

50% reduction in resources
Value Stream Mapping © S A Partners, 1993-2005 55
© Professor Peter Hines, 2005
 What Have You Learned?
„ Don’t be a ‘happy mapper’
„ Start by understanding what you are trying to
achieve
– Can anyone tell me the 4 Lean Principles?
– And what about a link to Strategy?
„ Involve the recipients in the mapping
– Don’t ‘do mapping’ to people
„ Don’t Just Map Internally
„ Don’t Just Map Order Fulfilment
„ No one map will do the job
– Chose the right maps

Value Stream Mapping 56

© Professor Peter Hines, 2005