Book notes: Value Stream Mapping
Tags: books, lean
Published: 2021-06-29 12:52:37

---
title: Book notes: Value Stream Mapping
canonical_url: https://danlebrero.com/2021/03/10/value-stream-mapping-summary/
published: true
tags: books, lean
cover_image: https://danlebrero.com/images/blog/books/value-stream-mapping/value-stream-mapping.jpg
description: Book notes on Karen Martin and Mike Osterling "Value Stream Mapping"
series: Book notes
---

These are my notes on [Karen Martin](https://twitter.com/KarenMartinOpEx) and [Mike Osterling](https://www.linkedin.com/in/mikeosterling/)'s [Value Stream Mapping](https://amzn.to/2LBGYSd).

The book explains the benefits of Value Stream Mapping and goes in detail about how to run it.

> If you can't describe what you are doing as a process, you don't know what you're doing.
<cite>Edwards Deming</cite>

# Key Insights

* Value Stream Mapping: most powerful organization transformation tool.
* Benefits of value stream mapping:
    1. Make work visible.
    2. Clear connection from every function to customer.
    3. Holistic systems thinking view.
        * Help a restructuring and alignment to deliver customer value.
    4. Simplification tool:
        * Easy to understand, easier to change.
    5. Practical means to drive improvement.
    6. Help onboarding.
* The process of value mapping (as opposed to the product) is what carries the power to instill transformational mindsets.
* Value stream mapping when:
    * Margins erode.
    * New competition or market share loss.
    * Want to increase company's market value.
    * Creating new products.
    * To explore pro/cons of centralization and decentralization.
* 3 consecutive days: deep focus.
* Transforming a value stream often produces a fair amount of organizational disruption.
* Must socialize the current state, future state and transformation plans.
    * Socialize: talk, explain, let people ask, discuss.
* 4 different versions of a process:
    * How the manager believes it operates.
    * How it is supposed to operate.
    * How it really operates.
    * How it could operate.
* In heavily siloed orgs, steepest lead time reductions are achieved by reducing hand offs. It requires:
    * Cross-training.
    * Robust process management systems.
* Don't improve a value stream that delivers a product your customers dont want.
* Focusing on Lead Time reduction forces problems to surface.
* Designing an improved future state map needs thick skin, intestinal fortitude, and a hefty dose of courage.
* The authority for determining how the improvement will be designed and implemented is given to the people who does the work being improved.
* Use the word "countermeasures" instead of "solution": improvements are temporary countermeasures, not permanent solutions.
* In mature continuous improvement orgs, the value steam owner is responsible for the P&L, often the value stream is structured as a business unit, that borrows, leases or purchases shared services from other parts of the org.
* VSM is underutilized to align people, visualize problems, prioritize improvements, increase performance.
* VSM helps build into the leadership team the habits:
    * Going to gemba.
    * Tying improvements to business needs, strategy and annual goals.
    * True collaboration aligned by a common goal amongst departments.
    * Assessing performance using standard time and quality metrics.
    
# TOC

* [Chapter 1 - Value Stream Management](#ch-1)
* [Chapter 2 - Setting the Stage and Enabling Success](#ch-2)
* [Chapter 3 - Understanding the Current State](#ch-3)
* [Chapter 4 - Designing the Future State ](#ch-4)
* [Chapter 5 - Developing the Transformation Plan](#ch-5)
* [Chapter 6 - Achieving and Sustaining Transformation](#ch-6)

# <a name="ch-1"></a>Chapter 1 - Value Stream Management

* Value Stream: sequence of activities an org undertakes to deliver on a customer request.
* Includes activities done by outside parties or the customer itself.
* Most value streams are highly cross-functional.
* Extended value stream: includes activities before the customer order and after the delivery.
* Support value stream: when the customer is internal.
* Value Stream Mapping: most powerful organization transformation tool.
* From Toyota.
* Difference with process maps:
    1. Provide effective means to establish a strategic direction for making improvements:
        * Because you see the whole picture.
        * Avoid suboptimization.
        * Macro level processes, not detailed steps.
    2. Cyclical view places the customer in the centre.
    3. Deepens org understanding:
        * Distills complexity.
        * Can be understood by everybody.
        * Takes days to create, instead of weeks.
    4. Data driven.
* Benefits of value stream mapping:
    1. Make work visible.
    2. Clear connection from every function to customer.
    3. Holistic system-Thinking view.
        * Help a restructuring and alignment to deliver customer value.
    4. Simplification tool:
        * Easy to understand, easier to change.
    5. Practical means to drive improvement.
    6. Help onboarding.

