Most companies are traditionally organized in a structure similar to the way in which family trees are done.
Functional organizations have the advantage of being very clear about the hierarchical differences in positions and levels, but the major disadvantage is that communication is poor and horizontal decision-making is lacking.
This type of structure worked relatively well when only a few products and services were performed at high volume levels. Now that the market has changed to demand a variety of products in small quantities quickly, it is almost impossible to use this same type of structure. Communication is a key element of a Lean Six Sigma Management Company in order to achieve agility and versatility. Unfortunately, the traditional functional structure does not allow and effective flow of information to the entire staff. While each department adds value, the company bureaucracy increases the complexity of the work.
Value Streams are business units composed of some multidisciplinary teams of people directly responsible for creating value for the customer from the time the order is placed until the cash payment for the order is received. A Value Stream flowchart tracks the processes from beginning to end to meet the needs of customers for a range of services or products without a complex bureaucracy.
Each Value Stream is composed of a family of products that share processing by similar operations during the production process. Organizing a company by Value Streams is returning to the basics of when the company started by having a team of people from different areas completely focused on delivering customer value and taking responsibility for the whole process, analyzing information, and making a decision. What about your organization? Is it set up correctly? If nor, are changes necessary?
One of the biggest causes of failure when developing strategies and practicing Lean Six Sigma is the fact that many companies develop projects and implement tools in all places at the same time, without establishing an accurate approach to the needs.
Value Stream Maps provide detailed knowledge of any process in a company; I.e including service, manufacturing, and the entire supply chain. The Value Stream Map provides an understanding of the flow of a process and helps in the detection of non-value-added activities.
Value stream process
Establishes the strategy to be developed in the process before executing changes. Views the process at multiple levels. Views the flow and sources of waste provides a common language for process analysis provides a model for creating flow and implementing Lean Six Sigma concepts and techniques. Detect bottlenecks. Detects areas of opportunity.
Elements of a Value Stream Map
At the top of the map you will find the flow of information moving from the right to the left connecting the customer requirements in terms of quantity and how often they order products and services. In the middle, you can see the steps of the process to produce a product or service connected with a push arrow and inventories between every step.
Finally in the bottom is the value-added time required by every step and the non-value added represented by the inventory or in case of service, it will be a queue.
Types of maps
Current State Map
The current state map is a reference document to determine activities that do not add value in the process and document the current situation of the value chain.
Develop a Current Value Stream Map
1.- Define the scope of the process by selecting any internal process that is generating the main problem of the company.
2.- Define product or service family by grouping products or services with similar steps or equipment.
3.- Develop the current value stream map to find the bottleneck of the system and recognize all forms of waste within the process.
4.- Develop the future value stream map where you can establish the potential solution and expected results. This map represents your tactical plan to execute your strategy.
Future Value Stream Map
The future value map presents the best possible solution and the most important projects to be developed in order to achieve the desired results of the strategic plan. It is important that the top managers understand the value stream map so they can realize the level of the impact of all the projects and improvements to be made. It is recommended that even a company, business unit, or plant develop a Current and Future Value Stream Map at least twice a year, along with a set of improvement events to be developed as part of the tactical plan.
The most important point is to understand is the amount of improvement in terms of delivery time, quality improvement, inventory reduction, and competitive advantage that the company is gaining among others. Amazing productivity improvement can be achieved by doing the Value Stream Map process carefully.