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Value Stream Analysis:
Beyond the Mechanics (Part 3 of 3)

Webinar
February 18, 2014
Welcome!
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© 2014 The Karen Martin Group, Inc.
 Coach / Facilitator / Consultant / Trainer: 
Lean transformation & business performance 
improvement in all industries.
 Teacher: University of California, San Diego
 Author & Speaker:
Karen Martin, President
The Karen Martin Group, Inc.
www.ksmartin.com

2013 Shingo 
Prize winner!

www.ksmartin.com/subscribe
3
Before the webinar…
• Materials:
– www.ksmartin.com/files/webinarmaterials/02‐18‐
2014_slides.pdf (or _handout.pdf)

After the webinar…
• Recordings:
–
–
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www.ksmartin.com/webinars
www.vimeo.com/karenmartingroup
www.youtube.com/karenmartingroup
www.slideshare.net/karenmartingroup

• Materials:
– www.slideshare.net/karenmartingroup
© 2014 The Karen Martin Group, Inc.

4
More VSM Learning
• Next Webinar
– Thursday, March 27, 11:00 am – 12:15 pm PT
– Value Stream Mapping: Case Studies
– https://www2.gotomeeting.com/register/288652530

• Recorded webinars (including 5S Supply and iGrafx)
– www.ksmartin.com/webinars

• Podcasts
– www.ksmartin.com/media (Podcast tab)

• Public VSM workshops – SHS and AME conferences
– www.ksmartin.com/events

• In‐house VSM workshops & facilitated VSM activities
– Call us!
© 2014 The Karen Martin Group, Inc.

5
You will learn how to…
• Create & manage a value stream 
transformation plan.
• Apply PDSA to assure that you’re making the 
best improvements.
• Engage the entire workforce in making 
change.
• Measure your progress.

© 2014 The Karen Martin Group, Inc.

6
Basic Current State Value Stream Map: 
3 Sections
1

2

3

© 2014 The Karen Martin Group, Inc.

7
Basic Value Stream Map: Future State
1

Customer

IT interface
Standard
work

Error
proof

IT-1

Crosstrain

Modified
approvals
2

Process 1

3

Crosstrain

Process 2

Function A
1 items

IT-2

LT = 1 days
PT = 10 mins.
%C&A = 99%

Process 3

Function C
5 items

5

4

Standard
work

Function E
10 items

3
LT = 2 days
PT = 120 mins.
%C&A = 95%

4
LT = 0.5 days
PT = 30 mins.
%C&A = 95%

1 days

2 days

0.5 days

Total LT = 3.5 days

10 mins.

120 mins.

30 mins.

Total PT = 160 mins.
Activity Ratio = 9.5%
Rolled %C&A = 89.3%

© 2014 The Karen Martin Group, Inc.

8
Basic Value Stream
Future State Performance Metrics
Current State 

Projected
Future State 

Projected
% Improvement

9.5 days

3.5 days

63.2%

180 minutes

160 minutes

11.1%

Activity Ratio

3.9%

9.5%

143.6%

Rolled % Complete & 
Accurate

30.0%

89.3%

197.7%

Metric
Total Lead Time
Total Process Time

Other?
Other?

© 2014 The Karen Martin Group, Inc.

9
Value Stream Mapping:
Phases and Timing
Repeat

Prepare

4 Weeks Prior 
to Mapping

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Three Consecutive Days

Execute 
Transformation 
Plan

Following 
Mapping

10
Current State Value Stream Map
<Client>
CURRENT STATE Value Stream Map
(Product>
<Map assumptions>
Demand Rate = XXXX/ Year
February 03, 2014