> If you can't describe what you are doing as a process, you don't know what you're doing.
<cite>Edwards Deming</cite>

* The process of value mapping (as opposed to the product) is what carries the power to instill transformational mindsets.
* Common failings:
    1. Using it only for improvement work.
    2. Only for tactical improvements. Cues:
        * Value stream map has >30 steps.
        * Formatted in swim lanes.
        * Missing information flows.
    3. Creating them during a [Kaizen Event](https://leanmanufacturingtools.org/625/planning-and-running-kaizen-events/).
        * Should happen before.
    4. Creating maps but taking no action.
    5. Mapping with an inappropriate team or no team at all.
        * Team must have the authority to make changes.
    6. No metrics.
* Where to begin?
    * Start with Strategy Deployment:
        * Method for defining and gaining consensus about priorities needed to realize an organization's business goals.
        * The value stream to improve will be obvious.  
        * Recommended books:
            * [Getting the right things done](https://amzn.to/2XrNRbe).
            * [Hoshin Kanri For The Lean Enterprise](https://amzn.to/2Lfb9i0).
            * [The Outstanding Organization](https://amzn.to/3nv9y51).
    * Value stream mapping when:
        * Margins erode.
        * New competition or market share loss.
        * Want to increase company's market value.
        * When solving a problem with [A3 management](https://en.wikipedia.org/wiki/A3_problem_solving), a workflow is needed.
        * Creating new products.
        * To explore pro/cons of centralization and decentralization.
    
## <a name="ch-2"></a>Chapter 2 - Setting the Stage and Enabling Success

* Structure:<br/>
![value stream mapping activities](https://danlebrero.com/images/blog/books/value-stream-mapping/value-stream-mapping-activities.png)

* 3 consecutive days: deep focus.
* Prepare phase:
    * Educate the mapping team and leaders on:
        * Lean principles.
        * Value stream mapping:
            * Purpose.
            * Benefits.
            * How is done.
            * Effect in org.
            * Daily briefing.
            * Roles.
    * The degree of value stream mapping success is highly dependent on the amount of up front planning, reflected in a charter.
    * Transforming a value stream often produces a fair amount of organizational disruption.
* Charter:
    * Download from [TKMG website](https://tkmg.com/books/value-stream-mapping/).
    * Planning.
    * Communicating.
    * Aligning.
    * Building consensus.
* Charter sections:
    1. Scope:
        * Specific conditions:
            * Proper scoping is critical when value stream mapping in knowledge work environments, because there is significant process variation exists within a single product family.
            * In many cases specific conditions may represent less than 25% of the value stream volume, but the future state design applies to 75% or more.
            * There is no much variation at the macro level as we think.
            * Dont be afraid to narrow your scope beyond your comfort level.
        * First/Last step:
            * Use verb-plus-noun.
        * Improvement time frame:
            * Recommendation: Fix deadline (3-6 months) and scope future state to fit it.
    2. Current state problems and business needs:
        * Clarity is a significant lever for building consensus and driving change.
        * Reasons for change. Sales pitch.
        * Same for "Benefits to Customers" and "Benefits to Business".
    3. Measurable Target Condition:
        * From X to Y.
        * Also the percentage improvement that they represent (is it a 5% improvement or a 100% one?).
    4. Accountable Parties:
        * Mandatory: Executive sponsor + Facilitator.
        * Executive sponsor:
            * Mandatory.
            * Person who oversees the entire value stream.
            * Who is ultimately accountable for the results.
            * May not be on the team, but at minimum:
                * Active on development of charter.
                * Attend briefings.
                * Monitor progress on transformation plan.
        * Facilitator:
            * Mandatory
            * Key on the success.
            * Teacher, time keeper, change agent, provocateur.
            * Comfortable with conflict, good listener.
            * Should not oversee nor work in the value stream.
        * Briefing attendees:
            * Get buy-in from support functions.
    5. Mapping team:
        * As small as possible, but all functions must be represented.
        * Typical 5-7 people, never more than 10.
        * Mostly leadership positions:
            * So they can influence/authorize future state.
            * Senior leaders understand the big picture better, which can lead to more innovative suggestions.
* Not communicate but socialize the value stream mapping charter:
    * Affected leadership.
    * Mapping team.
    * Workers in are that will be included:
        * Need a safe environment to be honest about current state.
* Data to collect:
    * Current and forecasted customer demand (1-2 years).
    * Quality reports.
                         
