Process Mapping. You cannot improve a process until everyone agrees on what the process is.

Transcription

1 Process Mapping You cannot improve a process until everyone agrees on what the process is. 1

2 Topics I. What is a Process Map? II. III. IV. Types of Process Maps A. Process Flow Chart B. SIPOC Diagram C. Value Stream Map Value-Add (VA) and Non-Value Add (NVA) Current State and Future State Maps V. Process Mapping Case Study Construction Equipment Rental Center 2

3 I. Process Mapping Process map (type of flow chart) is a visual representation of process work-flow. Either: High level system flow, or Detailed work flow within a system Process maps help facilitate a greater understanding of a process by identifying: Bottlenecks. Redundancies. Waste Key process inputs and outputs. Key decision points and criteria. Roles and responsibilities. 3

4 Creating Effective Process Maps Provide Details!! organizations often create flow charts of process steps, but effective maps support analysis by including useful data. Useful Data Examples: Setup time, wait time, processing time, travel distance between tasks, method of information travel, # staff, decision criteria, key input variables. Note: Lean / Six Sigma both require effective process mapping. 4

5 How Complicated? Toughest challenge in process mapping is determining the level of detail. Unfortunately, the answer is: As detailed as necessary for people to understand the process. 5

6 Paper and Pencil Vs. Computer Software Several six sigma and lean specialists recommend drawing process maps on paper with a pencil and an eraser. Drawing by hand: Is faster. Demonstrates that you can create the map yourself. Gets you closer to the process to better understand what is happening. Emphasizes the process map, not computer skills. 6

7 II. Types of Process Maps A. Process Flow Chart B. SIPOC Diagram C. Value Stream Map 7

8 A. Process Flow Chart A diagrammatic picture showing all steps or stages in a process. Flow charts help facilitate a greater understanding of the entire process by identifying where problems have occurred or may occur. 8

9 Some Flow Chart Symbols A Rectangle: Process or Action Step Diamond: Decision Circle: Flow Chart Continues At Next Step Triangle: Storage/Inventory Hexagon: Setup or Preparation Activity Delay or Wait Block Arrow: Work Flow Direction Start or End Point 9

10 Process Flow Chart Example Fast Food Restaurant A B Receive Order from Schedule Receive Order for Combo Meal Prepare Sandwich Prepare French Fries Prepare Fries Prepare Sandwich Is Sandwich Prepared? Prepare Sandwich Cook Meat Prepare Toppings Cook Fries Y Make Sandwich Are Fries Prepared? Y Prepare Fries Place Sandwich Under Heat Lamp Place Fries Under Heat Lamp Fill Drink Order Complete Order Under Lamp < 5 min? Under Lamp < 5 min? Scrap 10

11 B. SIPOC Diagram Supplier, Inputs, Process, Outputs, Customer Process for Creating SIPOC Diagram Map process into critical steps (4 5 main functions). Identify Customers that Receive Outputs Identify Process Outputs (Metrics) Work with customer to develop requirements -- separate key requirements from others. Identify Inputs that affect this process. Identify Suppliers of the process inputs. 11

12 SIPOC Diagram Suppliers Inputs Process Outputs Customer Step 1 Step 2 Step 3 Step 4 12

13 SIPOC Diagram Process a Mortgage Loan Suppliers Inputs Process Outputs Customer Appraisers Insurance Companies Title Companies Government Lender Programs (Basis Pts) Interest Rates Type of Loan Loan Value Loan Documents Mortgage Mortgage Customers External Underwriters Lending Institution Prepare (Setup) Loan Process Loan Underwrite Loan Clear Conditions Close Loan 13

14 C. Value Stream Map (VSM) Value stream all of the actions (value and non-value added) required to get a product to the customer or complete a service. Service flow ~ from order to delivery. Design flow ~ from concept to launch. Production flow ~ from raw material to finished goods. Value stream maps typically focus on entire system flow or major subsystems not just an individual process or operation. 14

15 Value Stream Map Symbols (Source: Learning to See, M. Rother and J. Shook, The Lean Enterprise Institute, 1999.) Process Process - Activity Data Box Inventory External Source Operator Supermarket (store inputs) Manual Information Flow Electronic Information Flow Finish Service To Customer 15

16 Value Stream Map Data/Inventory Box Examples C/T: min 2 Operators 5% Errors C/T time to complete task Data Box Internal Loan Processing I 30 loans Inventory I 0-20 calls Inventory 16

17 Other VSM Abbreviations C/O changeover time or setup time to begin a new task C/T (T/T) cycle or task time ~ time to complete a task VAT value add time or the time needed to complete a required task. NVA (non-value add time) = C/T VAT Note: Mfg (C/T) = Service Task Time (T/T) W/T wait time for next process step to begin. TC/T total cycle time, or the total time from when a task is started within a work center until it leaves work center. Service Time Units: sec, min, hours, days, months depends on application 17

