value stream transformation: achieving excellence through leadership alignment and holistic design
DESCRIPTION
To subscribe: http://ksmartin.com/subscribe To purchase the book: http://bit.ly/VSMbk These are slides from a talk given on 1/8/14 in San Diego, California at SME Connect's Operations Roundtable. Too many organizations today suffer from silo-centric behavior and intra-organizational conflict. And yet most don’t understand what’s holding them back from achieving outstanding performance. This is where Karen Martin’s new book Value Stream Mapping comes into play. Value stream mapping can unleash the full potential of an organization and deliver greater customer value, increased profit margins, and create fulfilling work environments. In this talk, Karen discussed how to: • Prepare and engage your leadership team in the transformation process • Gain a deep understanding about your current work systems and the related barriers to delivering value • Design a future state that enables outstanding performance on all fronts • Adopt a new design and lay the foundation for continued improvementTRANSCRIPT
Value Stream Transformation: Achieving Excellence through Leadership Alignment
and Holistic Design
CONNECT
January 8, 2014
© 2014 The Karen Martin Group, Inc. 2
Why Value Stream Mapping? Why Now?
To order from Amazon: www.bitly.com/VSMbk For more information: www.ksmartin.com/VSM
© 2014 The Karen Martin Group, Inc. 3
Value Stream Mapping’s Roots
• Value
• Value Stream
• Flow
• Pull
• Perfection
1996
Value Stream Defined
Value Stream: All of the activities required to
transform a customer request into a good or service.
4
First defined in The Machine That Changed the World, James Womack, Daniel Jones, & Daniel Roos, 1990.
Process Process Process
Customer
Request
Customer
Receipt
© 2014 The Karen Martin Group, Inc.
© 2014 The Karen Martin Group, Inc. 5
Function Function Function Function
Core Value Stream
Support Value Stream
Support Value Stream
Silo-Centric vs. Value Stream Thinking
Value stream segment
Value stream segment
© 2014 The Karen Martin Group, Inc. 6
Value Stream Mapping’s Roots
Mike Rother & John Shook 1999
Beau Keyte & Drew Locher 2004
Whenever there is a product for a customer, there is a value stream.
The challenge lies in seeing it.
— Mike Rother & John Shook, Learning to See
© 2014 The Karen Martin Group, Inc. 7
Value Stream Mapping: Common Failings
• Using the mapping process solely as a work design exercise
• Using the map to make tactical improvements
• Creating maps but taking no action
• Mapping with an inappropriate team—or no team at all
• Creating value stream maps during a kaizen event
• Creating maps with no metrics
• Mapping without a team charter or not socializing it
© 2014 The Karen Martin Group, Inc. 8
Value Stream Thinking: Strategy Before Tactics
Where am I? Where do I want
to go?
I-80 option I-40 option I-70 option
Which route should I take?
? ? ?
© 2014 The Karen Martin Group, Inc. 9
Value Stream Mapping Benefit: Reaching Leadership Consensus
© 2014 The Karen Martin Group, Inc. 10
Value Stream Mapping enables a mapping team to get ABOVE the work
© 2014 The Karen Martin Group, Inc.
VSM Promotes Systems Thinking
11
System Efficiency = Optimal Value Stream Performance
Individual Efficiency = Sub-optimization
Work: Degrees of Granularity
Value Stream
Process Process Process
Step Step Step
12
Macro Perspective
• Define strategic direction (“what”)
• Heavy leadership involvement
• Value Stream Mapping
Micro Perspective
• Identify the tactical “how”
• Heavy frontline involvement
• Metrics-Based Process Mapping
© 2014 The Karen Martin Group, Inc.
Work: Degrees of Granularity Order Fulfillment Value Stream
Order Fulfillment
Quote Design Produce
Fabricate Ship Assemble
Tactical Process-level Perspective
Strategic Value-stream Perspective
13 © 2014 The Karen Martin Group, Inc.
Value Stream Mapping: Visualize your Entire Operation on a Single Sheet of Paper
© 2014 The Karen Martin Group, Inc. 14
Customer
1
Process 5
Function E
LT = 1 days
PT = 15 mins.
%C&A = 95%
4
6
10 mins.
480 mins.
5 mins.
240 mins.
120 mins.
5 days
30 mins.
2 days
15 mins.
480 mins. Total LT = 9.5 days
Total PT = 180 mins.
