This is part 2, of the blog answering the question recently put to me “What is lean?”. In essence;

Lean is an approach to align your business to meet your customers needs.

In part 1, we addressed the first principle of lean putting your customer first – and this strictly means understanding value from your customers perspective.

Once you really understand value from your customers perspective, we map the value stream from start to finish.

Principle 2 – Map your Value Stream.

Richard on Value Stream Mapping

So, we understand what value is, as we have really interrogated it from our customers perspective. The 2nd principle of lean is to create a map that visually represents the value stream, as a customer would if they were in your organisation.

I’ve headed this blog with an actual value stream I mapped several years back, it is a traditional representation of a value stream, so I shall refer to it. However, I really would like to emphasise that the principle is more important than how it is finally presented, except to say, it should be understandable for all it is shared with.

Let’s address some questions that are often asked. What is the difference between value and a value stream?

Value is what your customer desires, A value stream includes all systems and processes required to deliver the product or service to your customer. It incorporates 3 major components;

• Information flow – Typically all the electronic (or paper) ordering, controlling, delivering systems in your organisation are included in the information flows
• Material flow – Typically this is where the actual processing or value add takes place in a tangible format, and under each process a data box captures relevant information about the process step
• Lead time ladder – This shows the amount of time spent value is added, compared with the lead time through each stage of processing.

We already know what the value is from a customer perspective so why do we need to map the value stream?

Well, when we examine our systems and processes we often see they have been designed without the customer’s desire for value incorporated into them. Often there are many tasks and functions we perform which adds no value to the customer, in fact it only adds cost, through time, quality, and expense.

By mapping the value stream, we can identify areas to reduce costs, speed up the lead time and improve quality.

In the example used for the header of this blog, this facility was adding value less than 1% of the time, so more than 99% of the time there was no value add to the product.

Value add is anything which changes the product or service, (fit, form or function), which your customer would be happy to pay for.

I hasten to add, the facility in question was recognised as being fairly efficient, it had a good track record, and like many organisations, believed it was doing reasonably ok.

There are some tips when creating a value stream map.

Firstly, map it where the work is done. Speak with the people doing the jobs first hand to get an accurate account of what is actually happening rather than what you think is happening.

Secondly, use a pencil, bring an eraser, because it usually takes a number of iterations to get it right. It’s a great idea to bring interested parties on the value walk with you. The insights you will gain from creating a map will astound you, and those creating it with you.

Finally, when you create the value stream, and you realise your precious organisation that you were sure was operating at 98%+ value with only 2% waste, and it turns out to be the inverse of this – (ie 98% waste, and 2% value add), don’t be upset.

If you find this situation in your organisation, you should be delighted. Imagine, before you discovered how you were actually performing, you had limited your perception of could be achieved too with 2% – and now you have just found an opportunity to lift your organisation by orders of multitude, and bring real improvement about, which the customer will be equally delighted with.

That brings us to the next principle, which really starts to get the rubber on the road, enabling a transformation to begin.