Lean Webinar Series:: Metrics-Based Process Mapping

Lean Webinar Series:
Metrics-Based Process Mapping
November 10, 2011
Company
LOGO
Welcome!
To new friends and old across the U.S.

(28 states)
To our global friends in:
 Australia
 Brazil
 Canada
 Hong Kong
 Romania
 The Netherlands
 Uruguay
© 2011 Karen Martin & Associates, LLC 2

Schedule & Materials
Schedule
 Content – 11:00 a.m.-12:00 p.m. PT
 Q&A – 12:00-12:30 p.m. PT
Link to slides (pdf format)
 www.ksmartin.com/files/webinarmaterials/11-
10-2011_slides.pdf (full slides)
 www.ksmartin.com/files/webinarmaterials/11-
10-2011_handout.pdf (2 slides per page)

Announcements
 Final webinars of 2011

 A3 Problem-Solving – Tuesday, Dec 6 (Part 1 of 2)
 A3 Problem-Solving – Wednesday, Dec 7 (Part 2 of 2)
 Learning needs for Jan-Mar 2012? Email: [email protected]
 Resources & tips
 Newsletter – www.ksmartin.com/subscribe
 Social Media
 www.facebook.com/karenmartinassoc
 www.twitter.com/karenmartinopex
 www.linkedin.com/in/karenmartinassoc
 www.slideshare.net/karenmartin2
 www.vimeo.com/karenmartinassoc - Recorded webinars & 3-part MBPM series
 When you leave the webinar, please click “File – Exit” vs. exiting
your browser.
Two Ways to Listen
Computer speakers Telephone
OR
If the control panel

indicates that you’re in
“listen only” mode, you
haven’t entered your
audio pin.

Two Ways to Ask Questions
1. Raise your hand – you

will be un-muted and
can ask verbally.
2. Type your question

into the question log.

Learning Objectives
Participants will learn:

 Key time and quality metrics for effective improvement
in office, service, and knowledge work settings.
 Step-by-step process for creating current and future
state maps.
 How to use MBPM to document the new standard work
and monitor process performance.

The Work We Do:
Degrees of Granularity
Macro
View
(Strategic;
heavy
Value Value Stream
Map
leadership
involvement)
Stream
Process Process Process
Micro Metrics-Based
View Step Step Step Process Map
(Tactical;
heavy
frontline
involvement)
8
Service Value Stream
Current State
Source Refrigeration & HVAC, Inc.
Current State Value Stream Map
Serv ice Deliv ery
Dispatch Repair Created February 11, 2009

CONFIDENTIAL Billing
Customer
Great
Plains
1
Verisae Excel
(Customer) Spreadsheet
Special Order (Customer)
Part
Supplier
Tech
Upload time Close call in Process Time

Pick up Part Process A/P
card Verisae Cards
at Parts Store
?% Account
A/P Admin
Tech Manager Payroll Admin
Tech
(West)
PT = 15 mins.
2 PT = 75 mins. PT = 0 mins. PT = 1 mins. PT = 10 mins.

%C&A = 85%
40% %C&A = 95% %C&A = 70% %C&A = 90% %C&A = 90%
Batch: 1x/day
Batch: 1x/day Batch: 1x/day Batch: 1x/day
Review Enter Invoices