18 Current State Process Map Loan Refinance Process LO Prepare Loan Interview / Get Signed Application C/T = 3 days VAT = 4 hrs I 40 loans Internal Loan Preparation C/T = 3 days VAT = 2 hrs 3 Processors Process External Appraisal Order Appraisal Final Loan Prep C/T = 4 days VAT = 2 hrs Appraiser Mail Loan Package Fund Loan Includes 3-day recission period C/T = 5 days Close Loan C/T = 4 days VAT = 3 hrs 2 Closers I 30 loans Clear Conditions varies by # and type C/T = 1-5 days VAT = 1-2 hrs 2 Processors I 30 loans Lender Underwriter C/T = 7-21 days VAT = 2-4 hrs 18

19 III. Value Add Vs. Non-Value Add Time Identify the value add time (VAT) to meet customer expectations. Non-Value Add Time (NVA) = Cycle Time (C/T) Value Add Time (VAT) In the prior example, identify some non-value add times. 19

20 Examples: Non-Value Add Time Time waiting for available staff (operator) Time waiting for mail Time waiting for external resource Time spent clearing avoidable loan conditions from the underwriter (rework time) Sources of NVA Time Poor Information Flow (Mostly Avoidable) Rework (Mostly Avoidable) Scheduling Imbalance (Maybe Some Unavoidable) Resource Imbalance (Maybe Some Unavoidable) 20

21 Total Cycle Time (Value and Non-Value Add) TC/T is the total time from start to finish. (time in system) How much time is VA? Hint: refer to VSM Task* VAT/NVA Time (hrs) Time (days) Loan Prep - Wait Customer Information NVA Loan Prep - Prepare Documents VAT Wait for Processor to be Available NVA 16 2 Internal Processing (Prepare Package/ VAT 2 Order Appraisal) 0.25 Internal Processing (Get Missing Info) NVA Wait for Appraisal NVA Update Loan Package with Appraisal VAT Mail Loan Package to Underwriter NVA 8 1 Wait for Underwriter Resource NVA Underwrite (Approve) Loan VAT Clear Conditions (Avoidable Errors) NVA Clear Conditions (Unavoidable Issues) VAT Wait for Closing Date NVA Close Loan VAT Submit Loan for Funding NVA 8 1 Funding (regulation) VAT 40 5 Total Time in System % VAT 17% * Assumes 1 day = 8 hours 21

22 Value Added Time Stack Chart VAT Stack Chart may be used to visually show the contribution of NVA to total cycle time (i.e, total time in system) % VAT ~ 17% (57 hours or 8 days) Note: Even in the best processes, NVA time will likely exceed VAT. Value Add Task Non-Value Add Task Loan Prep Wait for External Underwriter (Lending Institution) Fund Loan 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 22

23 Takt Time Vs. Cycle (Task) Time Cycle (Task) Time often is related to resource availability and efficiency (e.g., equipment or staff availability) Note: This differs from Takt Time (Lean Term)! Takt time Time needed to match the Next Process Customer demand rate for a product or service (takt German Origin for orchestra baton used to regulate musical beat ~ beat time ) Example: # Loan Applicants per Day may be used to determine how many resources are needed. Thus, this demand rate will affect the wait time elements within the Total Task Time. See Module on Service Throughput Modeling Loan Example: Takt time = 25 days (200 hours) Since demand will likely fluctuate, we often normalize takt time by month or quarter to create a planned time to maintain quasi level scheduling Note: Takt time is not equal to VAT (i.e, you may plan some inventory queues to better utilize resources due to scheduling imbalances.) 23

24 IV. Current & Future State Maps In creating process maps, one should draw both a current AND future state map. Future state maps provide: Vision of what the process flow should look like (recommended process flow). May need goals for current process evaluation metrics. Examples: less than 1 defect per million OR 2 days of inventory, process order in 2 weeks, etc.) Note: future state maps are not static -- they may change based on new customer demand rate / new technology availability,... 24

25 Improvement Never Ends Drawing your future state map is not the end of the process you must implement it! Review of Value Stream Mapping Process: Draw the Current State Map. Draw the Future State Map. Implement the New Process Flow / Business Rules. Re-Draw Current State Map and begin again. 25

26 V. Process Mapping Exercise Construction Equipment Rental Center Case Study: A large construction equipment rental company maintains a national network of sales and distribution centers for equipment rental (e.g., excavators, cranes, dozers, lifts,.) Main Customers: Small Contractors Basic Rental Order Process: Sales Coordinator receives an order and issues a job card. Various equipment are then obtained either from local branch center, another distribution center or repair center. The order is then gathered at the desired customer delivery center. To perform this task, you need several inputs including: List of Company Rental Equipment, Equipment Availability Schedule of Local Center, Access to Other Center s Equipment Availability, Distance Between Centers. Current Performance: 20% of orders take longer than 1 week to process. (Goal: 95% orders filled < 1 week). Main Customer Complaints: time to fill order, equipment that is not working properly (poorly maintained) 26

