ISBN-10:
0071828915
ISBN-13:
9780071828918
Pub. Date:
12/20/2013
Publisher:
McGraw-Hill Professional Publishing
Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation / Edition 1

Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation / Edition 1

by Karen Martin, Mike Osterling

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Product Details

ISBN-13: 9780071828918
Publisher: McGraw-Hill Professional Publishing
Publication date: 12/20/2013
Edition description: Net
Pages: 224
Sales rank: 217,527
Product dimensions: 6.00(w) x 9.10(h) x 1.00(d)

About the Author

Karen Martin is president of The Karen Martin Group, Inc., a firm that specializes in business performance improvement and Lean management practices. She's also the author of the Shingo Research Award–winning The Outstanding Organization, an instructor in the University of California, San Diego's Lean Enterprise program, and an industry advisor to the University of San Diego's Industrial and Systems Engineering program.


Mike Osterling provides support and leadership to organizations on their Lean transformation journey. Prior to consulting, Mike played a key internal role in Schneider Electric's Lean transformation during the 1990s. He is the cofounder of San Diego State University's Lean Enterprise program and continues to teach at SDSU and other universities.

Read an Excerpt

VALUE STREAM MAPPING

How to Visualize Work and Align Leadership for Organizational Transformation


By KAREN MARTIN, Mike Osterling

McGraw-Hill Education

Copyright © 2014 Karen Martin and Mike Osterling
All rights reserved.
ISBN: 978-0-07-182891-8



CHAPTER 1

Value Stream Management


In most organizations, no one person can describe the complete series of events required to transform a customer request into a good or service—at least not with any level of detail around organizational performance. This gap in understanding is the kind of problem that leads to making improvements in one functional area only to create new problems in another area. It's the kind of problem that results in adding processes that increase operational cost but doesn't truly solve problems with root causes that reside upstream. It's the kind of problem that propels well-meaning companies to implement expensive technology "solutions" that do little to address the true problem or improve the customer experience.

The lack of understanding about how work flows—or, more commonly, doesn't flow—across a work system that's sole purpose is to deliver value to a customer is a fundamental problem that results in poor performance, poor business decisions, and poor work environments. Conflicting priorities, interdepartmental tension, and—in the worst cases—infighting within leadership teams are common outcomes when a company attempts to operate without a clear understanding about how an organization's various parts fit together and how value is delivered to its customers. And significant time and money is wasted when organizations attempt to make improvement without a clearly defined, externally focused improvement strategy that places the customer in the center. Enter the concepts of value streams and value stream mapping.


What Is a Value Stream?

The term value stream was coined by James Womack, Daniel Jones, and Daniel Roos in the book that launched the Lean movement, The Machine that Changed the World (1990), and further popularized by James Womack and Daniel Jones in Lean Thinking (1996). A value stream is the sequence of activities an organization undertakes to deliver on a customer request. More broadly, a value stream is the sequence of activities required to design, produce, and deliver a good or service to a customer, and it includes the dual flows of information and material. Most value streams are highly cross-functional: the transformation of a customer request to a good or service flows through many functional departments or work teams within the organization.

An extended value stream includes those activities that precede a customer request (e.g., responding to a request for a quote, determining market needs, developing new products, etc.) or occur following the delivery of a good or service to a customer (e.g., billing and processing payments or submitting required compliance reports).

While many of a value stream's activities occur sequentially, others may be performed concurrently (in parallel) to other work. The activities in a value stream are not merely those that an organization performs itself: work done by outside parties and even the customers themselves are part of a value stream.

Value streams come in many forms. The primary type of value stream is one in which a good or service is requested by and delivered to an external customer. Other value streams support the delivery of value; we often refer to these as value-enabling or support value streams. Examples of support value streams include recruiting, hiring, and onboarding; IT support; the annual budgeting process; and the sales cycle. Complex creative work can be viewed as having its own value stream—from initial concept to an executable design or to product launch. Product design can be viewed as a value stream segment if the design is required to fulfill a specific customer order.

Many value streams can go on and on in both directions. For example, a value stream could include all of the activities from the time a customer selects an architect until drawings are delivered to a general contractor. Or until construction planning is complete. Or until the final inspection after a structure has been built. Or until revenue has been collected for the construction work. The product life cycle is also a value stream consisting of specification, design, supply chain, manufacture, commissioning, operation, and ultimately decommissioning and disposal. A full value stream for patient care might include appointment scheduling, registration, diagnosis, treatment, aftercare, and possibly even receipt of payment. As you'll learn in Chapter 2, one of the first steps you'll take in preparing to analyze a value stream is defining the scope—the "fence posts" or beginning and ending points for review. This will depend largely on the problems you need to address or the performance improvements you would like to realize.

