***Future States Hidden in Value***

Intro: Welcome to the E6S-Methods podcast with Jacob and Aaron, brought to you by E6S Industries, your source for expert training, consulting, and leadership in business performance and continuous improvement methods, like Lean and Six Sigma. In this episode number 83, we discover the value in the value streams in this discussion on Value-Add-Flow-Analysis and Future State Value Stream Mapping. Here we go. http://bit.ly/E6S-083; http://bit.ly/E6S-iTunes

Objection 1: value-add is obvious at this point. We shouldn't have to be so formal about it

Counter 1: strangely, what is value-add is quite debatable. Even with a strict definition, it's quite a subjective assessment

Objection 2: All I have to do is eliminate all the waste, what's the difficulty here?

Counter 2: Easier said than done. Usually you need to compromise and still leave some NVA on the table in order to move in the right direction. Gaining support is often more complicated than actually improving the process.

I How to perform Value-add-Flow- Analysis

a. Perform a VAFA in a process map or VSM; Start small.

i. Choose the critical path and deconstruct it into activities

ii. Identify which activities are (VA) Value Added vs. (NVA) Non-Value Added and (BVA) Business Value Added, i.e. NVA but can’t get away from it.

1. Ref Toyota Wastes (MR TOYOTA)

2. Rule of thumb: If the order cannot be fulfilled without the activity, it is likely Value-Added.

a. Be critical, though. Just because the particular process makes it mandatory, doesn’t mean it’s value-added to the customer

i. Changes the form, fit or function and the customer is willing to pay for it

ii. Done right the first time

b. Home buying example deconstructed

Process Cycle Efficientcy (PCE = VA_time/Total_time) = 104/28000 = 0.4%

II How to create a Future State Map

a. Start with the Ideal State – Dream it up, and be creative

i. What would a brand new startup do in their garage?

ii. What would Toyota’s process look like? (or Starbucks, or Disney, Amazon or Walmart?)

b. Arrange only the Value-added steps into the Future State

i. Assess how well it can work

c. Insert BVA steps where necessary

i. Where can you keep it out of the critical path?

PCE=4.5%

d. Adjust for current realities.

i. What can be achieved now?

ii. What must be put off until later?

iii. What actions or projects must be put into place to achieve the desired future state?

1. Project Plans and timelines

iv. Consider other tools and tactics

1. process load chart – Level loading work

2. Spaghetti diagram – Work cell

3. Setup time reduction – SMED

4. Standard Work Combinations Sheet - SWCS Time studies, Motion and work

III The Anecdotal statistic for the % of VA in Value Streams is 5%. Do we believe it?

a. real-life industry examples. Different businesses, geographies, process types

PCE = 1.7 hrs VA / 31.5 hrs tot. best case = 5.4%

PCE = 2.38/14.61 = 16%

PCE = 40/2500 = 1.6%

PCE = 11.5/273 (best case) = 4.2%

***Future States Hidden in Value***

Outro: Thanks for listening to episode 83 of the E6S-Methods Podcast. If you would like to be a guest on the podcast, contact us through our website. Join our mailing list! Subscribe to past and future episodes on iTunes or stream us live on-demand with Stitcher Radio. Find outlines and graphics for all shows and more at www.E6S-Methods.com. “Journey Through Success”