2.2 Value Stream Mapping

In the following video, Myles Ogilvie introduces Value Stream Mapping, a powerful technique to help you to understand how to measure and continually improve flow.

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MYLES OGILVIE:

Value stream mapping is a super powerful way to start to improve your flow. So this is a specific technique, value stream mapping, which helps you look at the end to end concept to cash process for anything. So whether it's buying a pencil, making a cup of tea, building software, or creating a new university course, value stream mapping is following the process from, I have an idea, to this is now generating value.

The way we run value stream mapping is typically get everybody into a room or a virtual room and invite, and everybody means everybody involved in that end to end process from having the idea, which is the beginning of the process, and the idea may be very ill formed to start with, so the beginning is having the idea, to getting the value.

Everybody involved in that interim process has a role to play in value stream mapping, which is to say what is the work that happens, what are the, lay all the tickets out on a great, big, long wall or a table or something. This idea happened, then it went to this committee, then it went to this conversation, then it went to that committee, work was done, passed on to another team, more work was done. Eventually, things happen.

When you lay out that value end to end and you date stamp it, when did these things happen, because you're looking backwards at a particular example or examples, and then you look at the wait time between things, between the tickets, what were the reasons for the wait and how long was the waiting. And what organizations find, is when you take an end to end process from concept to cash and you start mapping it for the first time when the organization has not been optimized, you tend to find that for about 95% of the time, work will be waiting. Nothing will be happening. So if you want to improve your flow, if you want to double your rate of flow through your organization, if your starting point is 95% idle, you only need to reduce that down to 90% idle and your working time has gone up from 5% to 10%. You've doubled your throughput.

So focusing on the wait time, this is like the dark matter of the universe, it's stuff you can't see because work is waiting, if you focus on the waiting, why is it waiting. The reasons that work waits we call impediments. These are things that are holding back your organization, stopping it from accelerating. If you know why work is waiting, then you can start to prioritize, well, which of those can we improve.

Can't improve everything. Some things will be easier to improve than others. But start to find your opportunities for improvement from your value stream map, which shows where things are waiting. That will help you accelerate, because getting faster delivery doesn't mean people running around faster doing work. It's not about accelerating the actual tasks people are doing. It's about removing the reasons for delay inside your organization. Very powerful method.

Business agility. If I just say a word about defining business agility, we find the words, better value, sooner, safer, happier, are the best definition of business agility that we've come across so far. They do express the reasons business agility is necessary, the reasons that organizations want it.

And that's why we coined the phrase here, better value, sooner, safer, happier, because talking about agility or waterfall or lean just alienates different people who have different cultural backgrounds, different methods that they're familiar with, different trainings they've done. Actually, they're all trying to improve these outcomes. And that's what organizations in the age of digital need to be able to do.

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Figure 3 illustrates how to measure the flow efficiency when queuing for a cup of coffee. In this case, the flow efficiency is 20%, meaning you spent 80% of the time waiting.

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Figure 3 Value stream mapping © 2021 Sooner Safer Happier Ltd

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A timeline diagram illustrating a value stream process from start to finish, taking into account the value added, wait time and experience from end to end. The steps are: Customer walks in wanting a coffee, Customer orders and pays, Order passed to the barista, Coffee is in the making, Customer given coffee and adapts to taste, Customer walks out the door with coffee. The Value Add timings associated with each of these steps are: START, ½ minute, ½ minute, 1½ minutes, ½ minute, STOP. The Wait Times are: 5 minutes, ½ minute, 5 minutes, 1 minute, ½ minute. The Experience Lead Time is 15 minutes. There is a summary box at the bottom left of the diagram containing the following information: Sooner: Flow Metrics, Lead Time: End-to-end elapsed time, Flow Efficiency: Value Add + Lead Time = 3 ÷ 15 = 20%, Throughput: Coffees per hour.

Figure 3 Value stream mapping © 2021 Sooner Safer Happier Ltd

As Myles Ogilvie explained in the video above, the wait time is when work is not happening. There are many different reasons work stops. Using the language of astronomy, the wait time could be considered the ‘dark matter’ of your system of work. By visualising and tackling this wait time, you can achieve radical performance improvement.

In most large organisations where there has been no historic focus on optimisation, the flow efficiency associated with work is below 10%: in other words, for over 90% of the time, work is waiting in queues. In order to improve the flow of value through your organisation, you will need to:

• visualise the flow,

• identify the wait times and bottlenecks and

• evaluate where the best place is to apply improvements.

Large organisations are complex and adaptive – as their people and environment shift, there can be a steady increase in disorder (entropy). A continual improvement approach to improving flow is advisable – improving ways of working is not a one-off exercise. The Law of Marginal Gains [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] (the belief that small improvements to any process amount to a significant improvement when added together) means that many small improvements over time can lead to extraordinary outcomes.

The business agility patterns described in the next sections are fundamental enablers for improvements in Better Value Sooner Safer Happier outcomes within your organisation. Brief summaries are provided, but further information about these patterns can be found on YouTube at https://soonersaferhappier.com/ and in the published text Sooner safer happier, patterns & antipatterns for business agility (Smart, 2020).