Customer

SalesForce

2

1

Prepare
Proposal
450 items

3

4

Hand Over to
Proj Mgmt

Send PO or
LOI
7 items

150 items

Excel

9 items

Plan &
Schedule
Project

5

7 items

Review
Specs; scope
project.
Prepare initial
cust. docs

7

Customer

Sales
2 approvals

Project Mgmt

41 items

LT = 2 weeks
PT = 12 hrs .
%C&A = 2%

LT = 0 week s
PT = 16 hrs.
%C&A = 35%

10A

11A

12

13A

14

15A

17

LT = 6 week s
PT = 92 hrs.
%C&A = 0%

16

19 items

Customer

Release Long
LT Items to
Production

Release
Complete
Final Design

Issue Reqs
for Short
Lead Parts

21 items

3 items

Build for Test
Product
6 items

3 items

Test &
Disassemble
Product

4 items

Build for
Shipment
PRODUCT

20 items

Package &
Ship
Product &
Systems

50 items

Customer

3 items

Approve Final
Documents

Eng

Eng

Purchasing
Planning

Production

Production

Production

LT = 105 day s
PT = 360 hrs .
%C&A = 75%

LT = 2 weeks
% C&A = 5%

Invoice
Customer
(final)

Finalize
Customer
Documents

Review &
Approve Docs

Start
designing
project

LT = 1 y ears
%C&A = 5%

8A

6

Eng, Quality,
Planning

Sales
(~ 200 pp)

LT = 2 week s
PT = 2.5 day s
%C&A = 75%

MS Project

LT = 85 day s
PT = 144 mins .
%C&A = 25%

LT = 2 week s
PT = 3 hrs .
%C&A = 5%

LT = 4 week s
PT = 48 hrs .
%C&A = 95%

LT = 5 day s
PT = 14 hrs .
%C&A = 90%

LT = 3 days
PT = 18 hrs .
%C&A = 95%

Engineering
Quality

Logistics

Finance
LT = 6 months

120 items

6B

8B

0 items

Begin Create
Customer
Docs

Create
Demand;
Issue Reqs for
Long Lead
Items

X3

PM
Planning
Doc Control
ME

Engineering
Quality

9

10B

11B

LT = 4 week s
PT = 72 hrs.
%C&A = 99%

LT = 2 months
%C&A = 50%

13B

15B
3 items

Procure Long
Lead Items
3 items

Invoice
Customer

Test & Build
from Test
Systems

18 items

LT = 1 months
PT = 3 hrs .
%C&A = 95%

Build for
Shipment
SYSTEMS

Invoice
Customer
(Shipment)

3 items

Purchasing

Finance

LT = 2 week s
PT = 3 hrs .
%C&A = 5%

LT = 2 months
PT = 4 hrs .
%C&A = 5%

Production

Systems
Production

Finance
Logistics
PM

LT = 6 day s
PT = 44 hrs .
%C&A = 95%

LT = 1 days
PT = 8 hrs .
%C&A = 95%

LT = 30 day s
PT = 6 hrs .
%C&A = 95%

22 items

LT = 7 months
PT = 124 hrs.
%C&A = 0%

LT = 5 day s
PT = 8 hours
%C&A = 80%

6C

25 items

10C

Invoice
Customer
Supplier
Send Parts

Finance
LT = 7 months

LT = 4 weeks
PT = 2.5 hrs .
%C&A = 95%

10.0 days
0.5 weeks

10.0 days
50.4 weeks

0.3 weeks

30.0 days
0.4 weeks

147.0 days

105.0 days

85.0 days

10.0 days

42.0 days

20.0 days

5.0 days

3.0 days

20.0 days

2.3 weeks

3.1 weeks

9.0 weeks

0.1 weeks

0.1 weeks

0.1 weeks

1.2 weeks

0.3 weeks

0.5 weeks

1.8 weeks

21.0 days
8.4 weeks

25.2 weeks

Total LT = 930.0 days

0.1 weeks

Total PT = 103.7 weeks
Activity Ratio = 55.8%
Rolled %C&A = 0%
Future State Value Stream Map
3.Create v isual
timeline to educate
customers

7. Error proof P.O. info
(correct s pecs , s hip to, etc .);
notify c us tomer re mis sing info
and drop dead date

5. Soc ializ e new c riteria for
engineering, quality &
purc hasing involv ement

4. Define technic al info
Ebara needs from
customer and when

1. Create procedure/train GS s ervic e
engineers to properly feedbac k
suggestions to engineering

Customer

6. Rev is e s tandard Ts & Cs to
inc orporate time limit for c us tomer
approv al for final pay ment

2.Create bulletin re:
s tandardized headplate
des ign to eliminate flange
orientation.

