# Presentation: 078935

## National Environmental Symposium

**January 25, 2006**

## What’s in a Name?

**Value Stream Mapping**
**Lean Manufacturing/Process**
**Kaizen**

**All Are Basically the Same Change Management Technique**

## Why Change?

**Things We’ve All Heard:**
**My Taxes Pay Your Salary, My Project should be Your Top Priority**
**If the Permit isn’t Processed Quickly, We’ll go to (Name of Nearby State)**
**The Slow Air Permitting is the Cause of the Downturn of the Economy in this State**
**Let’s set up a Blue Ribbon Committee of Outside Experts to Determine what should be Done**

## Proactive Focus

**Area of **
**Influence**

**Area of Concern**

**Proactive Focus**

## Focus of Value Stream Mapping

**Process Versus People**
**Customer Requirements Versus “We’ve Always Done it that Way” **
**Value-Added Activities Versus Waste**
**“****We Can” Versus “We Can’t”**

## What is a Value Stream?

**Pencil & Paper Tool**
**Helps Reveal Waste & Problems with Flow **
**Establishes a Common Language to Document Processes**
**Provides a Blueprint for Improvement**

**A Value Stream Involves all the Steps, both Value Added and Non Value Added, required to Complete a Product or Service from Beginning to End.**

**What is a Value Stream?**

**What is a Value Stream Map?**

**Notes:**
  Starts by getting the “right” people together
  A value stream must be an honest depiction of what is really happening.  In order for the greatest improvements to take place, there must be thorough documentation of all non-value added activities.

 Team focuses on the map and the team gets very objective about the right things to do to improve ...

## Value Stream Maps  -  Why are They Unique?

**Shows the Process Flow from a Systems Perspective**
**Includes Information Flow & Links it to Process Flow**
**Documents the Performance of the Process **
**End Results, Metrics Highlight Waste, & Visibility of Progress & Quality **

## Waste

**Obvious Sources of Waste:**
**Excessive Handoffs of Work Product**
**Work Product Waiting in In-Baskets**
**Process Steps with High Error Rates**

**Any Element that Adds***** *****No Value**** to the Final Product:  Waste only Adds Cost & Time**

## VSM Example – Eddie George/Jack Bauer Mail Order Company

- This example follows the evolution of the mail order company formed by Eddie George and Jack Bauer.  The two friends formed the company to provide high quality sporting goods and named themselves the George-Jack company.  In 1985 the two were operating much the same as older mail order firms had for the past 100 years.  The customer would remove the order form from the George-Jack catalog and mail it in with their check or money order.  Eddie would open the mail and sort the orders.  Jack would retrieve the orders from Eddie’s out box and pull the ordered products from the shelves in the warehouse.  After the orders were pulled, Jack would take that batch of products to shipping and package them for the mail.  After processing the day’s mail, Eddie would go to shipping and match the packages to the orders, type up mailing labels.  At the end of the day, Eddie would drive the truck home, stopping at the post office to mail all the packages.  During this time period, the George-Jack Company could ship approximately 40 orders per day with a total processing time of 8 days and 33 minutes.  However, due to errors, only 55 percent of all orders were processed correctly the first time.  The remaining 45 percent of orders either required double effort on Eddie or Jack’s part, the wrong product was mailed to the customer, or the product was mailed to the wrong address.  Typically, Eddie worked 9.2 hours each day while Jack worked only 7.3 hours.

