ENTERPRISE VALUE STREAM MAPPING AND ANALYSIS

PROCESS FLOW AND STEP-BY- STEP APPROACH

Submitted by: Art Balazs

Director Performance, Analysis & Integration C-17 Production and Operations IPT The Boeing Company

Derrell James
Director Enterprise Productivity Lean Electronics Rockwell Collins, Inc.

Andrew Parris, Ph.D.

Lean Transformation Atlas Program Lockheed Martin Astronautics February 14, 2002

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ENTERPRISE VALUE STREAM MAPPING AND ANALYSIS TOP LEVEL VIEW

The following basic flow diagram below provides the general framework for the process flows necessary to conduct enterprise value stream mapping and analysis.

3 - Map the flows of production, service, informational, money, and time

feedback loop

feedback loop

1 - Define the Business Life Cycle

2 - Define and analyze potential flows

4 - Construct top level current state map and validate step 1

6 - Validate all current state flows and interrelationships

5- Expand current state detail into constituent flows 7 - Capture current state data and conduct assessments of behaviors driven

13 - Renewal and cadence on progress repeat process

12 - Create and implement actions to achieve future state

11 - Create balanced set of metrics and confirm behaviors/ analyze potential gaps

10 - Create near term future state map

9 - Create ideal state map to drive breakthrough thinking

8 - Analyze waste, risks, and other inhibitors to success

feedback loop if gaps discovered

Note: The number sequence in the boxes represents the steps discussed on the following pages.

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ENTERPRISE VALUE STREAM MAPPING AND ANALYSIS THE THIRTEEN STEPS

The 13 steps for conducting the enterprise value stream mapping and analysis are as follows: STEP ONE: Define the business life cycle for your company, including the following analysis: What are the boundaries? What is the definition of value for the company and customer for the identified business lifecycle? What are the outcomes expected from the business? What is the vision and mission of the company? What are the major processes or organizational flows that exist for the company? Definition and identification of all key value stakeholders For example, a generic business life cycle may look like the following:
Enterprise Leadership

Interactive Process Flows

Market Definition and Business Planning

Strategic and Financial Planning/ Acquisition

Pursuit and Order Capture

Systems/ Program/ Product Management

Design and Development

Procurement and Build

Service and Support

Shared Services (Accounting, IT, HR, Legal, Health and Safety, etc.)

Also, include a representation of customer and supplier interactions to the flows. Finally, include the interactions of leadership and integration of the processes represented. It is recommended that an evaluation of how deep of a dive is taken during the value stream be completed at this point. Too deep of a dive will provide inordinate and unmanageable data, but too shallow of a view will result in a lack of clarity in the ability to identify wastes. STEP TWO: Assess other potential flows that may not be enterprise-wide, or are shared services, or those that may be in parallel to the flows already depicted. For example, any enabling infrastructures (IT, e-Business, human resources, accounting, etc.), or social/cultural analysis should be included. Finally, perform analysis of any external influences (societal, environmental, political) to the map as well as any de-stabilizing forces that may be internal or external (policies, laws, demographics, trends, etc.) STEP THREE: Assess and map the flows of products/programs/services, information, money, and time as appropriate and based on the business life cycle defined in step one. STEP FOUR: The resultant map and lists of influences represents the current state or level one work breakdown structure of the enterprise. At this point, validate boundaries, values, company outcomes, vision, and mission as identified in step one. Adjust as necessary to reflect reality.

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STEP FIVE: Take each portion of the current state and drill down one layer to the next level of constituent processes, flows, components, or influences. Walk the processes and document interfaces. The drill down of one layer of processes allows for the interaction of the various flows (social/technical) to be more apparent, and for more data to be gathered and analyzed. STEP SIX: Overlay all informational, social, and technical components of the flow not already captured and mapped. Validate the existence of the connections, and the decision points of the work breakdown structure/current state. Include any non-flowing, shared service, or enabling infrastructures (e.g. IT, HR, leadership, etc.) to the map STEP SEVEN: Capture relevant data that is measured in terms defined by the company and understood consistently (to prevent data comparison flaws). In other words, capture the metrics or information available for each piece and perform an analysis/linkage of the behaviors that each generates. Conduct assessments (e.g. LESAT) to capture other data elements and to create a comprehensive view. STEP EIGHT: Analyze and capture wastes, flow and value inhibitors (whether social or technical), costs, risks to flow, and risks to success criteria. Group these findings into enterprise themes, and perform an analysis to understand the implications to time, resources, and money that each represents. STEP NINE: Create an ideal state based on perfection. Elements of this state should include technical lean elements and social elements on demand, one by one, defect free, lowest cost, committed and capable workforce, autonomous decision making, rewards linked to performance, goal alignment, etc. It is recognized that reaching perfection is impossible, but it allows for breakthrough thinking and analysis that will create a more robust future state. STEP TEN: Create a future state achievable in a relatively short-term window (e.g. 18-24 months) based upon that ideal state. STEP ELEVEN: Assess and analyze the gaps in the ability to achieve the future state. Create a balanced set of measures/metrics for success and confirm behaviors generated conform to the future state directives. STEP TWELVE: Establish and implement actions/programs/events to drive the creation of value and elimination of waste to achieve the future state. Create necessary infrastructure (including organizational structure) to ensure leadership, integration, course corrections, validation, and accountability for the changes. Analyze risks, change management issues, and other inhibitors to successful implementation. Ensure actions allow for a total life cycle value stream view. STEP THIRTEEN: Establish a renewal period to re-visit and adjust the future state (a rolling 18-24 month view) on the path to the ideal state. Create a cadence to ensure stakeholder enrollment, and ownership and accountability for all actions and ongoing analysis.

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