Value Stream Mapping – Appraising your Business Supply Chain

Hope all of you had a happy holiday and are ready for 2013!  Last year I wrote about defining your 2012 objectives and putting them into actionable events.  I hope that as you review your objectives and actions, you were able to complete each one.  If not, and they are still important to you, determine why you weren’t able to accomplish, define whether or not they are still achievable and if the answer is yes, place those at the beginning of this year’s list.

For those of us who are responsible for achieving increased profits, I wanted to address the process of value stream mapping.  A value stream includes all activities to bring a product from your vendor’s raw material into the hands of the customer.  It includes all activities from Sales through the receipt of dollars for your product.  Any part of the process that takes time and resources but does not add value to the product is waste!  

Statistics show that 60% of operations activities do not add value to the customer.  VSM provides the key to

n      Reduce lead times

n      Improves product quality and space utilization

n      Reduces rework/scrap and inventory levels

n      Reduces indirect labor costs

Value Stream Mapping (VSM) serves as a personal magnifying glass and provides you with the tools to stand back, identify the waste in your business and to streamline processes to get rid of wa$te.

First, question how you currently run the organization.  How are sales measured? Are they measured by actual orders received and shipped?  In which case, you can invoice and receive monies.  Are they measured by what is forecasted by the sales person?  Does the product actually ship or is your warehouse filling up?

Order Entry:  Are orders tracked through the system based on need date or ship date?  Does everyone know?  Is the computer set up correctly to reflect?

How do you measure performance or do you?  Do you determine the sales accuracy of your sales people?  Do they understand that under-ordering or over-ordering will impact the levels of inventory on hand or the amount of wasted money spent on expediting and premium freight?

New Product Design is the key to your customer retention and growth.  It is the number one process to measure (your) business performance. Are all players at the table at the genesis of the new product - Sales / Engineering/ Producing Plant or Service provider/ suppliers / customer?  Have you evaluated the amount of old items that needs to be used up to avoid obsolesce and all the costs surrounding this waste?  Do we know the real date of the new product, part or service or will we upset and/or lose customers with a late introduction?

Purchasing/Inventory Management’s responsibility is to eliminate extras (they cost money in transporting, storage, and space).  This means we must evaluate our decisions to insure that we carefully order only what we need.  Working hand in hand with Sales people will assist in scheduling (only) needed parts.  This means that standards must be set for sales people and suppliers.

Once we understand how the stream should flow we need to evaluate the work involved in meeting our value stream objective.  Use a storyboard to facilitate “seeing” the process.  A picture is worth a thousand words and visualizing the process negates the denial factor.  What you will almost always learn is “gee, I had no idea….”

First, we must specify (remember, magnifying glass evaluation) the current process stream.  How does your organization really work?  Each step of each activity must be documented.  I always suggest using post-it notes as they are easy to move around as you begin to evaluate the waste in the process.  Once each step is documented – go back to the first one and evaluate the following:

• What is the labor cost per action – break labor down per step/action.
• How many forms do we need to use for each action – what is the cost of printing the forms?  Are they 100% useable or old and need to be replaced?  Can you combine several of them to save costs?
• How many times does the paperwork move from one desk to another before actually being actioned – quantify the labor costs as well as the potential loss of customers.
• Does your IT system enhance or delay your process – what has it cost you in customers?  What has it cost you in low productivity (and more errors) from your frustrated employees?

 Once each of the steps has been quantified in the process, sum to arrive at the total stream cost.                                                             $ TOTAL  _______________ 

Now, define the process stream if everything worked right. (labor, steps process, movement  process, IT process)  What will be the anticipated value of each?  Quantify each step as you did before.  Arrive at a sum total for this process stream. 

                                                                               $ TOTAL  _______________ 

Now, you are in the position to quantify your savings

Step 1. (the old way)    List the cost of old stream                   $_________________

Subtract

Step 2.  (the new way)  List the value of new stream              $_________________

Enter your total Activity Based Cost Savings (labor, steps process, movement process, IT process)                  

Value Stream Cost Benefits Dollars         $  _________________

Evaluate your strategy for eliminating waste in the process to insure success

ò  Define waste / AOP (Areas of Opportunity)

ò  Define process owners

ò  Develop Value Stream PITs (Process Improvement Teams)

ò  Schedule progress meetings between all process owners (internal / external) to insure understanding, buy-in or consensus!

As non-value streams are eliminated and streamlined solutions are implemented, remember to update the storyboard to show continued progress.  Invest those saved dollar$ on value-added education, capital equipment, and/or ergonomic equipment and furniture for your employees.  Provide cost reductions to your customers on your products and/or services without losing a dime!  The short term effort is well worth your long term objective.