1

13. Revis e proposal
template to limit time
to 4 revisions

9. Add initial
projec t releas e in
SF

16. Create trigger to
release (BOMs) for
purchas e.

10. Enforce customer
-reques ted CO
procedure

8. Create c riteria for
LOI ac ceptanc e

4A

Review PO

6A

Approve cust.
doc package

Customer

8

7A

Procure
items

PM

Stage order
(100% comp.)
Prod. Control
Hydrotest

Send
materials

Customer
Sales

25. Trans ition data
reduction to test engineer

5A

Plan &
Schedule
Project

26. Update data book
process to submit after test
reports received.

15. Create commodity
management team &
s upplier SLAs

18. Eliminate
Requisitions

3

Send PO or
LOI

LT = 10 day s
PT = 64 hours
%C&A = 95%

19. Analyz e/implement
c hange management
sy stem.

20. Create approved
s upplier program

2

Prepare
Proposals

Sales
Engineering
Quality
Purchasing

14. Standardiz e
WBS/QPR from
s uppliers

27. Pre-arrange
s hipping bas ed on
production sc hedule

9A

Build for
Test
(Product)

10

Test &
Disassemble
Product

Total PT = 16h

28. Create the means to
have a daily level-loaded
production sc hedule

(Includes Quality
Inspection)

11A

Build for
Shipment
(Product)

12

Package;
ready to ship
(including
docs)

13A

Invoice
Customer
(shipment)

Total PT=36h
Total PT=72h

Total PT=48h

Supplier
Purchasing

Warehouse

Production

Production

Logistics

Finance

LT = 3.1 day s
PT = 24 hrs.
%C&A = 99%

LT = 8 days
PT = 6 hrs.
%C&A = 95%

Production
LT = 1 y ears
%C&A = 75%

LT = 2 week s
LT = 8 hours
PT = 4 hrs.
%C&A = 95%

PT = 16 hrs .
%C&A = 90%

LT = 8 hours
PT = 6 hrs .
%C&A = 99%

21. Create
c onfigurator
(standard part)

12. Move to one
release (pump &
s ys tems )

Value
Stream
STOPS if
no PO

LT = 4 hours
PT = 2 hrs .
%C&A = 99%

LT = 1.1 day s
PT = 8 hrs .
%C&A = 95%

LT = 5 days
PT = 16 hrs.
%C&A = 95%

LT = 3 days
PT = 18 hrs.
%C&A = 95%

16. Create pull s ignal
for inv oicing.

4B

11. Create one-piec e
engineering flow

LT = 5 months
PT = 0 hrs .

Complete &
release
initial
customer
docs

5B

6B

Create
balance of
customer
docs

Invoice
Customer

X 1.5
Total PT=186h

7B

Invoice
customer
(major
materials)

9B

23. Automate
s hop order
release.

24. Eliminate witnes sed
tes ting of elec tric al feedthroughs onsite

Build for
Test
(Systems)

11B

Build for
Shipment
(Systems)

13B

12B

Approve
final
documents

Invoice
Customer
(docs)

Customer
22. Create
engineering tools

Eng (32 hrs)
Quality (4 hrs)

ENG
Quality

Finance

Production

Production

LT = 5 day s
PT = 22 hours
%C&A = 95%

LT = 1 days
PT = 8 hrs .
%C&A = 95%

Finance

Finance
LT = 30 day s

LT = 5 day s
PT = 36 hrs .
%C&A = 85%

LT = 2 day s
PT = 2.5 hrs.
%C&A = 95%

LT = 3 months
PT = 124 hrs.
%C&A = 80%

LT = 2 days
PT = 3 hours
%C&A = 95%

LT = 2 days
PT = 3 hrs .
%C&A = 95%

11C

5C

Build
Crates

Complete &
Release ENG
package BOM

Total PT=48h

Total PT=268h

Logistics

LT = 3 days
PT = 24 hours
%C&A = 99%

LT = 7 weeks
PT = 206 hrs .
%C&A = 85%

8 hrs.

