Lean Leadership Via Value Stream Mapping

Let the system take you to your destination

Nicholas Loyd

October 8, 2019

Without soil, water, and sunlight, a large, strong oak tree won’t grow. The same concept applies when building lean processes for a small to medium-sized manufacturer. While it’s critical to get every employee on board with lean practices, upper management must lead the way to ensure successful outcomes. This is especially the case with value stream mapping, a critical component in running a lean, efficient manufacturing operation.

The key to successful value stream mapping is remembering that customers only care about the value of the final product, not the manufacturing and logistical effort it took to produce the outcome. Value stream mapping’s purpose is to eliminate waste in production workflows and processes that do not add value. Upper management plays a key role in identifying and eliminating these nonvalue-added steps, or wastes, from product supply origin to product delivery. Value stream mapping is also known as value stream management, which means management must play a key role in ensuring its success.

Leadership engagement is required to identify key value streams, such as:
• Purchasing to accounts payable
• Raw material inventory to finished goods
• Customer order to invoice
• Human resource management
• Engineering and quality processes

In essence, value stream mapping is the process of making manufacturers look at their businesses the way their customers see them. This requires vision, and vision can’t be outsourced. It requires leadership to support all functions of the organization working together toward a successful customer outcome, rather than operating in silos.

Getting to the root of production problems with value stream mapping

Why is value stream mapping so important? As a certified trainer at Alabama Technology Network, part of the MEP National Network, I’ve spent more than 20 years answering this question for small to medium-sized manufacturers.

What you do not want to do is wait until you have a dissatisfied customer to begin the value stream mapping process. A couple of years ago, I worked with a medical device manufacturer that was unhappy because the product was consistently shipping late. Assembly was consistently behind because they were frequently waiting on missing components from the molding department.

After learning to see the process from a value stream perspective, the vice president of operations went to molding to investigate and discovered the press was running another part, instead of the component that was needed to avoid late delivery.

The molding manager’s response was, “We’ve got two more days on this current production run, then we’re going to run the part that assembly needs.”

The molding department was operating in its own production silo. They were focused on measuring the efficiency of their equipment, so they did not want to shut it down to change the run to produce the over-deadline part. Molding took this position because they didn’t want their accounting department to nail them on inefficient earned hours, which could have negatively impacted their department’s performance for the month. Unfortunately, it is very common to see misguided upper-level metrics drive such behavior at the process level.

Value stream management made these misaligned metrics more obvious to the vice president. The company was in danger of losing a valued customer because the final product wasn’t being delivered on time. Did the client care that the molding department was trying to increase efficiency? Absolutely not. There’s no clearer indicator that a company needs value stream mapping than an unhappy customer. If a metric that senior management communicates as important drives behavior that compromises performance to the customer, it is a bad metric.

Value stream mapping can provide relief from production woes like these, as long as senior management is ready to lead the way toward a full lean transformation. Leadership development is required to gain the skills and vision needed to support this transformation. This begins with training via hands-on leadership, education, and development (LEAD), including:
• Daily visual process management systems
• PDCA (plan-do-check-act) problem-solving mindsets
• Value stream strategy deployment
• Leadership, coaching, and skills development
• Understanding ourselves and our team members

This LEAD training method uses five modules to help management and employees work as a value stream team with aligned metrics and goals. Think of each of these modules as rungs on the “lean transformation ladder.”

LEAD Module 1: Assess and develop

LEAD training begins with assessing how leadership manages, and determining the specific levels in the organization where processes are managed. To understand management style, you have to look at personality types, the emotional intelligence of the leader, and the concepts of influence and power. This involves answering questions such as: “What drives people?” and “How do we coach and develop skills in our employees?”

This training module includes components such as:
Management theory overview: The evolution of management theory and how to avoid the “eight deadly wastes” in management processes (nonvalue-adding processes)

Understanding people: Exercises designed to help leaders take a look at themselves and others using personality profiles and management style assessments

Make it real (class time/homework): Leaders learn how to create a personal development plan

LEAD Module 2: Master process and time management

This module dives into one of the toughest workplace challenges for senior management: bandwidth. These teaching tools help leaders learn how to create leader standard work to divide and conquer time management.

