Value Stream Mapping Jacks Taxes Training Example

Solectron

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Value-Stream Map Phases

Agreeing on what process to study, how to map it, who will participate, and logistics.

Preparation

Current State

Agreeing on a well understood map of the current situation. Agreeing on a shared vision of a Lean future state. Agreeing on how to implement the future state plan

Future State

Planning

Preparation

Current State

Future State

Planning for Action

47

Typical Steps for Current State Mapping

1. 2. 3. 4. 5. 6. Document customer information Identify main processes (in order) Select data attributes Perform Value-Stream walk-through and fill in data boxes, including inventory and resident technology Establish how each station/process knows what to work on next (how they prioritize) and identify information flows. Calculate waiting time vs. processing time, First Pass Yield, and/or other Value-Stream summary measures

Preparation

Current State

Future State

Planning for Action

48

Value-Stream Map Phases Current State (Steps 1 3)

Line up the processes here Step 2
Operations Reporting
Scrap report New accounts & cost ctrs Sq. meters by project Freight spend by project Revenue by project

Step 1
Corp. Finance

SID ending inventory Info on reclass betwn projects

Customer information here

Format JE's for upload to Oracle
manual 240 Manual key entry of 0,000 lines

Site Controller & Regional Finance

Feedback

Approval

Information to process Customer P&L

Tool manual 0 0 JVs last ay 00 NVAs last ay

Split mat'l & labor revenues

manual 0 Assemblies price broken by Labor & Material components Total assys Feb:

Calculate allocations
manual

Validate accounts vs. COMDEF

manual

Upload to Oracle
Oracle

Final Review
Oracle 30

Make corrections

Release final figures to Corp.

Oracle

Day of lose

Fri

rocessing

minutes

20

240

300

30

Preparation

Current State

Future State

Planning for Action

49

Step 3

Summary:

Wait Time

minutes

500

Selected Data Attributes

2000

500

20

540

0 0 30

9 0

hours wait time hours processing time one on +3 to +4

to + Fri - Mon

RMAs in last ay requiring analysis & account reclass

<5% total cost + 2 to + 3 Tues-We

+3 We

+3 We

omplexity factors an /or Quality ata

rocessing time

20 2 0 cost centers 30 rivers <30% MS &T

300 Time of system running all sites at the same time +3 We

Manual vali ation an correction

+3 We

+3 We

30

+ 3 to + 4 We -Thurs Total 0

Common Data Attributes

   Process Time (PT) Wait (Queue) Time (WT) % Complete and Accurate information Available Time Setup Time Typical Batch Size (Inventory) Number of People Involved Reliability (System Downtime) Rework/revisions (e.g. design changes) Queue - Amount of paperwork in queue (FTQ)

Preparation

Current State

Future State

Planning for Action

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Value-Stream Map Phases Current State (Steps 4 6)

p r tion R porting

Step 5
S S F i

Corp. Fin n

SD l

&

p o

u o

&L

v nues

allocations
manual

T t l

884

<5

t t l

Day f Cl

D Fri

D t D+1 Fri - M

D+ t D+ T -W d

D+ W d

D+ W d

D+ W d

D+ W d

D+ W d

D+ t D+4 W d-T r

W it Tim Pr i

mi mi

t t

1 1

54

Preparation

Current State

Future State

Planning for Action

Step 6

51

61 16 d

R a YR VYR `Y TTVXR W T SRQ V U T SRQ

cbb

4. Record the data elements for each process step here

r r

w it tim r i tim D+ t D+4

9 9 B C0

9B

6. Capture the wait & process times, First Time Quality, & summary metrics here Su ry:
9 9 9B 9 99B 9 9 9

5 IP 4 0 B

4 B

4 B

4 B

f fr

4 B

4 B

9@ 9

503 C 0 E

4 54I 0 @

9@ 9@

99

60 0 H 4 5D 5 5C C 0 G

RMA in last day r iring analysis & account r class

&T

9 999@

C m l ity fact r and/ r ality data

Manual y ntry of 4 , lines

Manual validation and correction

Tim of syst m running all sit s at t sam tim

f f

ttt t fs

1 JV l t d 1 INVA l t d

Assem lies rice roken y abor & Material com onents

u u

tim

1 t driv r < MS 1

t r

9B

98

9B

99B

98

9A@

F FF E9B 5 4 9B 5 4 64 3 503 9 @ 9@

98

99

f pqf pi e d ed hf g d DC 5C 5 99 DC 5C 5 9 4 76 554 30 2 98

9 9

anual

manual

manual

( 

pi

&

Calculate

acle

COMDEF

manual

Oracle

Step 4
00

&

  ' % & %   % $

Info

ion o

Oracle

5. Identify what triggers that the process step can start and Fo at JE s Validate pload to Final Make how fo upload to accounts vs. information flows Oracle Review corrections


