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What is a value stream map?

The value stream is all the steps required to bring a product or service from order to delivery.  A value stream map (VSM) represents the flow of materials and information through that path.  This type of process map is a storyboard of how the work moves from request to receipt.  It represents a great tool to understand the current condition or state and identify improvement opportunities.  The goal is to identify and eliminate waste within and between processes.  

What makes the VSM unique is that shows the flow of all the high-level steps, allowing to see the entire value stream, how it works, and how value is delivered to the customer.  The customer is front and center while drawing the value stream, providing a clear line of sight to the external customer.  

The first two steps for Strategic Planning are to establish the Vision after assessing the current state and develop breakthrough objectives.  With the Value Steam Map, we easily see those areas where the flow stops, making it an effective instrument to understand the current environment. The improvement opportunities are the non-value-added steps, and those points the flow stop.  The future state map deploys the opportunities for improvement identified in the current-state map to achieve a higher level of performance.  This high-level of performance would be part of the strategic plan breakthrough objectives. 

A detailed explanation of how to create a VSM is beyond my scope but this how it looks.  A VSM has three parts, the information flow, the product flow, and the timeline.  

Value Stream Map Example

Before drawing the current state, it is important to go to gemba, where the action happens, to observe the processes and gathered information.  VSM uses a set of symbols or icons to represent a process, inventory, outside sources, transportation, information, and others.  The customer data box is the first thing you draw while doing value stream mapping, and it contains the daily requirements.  It also shows how the information flows from the customer to your facility, using different types of arrows for manual or electronic information. The sequenced process boxes represent product flow, and the data boxes under each contain relevant metrics, like the number of staff, process time, and lead time.  Between processes, you can add any work in process inventory.  Under them, it goes the timeline, which shows the lead time and the processing time.  Also, you can highlight non-value-added activities, to make sure that you see them as improvement opportunities.

Once completed, this map speaks to you.  You will see where the flow stops, where you have more inventory or more delays.  In the future state map, you will highlight those opportunities identifying them with the kaizen burst symbol.  Those are future kaizen or continuous improvement events.  

To improve flow, you will remove or minimize handoffs, rework, work in process, motion, transportation, batches, and other sources of waste.  You can also implement standardization, balance work, and improve quality.  

The last step of the VSM process is to create an improvement plan. Tie each item, long-term and short-term, to an objective of your improvement strategy.  

During the implementation of the strategic plan, continuous improvement events will lead the way.  These events are the part that says how to achieve the desired results.  The frequency of doing VSM can go anywhere from three to six months to a year.  Shorter times are better to drive action.

Value stream mapping is an excellent tool to analyze the current state of a value stream, which is the sequence of steps from request to delivery and design of the future state.  VSM is a strategic tool, while process mapping is a tactical tool.  Are you ready to work on your new strategy?

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What is strategy deployment (and why it is vital now)?

A strategy establishes the framework to make decisions, how to conduct business, deliver value to your customers, and achieve target revenues and profits. Strategic planning answers the question, where are we going, and how do we get there?

Hoshin planning or hoshin kanri means strategic policy deployment. It is a process to identify the strategy to follow, develop the objectives, communicate, and execute the plan. Hoshin is one of the various methodologies for strategic planning that emerge from Peter Drucker’s Management by Objectives (MBO). Some of the characteristics of Hoshin are that plans at different timeframes, from short-term to long-term, use PDCA and SMART goals, and establish periodic reviews to assess performance against the plan. In general, Hoshin planning has seven steps.

  1. Assess the current state and establish the Vision
  2. Develop breakthrough objectives
  3. Develop annual objectives
  4. Deploy annual objectives
  5. Implement annual objectives
  6. Monthly and quarterly review
  7. Annual review

Strategy deployment address critical business needs by aligning the goals with its strategy and the company resources at all levels. This alignment makes it possible to respond quickly to changes in the business environment. The use of the PDCA cycle brings into the mix a structure to deal with those changes. It provides a framework to identify and solve the problem.

Hoshin develops the skills and capabilities of the team by engaging them to answer the question of how do we get there? Leaders are expected to guide their teams based on their knowledge and experience. Aligned goals ensure that everyone is working toward the same ends. The team of problem-solvers that you developed, row in the same direction as you do to accomplish those goals.

Lean is a strategy that has proven effective in responding effectively to unforeseen changes and situations. In the time of the COVID-19 pandemic, it is vital to have a system to analyze the situation, create and implement a new business strategy. You can do this using Hoshin planning. If you decide to use Lean as your strategy, it will be the new framework to make decisions and conduct your business.

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What is a strategy? Do you have one?

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What is strategy?  Do you have one?  Or do you have a plan to achieve your business goals?

Many people confuse strategy with planning.  A strategy is the game plan for strengthening your business performance.  It establishes the framework to make decisions, how to conduct business, and deliver value to your customers, and achieve target revenues and profits. Planning is how you are going to achieve the business objectives and goals.

A plan without a strategy will not be effective.  Every organization needs a shared vision of where it is going, what is the business model, and what will drive decisions.  The strategy is how you are going to overcome the biggest hurdles, is what guides everybody in the same direction.

Planning comes after you know where you are going and what will frame the decision-making process.  Effective planning requires a look into the company’s strengths and weaknesses and to take countermeasures.  

Lean is a business management system, that when it is implemented as a whole, constitutes a great framework to conduct business.   The goal of lean or continuous improvement is to provide the customer with the highest quality, at the lowest cost, in a shorter time.  By using lean as a strategy, you will set your business for success.

Hoshin planning is the process used to identify and address critical business needs and develop people’s capabilities.   Continuous improvement or lean is a strategy to win by developing the team into problem solvers.  At times of economic uncertainty, it is critical to respond to changes in the business environment as fast as possible.  

When you and your employees know how to identify and respond to the daily challenges, the opportunities for success grow exponentially. Never is late to change your strategy, and win!