Managing Your Value Stream: the Key to Continuous Improvement

By Bill Kirkpatrick, Life Cycle Engineering

It’s 2014 and most companies have some form of improvement process in place. Whether it’s driven internally, from afar, by some corporate initiative or by a customer, some method is usually evident. Although you may have to look in the far reaches of your plant to find it, I assure you it’s there. Typically, while searching for that glimmer of light within an organization you’ll find an individual or maybe a small group that’s keeping your lean / continuous improvement (CI) hopes alive. Through them you’ll escape the next ISO or customer audit. All too often this is how CI is perceived.

Why is it that in 2014 we still find organizations that just can’t grasp the fact that if they don’t improve their quality, cost and delivery, they will soon be wiped from good ole terra firma? They have all the functions in place to manage the processes within their walls – Accounting, Engineering, Operations, Quality, Maintenance, Human Resources – so what’s the problem?

Let’s take a closer look at that little light that was found in an obscure part of the factory, where the lean guys hang 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 that’s in dire need of improvement due to a quality issue or poor productivity leading to profit loss. The good thing is they’re usually pretty darn good at what they do. However something’s amiss; even with these folks the plant still struggles to make the numbers that in the past were never an issue.

Let’s look at this group a little more closely. These folks are usually directed by an engineering department or reside within the maintenance organization or, worse yet, report to Operations. Operations, you ask? Yes, and I would hope most would agree that this is the last place you’d want your CI team to reside. When under Operations where do you think this team’s activities are going to be focused? True, Operations is usually a prime locale for lots of improvement opportunities and I do believe that if your organization were a wheel Operations would be at the hub of the wheel. However if the spokes aren’t robust in supporting the wheel then the whole system will struggle under the ever-imposing weight of customer demands and competitors.

The problem seems 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. So the obvious fix is to have the CI group report to the site leader and make the 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 effectively 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, and poor equipment utilization. Flow (measured as lead-time) will only improve when you start to address those things that are preventing it.

Chances are you’ve heard or seen how the use of a simple value stream map can show the current and future state of a value stream. Even though it’s used regularly it rarely is truly understood by everyone in the organization. Why? Maybe it’s because not all functional organizations realize they have customers, let alone a value stream. Think of all the functions that make up an organization. Each has a supplier and a customer, hence each deliver some value. Most likely each has waste that ultimately impedes flow. 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 their efforts now that they report to the correct level of the organization? 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 the crème de la crème. Wow, that’s a lot of mapping right? Well, yes, but not performed by just one team but using a team of teams lead 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.

Below is a quick list of typical functional groups and possible “products” to focus on to improve flow:

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

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

In summary 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 stream 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 their primary product’s flow (lead-time)
    a. Primary focus is the groups 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

Understanding value (and its adversary, non-value) is key to being successful in continuously improving a process. Focusing on product flow through the value stream will get you in the right mindset as you begin to understand and see what is impacting flow. Having players at the right level of the organization focusing on improving flow using a proven value stream management system will ultimately yield the improvements you seek.

Bill Kirkpatrick is a Senior Lean Subject Matter Expert with Life Cycle Engineering (LCE). Bill helps clients enhance performance by driving continuous improvement using Lean / Six Sigma techniques. He holds a Bachelor of Science degree in Engineering Technology, with an emphasis on Manufacturing, from East Tennessee State University. You can reach Bill at [email protected].

© Life Cycle Engineering


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