Receive Select & Assess Make Repair; Review Review & Receive
Get Part from Complete Call Review Open Invoices; into Verisae &
Dispatch Tech Problem ?% Call to raise Service Call Cash; Post
customer call Truck in GP Ticket Report Post Invoices Close in Excel; Mail
the NTE Data Payment
Dispatcher & Verisae (Pac) Invoices
Call Center Service Tech Dispatcher Service Billing Admin Posting Admin
Tech Tech Account Collections
Manager Manager Billing Admin
5 m. 120 m. 90 m. 75 m. 120 m. 240 m. 640 m. 6 days 240 mins. 640 m. Manager 120 m. 60 days
PT = 2 mins. PT = 5 mins. PT = 90 mins. PT = 0 mins. PT = 5 mins. PT = 25 mins. PT = 3 mins.
PT = 120 mins. PT = 10 mins.
%C&A = 60% %C&A = 60% %C&A = 90% %C&A = 80% %C&A = 75% %C&A = 98% PT = 10 mins. PT = 4 mins.
%C&A = 40% %C&A = 50%
Batch: 1x/day %C&A = 85% %C&A = 95%
Batch: 2x/day
Batch: 3-5x per wk Batch: 1x/week
0.0833 1.5 10.7 48 10.7 480
3 hours
2 minutes
2 hours
5 minutes
hours
90 minutes
1.25 hours
75 minutes
2 hours
120 minutes
4 hours
5 minutes
hours
10 minutes
hours
25 minutes
4 hours
3 minutes
hours
10 minutes
2 hours
4 minutes
hours Lead Time = 572 hours
Process Time = 349 minutes
Acronym Key
%C&A %Complete and Accurate Lead Time to invoice = 86.2 hrs
AR Activity Ratio Process Time =5.9 hrs.
FTE Full Time Equivalent NOTE: Business hours
1 – Information Flow
LT Lead Time Activity Ratio = 6.8%
RFPY = 1.1%
PT Process Time
Lead time to cash = ? days
RFPY Rolled First Pass Yield
2 – Material Flow (physical or electronic)

3 – Timeline
Traditional Mapping Method:
Process Flow Chart
Look up Customer
New Enter Order Product in Print Ship Ticket Load Trucks
in Eclipse Yes Yes
Customer? SALES Stock? SALES SHIPPING
SALES
No
No Yes
Notify Sales COD

Enter Customer Perform Credit Only; Notify Admin
Order Material Receive Material
Information Check Okay? No to update
PURCHASING RECEIVING
ADMIN FINANCE Customer Profile
FINANCE
How is this process performing?
10
Traditional Swim Lane Process Maps
How do we know what to improve?

11
What is a Metrics-Based
Process Map?
A visual process analysis tool, which integrates:

 Functional orientation of traditional swim lane
process maps
 Key Lean time and quality metrics
Highlights the disconnects / wastes / delays in a
process.
 Keeps the improvement focus properly directed
Serves as standard work for workforce training
and process monitoring.

(MBPM)
When is the MBPM Used?
For current state analysis and future state

design during an office/service-based
Kaizen Event.
 For complex processes, it consumes 1-2 days
As a standalone improvement tool.

Mapping Preparation
(if not part of a Kaizen Event)
 Select a skilled, objective facilitator.

 Scope the process being mapped
 Opt for narrow current state focus so you can explore deeply and minimize
variation.
 No decision trees in MBPM (interferes w/ timeline); loopbacks are linearized.
 Select a cross-functional team of no more than 10.
 Process workers (30-50% of the team)
 Upstream suppliers
 Downstream customers
 Subject matter experts (e.g. I.T., legal, etc.)
 Outside eyes
 Draw 6” wide swim lanes on the 36” paper.
 Pre-drawn lines – template available:
www.ksmartin.com/files/tools/MBPM_swimlanes.pdf
 Chalk line
 Manually draw
Supplies Needed
36” wide white paper

Scissors & masking tape
3 x 6” post-its (multiple colors)
2 x 2” post-its (green and yellow)
Sharpie markers
A red or other brightly colored marker
Calculators

Step 1: Label the map
Process Name
Included/Excluded Conditions
Current State MBPM
Date
Facilitator and/or Team Names
Step 2: List functions involved in process.
Process Name
Function A
Included/Excluded Conditions
Current State MBPM
Date
Function B
Facilitator and/or Team Names
Function C
Function D
Function E
Function F
Include external functions, if appropriate (e.g. customers, suppliers/contractors, etc.)

