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08/20/2012 12:28 PM
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Hi!
I'm in need of some help. I have been asigned to develop a VSM for Finance Month End process, but in all honesty I do not find the way to start working on it, 'cause as far as I understand this is no a linear process and there are so many different dependancies (accounts payable, receivable, general ledger, etc). Does any one has an example or guidance that could provide me.
Thanks for the help!!
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08/23/2012 10:35 AM
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I have completed a VSM for month end several years ago and my first step was to brainstorm the inputs and outputs of month end to understand the process.Take the inputs and identify the "supplier" of that information and when do they input that data into the process and what is their process time.You will then build up a clear picture of the month end process
Good luck
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08/23/2012 12:09 PM
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Oscar,
The first question I mighgt ask is why somebody wants you to map that particular process. A VSM is great, but not the only way to map a process. Depending on what somebody wants you to do, I might use a different mapping format.
Tom
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08/30/2012 01:05 PM
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Hi Oscar,
one way of seeing it would be to consider inputs of course and then identify processes that are used to produce the outputs (as there are for sure several paths/processes).
By experience, VSM works better when we identify linear paths (avoid complex diagrams).
You may have some "diversion" or "bypass" in your process streams, and the goal would be then to identify your "happy path" and potentially remove these "rerouting" as they may be source of wastes.
Hope this helps.
Good luck !
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08/30/2012 01:05 PM
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Thanks for your answers!
I have come to realize that the "typical" VSM drawing will not work and it looks like that a swim-lane type of approach will work better; but still not very successful with the brainstorming sessions as the finance team is not a believer in Lean
Rgds
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08/31/2012 10:06 AM
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I have done this process and of course we started with the Value stream. But after finishing project on second thought i might have done it differently.
Finance is a support fucntion, and rather look at processes they are very much interested in expressing their problems/issues.
The month end process has always have few usual supects as the pain points. Some of them are
1. receipt of closing informations from varous stake holders not arriving on time
2. No clear policy for carrying over and clean cut-off points for accounting
3. Lack of understanding of the process from different input providers
4. EPR related issues
So i would suggest
a. to start with a SIPOC, and the Customer being Finance and start mapping.
b. Elaborate them further with issues
c. catagorize them to broad buckets on Policies, cut-off points, ERP fixes etc...
d. Brainstorm for solutions
e. implement solutions
f. create process flow as part of SoP and document for further audits
Sorry for jumping in to a prescribing mode...but hope this helps...
Wish you good luck.
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08/31/2012 10:06 AM
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Oscar,
I just completed a month end close kaizen and we took > 1 full day out of the process and error proofed many items that had previously been manual. Each team member broke down their process steps and timing on post it notes. They were easy to move around, eliminate and modify during the brain storming sessions. At the end of the event, we taped them down and created the future state. It took them less than a month to fully implement.
The good news is that they now have the "fever" and are still looking for more ways to improve.
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08/31/2012 10:06 AM
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I am no finance guy, but here are my thoughts. If your team has limited experience with VSM and you have a lot of pathways, maybe map the ideal future state as a VSM (which should be simpler, more standardized, flowing without batching and waitimg, etc). Tthen go back and do the current state detailed maps for the individual pieces. This may enable you to better "see" the burst opportunities.
Focus your waste on idle and non-value added tasks, excess approvals, reports that are done / distributed manually, etc.
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08/31/2012 10:10 AM
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Hi Oscar,
Myself and my firm have completed numerous month end transformations (i.e. close in 2 days or less). Process mapping is good to communicate to the senior people of the process but when it's working with the front line, you need to show them how this lean effort is going to make life less stressful and improve their work quality and quality of life at work.
The key is the number of journal entries they are posting through to the GL and how they close the sub ledgers and then complete the reporting and analysis. I would recommend you actually do a job breakdown analysis to allow you to understand what can be moved around before month end (i.e. t minus 2).
Email me if you have more questions or need some help.
Regards,
Gerry Anderson
Finance Transformation Help
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08/31/2012 11:28 AM
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Hi Oscar,
Finance teams often don't believe in lean because they don't understand what it is and how it might be relevant to what they do. Unless you can overcome that then any VSM exercise would be pointless. I have done a lot of work with finance teams on lean, including on the monthend process, and it has made very significant improvements in both effectiveness and efficiency. I have written a few articles on the subject. You might find the one attached helpful to share with your finance team.
Regards
Peter
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09/04/2012 10:51 AM
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Perhaps you have your answer, but here are my thoughts.
I've been working almost exclusively as a Lean Six Sigma black belt with finance for over 4 years. I have helped with several projects that work on the close process. Sometimes small sub-processes and once the whole global process for multiple entities.
It is best to start with a good problem statement. The purpose of creating a VSM is likely to improve the process, so there should be some sense of the problem. (i.e. Close is not complete until day 7, which is 3 days longer than the goal of 4.)
When the problem is agreed upon, I suggest a very high level VSM that lays out how the various processes flow...close AP, close AR, close FA, book adjustments, close GL, consolidate, etc. Something generic like this should be what all entities do. You could then include a timeline that has ranges, averages, deadlines, etc. It's a bit messy, but remember that the goal is to create a picture of the process and the process is likely messy. (Another option that I've used successfully is to include a table below the timeline where different rows represent different organizations and include the times for each one. This effectively shows differences and encourages conversation between the different groups.)
The VSM should highlight specific areas in need of improvement - faster, less variability, etc. This can lead to smaller projects that are easier for people to handle without losing sight of the big picture for why it's important.
Not that I suggest it, but I did run a week-long kaizen workshop with over 20 participates to improve our global close from 9 days to 4. Our company was being acquired and had hard deadlines to meet in a very short period of time. We did a Post-It note exercise to layout out all the processes, show the dependencies, who did the work, how long it took, etc. At times we broke into 5 sub-teams to work various aspects. It was chaotic at times and I might have benefited from a megaphone and an air horn, but we got through it.
Long story short, your approach might depend on the reason and urgency for doing a VSM. I'm happy to provide help/advice if you want. Feel free to contact me.
john.sparks@experian.com
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09/04/2012 10:51 AM
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Hello,
we have redesigned the month-end closing process, the quarter-end and the year-end process. Here are our findings related to the new process: 1) finance wanted to get a shortern, less costly process. Closing is now completed on the 6 th business day across the whole group - consider that we hae 60 companies to close across 35 countries. 2) most of the closing work is not required to be done at the time of closing, but can and should be done during the month. 3) set or have the responsible senior executive to set a clear target what the new process should deliver: e.g. lead-time, capacity, costs, etc. 4) use a simple approach which captures the following dimensions of the process content: througput and value-adding time, costs, RASI, IT-system support, skills and knowledge measuring. For that, we have used MMM (see: hthttp://de.slideshare.net/...of...-management
).
happy process optimization.
cheers
Johann
Edited: 09/04/2012 at 10:53 AM by Lean Moderator
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