WHERE WILL YOU BEGIN?

“here, let me show you” (leading by example)

(part of the Total Quality Leadership (TQL) series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

Leadership skills that make an environment successful are the same skills that we learned when we were little.  Today, a coaching skill, leading by example.

It's not that the young ones can't do something.  They just need to be shown.  We demonstrate, step by step, how to put things together and they follow our lead.  We make it easy for them.  We relieve the stress they may have.  We show them how to do it right.  Once they learn, they go to the next level.  They experiment.  They do better than we can.  They now show us.

“You cannot create experience, you must undergo it.”  Albert Camus, French Novelist

The new CBS television show “Bosses” is one I enjoy because it represents leadership at its best.  It answers the question of how decisions made in the corporate office impacts those who have to perform the actual implementation of those decisions. 

Prior to consulting on topics I am not 100% familiar with, I spend time beforehand to familiarize myself with the workflows of the environment.  The two pictures are ones taken at the International Bridges in El Paso, Texas.  The picture on the left is a walk-over bridge for pedestrians, the one below, a drive-over for vehicles.  The time I spent following-by-example gave me a much better perspective on the associates' working environment on the bridge. 

A checklist for instructions includes the following:

1.  Find out what each employee knows (don’t make assumptions).  I found the associates to be well-versed.  They had to determine the crossing charge in both US change or dollars and Mexican Pesos.  I barely kept up as people walked or drove by and, many times, tossed in their change.

2.   Demonstrate whenever possible.  I took over for 5 minutes at a time and my head was reeling with the exchange I had to make between both country’s monies.

3.   Encourage questions.  I have always been one to drive my teachers crazy with questions.  As a (Dr.) Deming disciple, the "5 whys" comes naturally to me.  There are no stupid questions!

4.   Explain purpose of job.  Both associates were well-informed tutors.  I was able to tailor my course to the department with the knowledge they had taught me. 

5.   Follow up.  Their thirst for additional learning encouraged the manager and director to provide more team based education.  Procedures were tweaked to meet their respective needs.

6.   Recognize accomplishment.  Writing a column in the City’s online newsletter lets everyone know your Department news.  Everyone likes to see their name in print (and it’s zerO cost)!

My hands-on experience with the associates facilitated tailoring the team-based class to the needs of the department. Sometimes taking the lead means you have to follow first. 

“don’t forget your …” (planning)

(part of the Total Quality Leadership (TQL) series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

Leadership skills that make an environment successful are the same skills that we learned when we were little and playing in the sandbox.  The sandbox skill today, planning.

If a child has plans to play in the sandbox to build a castle, it is important to plan to bring a shovel and pail.  It is also important to plan to wear a hat and sun screen so the child doesn't get burned.  The latter is an adult's responsibility; the former is a responsibility we teach kids. 

To help them remember, we may write down “shovel and pail” on the blackboard (or paper or easel) in their bedroom.  Together, you may add other toys or things to the list.  Writing it down helps to remember and not forget.  When it is time to get ready, the child only has to look at the blackboard (or paper or easel) and erase it or draw a line through it when the item has been packed to go.  We eliminate the “regrets” and the “forgot” and the tears.  The castle gets built and you can relax and enjoy.

At my age, "senior moments" come often so writing things down is mandatory.  Reminders (post it notes are the best discovery) and checklists are important basic planning tools to help us remember and not forget. The process of planning is a three step process:

1.  What do I have to do?  (write it down)   

2.  What are the steps to get it done?  (be explicit)

3.  By when?

        What is the deadline?

        When did I promise?

I know, as you do, people who spend their lives telling you, “I don’t have time to write it down”.  Yet they always seem to have time to spend an hour “looking for” or “driving back” because they failed to remember.  Forgetting costs money in business and in your personal time.  An additional benefit of crossing a line through a completed action is it induces you to want to do more.  Planning (writing it down) saves time you can spend on other things, like doing absolutely nothing. 

“I knew you could do it” (motivation)

(part of the Total Quality Leadership (TQL) series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

The leadership skills that make an environment successful are the same skills that we learned when we were young.  Today, motivation.

When teaching a child to walk, we take both of their hands, stand behind them, and help them take one step at a time.  One step at a time - the learning experience.  Practicing daily.  One day we let go of one hand and the child takes wobbly steps but knows and feels the steady hand of the parent.  One day, the child takes his first steps alone.  They may fall but it's a new experience and the squeals from the delight of the  parents motivates the child to get up and try again.  One day, the child is walking all by themself (and we are now following behind them to make sure they stay out of harm's way).  Each child learns at their own pace.