Activ ity Ratio = 3.9%
Rolled %C&A = 30.0%
Process 3
Function C
LT = 5 days
PT = 120 mins.
%C&A = 85%
3
4
Process 4
Function D
LT = 2 days
PT = 30 mins.
%C&A = 99%
7
5
ABC Technology, Inc.
Current State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
IT-1 IT-2
45 items
Process 2
Function B
LT = 0.5 days
PT = 5 mins.
%C&A = 75%
11
3
Process 1
Function A
LT = 1 days
PT = 10 mins.
%C&A = 50%
5
2
1 items
Information
Flow
Work
Flow
Timeline
10 items
15
Basic Value Stream Map: 3 Sections
1
2
3
© 2014 The Karen Martin Group, Inc.
© 2014 The Karen Martin Group, Inc. 16
Customer
1
Process 3
Function E
LT = 0.5 days
PT = 30 mins.
%C&A = 95%
4
4
10 mins.
1 days
120 mins.
2 days
30 mins.
0.5 days Total LT = 3.5 days
Total PT = 160 mins.
Activity Ratio = 9.5%
Rolled %C&A = 89.3%
Process 2
Function C
LT = 2 days
PT = 120 mins.
%C&A = 95%
3
3
ABC Technology, Inc.
Future State Value Stream Map
Name of Value Stream Being Mapped
Demand Rate = XX / Year
Name of Value Stream Champion
Mapping Date
IT-1 IT-2
5 items
Process 1
Function A
LT = 1 days
PT = 10 mins.
%C&A = 99%
5
2
1 items 10 items
Standard
work
Modified
approvals
IT interface
Cross-
train
Cross-
train
Standard
workError
proof
Basic Value Stream Map: Future State
© 2014 The Karen Martin Group, Inc. 17
Basic Value Stream Future State Performance Metrics
Metric Current State Projected
Future State Projected
% Improvement
Total Lead Time 9.5 days 3.5 days 63.2%
Total Process Time 180 minutes 160 minutes 11.1%
Activity Ratio 3.9% 9.5% 143.6%
Rolled % Complete & Accurate
30.0% 89.3% 197.7%
User defined
User defined
© 2014 The Karen Martin Group, Inc. 18
Executing Transformation
Plan
Value Stream Mapping
Making Specific
Improvements
Prepare Understand
Current State Design
Future State
Develop Transformation
Plan
Execute Transformation
Plan
Three Consecutive Days 4 Weeks Prior to Mapping
Following Mapping
Repeat
Value Stream Mapping Activity Phases and Timing
© 2014 The Karen Martin Group, Inc. 19
© 2014 The Karen Martin Group, Inc. 20
1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:
Name
Name
Lourdes Dwyer
Diana Marie
Dave Gerald
Ryan Austin
FacilitatorValue Stream Champion
Sean Michaels
Contact Information
Contact Information
Demand Rate
Trigger
1,000 per year
Customer submits RFQ
Value Stream Mapping CharterScope Accountable Parties Logistics
Allen Ward
Nancy LittleSpecific
Conditions
Engineer to order, requires both hardware &
software customization
Value Stream
Champion
Capital equipmentExecutive
SponsorValue Stream
Event Dates
& Times
July 24-26, 2013
8:00 am - 5:00 pm
Dave ParksBase-camp
LocationFacilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
No new software; only minor changes to existing IT
systems; no additional staff; no budget changes
Future state design is fully realized by
December 31, 2013.
Last Step Production ships product
Logistics
CoordinatorDave Parks
July 24, 25, & 26
4:00-5:00 pm
First Step Sales reviews the RFQ
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master
Goals & Measurable Target Conditions Engineering, Vice President
Unclear & incorrect information flowing through value stream. IT, Director
Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title
Forecasted growth of 15% for next fiscal year. Sales, Director
Reduce PO to software development lead time by a minimum of 50%. Customer Service, Manager
Ambreen Motiwala
Danny Tran
Nancy Little
Reduce RFQ lead time by a minimum of 50%. Manufacturing, Director
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor
Faster delivery; less hassle; less cost. Function
Better working relationships between sales, estimating & engineering. Planning / Purchasing, Planner
Continential breakfast & lunch
Surf's Up - Room A
Tom St. James
Benefits to Customers & Business On-Call Support
JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)
Operational: LT in segments (RFQ to quote; PO to development). Signature:
Date:
Relevant Data Agreement
Financial: Estimate-to-actual cost comparison.
