Online Student Guide

2008 The Quality Group. All Rights Reserved, Version 1.0 June 2008

ST UD E NT G U ID E

Table of Contents
Current State Value Stream Mapping
Value Stream Mapping ..................................................................................................... 3
Product Family Analysis ................................................................................................... 3
Product Family Matrix....................................................................................................... 4
Value Stream Selection .................................................................................................... 5
Value Stream Mapping..................................................................................................... 6
Value Stream Mapping Symbols ...................................................................................... 7
Value Stream Mapping Logistics ..................................................................................... 8
Creating a Current State Value Stream Map ................................................................... 9
Current State Value Stream Maps for the Office ........................................................... 11
Glossary ........................................................................................................................ 13

2008 by The Quality Group All rights reserved.

Version 1.0 June 2008
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CU RR E NT ST AT E V AL U E ST R E AM M AP P I NG
The current state value stream map is a graphical and analytical depiction of current state
of the process for a specific value stream. Understanding the current state is a critical first
step to evaluating and improving the flow of value to the customer.

Introduction

Students will also be able to describe a current state value stream map.

The importance of identifying value streams within operations

Factors to consider when selecting a value stream for improvement
Steps to create a current state value stream map
How to calculate takt time and evaluate takt time versus cycle time

Value stream consists of all the activities required to generate a product or service from
start to finish.

Learning
Objectives

Value Stream
Mapping

Once designed, the value stream starts with taking in and processing your order, including
all the steps necessary to put that salad together, and ends with delivery of that salad into
your hands.
Think of the value stream for a product in terms of materials flowing from suppliers to
customers; including both internal and external customers, the transformation of materials
into products and services, and the flow of information that supports the material flow and
its transformation.
Our lean goals include reducing waste, improving quality, reducing lead time and reducing
costs for the value stream.
To do this we need to provide what is needed by customers, at the rate needed by
customers, when needed by customers in the quantity and quality needed, without waste,
and using methods that allow for development of people.
Keep in mind that customers may be the next process or operation in the value stream or
the external customer.
To get started we need to first select a product family for evaluation. Organizations may
produce numerous products or provide many services, and we cannot work on everything
at once.
What is a product family, and how do companies identify their product families?
A Product Family is a group of products or service offerings that go through the same or
similar processing steps. Typically the products within a product family use the same
equipment or tools in the processing steps.

Product
Family
Analysis

Products or services within a Product Family are not usually exactly alike, but they share at
least 80% of the same steps
Product Family Matrix is used to compare steps across products or services and identify
Product Families. The goal is to look at products or services from a processing point of
view, not a marketing point of view, so products that may seem dissimilar at first may
actually be very similar in terms of their processing steps.

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Product To create a product family matrix, the products or services the company provides should
be listed. Listing all products is ideal, but for companies that produce a large number of
Family Matrix products this may be a very daunting task. In this case the company may be able to
identify similar products, and may decide to focus on one of those high level product
groups. It is important to select a broad category to ensure that the product families that
are identified contain all related products.
Once all products have been listed, all the process steps that are required to produce the
product need to be gathered and listed across the top, forming a matrix. For physical
products, the manufacturing routings are usually a good source of required process
steps.
For service offerings or transactional processes the company may reference training
materials or other process documentation to create the list of steps. If no such
documentation exists they may need to start by creating basic process maps to
understand the steps required by each offering.

Once all products and process steps have been listed, the matrix is filled in by placing an
X under the process steps required by each product.

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As processes are marked, patterns will start to appear. To make the patterns more
apparent, the matrix should be sorted by the use of major process steps.
In our example, we sorted the matrix by Select bread in descending order then by Add
meat in descending order Then by Fill with soup in descending order.
To select the major process steps to use for the sort, many times it is useful to select a
primary category of equipment used for the process. There is no one right way to make
this selection, so it may take a few different sorts to be able to see groups of products.

In our example we separated our Soup product from the others because it shares fewer
than 80% of the process steps. It is important to note that our Salad product, though a very
different product from Sandwiches, is considered to be part of the same product family
because so many of the process steps are shared. This demonstrates why as many
products as possible should be included in the Product Family Matrix.

