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Starting Points for Different Value Streams

by Daniel T. Jones
July 16, 2013

Starting Points for Different Value Streams

by Daniel T. Jones
July 16, 2013 | Comments (3)

We are shaped by our experiences. This is particularly true in practicing Lean, which is learned by doing it. We also want to directly apply what we have learned to every new situation we encounter. However, this is not always successful. People and organizations are not convinced by examples from other industries; we need to intervene in different ways with different types of value streams.

I have been fortunate to work with and observe many experiments with pioneers in different industries as Jim Womack and I planted the seeds of lean thinking over the last two decades. This taught me to be humble in approaching a new industry and to spend time to really understand the nature of the value streams we are dealing with. On the one hand it means uncovering the engrained mental models that close their minds to Lean. On the other it means looking for the key bottlenecks that impede flow throughout the rest of the value stream.

Unless these systemic obstacles are revealed and addressed, little progress will be made. Furthermore, if this progress does not translate into increased sales, freed-up cash, lower unit costs, and/or reduced capital expenditure, interest from top management wanes very quickly. Reflecting on what has helped managers finally "get it" and start to make real progress improving their value streams, here is my summary of the key starting points in different industries. Please add more insights of your own.

Automotive and other assembly industries: Here the starting point is clearly creating standard work and improving the capability of each process. Then you can go on to link steps to create continuous flow, pull between separate activities and level the work. See Creating Continuous FlowCreating Level Pulland the Art of Lean website.

Process industries such as food and chemicals: The key here is challenging batch thinking by showing how putting the few products that account for the bulk of the work on a fixed schedule (patterned production) eliminates the chaos caused by changing the plan several times a day. This stability creates the conditions for ongoing learning and continuous improvement, to reduce batch sizes, eliminate inventories and produce in line with demand. See Breaking Through to Flow and Lean RFS: Putting the Pieces Together.

Retail and distribution in any sector: Here the key is to uncover the chaos and hidden costs (in inventories and capacity) caused by the order amplification that is passed upstream and to demonstrate the power of rapid replenishment to improve the ability of the system to supply the complete basket of products required by the end customer. See Seeing the Whole Value Stream and Building a Lean Fulfillment System.

Service and repair of products and services like telecoms: The key here is to turn unpredictable work into predictable work (by asking the customer or getting feedback from the product in use) so that the resulting work can be planned and executed in the promised time. See Creating Lean Dealers.

Healthcare: The key here is to make "ready to go" patients visible so they can be discharged on time and free up beds needed by patients coming into the hospital. Then you can make all the other work visible, match capacity with demand, trigger actions to move patients to the next step of their journey, and synchronize support activities with demand. See Making Hospitals Work.

Construction and other project work like IT: The key here is for the client and the design team to spend enough time together to clearly specify the work up front. This in turn minimizes the number of changes so the fabrication and erection can be planned and executed as smoothly and quickly as possible with minimum rework. See Rethinking Construction.

Software development: The starting point here is also to work with users to specify the requirements up front and then to break the work into small increments of time, to align the work steps with a rapid review and testing cycle and to respond and adjust quickly to the resulting feedback. See Run Grow Transform and The Lean Startup.

Financial services and most administration work: The starting point here is to eliminate the root causes of unnecessary demand created by the broken process before using this problem solving experience to simplify and stabilize each process by separating simple tasks from complex tasks, eliminating handoffs and completing today's work today. See Sense and Respond.

Public service delivery by central and local government: The key here is to identify the citizen groups that need help (such as the long term unemployed) and then to coordinate and align the delivery of the different services they need from each of the agencies involved.

Remember, these are just starting points. Once things start moving you will find you need many of the other insights and actions as well, but probably not in the same sequence. Sometimes it is necessary to start with the beginning of the value stream with (created or unpredictable) demand, sometimes at the end (with testing or discharge), and sometimes in the middle with the value stream itself. While particular industries are characterized by their core value streams, every organization is actually a collection of many different value streams. It is important to also think about all the support or enabling value streams necessary for the organization to accomplish its purpose.

But it is also worth remembering that the real value of leaning our existing value streams is what it tells us about how they could be improved next time around and the capabilities we will need to do so. Now we can see the potential leap we could make in designing the next generation products, services, processes, tooling, systems, supply chains, distribution channels and business models to stay ahead of the competition and create more value for tomorrow's customers.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
Keywords:  leadership
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3 Comments | Post a Comment
G. Pike July 17, 2013
Would you be able to take a stab at including the Publishing busines (books and magazines) in your list. Starting points for learning lean for current challenges can be hard to come by. Thanks for putting this list togehter.

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Aiponas July 18, 2013
I think most of companies willing to transform into LEAN need to start from this article and focus.

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Allan Arias December 18, 2013

Excellent information you shared here!!!



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