Executive SponsorSales effectiveness: RFQ conversion rate.
Signature: Signature:
Charter: Critical planning, communication, and consensus-building tool
© 2014 The Karen Martin Group, Inc. 21
1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:
Name
Name
Lourdes Dwyer
Diana Marie
Dave Gerald
Ryan Austin
FacilitatorValue Stream Champion
Sean Michaels
Contact Information
Contact Information
Demand Rate
Trigger
1,000 per year
Customer submits RFQ
Value Stream Mapping CharterScope Accountable Parties Logistics
Allen Ward
Nancy LittleSpecific
Conditions
Engineer to order, requires both hardware &
software customization
Value Stream
Champion
Capital equipmentExecutive
SponsorValue Stream
Event Dates
& Times
July 24-26, 2013
8:00 am - 5:00 pm
Dave ParksBase-camp
LocationFacilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
No new software; only minor changes to existing IT
systems; no additional staff; no budget changes
Future state design is fully realized by
December 31, 2013.
Last Step Production ships product
Logistics
CoordinatorDave Parks
July 24, 25, & 26
4:00-5:00 pm
First Step Sales reviews the RFQ
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master
Goals & Measurable Target Conditions Engineering, Vice President
Unclear & incorrect information flowing through value stream. IT, Director
Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title
Forecasted growth of 15% for next fiscal year. Sales, Director
Reduce PO to software development lead time by a minimum of 50%. Customer Service, Manager
Ambreen Motiwala
Danny Tran
Nancy Little
Reduce RFQ lead time by a minimum of 50%. Manufacturing, Director
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor
Faster delivery; less hassle; less cost. Function
Better working relationships between sales, estimating & engineering. Planning / Purchasing, Planner
Continential breakfast & lunch
Surf's Up - Room A
Tom St. James
Benefits to Customers & Business On-Call Support
JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)
Operational: LT in segments (RFQ to quote; PO to development). Signature:
Date:
Relevant Data Agreement
Financial: Estimate-to-actual cost comparison.
Executive SponsorSales effectiveness: RFQ conversion rate.
Signature: Signature:
Charter: Critical planning, communication, and consensus-building tool
© 2014 The Karen Martin Group, Inc. 22
1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:
Name
Name
Lourdes Dwyer
Diana Marie
Dave Gerald
Ryan Austin
FacilitatorValue Stream Champion
Sean Michaels
Contact Information
Contact Information
Demand Rate
Trigger
1,000 per year
Customer submits RFQ
Value Stream Mapping CharterScope Accountable Parties Logistics
Allen Ward
Nancy LittleSpecific
Conditions
Engineer to order, requires both hardware &
software customization
Value Stream
Champion
Capital equipmentExecutive
SponsorValue Stream
Event Dates
& Times
July 24-26, 2013
8:00 am - 5:00 pm
Dave ParksBase-camp
LocationFacilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
No new software; only minor changes to existing IT
systems; no additional staff; no budget changes
Future state design is fully realized by
December 31, 2013.
Last Step Production ships product
Logistics
CoordinatorDave Parks
July 24, 25, & 26
4:00-5:00 pm
First Step Sales reviews the RFQ
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master
Goals & Measurable Target Conditions Engineering, Vice President
Unclear & incorrect information flowing through value stream. IT, Director
Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title
Forecasted growth of 15% for next fiscal year. Sales, Director
Reduce PO to software development lead time by a minimum of 50%. Customer Service, Manager
Ambreen Motiwala
Danny Tran
Nancy Little
Reduce RFQ lead time by a minimum of 50%. Manufacturing, Director
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor
Faster delivery; less hassle; less cost. Function
Better working relationships between sales, estimating & engineering. Planning / Purchasing, Planner
Continential breakfast & lunch
Surf's Up - Room A
Tom St. James
Benefits to Customers & Business On-Call Support
JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)
Operational: LT in segments (RFQ to quote; PO to development). Signature:
Date:
Relevant Data Agreement
Financial: Estimate-to-actual cost comparison.
Executive SponsorSales effectiveness: RFQ conversion rate.
