Mapping the Extended Value Stream
- Achieving a “Lean Supply Chain”… what does this mean in practice? How can we achieve it?
- What are the challenges and benefits of mapping and improving the value stream beyond a single facility to the whole supply chain?
The central challenge is often to reduce working capital and/or overall costs, whilst maintaining service levels. How can this be achieved, against a back drop of…
- Complex manufacturing processes?
- Long lead-times and inventory?
- Multi-site manufacturing /distribution centres?
- Increasing levels of variety and responsiveness required by customers?
Extended Value Stream Mapping
Our experience from Value Stream Mapping within the four walls of a factory has taught us that there are significant benefits from a cross-functional team learning together to see the end to end, “warts and all” current state.
Often, some individuals have a wide perspective, but it is rare that all stakeholders share a common view of the waste, and even less so a shared commitment to take action to realise a future state plan. This tends to become exaggerated when people are located separately by geography or function.
For all these reasons, our approach is to assemble a cross-functional team from all the sites. If possible we visit all the sites along the value stream during the mapping and improvement process. If this is not practical we have used photographs and video to “bring the value stream to life”.
A robust process for mapping the extended value stream involves a number of steps, including:
- Materials and Information Flow Maps
- Lead-time analysis
- Value Adding vs. Non Value Adding
- Inventory Analysis – understanding what and why
- Financial analysis – the total cost of fulfilment
- Lean supply chain principles – assessing ourselves against the best
- Customer demand analysis
- Supplier Capability
Current State mapping leads to envisaging an “ideal” future state. From the “ideal”, it is essential to develop a “next” future state plan, achievable within 6-18 months.
- Develop a robust view of what is value adding in the value stream, compared with non-value-adding.
- Develop end-to-end thinking across the value stream, based on overall measures.
- Understand why current inventories exist and are required.
- Uncover inconsistencies in policies or their application.
- Develop understanding of what needs to be done differently to improve.
- Define the “ideal” and “next future state”, with a commitment to action.
We have learned through this process that firstly it is critical for the team to have a clear mission. What is being asked of them? What decisions are they empowered to make? How will they proceed with these? To what extent are you ready to directly involve customers or suppliers?
Secondly, an essential input to the process is data, lots of data. Experience teaches us that this can be overwhelming, but the key is to seek first to understand the context, in order to define the key data. The workshop activity can then focus on the analysis and implications of the data (the “so what” rather than the “what?”).
Thirdly, follow a robust process. Invest sufficient time for the team to follow this process, to develop understanding and a shared commitment. It is easy to reduce numbers and targets; it is much more challenging to understand why in order to define what could be done differently to achieve a different result.
Finally, it is essential to define a near term “next” future state – even if this is only 6 months away – and the actions you will take. A mountaineer is aiming for the summit, but has always to climb the next rock face first.
Challenges and Opportunities
- How well can your supply chain respond to the true customer demand?
- To what extent is there end to end understanding of “waste”?
- Have you defined an “ideal” future state for how you will design and manage the value stream?
- What progress are you making in an action plan toward your “next” future state?
- Have you hit an obstacle, or has progress become blocked?