Once the Product Families have been identified, a specific Product Family and its value
stream needs to be selected for initial Lean efforts. When selecting the initial value stream,
consideration should be given to the following:

Value Stream
Selection

What are the volume of products and services necessary to satisfy customer demand?
How much is needed and how long do we have to produce it?
What does a review of the performance data for issues related to quality, delivery, or costs
tell us?
Consider market competition, is the market changing? Are we losing business? Are there
new players in the market?
And finally, review routings. Select a stream that is not too simple or too complex.

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Value Stream Once we've selected an initial value stream, we need a way to manage the Lean
Mapping journey. Envisioning the future with improvements must be preceded by a hard look at

reality. Before we can start planning improvements we need to understand where we are
the current state. The data we have reviewed during the value stream selection
process provides performance information, but the old saying goes J a picture is worth
a thousand words.
Value stream maps provide a graphic representation of the sequence and movement of
information, materials and actions in a value stream.
They serve as a communication tool and help achieve agreement on how value is added
and where waste exists.
Typically they are a poster size graphic or storyboard drawn in pencil or on a whiteboard
to facilitate changes.
Usually value stream maps are shown in two parts current state and future state. The
team initially works to define the current state.
Value stream mapping focuses the team on the whole process - start to finish.
It allows the team to see the big picture. Recall that luncheon salad ... value stream
mapping would include the information or ordering flow as well as the operations or
steps necessary to produce the salad.
Value stream mapping helps prevent the "hit and miss" approach.
Following initial planning and review of the flow to identify all involved processes, the
team must go to the value stream to get map information; a checklist of what data to
collect is handy. Starting at the end or last operation or process and working backwards
is recommended. The checklist items apply for each of these operations.
The team needs to be attentive to exceptions and disruptions that may not show in a
typical flow; for example, is product brought into the line for rework or reprocessing?

After ensuring all necessary information has been collected, the team will review the data
and begin constructing the "current state" map.
Finally, the team needs to manage this "current state" mapping in support of the overall
timeline for the project.

CUSTOMER DEMAND
Determining and calculating demand for specific products based on customer orders
sounds straightforward, but may not be so easy.
And don't be short-sighted about that basic definition. The quantity of product required
comes with additional needs related to quality, delivery and price.
You must also consider how their requirements are communicated and understood.

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TAKT TIME
Takt Time is a calculation used to match the rate or pace of production to customer
demand and to final sales. The method determines the time required for each product,
part, or service based on demand. Takt Time equals Available time divided by customer
demand. In our example the lunch counter is open for 4 hours each day. This translates to
14,400 seconds. If current demand for salads during this four hour period equals 100 then
Takt Time is 14,400 divided by 100 which is equal to 144 seconds.
The process time bar chart shows the process time of each step. Next we take into
account our customer demand in terms of Takt Time. As you can see our third process
step takes 180 seconds while the Takt Time is 144 seconds. This is one of our first
indications of where improvement activities must focus, as step three cannot currently
produce at a rate to meet customer demand.

Lets look at how to put a map together by first reviewing some of the symbols.

Value Stream
Mapping
Symbols

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Value Stream
Mapping
Logistics

Now that we have reviewed the purpose of a current state value stream map and the key
components, lets start our mapping exercise. When gathering the team to walk the value
stream, it is important to follow a few key suggestions.
Beginning with a quick walk through of the value stream allows the team to become
quickly familiar with the general flow of product.
Do not rely on standard routing times or estimates. Wherever possible, gather information
live while the process is occurring.
Do not break the teams into groups to map segments of the process. A divide and
conquer approach will only allow a few team members to see portions of the process.
One of the fundamental principles of value stream mapping is to ensure that the entire
process is visible and understood by the entire team.

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1. Start the Current State Value Stream Map with the Customer and a data box
containing information about demand:

Quantity of each specific product required per time period

Pack quantity
Other relevant metrics

Creating a
Current State
Value Stream
Map

2. Next, draw the basic production processes and collect data for each operation.
Each process box indicates a group of processes through which material is
flowing. One process box stops and another starts where processes are not
connected and the material flow stops, creating WIP inventory.
Each process box may represent more than one processing step; the focus is on
where the material flows and where it stops.
Enter attributes for each operation and tally total cycle time, which is dependent on
processing and changeover time, in seconds or minutes.
Show the number of operators currently required to carry out each operation.
Focus at this time is to document the current state. For example, cycle time is the
time from entry into an operation or process to exit from the operation with
completion of that operations activities. The team will focus on identifying waste
and non-value adding activities as they move toward the future improved state.