So how many value streams does an organization have? It varies. Small organizations may have only one customer-facing value stream and many internal support value streams. Large organizations could have 5, 10, or even dozens of customer-facing value streams and hundreds of support value streams. Wherever there is a request and a deliverable, there is a value stream.

One way to determine how many value streams your organization has is by looking at the types of internal and external customer requests your organization receives and the number of variants of high-level process flows that each of those requests pass through. Requests that pass through similar process flow sequences form a single "product family." To reap the greatest gains from viewing work and organizing the business according to value streams, you will eventually want to analyze and improve each product family's value stream. The best methodology we've found to date for this effort is value stream mapping, a tool that helps you visualize complex work systems so you can address the disconnects, redundancies, and gaps in how work gets done. Used properly, value stream mapping is far more than a design tool: it's the most powerful organization transformation tool we've seen to date. Once people learn how to think in value stream terms, it's difficult for them to look at work in any other way.


What Is Value Stream Mapping?

The roots of value stream mapping can be traced to a visual mapping technique used at the Toyota Motor Corporation known as "material and information flows." As the West grew intrigued with Toyota's consistent track record and began studying how Toyota's approach differed from its own, we learned that Toyota's focus on understanding the material and information flow across the organization emerged as a significant contributor to its ability to perform at consistently high levels. As a result, mapping these types of flows became one of the hallmark approaches used in the Lean movement to transform operations. But value stream mapping is neither clearly understood nor effectively utilized in all circles. To understand why, a little history is in order.

Lean is a term that means different things to different people, which is one reason why companies, government agencies, and not-for-profit organizations have experienced such wide-ranging results from exploring and adopting Lean practices. When you look at the history of how Lean was introduced in the West and the degree to which our collective understanding of this management approach has evolved, you can see why there's confusion about what Lean is and what it is not.

The term Lean was coined by John Krafcik in a 1988 article based on his master's thesis at MIT Sloan School of Management and then popularized in The Machine that Changed the World and Lean Thinking. Lean Thinking summarized Womack and Jones's findings from studying how Toyota operates, an approach that was spearheaded by Taiichi Ohno, codified by Shigeo Shingo, and strongly influenced by the work of W. Edwards Deming, Joseph Juran, Henry Ford, and U.S. grocery stores. Lean Thinking framed Toyota's philosophical and operational bias around five key principles—value, the value stream, flow, pull, and perfection—and launched an era where thousands of companies attempted to mimic how Toyota operated. The Toyota Production System (TPS)—or Lean, as TPS and its newer iteration, Toyota Business Practices (TBP) are commonly referred to—became the darling of an army of consultants, authors, and improvement professionals.

While Lean Thinking provided a powerful foundation in understanding the basic concepts related to the actual delivery of value, several of the most pressing topics in Lean circles today—leadership practices, culture, problem solving, and coaching—weren't explicitly addressed. This isn't a criticism of Womack and Jones's transformative work. They were clearly at the leading edge of this revolution in management thinking. But, two decades later, we can now look back and see how little Lean academics, consultants, and practitioners collectively understood at that time, about the full range of philosophical underpinnings and management practices that have contributed to Toyota's ongoing success. As more and more people and organizations studied and adapted Toyota's methods, new discoveries surfaced.

Eight years later, Jeffrey Liker published The Toyota Way (2004), which was the first comprehensive look into how Toyota operates in terms of its philosophy, processes, people, and problem solving approach. While this pivotal work included an explanation of the mechanistic aspects of operations design, Liker's background in sociology propelled him to dig more deeply into the cultural and leadership elements at play. Liker organized his findings into 14 management principles that captured the essence of Toyota's organizational and business practices.

However, even with this expanded view of the foundational elements that produce consistently high levels of performance, many had difficulty seeing the core beliefs and behaviors that allowed Toyota to perform to these levels, thrive when times were good, and to bounce back quickly when faced with difficulties. Perhaps our Western minds couldn't grasp a management approach that most of us had never experienced firsthand. Or perhaps we naturally gravitate to mechanistic solutions because they are concrete. After all, dealing with people is complicated and messy. Part of the reason may lie with those consultants who—even after Lean literature was replete with information about the vital role leadership, problem solving, and daily improvement played in transformation—continued to focus on tools-based "implementation" versus people-based transformation. Whatever the reason, for many, their love affair with tools continued.

Value stream mapping was embraced as one such tool. Authors Mike Rother and John Shook studied Toyota's "material and information flow mapping" and recast the method as "value stream mapping" in the landmark book Learning to See (1999). The result of Rother's studies and Shook's 10 years of experience in a leadership role at Toyota, Learning to See provided us with the first tangible method for "seeing" the value streams that Womack et. al defined. After using value stream mapping for over 10 years to transform operations in nearly every industry, we believe it's the most powerful, yet under-utilized improvement "tool" we've seen to date. But the power behind value stream mapping lies in a little understood reality: it's far more than just a tool.