Signature: Signature:
Charter: Critical planning, communication, and consensus-building tool
© 2014 The Karen Martin Group, Inc. 23
1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:
Name
Name
Lourdes Dwyer
Diana Marie
Dave Gerald
Ryan Austin
FacilitatorValue Stream Champion
Sean Michaels
Contact Information
Contact Information
Demand Rate
Trigger
1,000 per year
Customer submits RFQ
Value Stream Mapping CharterScope Accountable Parties Logistics
Allen Ward
Nancy LittleSpecific
Conditions
Engineer to order, requires both hardware &
software customization
Value Stream
Champion
Capital equipmentExecutive
SponsorValue Stream
Event Dates
& Times
July 24-26, 2013
8:00 am - 5:00 pm
Dave ParksBase-camp
LocationFacilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
No new software; only minor changes to existing IT
systems; no additional staff; no budget changes
Future state design is fully realized by
December 31, 2013.
Last Step Production ships product
Logistics
CoordinatorDave Parks
July 24, 25, & 26
4:00-5:00 pm
First Step Sales reviews the RFQ
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master
Goals & Measurable Target Conditions Engineering, Vice President
Unclear & incorrect information flowing through value stream. IT, Director
Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title
Forecasted growth of 15% for next fiscal year. Sales, Director
Reduce PO to software development lead time by a minimum of 50%. Customer Service, Manager
Ambreen Motiwala
Danny Tran
Nancy Little
Reduce RFQ lead time by a minimum of 50%. Manufacturing, Director
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor
Faster delivery; less hassle; less cost. Function
Better working relationships between sales, estimating & engineering. Planning / Purchasing, Planner
Continential breakfast & lunch
Surf's Up - Room A
Tom St. James
Benefits to Customers & Business On-Call Support
JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)
Operational: LT in segments (RFQ to quote; PO to development). Signature:
Date:
Relevant Data Agreement
Financial: Estimate-to-actual cost comparison.
Executive SponsorSales effectiveness: RFQ conversion rate.
Signature: Signature:
Charter: Critical planning, communication, and consensus-building tool
Value Stream Scoping Diagram Defining Specific Conditions
Golden State Equipment, Inc.
Capital Equipment
Catalog
Configure to order
Engineer to order
Custom hardware
Custom software
Both New Product Development
Spares & subassemblies
Catalog
Engineer to order
24 © 2014 The Karen Martin Group, Inc.
© 2014 The Karen Martin Group, Inc. 25
Where should the “fenceposts” be? Function Activity
Marketing Generates sales leads
Sales Calls on and qualifies customers
Customer Submits RFQ to sales
Sales Reviews RFQ
Estimating Generates quote
Sales Approve quote
Customer Accepts quote; submits a PO
Sales Approves PO
Customer service Creates SO; compiles spec package
EE/ME design Designs product; generates BOM
Customer Approves design
EE/ME design Forwards design to SW dev
Software Dev Writes code
Purchasing/Planning Releases WO; schedules production
Supplier (external) Delivers materials
Production Manufactures & ships product
Customer Installs equipment
Field service Conducts 90-day follow-up
© 2014 The Karen Martin Group, Inc. 26
Who should be on the team, serve on-call, and attend daily briefings?
© 2014 The Karen Martin Group, Inc. 27
1
2 1
3 2
4 3
5 4
5
1 6
2 7
3 8
4 9
5 10
1
2 1
3 2
4 3
5 4
1
2
3
4 Date: Date:
Name
Name
Lourdes Dwyer
Diana Marie
Dave Gerald
Ryan Austin
FacilitatorValue Stream Champion
Sean Michaels
Contact Information
Contact Information
Demand Rate
Trigger
1,000 per year
Customer submits RFQ
Value Stream Mapping CharterScope Accountable Parties Logistics
Allen Ward
Nancy LittleSpecific
Conditions
Engineer to order, requires both hardware &
software customization
Value Stream
Champion
Capital equipmentExecutive
SponsorValue Stream
Event Dates
& Times
July 24-26, 2013
8:00 am - 5:00 pm
Dave ParksBase-camp
LocationFacilitator
Current State Problems & Business Needs Mapping Team
Boundaries &
Limitations
Improvement Time
Frame
No new software; only minor changes to existing IT
systems; no additional staff; no budget changes
Future state design is fully realized by
December 31, 2013.