##  Eddie George/Jack Bauer Company Current State in 1985

**40 Products Shipped **

**50 Orders Mailed to Company**

**US Mail**
**5 days**
**100%**

**Jack**
**1 min**
**3 hrs**
**100%**

**Jack**
**5 min**
**95%**

**Jack**
**5 min**
**---**
**100%**

**Eddie**
**6 min**
**---**
**90%**

**Eddie**
**10 min**
**---**
**80%**

**Eddie**
**6 min**
**---**
**80%**

**1 day**

**3 hours**

**4 hours**

**1 day**

**W/T**

**P/T**

**1 day**

**6 min**

** ****3 hours**

**1 min**

**5 min**

**5 min**

**6 min**

**10 min**

**4 hours**

**1 day**

**FTQ**

**100 %**

**100%**

**90%**

**95 %**

**80 %**

**100 %**

**80 %**

**3 hours**

**33 min**

**8 days**

**55 %**

**Total Lead Time:**

**8 days,         33 min**

** ****Eddie George/Jack Bauer Company Current State in 1985**

**10 Invalid Orders Returned**

**5 days**

**Issues – Keeping track of stock, all paper system, Eddie working harder and longer than Jack **
**( 9.2 vs  7.3 hrs),  both working long days, poor communication with customer, and many errors.**

**Pull Product from Shelves**

**Get Order from Eddie**

**Package Product & Bring to Shipping**

**QTY      50**

**QTY      50**

**QTY      40**

**QTY      40**

**QTY      40**

**QTY      40**

**QTY      40**

**Match Order, Make and Apply Label**

**Mail Product at End of Day on Way Home**

**50 Customers Per Day**

**Client**

**Open mail, Review & Sort Order**

## In 1995, Eddie and Jack began using a toll-free phone number to receive orders.  This allowed Eddie to type up the order and mailing label while the customer was on the phone.  This immediate quality check allowed a significant increase in first time quality.  The company was able to increase from 40 to 60 products shipped per day with an average of three errors.  The average processing for each order was reduced to 4 hours and 20 minutes but both Eddie and Jack had to increase their workday 10 hours.

## George Jack Company 

**60 Orders called in to Company**

**Jack**
**5 min**
** ****0hrs**
**95%**

**Jack**
**4 min**
**---**
**100%**

**Jack**
**1 min**
**---**
**100%**

**Eddie**
**10 min**
**---**
**95%**

**4 hours**

**W/T**

**P/T**

**10 min**

**5 min**

**4 min**

**1 min**

**4 hrs**

**FTQ**

**100%**

**100%**

**95 %**

**95 %**

**20 min**

**4 hrs**

**90 %**

**Total Lead Time:**

**4 hrs,       20 min**

**George Jack Company **
**Current State in 1995**

**Issues:****	****Keeping track of stock, all paper system, Eddie and Jack working**
**	****long 10-hr days, and some errors.**

**Eddie moved to room**
**where product is**
** – ****as order comes in, **
**Jack fills it**

**Improvements since 1985 – Increase in products sold from 40 to 60 (50%), less errors, wait time decreased from 8 days to 4 hours (95%), and processing time decreased from 33 to 20 minutes (39%)**

**Pull Product from Shelves**

**Package Product Apply Label**

**Take to Shipping Area**

**US Mail Delivery Twice a Day**

**Receive & Type Order and Make Label**

**QTY      60**

**QTY      60**

**QTY      60**

**QTY      60**

**60 Customers Per Day**

**Client**

## In 2005, a very tired Eddie and Jack began taking orders over the internet.  With this computerized system, customers typed in their own information and the computer converted it into order forms and mailing labels.  Eddie and Jack both worked pulling the products from the warehouse shelves and packaging them for shipping.  A conveyor system was used to transport the packages to the shipping area.  While on the conveyor a bar code scanner would read the shipping label and automatically send an email to the customer notifying them of the date that their order had been shipped and providing them with a tracking number.  Also, Eddie and Jack hired UPS to pick up their products four times a day for delivery.  These changes allowed the George-Jack Company to increase from 60 to 160 products shipped per day - still with three errors.  The average processing time was cut to 2 hours and 6 minutes and both Eddie and Jack were able to work only 6.7 hours per day.