Coaching associates is how we lead in a team based environment.  We appraise each associate, determine their strengths and weaknesses, and motivate them accordingly.  •To motivate means I have to know what’s important to you; to know that means I have to listen to you; to do that means I have to talk to you: I have to tell you my requirements so that you can tell me yours.

The best coaches understand that different things motivate different people at different times of their lives.   What motivated me twenty years ago has changed.  My "bucket list" has been a factor for that change.  Time has been a factor. 

As coaches we introduce change, explain the change, document the change and parrot the reason for the change until all associates understand the change and can action it themselves.  Some will stumble and others will run with it immediately.  Eventually, one step at a time, the entire team will move to the continuous improvement phase.  The circle will start again - introduce, explain, document and parrot.  Positive reinforcement ('I knew you could do it') will encourage the team to keep moving forward and remind them (and yourself) "experience is the fruit from the tree of errors". 

What three things motivate you in your personal life; in your professional life?

"it wasn't me, it was...!" (conflict resolution)

(part of the Total Quality Leadership (TQL) series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

Leadership skills that make an environment successful are the same skills that we learned when we were little.  Today's skill, conflict resolution.

When children disagree, we make sure the shouting and the yelling don't get too out of hand. Name calling indicates the disagreement has gotten to the point where there is no point.  Physical hands-on each other is a definite no-no (I know this is different for parents who use the ole "go out there and kick his butt" attitude but I think we have grown enough bullies, boys and girls, with that type of stance.  just my opinion)  Our responsibility as adults is to teach children how to argue.  There is a time to allow venting (letting each state their side), then there is a time to say "stop" and move them to resolution.  They cannot hear each other if both are speaking at the same time (or yelling and screaming).  Name-calling is not a solution, it says "the real problem [I have with you] is over 'cause I don't have any more to back up my side."  An initial solution today is to call a time out. The purpose is to give both time to think about their (poor) behavior, return, apologize, and calmly discuss the problem (hopefully) to resolution.  All is good with the world (for at least 30 minutes). 

A simple swat to the head with a large club was our cave-dwelling forefathers’ method of conflict management.  Debate, alternative solutions, creative ideas, and change are the differences in people that can also breed (positive) conflict.

Cognitive Conflicts are helpful conflicts.  The focus is on issue alternatives, advantages, disadvantages, cost-benefit analysis, and opportunity costs.  They clarify the issues and result in better decisions.  Members have a high commitment to the decisions made.  Properly managed conflict yields Constructive outcomes

·       Introduction of new approaches or solutions

·       Prevelent problems are brought out in the open

·       Thoughts and feelings are clarified

·       Interest and creativity are stimulated

·       Personal capabilities are stretched

Affective Conflicts are more personal conflicts.  They focus on members, accuse each other of selfish motives, argue for self-serving alternatives, finger-pointing, lobby each other, blame the other side, and second-guess previous decisions.  They can tear a team apart.  The result is a weak or ineffective decision with little or no commitment to implementation.  Unmanaged conflict yields Destructive outcomes.   

•         It breeds a climate of distrust and suspicion

•       There is resistance to teamwork

•       People leave the situation because of the turmoil

The selection below is one I found on the children's mini-page of our local newspaper. It is a test to evaluate conflict management skills 001.  How well will you do?







 

“all done...?” (performance appraisals)

(part of the Total Quality Leadership (TQL) series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

Leadership skills that make an environment successful are the same skills that we learned when we were little.  Today, performance appraisals.

When we ask children to do something, we tell them what to do and what the expectations are.  "I want you to sweep the kitchen floor and make sure you clean behind the table.  Thank you."  If it's the first time they've done it, we show them how.  We then turn the task over to them, we watch them for a while, and answer questions when asked.  When it appears the child understands the what, the how and the why, we leave them to finish the task. When they are done, they will come in and tell you to "come and look".  You walk into the kitchen, look at the floor and give your comments.  They may range from "good job" to "it looks good but you forgot to clean under the table".

"Good job" means the task is over and expectations have been met.  Depending on the age of the child, if he/she also mopped the floor, expectations were "exceeded".  If the first review means the task was not complete, the child will try again. When finished, the child will come in, and the review process, this time, should net the "good job" appraisal.  If not, the process of sharing with the child what was missed and having the child try again will continue until expectations are met and the "good job" appraisal is achieved.  Not all children learn at the same pace.  It may take only once for one child and several times for another.  One child may just need to understand exactly what you mean ("you didn't tell me to pick it up, you just said 'sweep' ".)  et touché!