Last Step Production ships product
Logistics
CoordinatorDave Parks
July 24, 25, & 26
4:00-5:00 pm
First Step Sales reviews the RFQ
Briefing
Dates &
Times
Meals
Provided
Briefing
Attendees
** required
*optional
** Allen W (COO), Joe M (CIO),
Sal T (VP Sales)
* Bruce R (VP Ops), Carlos P
(HR), Su T (CFO), Bill M (VP CS)
(Competition's RFQ LT is 1 wk and PO to delivery is 4 wks) Scrum Master
Goals & Measurable Target Conditions Engineering, Vice President
Unclear & incorrect information flowing through value stream. IT, Director
Lead time for RFQ turnaround = 2 weeks; PO to software dev = 5 weeks Finance, Controller
Desire to stay ahead of the competition & deepen customer loyalty. Function / Title
Forecasted growth of 15% for next fiscal year. Sales, Director
Reduce PO to software development lead time by a minimum of 50%. Customer Service, Manager
Ambreen Motiwala
Danny Tran
Nancy Little
Reduce RFQ lead time by a minimum of 50%. Manufacturing, Director
Freed capacity to absorb additional business w/o increasing staff. Production Supervisor
Faster delivery; less hassle; less cost. Function
Better working relationships between sales, estimating & engineering. Planning / Purchasing, Planner
Continential breakfast & lunch
Surf's Up - Room A
Tom St. James
Benefits to Customers & Business On-Call Support
JR HuntImprove quality of information flowing throughout value stream. Customer (contract manufacturer)
Operational: LT in segments (RFQ to quote; PO to development). Signature:
Date:
Relevant Data Agreement
Financial: Estimate-to-actual cost comparison.
Executive SponsorSales effectiveness: RFQ conversion rate.
Signature: Signature:
Charter: Critical planning, communication, and consensus-building tool
Prepare Understand
Current State Design
Future State
Develop Transformation
Plan
Execute Transformation
Plan
Create the Current State Map
28
1. Value stream walk #1 2. Layout the map 3. Value stream walk #2 4. Add map details 5. Add timeline; calculate
summary metrics
© 2014 The Karen Martin Group, Inc. 29
Effective Way to Visualize Relationships between IT Systems and the Operation
Prepare Understand
Current State Design
Future State
Develop Transformation
Plan
Execute Transformation
Plan
Create the Future State Map
1. Define the “right work” 2. Make the right work flow 3. Manage the right work
30
Prepare Understand
Current State Design
Future State
Develop Transformation
Plan
Execute Transformation
Plan
How will you realize the future state?
31
1 2 3 4 5 6 7 8 9 10 11 12
2 Improve quality of referral to 85% KESean
Michaels 100%
3,4Reduce lead time between scheduling
and preregistration step to 45 minutesProj
Dianne
Marie 75%
4 Only one check in per patient KERyan
Austin 50%
4 Reduce wait time in waiting area by 50% KEDianne
Marie 50%
6Eliminate 6 hour lead time associated
with transcription stepProj
Dave
Gerald 50%
7 Eliminate redundant data entry ProjDave
Gerald 25%
5Visually managed inventory; no outages
or expired itemsKE
Michael
O'Shea 100%
6 Reduce imaging LT to one hour ProjMartha
Allen 25%
8 Reduce report delivery LT to 30 minutes ProjMartha
Allen 0%
7 Reduce LT at image review to 1 day JDIDave
Gerald 100%
Value Stream Transformation PlanValue Stream
Value Stream Champion
Value Stream Mapping Facilitator
Allen Ward 1-Nov-12Executive Sponsor
Scheduled Review Dates
21-Nov-12
Outpatient Imaging
Paul Scanner
Dave Parks 13-Dec-12
10/18/2012 10-Jan-13Date Created
Value Stream Mapping Facilitator
Increase % of physicians receiving
electronic delivery
Planned Timeline for ExecutionStatus
Signature:
Agreement
Signature: Signature:
FS VSM
Block #Measurable Target Proposed Countermeasure
Implement standard work for referral
process
Exec.
Method*Owner
* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)
Cross-train and co-locate work teams
Value-stream specific radiologists
Implement voice recognition technology
Auto populate between PACS and
Meditech
5S CT supplies area; implement kanban
Collect copays in Imaging
Balance work / level demand
Visual metrics and indicators
Date: Date:
Executive Sponsor Value Stream Champion
Date:
Prepare Understand
Current State Design
Future State
Develop Transformation
Plan
Execute Transformation
Plan
Where the rubber meets the road…
32
• Accountability rests with executive sponsor • Monthly status meetings • Adjust plan as new discoveries are made
And then repeat…
33
Current State Value Stream Map
Outpatient Imaging Services
Demand = 15 per day
Customer Demand:
15 patients per Day
(Takt Time 1920 seconds)
8 hours per day
Referring
Physician
% C&A = 65 %
Check-in
Patient
(Admitting)
Cycle Time = 2 mins.