## George Jack Company 

**160 Products Shipped (3 Errors)**

**Order emailed in to Company**

** ****Jack/Eddie**
**4 min**
** **
**98%**

**Jack/Eddie**
**1 min**
**---**
**100%**

**2 hours**

**W/T**

**P/T**

**4 min**

**1 min**

**2  hrs**

**FTQ**

**100%**

**98 %**

**6 min**

**2 hrs**

**98 %**

**Total Lead Time:**

**2 hr,               6 min**

**George Jack Company **
**Current State in 2005**

**Eddie and Jack both**
**fill orders **

**Improvements since 1995 – Increase in products sold from 60 to 160 (267%), less errors, both worked less hours, wait time decreased from 4 hours  to 2 hours, 6 min  (48%), and processing time decreased from 20 to 6 minutes (70%)**

**1 min**

**Computer Receives Order & Makes Label**

**Pull Product from Shelves**

**Package Product, Apply Label, Use Conveyor**

**UPS Picks Up 4 Times Daily**

**QTY     160**

**QTY     160**

**160 Customers Per Day**

**Client**

## Waste

**POINTS TO REMEMBER ABOUT WASTE:**
**Consider Waste in the Context of the Value that the Process Provides to the **_**Customer**_
**Waste is Really a **_**Symptom**_** Rather than a Root Cause of the Problem**
**Waste Points to Problems within the **_**System**_
**Find and Address **_**Causes**_** ****of Waste to Improve Flow**
**Waste is Most Prevalent in the **_**Information Flow**_** of Non-manufacturing Processes**
**Experts  Suggests up to **_**40%**_** of What We do Adds no Value**

## Using the Value Stream Mapping Tool

**Using the Value Stream Mapping Tool**

**Understand How Things  Currently Operate.  This is the Foundation for the Future State**

**Value Stream Scope**

**Design a Lean Flow**

**Current State Drawing**

**Implementation Plan**

**Determine the Value Stream to be Improved  **

**The Goal of Mapping!  **

**Implementation of Improved Plan**

**Future State Drawing**

**Develop a Detailed Plan of Implementation to Support Objectives (What, Who, When)**

**Standardize for Later Improvement**

## Business Deployment Plan

**Bridges the Gap: **
**From Where We Are to Where We Should Be **

**Current **
**State**

**Future**
**State**

**Business Deployment Plan**

**Notes:**
  The first step in developing the implementation plan to is identify all the changes, the improvement ideas and “bold” move that need to be implemented to reach the future state

## Focus of Value Stream Mapping

**Process Versus People**
**Customer Requirements Versus “We’ve Always Done it that Way” **
**Value-Added Activities Versus Waste**
**“****We Can” Versus “We Can’t”**

## Value Stream Mapping Candidates

**Permitting Programs**
**Hiring Process**
**Process for Responding to Letters to the Governor**
**Any Manufacturing Process or Information Flow**

## Keys to Success

**Leadership **_**MUST**_** Demonstrate their Commitment to Change**
**Involve All Levels of the Organization at Every Step**
**Constantly Communicate Positive Progress**

## “Nothing is Particularly Hard if you Divide it into Small Jobs.”

**- Henry Ford**

## Michigan’s Experience

## Workshop Dates

**Pre-Scoping Session****	****	****March 1, 2004**
**VSM Training****	****	****	****March 29, 2004**
**Scoping Session****	****	****April 1, 2004**
**Workshop****	****	****	****	****April 26, 27, 28, 2004**
**System Development****	****	****May – August 2004**
**New System ****	****	****	****September 7, 2004**
**Implemented**

## Leadership Panel
Steve Chester – MDEQ, Jim Sygo - MDEQ, Ray Tessier – General Motors, Tom Breneiser – DaimlerChrysler,  Andy Hobbs – Ford, Robert Swanson – MLEG, Mike Johnston – MMA, Vince Hellwig - MDEQ

Workshop Participants
AQD – Lynn Fiedler, Steve Zervas, Bill Presson, Bob Byrnes, MaryAnn Dolehanty, Paul Collins, Cathy Simon, Steve Kish, Dennis Armbruster, Scott Klipa
Ford - Dennis Karl
DaimlerChrysler -  Mary Snow-Cooper, Debra Rowe
General Motors - Steve Tomaszewski, Nick Ramos, Mike Zielke, Sue Bracciano, Chris Bates, Frank Kodrack
MMA – Mike Johnston
MDEC – Susan Holben	
Value Stream Mapping (VSM) Coaches
Tim Connors, Carrie Saville