3. Continue by drawing in inventory triangles where material stops and accumulates

between operations.
There may be more than one place where inventory accumulates between
processes; be sure to draw each one.
Record inventory, either with an item count or by how long the items stay in each
location

4. Draw in delivery and shipment methods and frequencies for customer deliveries.
Remember the shipping process block.

5. Draw in one or two key suppliers, their shipping method and schedule, and data
boxes to capture relevant data (such as pack quantity). Do not draw in every
supplier or every purchased item; just pick one or two key incoming parts or raw
materials.

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Now you have a complete picture of material flow in your value stream.
Next we will focus on information flow.

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6. & 7.

Continue to add to the Value Stream Map by inserting production

control as a process box, and then add narrow lines to represent
information flow. Manual, or paper information flows are shown with a
straight line, and electronic information flow is shown with a zigzag line.
A small box can be used to label the information flows.

8. & 9.

The last step in creating a Current State Value Stream Map is to add
material movement arrows and timeline. A striped arrow indicates where
product is pushed from one operation to the next. Because each operation
in this Value Stream Map is given a schedule, each operation is producing
to that schedule rather than in response to a need from the downstream
operation. This is push material movement.
The timeline is drawn beneath all operations and inventory locations.

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CU RR E NT ST AT E V AL U E ST R E AM M AP P I NG

By understanding the "current stat e" of the selected value stream, a team can then begin
identifying opportunities to better meet customer demand and envision the "future state".

Now lets try an example for the office environment; invoice processing.
Suppliers are required to send paper invoices by mail. Once a week, all the invoices that
have been received are manually entered into the system by a data entry clerk. The
entered invoice is put in the system work queue for the purchasing agent responsible for
that supplier.

Current State
Value Stream
Map for the
Office

The purchasing agent then manually matches the invoice to the related purchase order.
Once the invoice is matched to the PO, the original requester of the goods or services is
required to confirm that payment can be released.
After the requester has marked the invoice as OK to Pay, the invoice is released for
check print & mail, which is performed in a weekly batch run.
Lets build a Current State Value Stream Map for this process.

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In this case, our suppliers are both the supplier on the Value Stream Map because they
supply the raw material, which is the invoice, and the customer, because they receive the
product, which is the payment.
Starting from the end of the process, draw in the customer and metrics that we know
about their delivery requirements. Add all the processing steps and their data boxes.
Add inventory triangles where the product stops and waits for the next processing
step.
Remember that our product is the invoice. Assume we walked this process mid-week, so
our inventory levels will be based on a mid-week count. Draw in the delivery modes and
frequency for the deliveries to customers. Draw in the suppliers, their data boxes, and
delivery modes and frequencies.
Now lets draw in our information flow, motion, and timeline of the product.
In office environments the product being produced is often information rather than a
physical product. Do not confuse information flow with product flow in an office
environment. Information is the information about process and product scheduling.
Suppliers do not receive any communication from our organization that they may submit
an invoice. Their trigger for releasing an invoice is when they provide goods or services.
Our organization A/P system is notified that the supplier received their check when the
check clears the bank.
Processing the invoice is scheduled in two processes both invoice entry and print/mail
are executed only weekly. The remaining steps are not scheduled; invoices are pushed
through the processing steps.
Also notice that once the invoice has been entered into the system, once an operation
has been completed the invoice is placed in the next operations queue when it is ready
for processing. This is passive notification that work needs to be done on the product.
One way to see the waste of inventory in an office environment is to identify where the
product is waiting to be processed. In our example here, it is now apparent that invoices
are piling up before the Ok-to-Pay step, even though that operation has plenty of
available time. This is an area we should target for improvement.

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Key Terms, Concepts, and Tools to Remember:

Current
State Value
Stream

A snapshot view of a value stream as it exists at the time of

observation.

Value
Stream

A holistic collection of value added and non-value added activities

that chain together to create a product or service.

Value
Stream Map

The visual documentation of the activities creating stakeholder

value and how information and resources flow between them

Value
Stream
Mapping

A paper and pencil tool that helps you to see and understand the
flow of material and information as a product or service makes its
way through the value stream.

2008 The Quality Group


Glossary

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