5 days

35 days

8 hrs.

4 hrs.

36 hrs.

206 hrs.

6 hrs.

105 days

4 hrs.

1 days

5 days

3 days

3 days

Timeline LT = 160 days

2 hrs.

8 hrs.

16 hrs.

18 hrs.

24 hrs.

Timeline PT = 320 hrs.
Activity Ratio = 25.0%
Rolled %C&A = 21%
Total PT = XX
Improvements / Hypotheses
Improved quality of information upfront.
Removed handoffs.
Shifted roles & responsibilities in 4 work areas.
Added a proper cross‐functional kick‐off activity.
Merged work.
Re‐sequenced work.
Moved work in parallel.
Innovated re: design.
Created new work triggers.
Created one‐piece flow in engineering by 
reconfiguring staff and workloads.
• Rationalized suppliers (starting the process).
• Implementing a hard stop to work if no PO received.

•
•
•
•
•
•
•
•
•
•

© 2014 The Karen Martin Group, Inc.

13
Value Stream Performance Improvement
Projected Results
Current State 

Projected
Future State 

Projected
% Improvement

17 months

7.5 months

56%

Timeline Process Time

600 hours

450 hour

25%

Rolled % Complete & 
Accurate

0%

21%

> 2,000%

On‐time delivery

13%

90%

592%

25/project

12/project

52%

Metric
Timeline Lead Time
(RFQ to shipping)

# Internally‐produced 
Change Orders

© 2014 The Karen Martin Group, Inc.

14
PACE Prioritization chart

© 2014 The Karen Martin Group, Inc.

15
Prioritization Grid
Creating the Transformation Plan

16
Value Stream Transformation Plan
Value Stream
Executive Sponsor
Value Stream Champion
Value Stream Mapping Facilitator
Date Created
Kaizen
Burst #

4
5
6
7
8
9
10
11
12
13
14
15
16

Content removed for sanitization purposes

3

Jim McMahon

2/10 + bi-weekly Thu 10 am

Sally Brooks
Karen Martin
1/5/2014
Exec.
Method *

Owner

Create procedure/train GS service engineers to
properly feedback suggestions to engineering.

Improvement Objective / Hypothesis

1
2

Scheduled Review Dates

Product Y

PROJ

Create bulletin re: standardized headplate
design to eliminate flange orientation.

PROJ

Steve

Create visual "milestone" timeline to
educate customers.

KE

Bruce

Define technical info needed from
customer and when.

KE

Bruce

Socialize new criteria for engineering,
quality, & purchasing involvement.

PROJ

Jessie

Revise standard Ts & Cs to incorporate time limit
for customer approval for final payment.

PROJ

Sally

Error proof P.O. info (correct specs, ship to,
etc.); notify customer re missing info and
drop dead date.

KE

Jessie

PROJ

Mike

JDI

Jessie

Resocialize existing customer-requested
CO procedure.

PROJ

Steve

One piece engineering flow

PROJ

Steve

Move to one release (pump & systems)

PROJ

Bob

JDI

Jessie

Standardize WPS/PQR from suppliers.

PROJ

Marcia

Create commodity management team &
supplier SLAs.

PROJ

Tom

KE

Marcia

PROJ

Sally

Create criteria for LOI acceptance.
Add initial project release in SF.

Revise proposal template to limit time to 4
revisions.

Create trigger to release (BOMs) for
purchase.
Create pull signal for invoicing.

17

Planned Timeline for Execution

Steve

Proposed Countermeasure

J

F

M

A

M

J

J

A

S

O

N

D

Status

Agreement
Executive Sponsor

Value Stream Champion

Value Stream Mapping Facilitator

Signature:

Signature:

Signature:

Date:

Date:

Date:

* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)

17
Improvement Roles

Strategic

Who?