**Leadership Panel**
**Steve Chester – MDEQ, Jim Sygo - MDEQ, Ray Tessier – General Motors, Tom Breneiser – DaimlerChrysler,  Andy Hobbs – Ford, Robert Swanson – MLEG, Mike Johnston – MMA, Vince Hellwig - MDEQ**
**Workshop Participants**
**AQD – Lynn Fiedler, Steve Zervas, Bill Presson, Bob Byrnes, MaryAnn Dolehanty, Paul Collins, Cathy Simon, Steve Kish, Dennis Armbruster, Scott Klipa**
**Ford - Dennis Karl**
**DaimlerChrysler -  Mary Snow-Cooper, Debra Rowe**
**General Motors - Steve Tomaszewski, Nick Ramos, Mike Zielke, Sue Bracciano, Chris Bates, Frank Kodrack**
**MMA – Mike Johnston**
**MDEC – Susan Holben****	**
**Value Stream Mapping (VSM) Coaches**
**Tim Connors, Carrie Saville**

***State of Michigan Air Permit Process***

## Purpose Statement

**The purpose of the Air Permit Team is to develop and implement an air permitting process that results in expeditious issuance of environmentally sound, operationally flexible, and achievable permits in a timeframe not to exceed 6 months and ensure requirements are identified clearly prior to submittal reducing rework in the process by 90% . **

## Measurable Metrics & Performance

| Metric
SPQRC | Current Estimate
(coming into workshop) | From Current State Map
Day 1 | Target from Future State Map
Day 2 |
| --- | --- | --- | --- |
| Process Time | 18 wks,     
 6.5 days | 51 Days - 70.5 Days | 90 – 94 Days
(w/o pre-meeting) 
97 – 101 Days |
| Wait Time | 63 weeks, 5.5 days –
80 weeks, 5.5 days  | 322 days
(134 unidentified)
(188 identified) | 57 – 88 Days
(w/o pre-meeting)
78 – 109 Days |
| Lead Time |  | 367 - 392 days | 147 – 182 Days
(w/o pre-meeting)
175 – 210 Days) |
| First Time Quality | 0% | 0% | 72% |

**Measurable Metrics & Performance**

## Slide 27

## Overarching Principles of New Process

**Proactive vs. Reactive Process**
**Shared Accountability**
**Specific Timelines**
**Action/Resolution**

## Key Elements of Michigan’s New Permitting Process

**Expectations for Success**
**Standardized Application Checklists**
**Permit Scoping Meetings**
**Up-Front Draft Conditions**
**Agency and Applicant Deadlines**

## Indicators of Success

| Permitting Times |  | Calendar Days |  |
| --- | --- | --- | --- |
|  |  | 2003 | 2005 |
| Process Target | 110/180 | 167 | 53 |
| AQD Processing Time Per Statute (from complete information) | 60/120 | 61 | 41 |
| Applicant Processing Time | 50/60 | 106 | 11 |

## Indicators of Success

**Administrative Completeness**
**Complete at Submittal  in 2003 – 82%**
**Complete at Submittal in FY 2005 – 95%**

## Slide 32

## Other Impacts

**Process Timing for Other Groups**
**Better Working Relationships **
**Say What We Do and Do What We Say**
**Reduced 4 FTEs and Added 4 FTE’s Worth of Work from Other Groups**
** ****Improved Morale**

## New Process is Designed to:

**Be Transparent**
**Be Efficient **
**Be Proactive **
**Be Timely **
**Foster Communication Between All Parties**

## If you make every game a life and death proposition, you're going to have problems. For one thing, you'll be dead a lot.-- Dean Smith, Basketball Coach UNC

## Lynn Fiedler517-373-7087fiedlerl@michigan.govInformation on Michigan’s Processwww.deq.state.mi.us/aps/miparp.shtml

**EPA’s Website**
**www.epa.gov/lean**