Step 3: Document all activities (steps) on
3 x 6” post-its; place sequentially.
Step Step Parallel Steps
1 2 (concurrent
activities)
Ticking clock
Document the Current State
Step 3 – Document all activities/steps

on 3 x 6” post-its.
 Use verb/noun format; clear and concise.
 Include function.
 Separate tasks that have different quality
outputs or timeframes; combine tasks
otherwise.
 Place post-its in appropriate swim lane,
sequentially (according to the ticking clock).
 Be “the thing.”
Step 3: Document task & function
Activity
(Verb / Noun)
Function that
performs the
task
Step 4: Number the Activities
Step #
Note: For parallel

activities, use
alpha modifiers --
e.g. 8A, 8B, etc.
Step 5: Add step-specific information
Barriers to Flow
(if relevant)
# Staff • Batching
(if relevant)
• Shared
resources
• System
downtime
• Etc.
PT (Process Time)
% Complete &
Accurate LT (Lead Time)
Key Lean Metrics: Time
Process time (PT)

 The time it takes to actually perform the work, if one is
able to work on it uninterrupted
 Includes task-specific doing, talking, and thinking
 aka “touch time,” work time, cycle time
Lead time (LT)
 The elapsed time from the time work is made available
until it’s completed and passed on to the next person or
department in the chain
 aka throughput time, turnaround time, elapsed time
 Includes Process Time

Step-Specific Lead Time vs.
Process Time
Lead Time
Process Time
Work Work passed
Received to next step
LT = PT + Waiting / Delays

Key Lean Metrics: Quality
%Complete and Accurate (%C&A)

 % time downstream customer can perform task without
having to “CAC” the incoming work:
 Correct information or material that was supplied
 Add information that should have been supplied
 Clarify information that should or could have been clear
 This output metric is measured by the immediate
downstream customer and all subsequent downstream
customers.
 If workers further downstream deem the output from a
particular step to be less than 100%, multiply their
assessment of quality with the previous assessments.

Metrics Reminders
Typically obtained via interview; questions must

be high quality
PT & LT
 You can “chunk” these metrics for a series of post-its
when necessary
 When wide variation, do one of three things:
 Narrow your scope (pick a specific circumstance)
 Use the median
 Indicate the variation, but use the median for the timeline
%C&A
 Determined by immediate downstream customer and
all subsequent downstream customers
 Response is placed on the post-it for the output step
 0% at a particular step is not rare
Dealing with high variation
metrics
Map the rule (80%), not the exceptions

(20%).
 For metrics with ranges, use the median.
Continue to add conditions to your
scope if you need to.
 To minimize “it depends” answers.

Metrics-Based Process Mapping:
Three-Part Series
Part 1: Document the current state

Part 2: Analyze the current state; design
and implement the future state
Part 3: Document the improved process

Step 6: Define the “Timeline Critical Path”
For parallel activities: Chose the longest LT unless a

“dead-end” activity
Complex Process with Many Concurrent
Activities (Parallel Steps)
31
Step 7: Create the Timeline
Timeline for Concurrent Work /
Parallel Flows
Close file
PT = 5 min
LT = 8 hrs
Sign Email packet

Sign P.O.
Contract to Supplier
PT = 1 min
LT = 4 hrs
PT 1 min
LT 4 hrs
Bring longest lead time (and its associated PT)

to the timeline, unless it’s a “dead end step.”

Step 8 – Calculate Summary
Metrics
Timeline PT Sum
Timeline LT Sum
% Activity
 (PT Sum/Total LT Sum) x 100
Rolled First Pass Yield (RFPY)
 %C&A x %C&A x %C&A…
 Include ALL post-its, not just critical path
Labor requirements (next slide)

Summary Metrics: Labor
Requirements
Total PT
 Sum of all activities, not just timeline
Labor Requirements
Total PT (in hrs) X # occurrences/year
# FTEs* =
Available work hrs/year/employee**
* FTE = Full-Time Equivalent (2 half-time employees = 1 FTE)
**Available work hrs/yr/emp = # full-time hrs – paid holidays, vacation & sick time.
Full time is typically 2,080 hrs per year.