Sit Controll r & R gion l Fin n

wx c w
l

wx c
Release final figures to Corp.
Oracle T t l 66 96

w cw y  #   ! " !!    f e f ed 54 I6 54 I6 d 76 554 30 4 C

VSM Icons
Process Box RP Technology Used

IN
In Box (Queue) External Schedule or Event Movement by Push

Customer

P/T W/T Quality

Conversation Information Flow

Electronic Information Flow

Worker Data Box

Weekly Schedule

Reminder post-card

Movement of physical property

Supermarket

Withdrawal (Pull)

Monitoring

Iterations

Changeover

Kaizen Lightning Burst

XOXO

Leveling Mix and/or Volume

FIFO

First-In First-Out Flow

52

Jacks Taxes
ack is a Licensed Accountant and maintains a practice in personal, self-employed and small business income tax preparation. ack would like to take on more corporate clients because of the higher margins. However, during the tax season, self-employed returns require long hours because of the frequent waits, delays and errors. If ack can improve the process for self-employed clients, he could take on more work during that time of year. Generally, the sequence of events begins for each client sometime in late anuary with acks assistant, ohn, (1) sending a reminder to submit their records as soon as possible. Then, sometime before the first of April, the client must bring in all necessary forms and receipts. Regular clients drop off or send their box of receipts and tax forms from various income sources. ack (2) sorts the receipts and documents, finding that most of the time, there is something missing. He notifies clients asking for missing documents. His next step is to (3) prepare worksheets for the client in the TS tax system. Once ack starts filling out the worksheets, he frequently needs to (4) confirm deductions such as what expenses qualify as business-related and details regarding retirement or insurance deductions. Once ack has completed the worksheet, his assistant ohn actually (5) prepares the IRS forms. For self-employed clients, ohn waits until Thursday when he prints all returns that have accumulated during the week from the TS tax system. Of course, (6) ack must review and sign each return. Finally, ohn completes the process by packaging and (7) mailing the IRS forms with the necessary attachments to each client.
53

Data Set
Tax Season: 8 weeks / 40 Self-Employed Clients (1) Send Reminder: ohn P/T = 10 min FTQ = 100% (2) Sort receipts & documents: ack P/T = 30 min W/T = 1 week in inbox before sorting FTQ = 10% (3) Prepare Worksheet: ack Technology used: TS P/T = 60 min W/T= 4 week wait to prepare worksheet FTQ = 95% (4) Confirm deductions: ack P/T = 10 min W/T = 1 week to complete confirmations FTQ = 50% (5) Prepare IRS tax forms: ohn Technology used: TS P/T = 15 min W/T = 1 week in inbox before form prep. FTQ = 98% (6) Review and sign forms: ack P/T = 15 min W/T = 1 day avg. in inbox before signing FTQ = 100% (7) Collate and mail forms to client: ohn P/T = 10 min W/T = 1 day accumulation before collation and mailing FTQ = 100% KEY P/T = Process Time W/T = Wait Time FTQ = First Time Quality TS = Tax Software
54

Draw Current State Map

Dont Solve it. ust Draw It!!

Preparation

Current State

Future State

Planning for Action

55

Typical Steps for Current State Mapping

1. 2. 3. 4. 5. 6. Document customer information Identify main processes (in order) Select data attributes Perform Value-Stream walk-through and fill in data boxes, including inventory and resident technology Establish how each station/process knows what to work on next (how they prioritize) and identify information flows. Calculate waiting time vs. processing time, First Pass Yield, and/or other Value-Stream summary measures

Preparation

Current State

Future State

Planning for Action

56

Jacks Taxes - Current State

Client
40 clients

Send reminder

Sort receipts & IN documents ack 30 min 1 week 10% 30 min 1 week 4 week

Prepare worksheet TS ack 60 min 4 weeks 95% 60 min

Confirm deductions

Prepare IRS forms TS IN

Review & sign forms IN ack 15 min 1 day 100% 15 min 1 day 1 day

ail forms

ohn P/T 10 min W/T FTQ 100% 10 min

ack 10 min 1 week 50% 10 min 1 week 1 week

ohn 15 min 1 week 98% 15 min

ohn 10 min 1 day 100% 10 min

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min FTQ=4.7% 57

Analyze the Current State to identify waste that might be eliminated

Preparation

Current State

Future State

Planning for Action

58

Using 5 Whys to Identify Root Causes in the Current State

10% FTQ for Sort receipts & documents

Why?

Why?
issing Documents isplaced documents unlikely New Client unlikely

Why?