## <a name="ch-3"></a>Chapter 3 - Understanding the Current State

* Purpose of value stream map: consensus building to accelerate improvements.
* Represents:
    1. How work flows.
    2. Who does the work.
    3. How the value stream is performing on the day the map is created.
* If value stream has high variations, make note of variations.
* 4 different versions:
    * How the manager believes it operates.
    * How it is supposed to operate.
    * How it really operates.
    * How it could operate.
* Activity Kickoff - Page 52.
    * Everybody introduces themselves where they stand in the map and state their internal/external providers/customers.
    * Ensure expectations are aligned with charter.
    * Charter is not open for debate.
    * Rules of engagement.
* Value stream walks:
    * Going to the gemba.
    * Objective:
        * See, feel, hear, smell the current condition.
        * Understand physical separation between producer and consumer.
        * Workers more open, comfortable, and honest in their own environment.
        * Show respect for workers.
    * Do it twice the same day.
    * Second time do it backwards:
        * Different perspective.
        * Easier to see "pull" design opportunities.
    * The whole team together.
* Types of work:
    1. Value adding.
    2. Necessary non-value-adding.
    3. Unnecessary non-value-adding.
* Documenting Current State. Steps:
    1. Walk the Value Stream:
        * Write improvement ideas in a list and avoid discussing them.
    2. Map Layout:
        * Focus on basic:
            * What is done.
            * Who does it.
            * What order.
    3. Walk the Value Stream (again):
        * Performance of value stream.
        * Find barriers to flow.
    4. Add Map details.
    5. Summarize the map.
* Map Layout:
    * Customer Post-it in top center.
    * If there is an external supplier, place the customer on top right and supplier in top left.
    1. Agree on process blocks of the value stream:
        * Between 5-15.
        * Less than 5: not enough details.
        * More than 15: too detailed (likely) or value stream mapping too broad.
        * New process block when work stops flowing, usually due to:
            * Handoff.
            * Work accumulates.
            * Work is only processed at predetermined time intervals.
    2. Process should have:<br/>
       ![Process blog first walk](https://danlebrero.com/images/blog/books/value-stream-mapping/process-block-first-walk.png)
    * Branching is ok if there is just one/two process difference.
    * Parallel work is also ok.
    3. Number the process blocks sequentially for easy reference.
* Key performance metrics for each process block:
    * Process time (PT):
        * Time to do one unit of work.
        * If work is batched, one batch.
        * Includes:
            * "Talk time" -- meetings.
            * Read and think time.
        * Record separately "machine time" if it is significant.
        * Do not include waiting or delays.
        * It is the time it would take to do the work if the process workers could work on one item uninterrupted.
        * If PT varies wildly use median, not mean.
        * Opt for accuracy over precision.
    * Lead Time (LT):
        * Queue time + delays + PT.
        * Use business hours (typically 8 hours per day).
    * Percent Complete and Accurate (%CA):
        * Quality.
        * Incorrect, incomplete or unclear information from upstream.
        * Ask downstream process and place metric in upstream one.
* Additional information in each process block:
    * WIP:
        * In-box + In-process + Out-box.
        * Make note of oldest item in queue.
    * Number of people.
    * Number of hours worked.
    * Process effectiveness.
    * Work volume/demand rate.
    * Work trigger.
* Barriers to Flow:
    * Actions or conditions that inhibit the uninterrupted progression of work.
    * Do not include high LT or low %CA.
    * Examples:
        * Batching:
            * Note size and frequency.
            * Not all batching is bad.
        * System downtime.
        * Shared resources:
            * % of time staff is not available.
        * Task switching and interruptions.
        * Prioritization rules:
            * Conflicting or differing rules.
* Map Details:<br/>
![Map details](https://danlebrero.com/images/blog/books/value-stream-mapping/value-stream-map-details.png)
  * Place WIP to the left of the process block. Use inbox icon.
  * Connect processes with dashed push arrows or pull withdraw arrows.
  * Add IT Systems that connect the processes:
        * Use lightning blot if an automated process that push information to person or other IT System.
* Timeline and Map summary:
    * In parallel processes, pick up the one with the longest lead time.
    * Summary metrics:
        * Total LT.
        * Total PT.
        * Activity Ratio (AR):
            * Degree of flow.
            * Total PT / Total LT * 100.
            * 2-5% is not uncommon.
        * Rolled Percent Complete and Accurate:
            * (%C&A) process 1 * (%C&A) process 2 * ...
            * 1-10% is not uncommon.
            * In parallel paths, include the %C&A of all processes.
        * Total Label Effort:
            * Sum of PT, including all parallel processes.
            * Expressed as either:
                * Total hours.
                * Equivalent FTE (Full time employee).
                * Labor dollars.
            * FTE formula: Total labor PT * # occurrences per year / # available hours per employee per year.
* When you want to include pre-service in the value stream map, then use the layout:<br/>
![Value stream map with preproduction](https://danlebrero.com/images/blog/books/value-stream-mapping/value-stream-map-with-preproduction.png)      
* Common process findings:
    * Loopbacks.
    * Unnecessary hand-offs.
    * Rework due to errors and lack of clarity.
    * Batching.
    * Functions missing or getting involved too early or too late in the process.
    * Redundant activities.
    * High variation in how work is performed.
    * No documented standard work.
    * Excessive inspection (reviews, approval, audits).
    * Overspecialization of staff.
    * Existing technology not fully leveraged.
    * Underutilization of skills.
    * Compliance overkill.
    * Delays due to juggling multiple responsibilities.
    * Push and overburden.
    
