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Lean Enterprise Institute Publishes 2nd Edition of Seeing the Whole Value Stream with New Examples of Lean Supply Chain Analysis

Cambridge, MA, Dec. 1, 2011 – The Lean Enterprise Institute (LEI), a nonprofit research, education, publishing, and conference company with a mission to advance lean thinking around the world, today announced publication of the second edition of its groundbreaking workbook Seeing the Whole Value Stream by lean management thought leaders James Womack and Daniel Jones.

The workbook contains a completely new section with five essays on how companies are analyzing and improving lengthy supply chains by using extended value-stream mapping to collaborate with their suppliers and customers.

The essays explain:

  • How to spread value-stream thinking from manufacturers to final customers through a car dealer’s service department.  
  • How Tesco is applying extended value-stream thinking to retail.
  • How Acme Alliance, a manufacturing job shop, used value-stream mapping collaboratively with suppliers and customers.
  • How to add realistic costs for connecting and managing activities along extended supply chains to understand the total cost of ownership.
  • How a global manufacturer can analyze all the value streams in a complex supply-chain network.

“You get the supply system you deserve,” said Jones. “Taking responsibility for redesigning your supply systems may be one of the biggest business opportunities right now”.

China Price Problems

When the first edition appeared in 2002, companies were rushing to de-integrate supply chains by outsourcing and offshoring as they searched the globe for suppliers who would quote dramatically lower piece-part prices.

“As a result, the velocity of the typical supply chain crossing multiple companies and countries has been falling because suppliers are now spread out everywhere,” said Womack. “It takes literally months to do minutes of value-adding work.

Today, currencies have shifted, labor costs in many low-wage countries have risen steadily, and suppliers in high-wage countries have gone out of business. And in the aftermath of the March 2011 earthquake and tsunami in Japan that disrupted global supply chains for half a year, companies are rethinking how they source, transport, and schedule needed parts across extended value streams.

“What we describe in the book is how to do a detailed analysis of an extended value stream,” Womack explained. “We identify every step in the complex value-creating process. And then we ask some simple questions about every step. Is it capable? Is it available? Is it flexible? Is it adequate in terms of capacity? And then we ask how are the steps connected.”

Lean Thinking for Supply Chains

To answer these questions, the first edition introduced extended value-stream mapping, a breakthrough tool for understanding and improving extended supply streams stretching across companies and countries. To clearly illustrate the mapping process in action, the book uses a simple example based on an actual product, a windshield wiper assembly, as it moves through eight separate facilities and four companies in two countries.

The mapping methodology takes managers step-by-step through an improvement process that converts the traditional value stream of isolated operations into an ideal future-state value stream in which value flows from raw materials to customer in just 6% of the time previously needed. The dramatically improved value stream also eliminates all the transport links, inventories, and handoffs, which are the key drivers of hidden connectivity costs.

“There is a real need now for suppliers and customers — whether it’s across corporate boundaries or within global enterprises that have lots of subsidiaries and departments —to jointly understand the total flow of value; to actually see the value stream that they share,” Womack said.

“UK retailer Tesco was the first to use Toyota’s Parts Distribution System to create its rapid replenishment system, which helped them grow to the third largest retailer in the world, and that is now even being followed by the mighty WalMart,” said Jones.

The text in the 108-page second edition is supported by multiple diagrams, charts, and mapping icons for extended value streams. The main sections of the book are:

  • Foreword to the Expanded Second Edition (by LEI CEO John Shook)
  • Introduction: Changing Your Focal Plane
  • Getting Started
  • The Current-State Map
  • What Makes an Extended Value Stream Lean
  • Future States 1 and 2
  • The Ideal State
  • New Perspectives on Extended Value Streams

Seeing the Whole Value Stream

About the Authors

Management expert James P. Womack, Ph.D., is the founder and senior advisor to the Lean Enterprise Institute, Inc., (LEI) a nonprofit research, education, publishing, and conference company that he began in August, 1997, to advance lean thinking around the world.

Daniel T. Jones is a management thought leader, an advisor on applying lean thinking, and founding chairman of the Lean Enterprise Academy (LEA) in the UK, which is dedicated to pushing forward the frontiers of lean and helping others with its implementation.

This Workbook is for:

  • Senior managers, purchasing managers, sales managers trying to change the discussion with customers from price to value, lean implementation leaders, logistics managers, supply-chain managers.
  • Suppliers to manufacturing and service companies pursuing lean transformations.
  • Companies that are ready to spread lean transformations beyond the four walls of their facilities to suppliers and customers.

Lean Community Resources

Join LEI’s community of Lean Thinkers to receive newsletters with lean management resources. You also get access to case studies, lean leadership interviews, webinars, and insights from LEI CEO John Shook, who helped Toyota transfer its lean manufacturing and management systems to the U.S., and LEI Founder Jim Womack, who led the MIT research team that coined the term “lean production.”

What is Lean?

The terms lean manufacturing, lean production, or lean management refer to a complete business system for organizing and managing product development, operations, suppliers, customer relations, and the overall enterprise that requires less capital, material, space, time, or human effort to produce products and services with fewer defects to precise customer desires, compared with traditional modern management.

Lean Enterprise Institute

Lean Enterprise Institute, Inc., was founded in 1997 by management expert James P. Womack, Ph.D., as a nonprofit research, education, publishing, and conference company with a mission to advance lean thinking around the world. We teach courses, hold management seminars, write and publish books and workbooks, and organize public and private conferences. We use the surplus revenues from these activities to conduct research projects and support other lean initiatives such as the Lean Education Academic Network, the Lean Global Network and the Healthcare Value Network. Visit LEI at https://www.lean.org for more information.