% C&A = 90 %
5
Send
Reports
(Imaging)
Cycle Time = 3 mins.
% C&A = 90 %
6
Hospital
5 mins.
Schedule
Appointment
Cycle Time = 11 mins.
Lead Time = 12 mins.
% C&A = 98 %
6
Pre-register
Patient
Cycle Time = 30 mins.
Lead Time = 990 mins.
% C&A = 100 %
5
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
0.0833 hrs.
2 mins.
0.0833 hrs.
1 mins.
0.75 hrs.
10 mins.
0.5 hrs.
15 mins.
0.0833 hrs.
3 mins.
4.13 hrs.
15 mins.
6.08 hrs.
5 mins.
16 hrs.
1 mins.
1.83 hrs.
1 mins.
2 hrs.
3 mins.
LT = 32.5 hrs.
CT = 56 mins.
CT/LT Ratio = 2.87%
Lead Time = 12 mins.Lead Time = 990 mins.
Prep
Patient
(Tech)
Cycle Time = 10 mins.
% C&A = 100 %
2
Check-in
Patient
(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Complete
Exam
(Tech)
Cycle Time = 15 mins.
% C&A = 90 %
2
Transmit
Images
(Tech)
Cycle Time = 3 mins.
% C&A = 100 %
2
Read/Dictate
Exam
(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Transcribe
Report
(MDI)
Cycle Time = 5 mins.
% C&A = 75 %
6
Review
Draft/Sign
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports
(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
230 mins. 5 mins. 248 mins. 365 mins. 960 mins. 110 mins. 120 mins.45 mins.
E Pay
Excel
ADS
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
PACS
5 mins.
Lead Time = 24 days
Meditech
123
4
5 6 7 8 9 10 11 12 13 14
Auto Fax 50%
Us Mail 25%
MD Mailbox 25%
Rework Loop via Fax 25% of the time
Rolled First Pass
yield = 29%
Future State Value Stream Map
Outpatient Imaging Services
Demand = 15 per day
Referring
Physician
% C&A = 85 %
Send
Reports
(Imaging)
Cycle Time = 3 mins.
% C&A = 90 %
6
Hospital
Schedule appt
Pre-register
Cycle Time = 11 mins.
Lead Time = 45 mins.
% C&A = 98 %
6
CT=Cycle Time
LT=Lead Time
%C&A=% Complete & Accurate
0.0833 hrs.
1 mins.
0.583 hrs.
10 mins.
0.333 hrs.
10 mins.
0.0833 hrs.
2 mins.
2 hrs.
15 mins.
7 hrs.
1 mins.
0.0333 hrs.
1 mins.
0.5 hrs.
3 mins.
LT = 11.3 hrs.
CT = 43 mins.
CT/LT Ratio = 6.32%
Lead Time = 45 mins.Lead Time = 15 days
Prep
Patient
(Tech)
Cycle Time = 10 mins.
% C&A = 100 %
2
Check-in
Patient
(Imaging)
Cycle Time = 1 mins.
% C&A = 98 %
3
Complete
Exam
(Tech)
Cycle Time = 10 mins.
% C&A = 90 %
2
Transmit
Images
(Tech)
Cycle Time = 2 mins.
% C&A = 100 %
2
Read/Dictate
Exam
(Radiologist)
Cycle Time = 15 mins.
% C&A = 95 %
2
Review
Draft/Sign
(Radiologist)
Cycle Time = 1 mins.
% C&A = 95 %
2
Reports
(Imaging)
Cycle Time = 1 mins.
% C&A = 99 %
220 mins. 5 mins. 120 mins. 420 mins. 2 mins. 30 mins.35 mins.
E Pay
Excel
Symposium
Internet
Waiting Room
Management
System
Fax Order
Solutions
PACS
5 mins.
