2. MAPPING YOUR VALUE STREAM

You are here in your Lean journey:

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For you to buy a pair of jeans, a lot has to happen before the purchase: someone has to provide the raw material, someone has to design it, then comes manufacturing and distributing the pieces. Each of these steps involves many people, processes and time frames. And all of that is necessary for the company to deliver its value (which in this case could be style, comfort, etc.) to you.

For you to use a CRM software, there are also many steps, people and processes that must be aligned: there must be a definition of the project scope, then people have to actually develop the software. After that, nothing happens if there aren’t sales people and operations in place, followed by maintenance and support, so that you can be successful using that tool.

See how many steps it takes to deliver value? These steps altogether compose the Value Stream Map, a.k.a. VSM.

VALUE STREAM MAPPING: a visualization of all the steps required to deliver a product or service. Used to illustrate, analyze and improve the process.

A Value Stream Map (VSM) displays every step necessary to delivering value to a customer. From start to finish. From the moment you get the supplies (whether they are physical or not, like data) to the moment the value is delivered to the customer.

Because of that, the VSM is a great tool to visualize, analyze and improve your value-creating process.

Here’s an example of what a simple Value Stream Map looks like:

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DON’T PANIC. IT’S EASIER THAN IT LOOKS

At first, reading a VSM can seem impossible. There are infinite different ways to build it (seriously, Google it), many details and no law on how it should be done.

But once you understand the logic of it and what every box and every letter stand for, it will all make sense. Let’s do this:

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These are the steps necessary to deliver the value. Here you will find

  1. The activity
  2. The people responsible for it
  3. Details on how to do it (if necessary)
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These are the metrics:

People (P): How many people are necessary to do the activity

Lead Time (LT): how long it takes to move to the next step (that can include waiting time, approvals and so on)

Cycle time (CT): how long it takes to perform the task itself

*Don’t worry about those metrics now because we will get back to them in the next chapters.

WASTE

A LEAN MANAGER’S WORST ENEMY

Once you map where your value comes from and what the necessary steps to delivering it are, you will probably find out that some of those steps (or many of them) are not adding so much value to what you deliver.

We call that waste.

WASTE: everything that doesn’t add value to the customer

Beware! Waste comes in all shapes and sizes.

Sometimes it’s easy to see. Like the waste of resources when you buy a software license and never use it.

But sometimes it’s hiding in plain sight. Have you ever stopped to think about the waste of time an unproductive employee can generate just by working in an environment that is too cold or too hot?

Every activity someone performs at your company should be in order to create value, not waste. If an activity doesn’t create value, it should at least support other activity that will create value itself.

Everything else is waste

To categorize your activities more easily, answer these two questions:

  1. Does that activity add value to the customer?
  2. Is it necessary to keep the organization alive and well?

Try putting them in a chart like this and you will be able to see all activities through a Lean lens:

TYPES OF ACTIVITIES

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VALUE-ADDING ACTIVITIES:

  • The customer wants them and will pay for them
  • They are done right the first time, with no mistakes
  • They take information or raw materials and transform them into something with more value

EXAMPLES:

  • Taking a metal plate and turning it into a piece that will later help to build an airplane
  • Letting customers schedule, reschedule or cancel appointments on their phones

WHAT TO DO: keep them!

INCIDENTAL ACTIVITIES:

  • They support value-adding activities and are required to maximize the value of the delivery
  • Customers have no interest in paying for them, but they must happen anyway
  • They are a necessary waste

EXAMPLES:

  • Having you and your luggage pass through an X-ray at the airport
  • Adding tons of bubble wrap around the products your order online to protect them

WHAT TO DO: reduce or automate them.

WASTEFUL ACTIVITIES:

  • They don’t add any value, only consume resources (time, money, effort)
  • They harm efficiency and productivity
  • They could be stopped and would be invisible to the customer

EXAMPLES:

  • Storing documents or information the company doesn’t use anymore
  • Assigning an overqualified person to execute a task that is too simple for them

WHAT TO DO: eliminate them

The bad news is that, once you classify the activities, you’ll probably see that most of what you do is waste. The good news is that this is normal. And the awesome news is that this guide is going to help you to eliminate all of that waste and become Lean. Stay tuned.

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GEMBA: WHERE THE MAGIC HAPPENS

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All of that value-creating and waste-generating activities happen somewhere. And that place is called the Gemba.

Gemba is a japanese word that means “the real place.” When a Japanese journalist is reporting, they say they are “live from the Gemba.” When the police refers to a crime scene, they refer to the Gemba. And in the Lean world, when we talk about where value is created, we talk about the Gemba.

GEMBA: the place where value is created

The Gemba can be a different place depending on what product or service you offer. For example, in a software company, the Gemba can be the office, while in a construction business, the Gemba can be the building site. And so on.

Get to the Gemba, map out where you value is coming from, discover what waste you are generating and let’s create flow!

BEFORE YOU GO ON
IMPORTANT THINGS TO REMEMBER WHEN MAPPING YOUR VALUE STREAM

  • Make sure you identify every step necessary for your company to create value and display those steps in a visual representation so that you can see more clearly which are actually necessary and which are just waste
  • Categorize your activities in order to see what you should keep (value-adding ones), what you should automate or reduce (incidental ones) and what to eliminate (waste)
  • The Gemba is the real place. The place where the value is created. So get to it to find opportunities to improve your value creation process