Create Value: Map the Value Stream

If you can't describe what you are doing as a process, you don't know what you're doing.” W. Edwards Deming

Our work and home lives our bounded by standard operating procedures and process—and too many of them stink.  We all have encountered Byzantine-like bureaucracies where the lines are long, the rules are contradictory,  and nothing makes any sense.  Poor user experience (UX) design can even be found at leading technology companies.  One eBook platform requires new books be purchased through their website and rather than device-based applications. Why?  

Business process owners should strive to create a customer experience that delights rather than frustrates.  Designing better processes is not magical, nor is it a one-time event.  To improve, we need to understand the value stream (the process), eliminate waste, and regularly review and adjust.  

 

Map the Value Stream

A value stream map is a customer-centric process flow diagram.  It begins with a customer request and ends with it being fulfilled.  The first step is identifying what we are mapping:

Who are the customers?

What triggers their request?

What benefits do they receive?

What does the enterprise receive?

Imagine you want to understand the flow of value at a restaurant.  Our customers are the patrons.  The event is triggered by their hunger or desire for a dining experience.  They receive a meal and an experience.  In turn, the restaurant receives financial and other benefits.

Second, we want to create a visual flow of the work.  The easiest way to create this map is to find a large wall and a stack of Post-It Notes.  The value stream starts when the customer enters the door and ends when they finish their meal and leave.  Each Post-It Note represents a discrete step in the customer journey.

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 Identify Delays

Third, we want to identify delays in the process.  There are two primary forms of delay—waiting and hand-offs.  Waiting occurs when:

  • We are waiting for the process to begin. (We enter the restaurant and are waiting to check-in); 
  • A process is interrupted, pending input from something else.  (The server tries to take our order before we have received our menus), or 
  • The process is substantially complete, but we are waiting on the final step.  (We have finished eating and are waiting for the bill).

We can collect metrics on the average waiting times between steps and then code them based on their length and impact.  We use green for acceptable, yellow for medium, and red for unacceptably long waits. 

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We find there is an unacceptably long wait after a customer checks in and before they are seated.  There is also concern about the delay from the time people are seated until they order, and then after they receive their bill and before they leave.  

The restaurant may have limited seating capacity, which causes the long wait for people to be seated.  Increasing capacity may not be viable.  However, accepting reservations could reduce waiting time.  

In analyzing the lag between being seated and ordering, we may observe a delay in customers receiving the menu.  Having the host give patrons their menus when they are seated may resolve this problem.  Using tableside credit card machines (which are common in Europe) can eliminate several steps and reduce the overall payment cycle timing.  

Hand-offs occur when the steps in the process are distributed across multiple individuals or teams.  When work is passed from one group to the next, both time and context are lost.  In the restaurant, we observe this phenomenon when the food runner does not know who ordered which dish.    In knowledge work, valuable information is lost when people are asked to only execute a task without understanding the broader perspective.  

 

Identify Waste 

After mapping out the value stream, we evaluate each step to understand its contribution to the overall process.  We consider whether the steps are:

  • Primary activities that directly contribute to the customers’ experience;
  • Supporting or enabling activities that do not contribute to the experience, but are necessary; or 
  • Waste, which does not add value and can be eliminated.

When considering a software development processes, the primary activities include designing, building, testing, and deploying the code into production.  Without these steps, we would not have a working application.

Supporting or enabling activities would include developing a plan, risk management, and customer demonstrations.  These activities are not necessary, but they help ensure a better and more predictable process.  

There are wasteful activities in most value streams.  Unnecessary reviews and approval steps are a form of waste. Unproductive meetings are also common and costly.  One application development program created a 50-page status deck each week that was reviewed in 3-successive management meetings that were each 2-hours long.   

 

Measure Improvement

Measuring performance is essential.  As Deming said, “without data, you’re just another person with an opinion.”  We can use data to help us identify where we have problems and if we have improved.  

Useful metrics include: 

  • Lead Time.  The total amount of time it takes to complete the end-to-end process;
  • Completion Rate.  The number of items completed in a time period;
  • Wait Time.  The amount of time an item waits between steps in the process; and
  • Defect Rate.  The percentage of items that do not meet the quality standard or need to be reworked.

Lead time measures the duration from the time customers initiate a request until it is fulfilled.  Many service organizations often begin tracking a request when they start working on it.  However, the customer’s clock starts much earlier.  Consider the last time you called customer service.  In addition to the 5-minutes speaking to the representative, you probably counted the hour that you were on hold waiting for your question to be answered.  

The completion rate is a level measure of productivity.  How many units are produced each hour, day, or week?  We can use this metric to see if there is variability in the process or if we are improving.  As we begin improvement efforts, we should track changes in both the completion and defect rates to avoid focusing on output over quality.  

 

Improve Continuously

The Deming Plan-Do-Check-Act (PDCA) Cycle is almost synonymous with process improvement.  In the PDCA cycle, teams:

  • Plan a new process or changes to an existing one;
  • Execute (do) the process and collect performance metrics;
  • Study (check) the performance metrics and the outcomes; and 
  • Adjust (act) to improve the process during the next iteration.

Successful organizations execute the improvement cycle regularly.  Improvement is incremental and based on observations of how these modifications impacted the process.  Often changes have unanticipated or unintended consequences.  Also, as one part of the process improves, bottlenecks, or issues in other areas are uncovered.

© 2020, Alan Zucker; Project Management Essentials, LLC

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