Set-upReduction
Remove
Check inand Reduce
System Access
Work Balancing
StandardWork
Pull System(Supplies Kanban)
VisualWorkplace
Voice Recognition
Batch Reductions
5S
Co-locate
Standard
Work
Work
Balance
ContinuousFlow
Value StreamAlignment
Auto Fax 80%
Us Mail 15%
MD Mailbox 5%
Rolled First Pass
yield = 40%
Rework Loop via Fax 10% of the time
Customer Demand:
15 patients per Day
(Takt Time 1920 seconds)
8 hours per day
12
3
45 6 7 8 9 10 11
Risk Reduction
(Joint Commision)
Meditech
Metric Current
State
Improved
State
%
Improvement
LT 32.5 hrs 11.3 hrs 65%
PT 56 mins 43 mins* 23%
AR 2.9% 6.3% 117%
RFPY 29% 40% 38%
# Steps 14 11 21%
Tech turnover
(annual) 100% 25% 75%
Outpatient Imaging
Value Stream Improvement Results
* This reduction (freed capacity) enabled the client to collect $500K more in annual
revenue without incurring additional labor or equipment expenses.
Current State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000 Supplies Purchasing - Current State VSM
Finance
Review
Budget
PT = 5 mins.
C&A = 60%
6
Corp Purchasing
Manager
Approve in
ERP
PT = 5 mins.
C&A = 90%
1
0.25 days
5 mins.
0.5 days
5 mins.
5 days
5 mins.
1 days
5 mins.
1 days
10 mins.
0.5 days
15 mins.
3 days
5 mins.
7 days
15 mins.
10 days LT = 28.4 days
PT = 65 mins.
AR = 0.477%
Supervisor
Review Req.
PT = 5 mins.
C&A = 95%
2
Sys Engineer
Review
Requisition
PT = 5 mins.
C&A = 90%
1
IS Manager
Review
Requisition
PT = 5 mins.
C&A = 100%
1Financial Mgr
Review
Requisition
PT = 10 mins.
C&A = 95%
1
Admin Asst
Enter
Requisition
PT = 15 mins.
C&A = 98%
1
4 hrs. 40 hrs. 8 hrs. 8 hrs. 24 hrs. 56 hrs.
Originator
Inititate Req.
PT = 10 mins.
C&A = 10%
31
2 hrs.
Form File
File Maker
ERP
Quicken
Vendor
Website
Excel
4 hrs.
Customer Demand:
615 requisitions per y ear
20 ReqsExternal
Supplier
PT = 20 mins.
Hard CopySupplies
Data Entry
Corp Purchasing
Submit PO
to Supplier
PT = 15 mins.
C&A = 98%
6
10 Reqs 63 Reqs
1
2 3 4 5 6 7 8 9 10
RFPY = 4.2%
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activ ity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Y ield
80 hrs.
Supplies Purchasing - Future State VSM
Customer Demand:
615 requistions per year
Dept.
Manager
Approve
in ERP
PT=5 mins.
C&A = 90%
1
0.5 days
5 mins.
0.75 days
5 mins.
1 days
20 mins.
10 days LT = 12.3 days
PT = 30 mins.
AR = 0.508%
Supervisor
Review
Req.
PT=5 mins.
C&A = 95%
28 hrs.
Originator
Enter Req.
in ERP
PT=30 mins.
C&A = 85%
31
File Maker
ERP
Vendor
Websites
6 hrs.
Standard
Work for
review
Additional
IT access
Requisition
Checklist
Cross
Training
Additional
IT access
External
Supplier
PT=20 mins.
Supplies
4 hrs.
Auto Notify
Integrate Form
File with File
Maker
Use budget in place
of Quicken
Dedicated
Buyers
Corp Purchasing
Place
Order
PT=20 mins.
C&A = 98%
6
Approval
1
2 3 4 5
PT = Process Time
LT = Lead Time
C&A = % Complete & Accurate
AR = Activity Ratio (PT/LT x 100)
RFPY = Rolled First Pass Yield
RFPY = 71%
80 hrs.
Future State Value Stream Map
Purchasing — Non-repetitive purchases less than $5,000
Metric Current
State
Projected
Future State
%
Improvement
Total Lead Time 28.4 days 12.3 days 56.7%
Total Process Time 65 mins 30 mins 53.8%
Activity Ratio 0.48% 0.51% 6.3%
Rolled %C&A 4.2% 71.0% 1,590%
# Handoffs 10 5 50%
# IT Systems 6 3 50%
Purchasing Process
Projected Results
%C&A = Correct & accurate (Quality)
© 2014 The Karen Martin Group, Inc. 40
Value Stream Mapping: As Much Art as Science
© 2014 The Karen Martin Group, Inc. 41
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© 2014 The Karen Martin Group, Inc. 42
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San Diego, CA 92122 858.677.6799
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