Customer did not submit

1 Document all potential root causes 2 Ask if any causes are more likely the root than another 3 Drill down by asking why on most likely root causes

acks requirements not communicated

When using 5 Whys? ask the following . . . Do you think this is the root cause? Should we ask why again? Does it matter any more?
59

Now think about ways that you could eliminate the waste. Draw your solutions on the Current State map.

Preparation

Current State

Future State

Planning for Action

60

Designing the Future State Specific Questions to Ask

What does the Customer want? Quality Timing/Frequency Features How can you make the work flow more smoothly? Eliminate rework Eliminate delays Eliminate repetitive work Consolidate work How are resources applied? Are resources adequate? Are resources capable? Is quality produced at each step? Is quality defined and measured? Are resources available? Waiting at times and too busy at other times? Unavailable due to working on other (the wrong?) jobs?
Preparation Current State Future State Planning for Action
61

What are the customer requirements?

Preparation

Current State

Future State

Planning for Action

62

Jacks Taxes Current State

Client
40 clients

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:
Tax Forms completed accurately Finished before filing time

Send reminder

Sort receipts & IN documents ack 30 min 1 week 10% 30 min 1 week 4 week

Prepare worksheet TS ack 60 min 4 weeks 95% 60 min

Confirm deductions

Prepare IRS forms TS IN

Review & sign forms IN ack 15 min 1 day 100% 15 min 1 day 1 day

ail forms

P/T W/T FTQ

ohn 10 min 100% 10 min

ack 10 min 1 week 50% 10 min 1 week 1 week

ohn 15 min 1 week 98% 15 min

ohn 10 min 1 day 100% 10 min

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min FTQ=4.7% 63

How will you make work flow smoothly?

Preparation

Current State

Future State

Planning for Action

64

Jacks Taxes Current State

Client

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:
40 clients Tax Forms completed accurately Finished before filling time

Send reminder

Sort receipts & IN documents ack 30 min 1 week 10% 30 min 1 week 4 week

Prepare worksheet TS ack 60 min 4 weeks 95% 60 min 1 week

Confirm deductions John ack 10 min 1 week 50% 10 min 1 week

Prepare IRS forms TS ohn 15 min 1 week 98% 15 min 1 day IN

Review & sign forms IN ack 15 min 1 day 100% 15 min 1 day

ail forms

P/T W/T FTQ

ohn 10 min 100% 10 min

CO BINE PROCESSES

ohn 10 min 1 day 100% 10 min

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min

FTQ=4.7% 65

How will you trigger or sequence work?

Preparation

Current State

Future State

Planning for Action

66

Jacks Taxes Current State

Client

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:
40 clients Tax Forms completed accurately Finished before filling time

Send reminder

Sort receipts & IN documents ack 30 min 1 week 10% 30 min 1 week 4 week

Prepare worksheet TS ack 60 min 4 weeks 95% 60 min 1 week

Confirm deductions John ack 10 min 1 week 50% 10 min 1 week

Prepare IRS forms TS ohn 15 min 1 week 98% 15 min 1 day IN

Review & sign forms IN ack 15 min 1 day 100% 15 min 1 day

ail forms

P/T W/T FTQ

ohn 10 min 100% 10 min

CO BINE PROCESSES

ohn 10 min 1 day 100% 10 min

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min FTQ=4.7% 67

How will you organize work between interruptions in flow?

Preparation

Current State

Future State

Planning for Action

68

Jacks Taxes Current State

Client
40 clients

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:
Tax Forms completed accurately Finished before filling time

Send reminder

Sort receipts & IN documents ack 30 min 1 week 10% 30 min 4 week

Prepare worksheet TS ack 60 min 4 weeks 95% 60 min

Confirm deductions John ack 10 min 1 week 50% 10 min

Prepare IRS forms TS ohn 15 min 1 week 98% 15 min

Review & FIFO sign forms FIFO

ail forms

P/T W/T FTQ

ohn 10 min 100% 10 min 1 week

CO BINE PROCESSES

ack 15 min 1 day 100% 15 min 1 day 1 day

ohn 10 min 1 day 100% 10 min

1 week

1 week

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min FTQ=4.7% 69

Can you establish a rhythm to pace the work and eliminate problems?