Performance appraisals should be used as a way to increase employee achievement.  Back in the day performance evaluations were used as a "gotcha" tool.  To evaluate means to examine and judge something, not a person.  To appraise: HR – to make a formal assessment of an employee or an employee’s performance following an agreed set of criteria.

In our team based environment, both employee and team leader (or manager and director; director and vice president...) sit down and discuss achievements and needed (continuous) improvements of the year past.  This should not be a surprise to either involved.  In a team based environment, we share performance every day.  When a correction needs to be made, we share immediately.  The goal is to continuously coach our team for their success and ours.  The introduction of SMART goals in the '90s was the tool to assist in the professional development of all employees regardless of level.  SMART goals articulate the expectations and eliminate the nebulousness of evaluations (what does "you're a good leader" mean?). 

• Specific  (what is the task or objective?  Attach details if appropriate)
• Measures  (standards and parameters)
• Achievable  (is it?)                         
• Realistic  (is it?)
• Time-bound  (start / finish dates)

When questions are asked, they need to be answered to the satisfaction of the one who asked.  The old "that's why I hired you" comment does nothing to inspire or teach or answer a question.  Today that comment translates to "I don't know but I don't want to tell you I don't know".  It's ok if you don't know, just say that rather than putting the onus on the questioner.

Remember the "one size does not fit all" mantra.  Employees (all humans) learn at a different pace.  Specificity removes ambiguousness in expectations - the "you didn't say x, all you said was....".  The time taken up-front to insure goals are understood, and agreed to, by both the team leader and the associate saves time in behavior and task performance.  It allows for an easy "yes" or "no" when responding to the "all done?" questions in the performance appraisal process.  The goal for both you and the employee is to achieve the "good job" grade.

Are you employing SMART in your business? 

 



Leading From Behind - Team Based Management !

“Leading from behind" is a management style born from the genesis of team-based, learning organizations. The ship’s captain is the last one off the ship when problems abound, the shepherd is behind the flock guiding them, and the generals are not the ones on the front lines.  In former South African President Nelson Mandela’s autobiography, he references the shepherd and his flock. In his story he relates, “a shepherd walks behind his flock, making sure they all stay together and keeps them moving in the right direction”.

The pyramid as we baby boomers knew it – management on top and associates on the bottom - flipped in the mid-1990s. As the philosophy of “team based environment” grew, so did the understanding that the original bottom of the pyramid, the workers, were actually the ones who generated the dollars. The logic is simple and is in response to this business analogy – “If management did not come into work today, would the organization still run?” respond.  “If the associates did not come into work today, would the place still run?  respond.

The new pyramid reflects the value of the associates in the organization (they are, after all, our greatest assets). Our responsibility is to ensure we provide our management and associate staffs the tools they need to perform their job responsibilities.  Building excellence into every aspect of the company by focusing on creating a workplace that encourages EVERYONE to contribute is the primary component of World Class Environments.  Coaching and team building are the fundamentals of the lead-from-behind philosophy. 

Coaching High Performance Work Teams

Coaching is defined as education, lessons, instruction, training, or schooling.  Coaches instill fundamentals. Coaches build teamwork (“we are only as strong as our weakest link”). Coaches evaluate and adjust (H we are not all alike). Coaches reinforce and motivate. Coaches help every team member see how each of them is important to the team’s success. Coaches help find out which specific skills the organization values, and why (micro-education eliminates micro-managing). Coaches encourage staffs to take risks by building a supportive environment that lets them learn from failures (“experience is the fruit from the tree of errors”). Managers who see themselves as coaches tend to see their employees as individuals of innate talent and worth.

 

Today’s success in any organization large or small is its people. Empowering employees to make their own decisions based on sound educational judgment is imperative for survival (“give a man a fish and you feed him for a day; teach a man HOW to fish and you feed him for life”). Top-level managers recognize a team-based environment is a benefit (the key) to their organization and their bottom line cost savings.  Once you’ve coached your team and taught them the skills to achieve, get out of the way and lead from behind.

"do you want this one or this one?" (Decision-making)

(part of the Total Quality Leadership Skills series)

How an organization achieves world class quality excellence depends on its leaders within the organization, at all levels of the organization.  Whether your organization has just started its quality journey with ISO certification or are ready to apply for the world renowned Deming award, the critical success factor to world class quality excellence…it’s all in the leadership!

It is my (proven) belief that the leadership skills that make an environment successful are the same skills that we learned when we were little and playing in the sandbox.  The sandbox skill I want to talk about today is decision making.

