Value Stream Mapping; The Systems Pareto Tool By Ronnie Daughtry   In the year 1906 Italian born economist Vilfredo Pareto made a very famous observation while studying the wealth and property distribution in Italy. What he found in his study by applying a mathematical algorithm was that about eighty percent (80%) of the wealth was controlled by only twenty percent (20%) of the people. This fact in itself was not a significant observation at the time but during the early nineteen thirties (1930’s) a management pioneer by the name of  Dr. Joseph Juran credited this finding as a significant principle and he surnamed it the “Pareto Principle.” Juran began to apply and generalize this principle often referring to it as the “vital few or the 80/20 rule.”  Today a pareto chart is used to graphically display data cause types from largest to smallest in a bar chart form. Using a the top twenty percent (20%) cause type application, one can focus efforts toward eighty percent (80%) problem effect resolution by focusing on  the first one (1), two (2), or three (3) bars that usually make up twenty percent (20%) of the cause types. Value Stream Mapping Value Stream Mapping is probably the most widely utilized lean tool used to analyze business and production systems. The Value Stream Mapping process begins by first establishing a scope in a business case scenario or by identifying a specific product family in the case of a production system or factory example. Next, a “Current State Map” is drawn using a set of standard icons. The result is a snap-shot in time of the process being mapped. Value Stream Mapping is somewhat different than other types of process mapping in the fact that both the steps or process flow are shown at the bottom of the map and the information that drives the steps are shown at the top of the map. In addition, all the steps or processes are mapped with one key point in mind; the customer.  Knowing and understanding who and exactly what the customer expects is a key tenant in lean. Value Stream Mapping helps to formally clarify what the customers’ requirements are.  More importantly, the process and information flows that support that customer are identified. In lean, the organizational challenge is to identify the true customer requirements and develop a process to do only that. This is the essence of lean and the premise that makes Value Stream Mapping a great tool. Applying the Pareto Principle to Value Stream Mapping The third step involved in Value Stream Mapping is called the “Future State Map.” In this step a vision for the future of the value stream is determined. The goal is to improve by focusing on the correct improvement projects that really make a difference and effect the total system lead time.  It is in the Future State Mapping step that the pareto principle can be applied.   If truly eighty percent (80%) of the results can be driven by the correct  twenty percent (20%) of the improvement projects identified  then,  it is imperative that the correct projects are identified.  The pareto principle will hold true in this case if and only if the correct projects are identified and implemented.    Improvements for the future state are identified by systematically evaluating the information flow and key process steps from the Current State Map. In a sense, the Current State Map is used as a launching pad for the Future State Map.  This process always begins  at the customer and works  in reverse order following the information flow back to the first step in the process.  As each step and the information flow is evaluated,  brainstorming begins on what might be improved for the future. The value stream lead time which is measured at the bottom of the Current State Map becomes the basis for prioritization of the projects and activities that will be directed to improve the value stream.  The opportunities for improvement that are identified during the Future State Mapping analysis are known as “Kaizen Bursts.”  These kaizen bursts are best classified by type of activity that must be conducted or completed in order to achieve the future state vision.  Typically, those activities fall into one of three types of activities. First, there are those activities that require a team in some type of dedicated focused workshop or what is commonly known as a “Kaizen Workshop” These workshops are usually five (5) days in duration and the associates involved are one hundred percent (100%) dedicated to workshop related activities.  Second, there are those types of activities that require a focused team approach.  In this type of activity, associates may work on and off on a project for a specific amount of time. The associate carries on regular work duties but participates for periods of time with a focused team  on project work related to the Future State Map.  Finally, there may be individual tasks identified. Individual tasks are activities that do not require a group or a team approach. These tasks are assigned and can be completed quickly utilizing one person.  How Does One Eat An Elephant? The age old question of “How do you eat an elephant?” is very applicable when it comes to implementing the future state map. One simply cannot eat an elephant all at once. It must be consumed one bite at a time. The same is true with value stream mapping. There are usually many projects and activities that can be improved within  a given value stream. There can be so many items identified to improve that  an organization can become consumed with activities to do.  Without focus, Value Stream Mapping will not just open up a can of “to do”  but it may open up an entire case of it.  The pareto principle will keep the organization focused on the one bite at a time. Not only will the one bite at a time but it is the correct bites first. In order to do this the correct twenty percent (20%) of the projects must be identified.  This is simply determined by relating the projects to the effect on the lead time as a basis for selection.  In general this will narrow down the projects greatly. The cream always rises to the top and the vital few are born.  Implementation Value Stream Mapping is a great tool. It really helps the organization to see the whole related to the customer.  However, in the end it is just a tool.  It is not lean in a bottle. The end result of the initial activity is a vision for the future called the Future State Map and a plan to implement it. That is it.  So, what should we say then? “Go get busy and do it!”.

In addition to  Lean Consulting Services,  TAG provides   Project Management, Engineering & Technical Support, Training Services,  Maintenance & Reliability Services, and Architectural & Design Services.  Call us toll free at 877-824-3647 or visit  www.tag.bz for more information. About the Author: This month's newsletter was written by Ronnie Daughtry.  Ronnie is Manager of Project Operations and a Senior Lean Consultant with The ACCESS Group (TAG). He has over seventeen years of experience holding various leadership and managerial roles in lean manufacturing, continuous improvement, supplier quality engineering, manufacturing operations, and human resources. The balance of his various leadership roles have been in the automotive sector for Robert Bosch Corporation in many locations in North America, South America, and Europe. In addition to being a lean practitioner, Ronnie is also a high energy speaker and a professional facilitator. Ronnie has been trained and certified as a Metaplan Facilitator and has moderated many leadership visioning and strategic planning sessions. Ronnie has a Masters in Management and Organizational Development , Bachelors in Management and Human Relations from Trevecca Nazarene University, and an AS degree in Communications from Volunteer State Community College.