Summary Metrics
Projected Projected %
Metric Current State
Future State Improvement
Timeline PT 110 mins
Timeline LT 7 days
% Activity 3.3%
Rolled First
9.2%
Pass Yield
Total Process
170 mins
Time
Labor
106 FTEs
requirements
Freed capacity
Analyzing the Current State
Step 9 – Identify the value-adding (VA)

and necessary non-value-adding (N)
activities
 This is the first of two “bridge steps” between
current state documentation and future state
design.
 Use small colored post-its labeled with “VA” or
“N”.
 All unlabelled post-its represent waste.

Customer-Defined Value
Value-Adding (VA) - any operation or activity

your external customers value and are (or
would be) willing to pay for.
Non-Value-Adding (NVA) - any operation or
activity that consumes time and/or resources but
does not add value to the product (good or
service) the customer receives.
 Necessary – support processes, regulatory
requirements, etc.
 Unnecessary – everything else - WASTE

Eight Wastes (Muda)
Overproduction Motion (people)

Inventory Transportation
Waiting (material/data)
Over-Processing Underutilized
people
Errors

Step 9: Label the value-adding (VA) and
necessary non-value adding (N) activities

Document the Current State
Step 10 – Circle (with a red marker) the

step-specific metrics that indicate the
greatest opportunity for improvement.
 Low step-specific %activity, low %C&A, etc.
 This is the second “bridge step” between
current state documentation and future state
design

Step 10: Circle the data that indicates
the greatest need for improvement
Typical Current State Findings
Islands of value-adding activities

All other time is “waste.”
Rework
First Step Last Step

Adding Value
Future State Design: How can we progress from one

“VA” or “N” step to the next and eliminate all waste?
Future State Design
Goals
 Reduce overall LT & PT
 Improve quality (increase RFPY)
 Increase % activity
 Improve LT, PT, and %C&A at individual steps
May need to perform root cause analysis before
determining countermeasures to realize the
future state
Mapping steps
 Clean sheet or modify current state map
 Same steps as current state
 Calculate projected metrics
The Right Process
Standardize work
Mistake proof work
Make problems visual
Fix problems immediately
Create continuous flow
Level demand
Balance work
Create pull systems

Future State Design Considerations
 Eliminate steps / handoffs  Standardize work
 Combine steps  Eliminate unnecessary
 Create parallel paths approvals /
 Alter task sequencing authorizations
and/or timing  Stop performing non-
 Implement pull value adding (NVA)
tasks
 Reduce / eliminate batches
 Co-locate functions
 Improve quality based on flow; create
 Create an organized, visual cells (teams of cross-
workplace functional staff)
 Reduce changeover  Balance work to meet
 Eliminate motion & takt time requirements
transportation
46
Future State Projected Summary Metrics:
Labor Requirements
Total PT
 Sum of all activities, not just timeline
Labor Requirements
Total PT (in hrs) X # occurrences/year
# FTEs =
Available work hrs/year/employee
Freed
= Current State FTEs – Future State FTEs
Capacity

Document Projected
Future State Results
Projected Projected %
Metric Current State
Future State Improvement
CP PT 110 mins 85 mins 23%
CP LT 7 days 4 days 43%
Activity Ratio 3.3% 4.4% 33%
RFPY 9.2% 50.4% 448%
Total PT 170 mins 140 mins