                      

                    

“Which of the two sets do you want?” The choice might be based on a favorite color. The choice might be to pick the orange shovel from one set but the red pail from the other.  As a child, decisions are limited. “Which clothes do want to wear?” “Which toys do you want to take?” “Which sandwich do you feel like eating?” Parents are there to make sure children make the right decisions.  They may have a firm “no” in response or they may try and cajole the child into picking something else. Parent’s responsibility is to tell them the end result of their decisions. Unless the choice is detrimental to the child, letting them make up their own minds is fun for them. It makes them feel grown-up and teaches them life-long learning skills. They face few consequences because parents are their safeguards.

The greatest power that a person possesses is the power to choose.

As adults, decision-making carries the weight of making the RIGHT choice. Following are the decision-making steps needed to make the right choice:

(1.) Start the decision-making by identifying your wants and needs;

(2.) Rank each;

(3) Gather all the information necessary to make a decision. Explore alternatives, consequences, advantages, and disadvantages. Be objective, not emotional:

(4) Establish how much of a risk you are willing to take. Then, consider these strategies

 (a) choose the safest alternative - the one that can’t fail,

 (b) select the one with the best odds for success,

 (c) pick the option with the most desirable outcome - despite the risk

(5) Eliminate any option that might present a loss you won’t be able to live with – despite high odds for its success; and finally,

(6) Picture how you would deal with negative consequences.

The following is an example of a decision-making process to answer the question:  when to get gas:

The act of choice is the high point of the decision-making process. The more we investigate up front, the better our choice The choice itself is the conclusion of the process.  Once made, decisions will trigger: (a) action, (b) movement, or (c) change. It’s wise to remember, adults do face the consequences of  their decisions and, most of the times, there are no safeguards.  (OMG, I ran out of gas!)

Leadership Negotiation Skills Learned in Middle School

                                                  
                                                  "If you behave …”     (Negotiation)



Classroom Behavior Agreement



To the left, you see a working agreement developed by middle school 7th graders.  At the start of the first day, the homeroom teacher led her 25 7th graders through, what we call in the business world of team, defining a working agreement.  She explained to them this year one of the school’s goals was to eliminate bullying.  She shared with them they were going to go through an exercise of writing down the rules of good behavior for the class.

There were several “bullies” in the class (although they were not pointed out) and it took a while to get them on board with the process. They were split up on all the teams. Once the students got to the "Positives” (what would they gain), they started coming around.  The "Consequences" clinched it.  Once you know what the consequences are then it becomes your decision on whether to follow the rules or not.  At 12 and 13 years old, they more than understood that.  The other area of opportunity that came up during the long discussions was many of the students did not recognize their (poor) behavior.  It wasn’t something that was actioned at home.  If they did something wrong, they received the back of someone’s hand and that was the end of that.  By the end of the class exercise, every student agreed with the list.

Since this was their agreement, one they had created, not the teacher, the commitment was there. When the teacher asked for a show of hands, every student raised their hand in agreement. The Agreement hangs on the wall, visible as soon as you walk in the door (the parents read it when they came in for their parent-teacher introduction).  It serves as a constant reminder (their promise) on manners, courtesy and respect for each other.

  



 

Team Working Agreement (behavior)



The statements above are part of the agreement created with and by a city's department associates.  I took them through the same exercise as the students.  There was a dysfuntionality with the team.  Some had been there for more than 20 years, others just came on board.  The multi-generational gap was great.  The objective was to get them to move to a positive mind-set before addressing anything else.

First, the participants in this workshop broke into groups.  Each had 30 minutes to brainstorm the response to:  "When people see our team, they will see a team that .......". 

After 30 minutes, each team presented their comments.  It was glaring - they were very similar.  Another 30 minutes was spent negotiating the sequence of each statement as well as the wording.

The team working agreement above is an example of the top 10 behaviors in team courtesy, manners, and respect.  The agreement was distributed to all attendees as well as those in other sections of the department.  Not one person disagreed with the list.  A copy hangs in each work place whether cubicle, inside a city vehicle, or office.  It acts as a reminder of (a negotiated) list of appropriate behavior.

Negotiation is defined as resolving disagreements through discussion and compromise (the word compromise is a good thing).  Both team agreements were successful because each was negotiated between those it directly affects.  The desire to make it work increased because it was their (the students, the city team) words, their rules of conduct.  They wanted to be held accountable for its (their) success.

It has been a year since the agreements were placed into action.  Both agreements are used as an introduction for the new members to the class / team.  Both groups continue to achieve their goal and both are happier (and hence more productive) because of it.  In the business world we call it a win-win negotiation strategy.