Managing Your Value Stream

Even with good people in a plant, careful attention to the continuous-improvement process is required.

Why is it that in 2015 we still find organizations unable to grasp the fact that if they don’t improve their quality, cost and delivery, they will soon be gone? They probably have all the functions in place to manage their processes—Accounting, Engineering, Operations, Quality, Maintenance, Human Resources and others—so what’s the hold up?

Lean subject-matter expert Bill Kirkpatrick of Life Cycle Engineering uses the following story to answer. It’s set in an obscure part of a factory, where the lean crew hangs out with their maps, racking system and 5S supplies. They typically perform one-off projects (kamikaze kaizen) that have little impact because the project may only address the smoke when the fire is elsewhere. These projects are usually directed by a department head in dire need of improvement due to a quality issue or poor productivity leading to profit loss. The good news is that they’re usually adept at what they do. But something’s missing. Even with these folks, the plant still struggles to make the numbers that in the past were never an issue.

Who’s in charge?

Look at this type of group more closely. Kirkpatrick says it’s usually directed by Engineering or resides within Maintenance. Or it could report to Operations—which many might agree is the last place you’d want the continuous-improvement (CI) team to reside. Under Operations, where would this team’s activities be focused?

Granted, Operations is usually a prime locale for lots of improvement opportunities, and Kirkpatrick believes that if an organization was a wheel, Operations would be at the hub. But if the spokes don’t properly support the wheel, the whole system will struggle under the weight of customer demands and competitors.

In Kirkpatrick’s opinion, the problem is twofold. First, the improvement organization doesn’t always report to the correct level in the organization. Second, they don’t have a sustainable process to direct their actions. Trying to sell ideas left, right, below and above within an organization is a daunting challenge for any professional in any setting.

The obvious fix, he explains, is to have the CI group report to the site leader and make the group’s lead individual part of the staff responsible for one thing and one thing only: improving “flow” across all processes in the organization. Having this position at the staff level allows the bridging of functional groups or process teams that aren’t always focused on flow.

Flow must occur in any and all processes, and any impedance to flow must be identified, communicated and eliminated using a sustainable process. Think of what impedes flow within your organization:

• Poor quality
• Poor efficiency/productivity
• Poor material movement
• Poor information flow
• Poor equipment utilization.

“Flow, measured as lead-time,” Kirkpatrick says, “will only improve when the elements that prevent it are addressed.”

Value-stream mapping

Kirkpatrick points to value-stream mapping as an effective solution. Many readers understand how this tool can show the current and future state of a value stream. Yet, he says, even though such maps may be used regularly, they are rarely fully understood by everyone in the organization. This may be because not all functional organizations realize they have customers, let alone a value stream.

“It’s important to consider all the functions that make up an organization,” Kirkpatrick says. Since each has a supplier and a customer, each delivers some value. Most likely, each has waste that ultimately impedes flow. Unfortunately, lack of flow within their own value stream is eventually felt in the product value stream to the end-user.

How does the CI team know where to focus its efforts when they do report to the correct level of the organization? According to Kirkpatrick, “Using value-stream mapping as a tool is one thing, but having each group within an organization using it as the primary form of CI is world-class.”

While that approach may sound like a lot of mapping, Kirkpatrick is quick to note that it’s not performed by just one team. It’s performed by “a team of teams led by the CI group.” Instead of functional teams using gut and intuition or a big list of projects to determine what to focus on next, they begin to grasp the idea of using value-stream mapping to manage where to focus efforts in improving the flow of their product.

Functional groups

Kirkpatrick offers this quick list of typical functional groups and possible “products” to focus on to improve flow:

• Human Resources—Employee recruitment (time required to replace or add employees)
• Engineering—Configuration management (time required to initiate a configuration change)
• Business Development—Job estimating (time required to estimate work for new business)
• Maintenance—Mean Time to Repair (time required to repair equipment)
• Quality—Root Cause/Corrective Action (time required to get to RCCA)
• Procurement—Purchased Lead-time (time required to procure an item)
• Operations—Product Lead-time (time required to produce goods from start to end)

These products can all be considered value. Each has impediments that adversely affect flow within each value stream. At this point, each functional group would be responsible for showing improvement in flow. As they improve, so does the overall organization.

According to Kirkpatrick, the process looks something like this:

• 1. Continuous Improvement (CI) group reports to site leadership.
• 2. CI group is responsible for improving flow (product lead-time)
  • a. Primary focus is the flow of customer product
  • b. Value -mapping as primary tool (limit kamikaze kaizen)
    • i. Develop current and future-state maps (could be many)
    • ii. Develop primary metrics to track improvements
    • iii. Develop and execute future state project plan
  • c. Becomes primary form of CI as the future state now becomes new current state, hence the cycle of continuous improvement
• 3. Each functional group is responsible for improving its primary product’s flow (lead-time)
  • a. Primary focus is the group’s primary product (could be several)
  • b. Value-stream mapping as primary tool
    • i. Develop current and future states
    • ii. Develop primary metrics to track improvements
    • iii. Develop and execute future-state project plan
  • c. Becomes primary form of CI as the future state now becomes new current state
• 4. Bi-weekly or monthly meetings to review status of each future state
  • a. Share and communicate status to improve flow
    • i. Future-state plan status
    • ii. Next products flow to improve
  • b. Communicate with all employees via improvement kiosk throughout the facility

As Kirkpatrick describes it, understanding value (and its adversary, non-value) is key to being successful in efforts to continuously improve a process. “A focus on product flow through the value stream,” he says, “will help develop the right mindset as team members begin to understand and see everything that impacts flow. Having players at the right level of the organization with a focus on improving flow using a proven value-stream management system will yield the desired improvements.” MT

Bill Kirkpatrick is a Senior Lean Subject Matter Expert with Life Cycle Engineering (LCE.com). Contact him at bkirkpatrick@LCE.com.