Value stream maps offer a holistic view of how work flows through entire systems, and they differ from process maps in several significant ways. First, value stream maps provide an effective means to establish a strategic direction for making improvement. The inclination to jump into the weeds and design micro-level improvements before the entire work system—the macro picture—is fully understood, is a key contributor to suboptimization. As shown in Figure 1.1, work has various degrees of granularity. Value stream mapping, the macro perspective, provides the means for leadership to define strategic improvements to the work flow, whereas process-level mapping enables the people who do the work to design tactical improvements. As you'll learn about in the next chapter, this difference signals the need for a higher-level value stream mapping team than what many organizations often think they need.

Second, value stream maps provide a highly visual, full-cycle view—a storyboard—of how work progresses from a request of some sort to fulfilling that request. This cycle can be described as request to receipt, order to delivery, ring to ring (phone call to cash register), cradle to grave, or quote to cash. A cyclical view places the customer (who is typically both the requester and recipient) in a central position, which provides a powerful means to view an entire work system as it relates to delivering customer value. As shown in Figure 1.2, visually depicting the cycle of work typically includes three components: information flow, work flow, and a summary timeline. Chapter 3 will describe each component in detail.

Third, the process of value stream mapping deepens organizational understanding about the work systems that deliver value and support the delivery of value to customers, which aids in better decision making and work design. By distilling complex systems into simpler and higher-level components that can be understood by everyone from senior leaders to the front lines, organizations create common ground from which to make decisions. In addition, the mental shaping that's needed to succinctly define complex work systems is a boon when redesigning work to deliver greater value, faster, at lower cost, and in safer and more fulfilling work environments. There's a logistics advantage as well: value stream mapping enables a team to fully understand how work flows through a complex system in a matter of days, whereas detailed process mapping (which serves a different purpose) can take weeks or months and is too detailed to help in making effective strategic decisions.

Fourth, the quantitative nature of value stream maps provides the foundation for data-driven, strategic decision making. Measuring overall value stream performance and identifying the barriers and process breakdowns as the work flows through the value stream is a powerful way to drive continuous improvement so that an organization is able to better meet the needs of both its customers and its internal operation.

Last, value stream maps reflect work flow as a customer experiences it versus the internal focus of typical process-level maps. Many organizations are structured as a series of function-based silos that bear little relationship to the customer fulfillment cycle. As depicted in Figure 1.3, value stream maps force an organization to think holistically in terms of cross-functional work systems and product families. While this type of thinking can pose challenges during the future state design phase of mapping, it's exactly the type of challenge progressive organizations must embrace. Value stream mapping forces an organization's hand to either make the difficult structural changes that are more in line with the cross-functional reality within which they exist, or continue to deny reality, stick with outdated structures, and continue to perform accordingly.


The Benefits of Value Stream Mapping

It bears repeating: the benefits of well-executed value stream mapping go far beyond how it's commonly but narrowly viewed: as a work flow design tool. While organizations rightfully turn to value stream mapping to serve a specific end (an improved value stream), they often miss the ample transformational opportunities that have longer-lasting and deeper benefits than the mapping results themselves. Transformation requires fundamental changes in an organization's DNA; done well, value stream mapping can be instrumental in facilitating the necessary shifts in mindsets and behaviors.


Visual Unification Tool

While value stream maps are powerful tools in improving manufacturing production work flows, they are arguably even more powerful when used to visualize work that's not particularly visual to begin with. In most office, service, creative, and knowledge work environments, much of the work centers on information exchanges that are either verbal or electronic. The ability to visualize non-visible work is an essential first step in gaining clarity about and consensus around how work gets done.

Value stream mapping is particularly useful for visualizing how IT systems and applications enable (or don't enable) the provision of value to customers. The mapping process often reveals disconnects, redundancies, and unnecessary complication that otherwise aren't understood by everyone across the organization. We've seen significant and sudden project and budget shifts occur in technology areas because of the discoveries gained through value stream mapping.


(Continues...)

Excerpted from VALUE STREAM MAPPING by KAREN MARTIN, Mike Osterling. Copyright © 2014 Karen Martin and Mike Osterling. Excerpted by permission of McGraw-Hill Education.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Acknowledgments ix

Introduction xi

1 Value Stream Management 1

2 Setting the Stage and Enabling Success 27

3 Understanding the Current State 51

4 Designing the Future State 99

5 Developing the Transformation Plan 125

6 Achieving Transformation 135

Appendix A Value Stream Mapping Icons 149

Appendix B Outpatient Imaging Services Value Stream 153

Appendix C Purchasing Value Stream 161

Appendix D Repair Services Value Stream 167

Appendix E Shelving Systems Value Stream 175

Appendix F Software Development Value Stream 181

Index 187

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