Example from [Value Stream Mapping in Office and Service](https://www.slideshare.net/KarenMartinGroup/value-stream-mapping-in-officeservice-joint-webinar-with-igrafx/15-Basic_Value_Stream_Map_ABC):

![Value stream map example](https://danlebrero.com/images/blog/books/value-stream-mapping/value-stream-map-example.jpg)

## <a name="ch-4"></a>Chapter 4 - Designing the Future State 

* Facilitator has to shift from "what is" (uncover and analyze) to "what could" (innovate).
* Don't improve a value stream that delivers a product your customers dont want.
* Lean is all about creating flow.
* 3 Overall considerations:
    1. What work should be done.
        * Two ways of eliminating waste:
            1. Eliminate work.
                1. Remove unnecessary non-value-adding activities.
                1. Reduce effort for necessary non-value-adding activities.
                1. Reduce effort on value-adding activities.
                * In heavily siloed orgs, steepest lead time reductions are achieved by reducing hand offs. 
            2. Adding work:
                * When overall process time and lead time are reduced.
                * Temporarily add inspection step to prevent defects reaching customers.
    1. Making that work flow.
        * Key question: what is preventing the lead time from being the same as the process time for each and every process blog?
        * Focusing on Lead Time reduction forces problems to surface.
        * Examples:
            * Apply classic lean countermeasures and improvement work.
            * Address root cause of batches.
            * Shift sequential process to parallel.
            * Combine tasks to reduce hand-offs.
            * Resequence work.
    1. Managing the work to achieve continuously improved performance:
        *  How will you determine if the value stream is performing as intended?
        * Who will monitor and mange value stream performance?
        * Each value stream needs 2-5 KPIs. 
            * Typical: Quality, cost, delivery, safety, morale.
        * Many process blocks will benefit from their own KPIs.
        * KPIs must be actively managed by the value stream manager.
* Embracing value stream thinking is a mark of an organization that has shifted from siloed thinking (me and my team) to holistic thinking (customer and company).
* Reducing process time will free capacity:
    * Firing people is disrespectful/not lean.
    * Remaining people will have no further interest in improving.
* Future state design kickoff:
    1. Review charter.
    2. Review the current state findings.
    3. Introduce relevant counter measures:
        * Standardizing the work.
        * Build quality at the source.
        * Installing visual management.
        * Pull systems.
        * Batch reduction.
        * Level loading.
        * Work balancing to takt time.
        * Cells and collocation.
        * Work segmentation.
        * Cross-training.
        * Automation.
    * Avoid advanced techniques until the basics are working.
    * Most office and service value streams will require more than one value stream map.
* Creating the future state value stream map:
    * Blank sheet that is 30% shorter than the current value map.
    * Place current value map on top of it.
    * Design usually happens organically.
