The most successful way to look at unneeded business processes and their costs to the business is through a Value Stream Mapping (VSM) project. VSM provides a clear view of how various business processes are related to each other and assesses the need for those processes and how efficient they really are.
During Value Stream Mapping, a model is created which shows how much time, effort and cost is required for a specific process. We use the Brown Paper Exercise to involve all of the process owners which generates greater acceptance of the results and allows full participation in solutioning. When a VSM project is done for an entire company, leadership is given a clear view of their core business processes and how they are working from the perspective of time, cost and necessity. Just as important is that the Value Stream Mapping process begins process improvement discussions among small group of people immediately which results in a lot of immediate improvements. Value Stream Mapping is a complex and intense process that requires extensive assessment and analysis, considerable openness and a commitment to change. Group 50 recently completed a Value Stream Mapping (VSM) project for a hi-tech aerospace company. The required deliverables were:
- Analyze the company’s processes from Order Entry through Operations through Cash
- Identify all causes of waste (Muda), in-efficient process flow (Mura) and misaligned capacities (Muri)
- Create a plan to “fix” all of these opportunities (see a recent article on this topic)
These are fairly typical deliverables for an intensive VSM study. During the project, we identified opportunities in manufacturing lead times, wasted costs and lead time in distribution, manual efforts that were complicated by shadow systems, significant reductions in working capital and best practices from around the company that could be shared. Small projects immediately spawned from the work done.
Value Stream Mapping is as much about getting people to think about improving the processes they own. One of the significant outcomes most analysis skips is the opportunity to impact the company’s organization and people. As we created our Map, we recorded data point after data point; frequency, part/product flow, hand offs, dwell time, paper/computer tracking systems, etc. To state the overly obvious, the more data we collected, the more obvious it became that the heart of almost every event are the people associated with the process;
- How are they structured?
- Have they been provided the appropriate tools and resources?
- Have they received the proper training?
- Do they have the authority and responsibility to make routine decisions?
- Do they have the data required to make an informed decision?
- Are their rewards tied to the desired results? (For a more concise view of the relationship of these questions and positive outcomes, see Group50® ‘s Business Hierarchy of Needs®).
One of the key outcomes from a Value Stream Mapping exercise MUST be an “Organization Design and Development plan.” At the same time you are implementing short-medium-long term projects via Kaizens (or other project methods) to re-design the manufacturing floor or to optimize materials flow, take a look at how the teams are structured, how information flows to and from the team, who makes the decisions, and how they are trained. Most important is to make sure that there is an organizational improvement plan that provides everyone the new skills required to successfully operate in redesigned business processes.
Once a company invests in a Value Stream Mapping analysis, do take the extra step to create a plan to optimize your “people systems” not just your “operating systems.”
If you want to find out more about the Group50 Organizational Development Practice, and our continuous improvement programs including Value Stream Mapping, call (909) 949-9083, request more information here, or email firstname.lastname@example.org.
About the author: Jim Gitney is the Founder and CEO of Group50. Jim and the Group50 team are all former executives with well-known manufacturing and distribution companies who understand what it takes to design, train, develop and motivate organizations to successfully implement a company’s strategic plan. Group50 has designed a series of strategic assessments, workshops and strategic execution tools that optimize your organization.
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