Labor
1.7 FTEs 1.4 FTEs 18%
requirements*
600 hrs =
Freed capacity
0.3 FTEs
*Demand = 1,200 per year
48
PACE Improvement Prioritization Grid
9 22 17
4 23 8 21
10 3
Easy 5
13
1 16
15
Ease of Implementation
20 14
19
6
7
11
2 18
12
Difficult
High Low
Anticipated Benefit
Create an Action Plan: Who, What, When, Where, and How?
Future State Implementation Plan
Value Stream Outpatient Imaging Implementation Plan Review Dates
Executive Sponsor Allen Ward 11/1/2007
Value Stream Champion Sally McKinsey 11/21/2007
Value Stream Mapping Facilitator Dave Parks 12/13/2007
Date Created 10/18/2007 1/10/2008
Block Implementation Schedule (weeks) Date
Goal / Objective Improvement Activity Type Owner
# 1 2 3 4 5 6 7 8 9 10 11 12 Complete
Implement standard work for referral
2 Improve quality of referral KE Sean O'Ryan
process
Reduce lead time beween schedulingand Dianne

3, 4 Cross-train and colocate work teams PROJ
preregistration steps Prichard
Eliminate the need for two patient check- Michael

5, 6 Collect copays in Imaging KE
ins O'Shea
Dianne
6 Eliminate bottleneck in waiting area Balance work / level demand KE
Prichard
Eliminate lead time associated with

9 Implement voice recognition technology PROJ Sam Parks
transcription step
10 Eliminate batched reading Reduce setup required KE Sam Parks
Reduce inventory costs, regulatory risk Michael

7 5S CT supplies area; implement kanban KE
and storage needs O'Shea
12 Reduce delay in report delivery Implement additional fax ports PROJ Martha Allen
Increase percentage of physicians

12 Reduce delay in report delivery receiving electronic delivery (rather than KE Martha Allen
hard copy)
Approvals
Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator
Signature: Signature: Signature:
Date: Date: Date:

Electronic Documentation?
Archive the team’s work

Distribute the maps to remote locations
Document the new standard work for the process
 Training/retraining staff
 Monitoring process performance
Communicate the impact of Kaizen Events and
other improvement activities
Excel product demo: www.vimeo.com/27016122
 Fast forward to 8:00 to begin tool demo.

The Improved State Becomes Standard Work
0 Current State Metrics-Based Process Map
PT Units Process Details Mapping Team
1 Seconds Hours Process Name Order Fulfillment Diane O'Shea Ryan Austin
0 Minutes Days Specific Conditions Domestic orders through sales force Sean Michaels Mary Townsend
LT Units Occurrences per Year 37,500 Sam Parks
15 Seconds Hours Hours Worked per Day 8 Sally Dampier Facilitator
6 Minutes Days Date Mapped 25-Jun-08 Michael Prichard Dave Morgan
-1 Step # ► 1 2 3 4 5
0 Function /
Department Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A
Fax PO to Sales
1 Customer 0 0 45%
Rep
Review PO;
clarify with Fax PO to
2 Sales Rep 20 2 90% 10 4 90%
customer as warehouse
needed
5 Finance
Check inventory
Warehouse / levels; notify Fax PO to Sales
6 5 4 95% 5 0.33 90%
Shipping Sales Rep re: Rep
status
Critical Path PT 0 20 10 5 5
Critical Path LT 0 2 4 4 0.33
Rolled %C&A 45% 90% 90% 95% 90%
Total PT 0 20 10 5 5
Color-Coded Summary Metrics Sheet
 The Excel mapping tool auto-calculates:

 Summary time and quality metrics for before and after maps
 Projected % improvement (color-coded for visual ease)
 Staffing requirements
 User-defined metrics
Creating the Current State MBPM
Phase I
1. Label the map in upper right corner.

 Process name, date, facilitator and/or team members
2. List the functions involved in left column.
3. Document all activities/steps.
 Verb/noun; concise language; include function as well.
4. Number the activities.
 One number per column; concurrent activities are
labeled A, B, C, etc.
5. Add activity-specific metrics (PT, LT, %C&A),
barriers to flow, and number of staff involved
(if relevant).
 Include units of measure (mins, hrs, days, etc.)

Creating the Current State MBPM
Phase II
6. Define the critical path.