        * Page 116 list some design question to help.
    1. Start with *what* should be done, not *how*.
        * Include only the process description.
    2. Decide which functions will perform the work at each process, and the metrics.
    3. Calculate summary metrics and create a table to compare current vs future VSM.
    4. Note in the future state the improvements required:
        * Use "kaizen bursts":<br/> ![kaizen burts](https://danlebrero.com/images/blog/books/value-stream-mapping/kaizen-burst.png)<br/>
         * What, not how.
        * Improvements will need to go through the PDSA cycles.
    6. Brief the relevant leadership and key stakeholders.
* Designing an improved state also needs thick skin, intestinal fortitude, and a hefty dose of courage. 
    
## <a name="ch-5"></a>Chapter 5 - Developing the Transformation Plan

* Download XLS from [TKMG website](https://tkmg.com/books/value-stream-mapping/).
* Living document.
* Near future state so teams are encouraged by its progress.
* To be reviewed regularly.
* Monthly status meeting are not enough for driving execution and making adjustments.  
* Elements:
    * Measurable target.
    * Proposed countermeasures:
        * Kaizen bursts. 
        * The authority for determining how the improvement will be designed and implemented is given to the people who do the work being improved.
        * Use the word "countermeasures" (instead of "solution") to reflect fluidity.
        * Improvements are temporary countermeasures, not permanent solutions.     
    * Execution method:
        * Just-do-its:
            * Small, low risk, easy to test, cheap.
        * Kaizen Event:
            * 2-5 days.
            * Significant planning and careful scoping.
        * Projects:
            * More complex or expensive.
* Owned by the value stream champion.

## <a name="ch-6"></a>Chapter 6 - Achieving and Sustaining Transformation

* Must socialize the current state, future state and transformation plans.
    * Socialize: talk, explain, let people ask, discuss.
* Transformation plan reviews:
    * Attendees: 
        * Executive sponsor.
        * Value stream champion.
        * Few owners of the improvements.
    * Purpose: 
        * Assess progress.
        * Ensure robust PDSA is being used.
        * Address obstacles.
        * Consider shift in plan if new information or condition warrants it.
    * Agenda suggestion in page 143.
    * Sustaining improvement is easy:
        * Plan well.
        * Build consensus.
        * Follow PDSA to the letter.
        * Have strong management system:
            * One person that owns the whole value stream and has the authority to affect it.
            * In mature continuous improvement orgs, this person is responsible for the P&L, often the value stream is structured as a business unit, that borrows, leases or purchases shared services from other parts of the org.
* Recommended one VSM per year for key value streams.
* VSM is underutilized to align people, visualize problems, prioritize improvements, increase performance.
* VSM helps build into the leadership team the habits:
    * Going to gemba.
    * Tying improvements to business needs, strategy and annual goals.
    * True collaboration aligned by a common goal amongst departments.
    * Assessing performance using standard time and quality metrics.