Preparation

Current State

Future State

Planning for Action

70

Jacks Taxes Current State

Client

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:
40 clients Tax Forms completed accurately Finished before filling time

Send reminder

Sort receipts & IN documents

Prepare worksheet TS

Confirm deductions John ack 10 min 1 week 50% 10 min

Prepare IRS forms TS ohn 15 min 1 week 98% 15 min

Review & FIFO sign forms FIFO

ail forms

ack ack 30 min XOXO 60 min P/T 1 week 4 weeks W/T 10% 95% FTQ 100% 30 min 60 min 10 min 1 4 week week

ohn 10 min

CO BINE PROCESSES

ack 15 min 1 day 100% 15 min 1 day 1 day

ohn 10 min 1 day 100% 10 min

1 week

1 week

Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min Total Lead Time = 2 days FTQ=4.7% FTQ ~ 100%

Total Processing Time = 110 min 71

What process improvements are necessary to achieve the Future State Value-Stream?

Preparation

Current State

Future State

Planning for Action

72

Jacks Taxes Current State

Checklist and accordion file process Data entry worksheet training

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Customer Demands:

Client
40 clients

Tax Forms completed accurately Finished before filling time

Send reminder

Sort receipts & IN documents

Prepare worksheet TS

Confirm deductions John

Prepare IRS forms TS

Review & sign forms FIFO FIFO

ail forms

P/T W/T FTQ

ohn 10 min 100%

ack ack 30 min XOXO 60 min 1 week 4 weeks 10% 95%

CO BINE PROCESSES

ack ohn 10 process time 15 min Reducemin 1 to 75 min week 1 week 50% 98% Standardize Work Total Waiting Time = 7 weeks + 2 days Total Processing Time = 150 min

ack 15 min 1 day 100%

ohn 10 min 1 day 100% FTQ=4.7% FTQ ~ 100%

Total Lead Time = 2 days

Total Processing Time = 110 min 73

Jacks Taxes Future State

Checklist and accordion file process Data entry worksheet training

Takt Time = Available time / Customer Demand = 40 days / 40 Clients = 1 per day

Client
40 clients 1 per day Over 8 weeks

Customer Demands:
Tax Forms completed accurately Finished before filing time

max 1 day Send reminder IN ohn 10 min 100% 10 min XOXO Data entry + print TS forms Check & FIFO sign forms

max 1 day ail forms FIFO

P/T W/T FTQ

Reduce process time ohn to 75 min 75 min Standardize Work 100% 75 min 1 day

ack 15 min 1 day 100% 15 min 1 day

ohn 10 min 1 day 100% 10 min

Total Waiting Time = 2 days Total Processing Time = 110 min FTQ ~ 100% 74

Summary of Results: Potential Impact

Reduced PT 40 mins (27%) ack could add 11 additional self employed clients without adding work hours! Increased revenue, no more time. FTQ increased (4.7% to ~ 100%). Improved area of greatest opportunity. Turn-around time is now well within customer expectations (7 weeks down to 2 days). Able to respond to customer needs faster. oved 70 mins of acks high priced time over to ohn. ack can now concentrate on more complicated returns or on obtaining more higher revenue generating corporate clients.

Reduced personal overtime ack does not stay late signing returns anymore. This new Future State now becomes the next Current State (continuous improvement). Next ack could investigate further leveling the work he receives in, filing electronically,
75

Planning For Action Now that youve got a Future State

Ensure you have anagement buy-off Create a specific implementation plan Identify group(s) for piloting improvements (where practical) Quantify and

easure

How much will it cost? How much will it save?

Preparation

Current State

Future State

Planning for Action

76


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Com ine prepare or eet confirm e uction an prepare I S form

B. Trigger/Sequence Work: Establish Checklist and Accordion File

Support:

Resp: Jack

Support:

||

Jack

Project Spon or: Project ate:

Project Goal:

Implementation Plan Example

Implementation Objective

Preparation

Obtain higher margins via more corporate clients; retain current customer base.

Methods/Action Steps

Implementation Plan: ac '

Current State

OWNER TARGET

Future State

axe

a t e ie ate: e ie Fre uenc a : ate: Next Project e ie erall Statu % Complete :

Dec-04

imeline Jan-05

Planning for Action

Feb-05

7 2 72 %

O j

77
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Next Steps
1. Identify opportunities that could benefit from a Value-Stream apping analysis 2. Get people into the VS 3. Complete some VS 4. Post results to training

activities

ySolectron

Success generates enthusiasm and more successes!

Preparation

Current State

Future State

Planning for Action

78

Potential Areas to Map

j j j j j j j j j j j j Close process Weekly/bi-weekly P&L process Forecast/rack-up process Reserve review process (E&O, A/R, etc) Credit limit process Discrepancy process for A/P Inter-company process A/R collections Statutory/legal external reporting process w/ KP G Fixed assets process Finance approval process NPI invoicing process

79

PROPOSED VSM OPPORTUNITIES

List Ideas 1 2 3 4 5 6 7 8 9 Ideas for VSM Value-Stream Mapping Facilitator Process Owner Expected Due Date

80