27 Exercises Based on the case study information provided, create the following: 1. SIPOC Diagram 2. Current State Process Flow Chart Identify VA and NVA activities 3. Future State Process Flow Chart 27

28 1. SIPOC Diagram Suppliers Inputs Process Outputs Customer Receive Order Find Source for Equipment Gather Equipment at Delivery Center Deliver Order to Customer 28

29 SIPOC Diagram Suppliers Inputs Process Outputs Customer Small Contractors (Preferred List) Builders Do-ityourselfer Receive Order Find Source for Equipment Gather Equipment at Delivery Center Deliver Order to Customer 29

30 SIPOC Diagram Suppliers Inputs Process Outputs Customer Equipment -- time to provide order -- equipment reliability Small Contractors (Preferred List) Builders Do-ityourselfer Receive Order Find Source for Equipment Gather Equipment at Delivery Center Deliver Order to Customer 30

31 SIPOC Diagram Suppliers Inputs Process Outputs Customer Rental Equip List Sales Training in Equipment Use Equipment Availability Shipping Costs between Centers Repair Records Maintenance Records Equipment -- time to provide order -- equipment reliability Small Contractors (Preferred List) Builders Do-ityourselfer Receive Order Find Source for Equipment Gather Equipment at Delivery Center Deliver Order to Customer 31

32 SIPOC Diagram Suppliers Inputs Process Outputs Customer Equipment Providers Equipment Repair Services Rental Equip List Sales Training in Equipment Use Equipment Availability Shipping Costs between Centers Repair Records Maintenance Records Equipment -- time to provide order -- equipment reliability Small Contractors (Preferred List) Builders Do-ityourselfer Receive Order Find Source for Equipment Gather Equipment at Delivery Center Deliver Order to Customer 32

33 2. Current State Process Map Rental Equipment Process Order Shipment To Delivery Center Yes Receive Order Send Order to Customer Delivery Center Are all parts Working properly? Yes Notify Customer Order is Ready No Repair Process Are parts Available at Another Center? No No Are all parts Available at Delivery Center? Yes Deliver Order Wait till Available 33

34 Total Cycle (Task) Time TC/T is the total time from start to finish. How much time is value added? Task Time, Low Time, High Prepare and Send Order to Delivery Cente 15 min 1 hour Check for Equip Availability at Local Cent 15 min 1 day Find and Ship Missing Equip from Other Centers, Wait Current Customers) 1 day 2 weeks Verify that all Equipment is Functioning 1 day 1 week Repair Equipment 0 3 days Notify Customer Order is Ready 15 min 2 day Prepare Order for Delivery/Pick-up 15 min 1 day Avg: 5 days; High: 3 weeks 34

35 Total Cycle Time and VAT How might you reduce the NVA time? Task Time, Low Time, High VAT NVA Prepare and Send Order to Delivery Center 15 min 1 hour 15 min track down missing information Check for Equip Availability at Local Center 15 min 1 day 15 min resolve computer system discrepancies Find and Ship Missing Equip from Other Centers, Wait Current Customers) 1 day 2 weeks 1 day - no equip within 1 day ship, - wait for other customers, - resolve scheduling errors Verify that all Equipment is Functioning 1 day 1 week 0 Repair Equipment 0 3 days 0 Note: order new equipment if major repair required Notify Customer Order is Ready 15 min 2 day 15 min track down customer Prepare Order for Delivery/Pick-up 15 min 1 day min Note: varies based on equipment order Avg: 5 days; High: 3 weeks 2-3 days 35

36 3. Future State Process Map Rental Equipment Process Find Missing Equipment Process Receive Order Are all parts Available? Y Determine Best Location to Obtain Equip Notify Customer of Order Availability Does Customer Accept Schedule? Y Send Job Order Request to Appropriate Center(s) Ship/ Gather Equip At Delivery Center Notify Customer Order is Ready N Issue Lost Customer Report Deliver Order 36

37 Eliminating NVA Activities Some examples of possible improvements in this case are: Creation of equipment readiness process to insure only functioning equipment is sent to a delivery center. Early customer notification process (automated). Software system to find best equipment source for order. Setting up lost customer database to allow for better resource allocation in future. 37

38 Final Case Study Comments This future state map got closer to the customer s goal (order < 1 week), but we are not done yet? We must seek continuous improvement! Improvement of chronic problems often will require a closer look at many issues including: resource allocation, reasons for defective equipment, preventative maintenance schedules, IT systems Again, the real value in process maps (flow charts) often is to get everyone to agree on: key process steps, resources, decision criteria, waste!! 38