 Longest LT unless “dead-end” step; use colored marker
7. Create the timeline.
8. Calculate the summary metrics
 CP PT Sum, CP LT Sum, AR, RFPY, Total PT, Labor
Required
9. Define the value-adding and necessary non-
value-adding activities
 Use small colored post-it labeled with “VA” and “N.”
10. Circle the step-specific metrics that indicate the
greatest opportunity for improvement.
 Use red marker.
 Longest LTs, Low %C&As, High PTs, Low step-specific ARs

For Further Learning
Excel tool for Chapter 12 – Manual method www.vimeo.com/karenmartinassoc

electronically archiving 3-part MBPM series (including
Excel tool demo)
Onsite workshops (8-24 participants) & facilitated mapping sessions
Public workshops:
Portland, Oregon – February 22, 2012 (ASQ)
Winnipeg, Manitoba, Canada – June 4, 2012 (CME)
Chicago, Illinois – October 15, 2012 (AME)
Learning Objectives
Participants will learn:

 Key time and quality metrics for effective improvement
in office, service, and knowledge work settings.
 Step-by-step process for creating current and future
state maps.
 How to use MBPM to document the new standard work
and monitor process performance.

For Further Questions
Karen Martin, Principal

7770 Regents Road #635
San Diego, CA 92122
858.677.6799
[email protected]
Connect & learn

Monthly newsletter: www.ksmartin.com/subscribe
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Lean Webinar Series:

Metrics-Based Process Mapping

November 10, 2011

To new friends and old across the U.S.

© 2011 Karen Martin & Associates, LLC 2

© 2011 Karen Martin & Associates, LLC 3

 Final webinars of 2011

Computer speakers Telephone

If the control panel

© 2011 Karen Martin & Associates, LLC 5

1. Raise your hand – you

2. Type your question

© 2011 Karen Martin & Associates, LLC 6

Participants will learn:

© 2011 Karen Martin & Associates, LLC 7

Process Process Process

Dispatch Repair Created February 11, 2009

Upload time Close call in Process Time

2 PT = 75 mins. PT = 0 mins. PT = 1 mins. PT = 10 mins.

Review Enter Invoices

0.0833 1.5 10.7 48 10.7 480

2 – Material Flow (physical or electronic)

Notify Sales COD

How is this process performing?

How do we know what to improve?

A visual process analysis tool, which integrates:

© 2011 Karen Martin & Associates, LLC 12

For current state analysis and future state

© 2011 Karen Martin & Associates, LLC 14

 Select a skilled, objective facilitator.

36” wide white paper

© 2011 Karen Martin & Associates, LLC 16

Include external functions, if appropriate (e.g. customers, suppliers/contractors, etc.)

Step 3 – Document all activities/steps

Note: For parallel

Process time (PT)

© 2011 Karen Martin & Associates, LLC 24

© 2011 Karen Martin & Associates, LLC 25

%Complete and Accurate (%C&A)

© 2011 Karen Martin & Associates, LLC 26

Typically obtained via interview; questions must

Map the rule (80%), not the exceptions

© 2011 Karen Martin & Associates, LLC 28

Part 1: Document the current state

© 2011 Karen Martin & Associates, LLC 29

For parallel activities: Chose the longest LT unless a

Sign Email packet

Bring longest lead time (and its associated PT)

© 2011 Karen Martin & Associates, LLC 33

© 2011 Karen Martin & Associates, LLC 34

* FTE = Full-Time Equivalent (2 half-time employees = 1 FTE)

© 2011 Karen Martin & Associates, LLC 35

Step 9 – Identify the value-adding (VA)

© 2011 Karen Martin & Associates, LLC 37

Value-Adding (VA) - any operation or activity

© 2011 Karen Martin & Associates, LLC 38

Overproduction Motion (people)

© 2011 Karen Martin & Associates, LLC 39

© 2011 Karen Martin & Associates, LLC 40