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6 minutes reading time (1151 words)

Value Stream Maps & Integrated PM

"If we follow the Integrated PM approach, then at some time we’ll need to leverage the benefits of Value Stream Mapping, but currently we haven’t even recognized the project flows, let allow map, manage, and improve them."

A Value Stream Map (VSM)is used in Integrated PM system to facilitate the management and improvement of project stocks and flows, while improving the overall performance of projects. The VSM consists of three main components:

1. Material/Work flow- Shows the flow of material or work as it progresses from raw materials, through each major process step (machine, tank, or arrangement of vessels), to finished goods moving toward the project client.

The material and work flows within an Integrated PM system include the tangible, measurable assets activities and tasks used within a project to produce its deliverables or work products. This would include the hardware and software used to configure a server, forms used to produce documents, approval steps, and logos for brands.

This is a high-level view showing only major pieces of equipment or processing systems, with data boxes that illustrate the performance of each piece. All inventories (system stocks) along the flow are also shown, with data boxes that show the contents of each inventory storage.

2. Information flow- The flow of all major types of information that govern what is to be changed within a project, how it is to be accomplished in terms of guidelines, constraints, policies, and procedures, and when it is to be made/changed. This starts with orders/requests from the client, traces back through all significant planning and scheduling processes, and ends with schedules and control signals to the production floor, development staff, or project team.

Inventories of information assets are typically part of a knowledge management system to provide greater management and ability to leverage information assets across the organization, and increase project performance. Information typically flows in the opposite direction of material flow.

3. Timeline- Shows the deliverable value- add time and contrasts it with non-value-add time. It is a line at the bottom of the VSM in the form of a square wave. This is a key indicator of waste in the process: it shows the effect of waste but not the cause; that should be diagnosed from the other two components or layers of the VSM.

The roots of value stream mapping can be traced to a visual mapping technique used at the Toyota Motor Corporation known as "material and information flows." As the West grew intrigued with Toyota's consistent track record and began studying how Toyota's approach differed from its own, we learned that Toyota's focus on understanding the material and information flow across the organization was a significant contributor to its ability to perform at consistently high levels. As a result, mapping these types of flows became one of the hallmark approaches used in the Lean movement, Systems thinking, Value realization initiatives, forms within Value engineering, and Integrated PM to transform operations.

Value stream maps offer a holistic view of how work flows through entire Integrated PM system, and they differ from process maps in several significant ways. First, value stream maps provide an effective means to establish a strategic direction for making improvement.

The inclination to jump into the weeds and design micro-level improvements before the entire Integrated PM system- the macro picture- is fully understood, is a key contributor to suboptimization. This occurs when you make an improvement to one component of a system while ignoring the effects of that change on the other components. A seemingly important improvement could cause the overall work system to perform more poorly. For example, if one department successfully reduces its turnaround time, but the faster output merely causes a larger queue and/or more work for the downstream department, the improvement may have a negative impact on the performance of the overall system.

Value stream mapping, the macro perspective, provides the means for leadership to define strategic improvements to the work flow, whereas process- level mapping! enables the people who do the work to design tactical improvements. This difference signals the need for a higher-level value stream mapping team than what many organizations often think they need.

Second, value stream maps provide a highly visual, full-cycle view- a storyboard- of how work progresses from a request of some sort to fulfilling that request. This cycle can be described as request to receipt, order to delivery, ring to ring (phone call to cash register), cradle to grave, or quote to cash.

A cyclical view places the project client (who is typically both the requester and recipient) in a central position, which provides a powerful means to view an entire work system as it relates to delivering customer value. As shown in Figure 1.2, visually depicting the cycle of work typically includes three components: information flow, material or work flow, and a summary timeline.

Third, the process of value stream mapping deepens organizational understanding about the work systems that deliver value and support the delivery of value to project clients, which aids in better decision making and work design. By distilling complex systems of Integrated PM into simpler and higher-level components that can be understood by everyone from senior leaders to the front lines, organizations create common ground from which to make decisions.

In addition, the mental shaping that's needed to succinctly define complex work systems is a boon when redesigning work to deliver greater value, faster, at lower cost, and in safer and more fulfilling work environments. There's a logistics advantage as well: value stream mapping enables a team to fully understand how work flows through a complex system in a matter of days, whereas detailed process mapping (which serves a different purpose) can take weeks or months and is too detailed to help in making effective strategic decisions.

Fourth, the quantitative nature of value stream maps provides the foundation for data-driven, strategic decision making. Measuring overall value stream performance and identifying the barriers and process breakdowns as the work flows through the value stream is a powerful way to drive continuous improvement so that an organization is able to better meet the needs of both its customers and its internal operation.

Last, value stream maps reflect work flow as a customer experiences it versus the internal focus of typical process-level maps. Many organizations are structured as a series of function-based silos that bear little relationship to the customer fulfillment cycle.

Value stream maps force an organization to think holistically in terms of cross-functional work systems and product families. While this type of thinking can pose challenges during the future state design phase of mapping, it's exactly the type of challenge progressive organizations must embrace. Value stream mapping forces an organization's hand to either make the difficult structural changes that are more in line with the cross-functional reality within which they exist, or continue to deny reality, stick with outdated structures, and continue to perform accordingly.

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Where to begin Value Stream Mapping?
Value Stream Mapping for Project Performance
 

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Thursday, 26 April 2018
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