These training components include:
Eisenhower matrix: Based on an “urgent vs. importance” matrix, this is a proven process to help senior management learn how to root out less important tasks and prioritize more effectively

Personal kanban: Uses a systematic approach to identify priority tasks and processes that deliver more value to the customer

Daily management system components: Manager or leader’s standard work

Visual scoreboard to:
—Identify customers who directly benefit from each process
—Assess process input standard conditions
—Identify key performance indicators for inputs and outputs
—Develop visual process management methods
—Provide daily accountability processes
—Practice leadership discipline to monitor and audit performance and improvements

Make it real: Creating daily visual management scoreboards for managing departmental performance. This helps companies continuously determine if they are winning or not.

LEAD Module 3: Problem solving to close the gaps

Where are the gaps in the production line? What is missing that could be delivering value to the customer? Where do these processes and people overlap? Management in this module learns to identify these critical gaps with hands-on techniques to break down larger processes into bite-sized tasks.

These training components include:
Kaizen kata: Identifying gaps between standard and actual situations, and introducing the kaizen kata process

PDCA problem solving (eight steps):
—Clarify and describe the problem
—Break down and analyze the problem
—Set targets
—Root cause determination
—Develop countermeasure
—Implement countermeasure
—Monitor and check results
—Standardize and learn

Make it real: PDCA problem-solving tool applied to real company issues

LEAD Module 4: Define leadership

What’s the difference between managing and leading? According to novelist Mark W. Boyer, “If you are not taking the time to set your own goals, chances are pretty high someone else is doing it for you. So don’t be surprised someday when you end up someplace you never hoped to be.”

It’s difficult to lead when management isn’t on the same page. This training module can help avoid leadership snafus like the scenario we described earlier where department priorities were out of alignment with goals for delivering customer value.

These training components include:
Leadership:
—Management vs. leadership
—Motivational theory
—Managing a multigenerational workforce
—Conflict management and managing for consensus

Skills development:
—Job instruction training–TWI’s four-step method of training for job skills development
—Giving good feedback

Coaching
—The coaching kata
Kata in practice

Make it real: Coaching kata with problem solving

LEAD Module 5: Break value into brass tactics

At this stage in the value stream mapping journey, senior managers have learned to move beyond trying to physically fix all the problems at their facility and are now focused on developing their employees to solve their own production line issues. This training module takes a strategic-thinking approach to deploying vision and business targets to all levels of the organization.

These training components include:
Value stream strategy
—Developing value stream thinking
—Defining strategy deployment

Value stream strategy deployment process
—Mission statement and corporate vision
—Define strategic business goals
—Objectives and targets/actions and methods
—Visual management boards at all levels
—Layered audits and review process

Make it real: Plan steps for value stream strategy deployment 

Value stream mapping the way to customer satisfaction

Value stream mapping engages all the key people in every organizational function that touches the customer experience: from the time the customer places an order until they receive the final product. All of the functions at a company must align around the same goals and metrics so they don’t conflict with one another, as in the molding example described above.

Value stream mapping doesn’t have to be complicated, but it does take leaders with the vision to ask important questions, such as:
• If our customer sees our company one way, why don’t we think about ourselves that way?
• What are the value-draining issues in each step of the customer journey?
• How do we define our company’s “future state” or our vision of where we should be going?

True value stream mapping leadership is like GPS mapping. When you put in an address, you’re relying on the system to navigate all the sudden stops and hairpin turns. If the entire system is working properly, it will deliver a clear path to your destination. A leader has the vision to say, “OK, this is where we’re going. I’m giving you the tools to figure out how to get us there.”

To learn more about leadership training for value stream mapping, connect with the experts at your local MEP Center.

About The Author

Nicholas Loyd’s picture

Nicholas Loyd

As a certified trainer for the MEP National Network and MIT’s Lean Advancement Initiative, and as an avid learner of the Toyota Way, Nicholas Loyd of Alabama Technology Network has facilitated hundreds of lean implementation events in various industries over the past 20 years. Loyd's expertise includes lean leadership, value stream strategy deployment, and people development.