Accountability

Tool

Sr. Leaders

“What has to happen”

Hoshin Plan, A3, 
Value Stream 
Mapping

“How it will happen”

Kaizen Events, 
Just‐do‐its,    
and Projects

Tactical

Middle 
Management

Frontlines

© 2014 The Karen Martin Group, Inc.

18
Value Stream Mapping:
Phases and Timing
Repeat

Prepare

4 Weeks Prior 
to Mapping

Understand 
Current State

Design
Future State

Develop 
Transformation 
Plan

Three Consecutive Days

Execute 
Transformation 
Plan

Following 
Mapping

19
Key Success Factors
• Consistent Executive Sponsor involvement
– Run or attend status meetings

• Consistent status meetings
– At least monthly
– Every other week to start

• Single point of ownership
– But collaborative problem solving and obstacle 
removal.

• PDSA at every meeting
• Edit the future state map real time
• Adjust the transformation plan as needed
© 2014 The Karen Martin Group, Inc.

20
Develop
hypothesis

Refine
Standardize 
Stabilize

Conduct 
experiment

Measure 
results
© 2014 The Karen Martin Group, Inc.

21
21
Physically Post 
the Future State Map
Physically Post
the Transformation Plan
© 2014 The Karen Martin Group, Inc.

22
Value Stream Transformation Plan
Value Stream Product Y

Scheduled Review Dates

Executive Sponsor Jim McMahon

2/10 + bi-weekly Thu 10 am

Value Stream Champion Sally Brooks
Value Stream Mapping Facilitator Karen Martin
Date Created 1/5/2014
Kaizen
Burst #

Improvement Objective / Hypothesis

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Content removed for sanitization purposes

1

17

Planned Timeline for Execution

Exec.
Method *

Owner

Create procedure/train GS service engineers to
properly feedback suggestions to engineering.

PROJ

Steve

0%

Create bulletin re: standardized headplate
design to eliminate flange orientation.

PROJ

Steve

100%

Create visual "milestone" timeline to
educate customers.

KE

Bruce

50%

Define technical info needed from
customer and when.

KE

Bruce

50%

Socialize new criteria for engineering,
quality, & purchasing involvement.

PROJ

Jessie

100%

Revise standard Ts & Cs to incorporate time limit
for customer approval for final payment.

PROJ

Sally

100%

Error proof P.O. info (correct specs, ship to,
etc.); notify customer re missing info and
drop dead date.

KE

Jessie

0%

PROJ

Mike

100%

JDI

Jessie

50%

Resocialize existing customer-requested
CO procedure.

PROJ

Steve

80%

One piece engineering flow

PROJ

Steve

10%

Move to one release (pump & systems)

PROJ

Bob

0%

JDI

Jessie

100%

Standardize WPS/PQR from suppliers.

PROJ

Marcia

25%

Create commodity management team &
supplier SLAs.

PROJ

Tom

30%

KE

Marcia

50%

PROJ

Sally

50%

Proposed Countermeasure

Create criteria for LOI acceptance.
Add initial project release in SF.

Revise proposal template to limit time to 4
revisions.

Create trigger to release (BOMs) for
purchase.
Create pull signal for invoicing.

J

F

M

A

M

J

J

A

S

O

N

D

Agreement
Executive Sponsor

Value Stream Champion

Value Stream Mapping Facilitator

Signature:

Signature:

Signature:

Date:

Date:

Date:

* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)

Status
And Repeat…

© 2014 The Karen Martin Group, Inc.

24
“The new bible for value stream mapping.”
—Art Byrne, author, The Lean Turnaround

Amazon: www.bitly.com/VSMbk
More info: www.ksmartin.com/VSM
© 2014 The Karen Martin Group, Inc.

25
For Further Questions

Karen Martin, President
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com
Blog & newsletter:  www.ksmartin.com/subscribe

© 2014 The Karen Martin Group, Inc.

26
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