POINT OF VIEW

Daniel Markovitz

the COVID-19 pandemic will AT SOME POINT, be behind us, whether that’s due to a vaccine, a two-minute test, or herd immunity. But if you want to thrive in the POST-COVID world, you’ve got to start working on operational improvements now. After all, if you’re walking to the starting line while your competitors are already settled into the blocks, you’ll never catch up.

Value-stream Mapping is a tool that can help you become faster and more nimble — both now, and in World 2.0. Value-stream maps (VSMS) show both the material and the information flow in any kind of end-to-end process, such as ‘order to cash’, or ‘new product to introduction’. By revealing the handoffs that take place along the way, the delays, and the defects within and between processes, VSMS serve as an X-ray into the otherwise invisible workings of your operations, enabling you to address long-hidden problems that make an organization slow and unresponsive.

Two of my clients — a mid-sized manufacturer of girl’s dresses, and a small producer of camping accessories — have taken advantage of the Covid-19-induced business slowdown to map out their key processes. Their maps revealed numerous steps with long lead times, poor information flow, and high error rates — all clear opportunities for improvement that had heretofore been hidden. Both companies are already seeing benefits in the form of lower costs and shorter lead times.

Following are three examples of how VSMS have helped these companies see into their processes more clearly and become more efficient.

The dress maker designs dresses in the SAMPLE DEVELOPMENT.

U.S. and uses contract factories in Asia for manufacturing. Design and development is an iterative process that broadly works as indicated in Figure One.

Depending on the complexity of the item or the idiosyncrasies of the fabrics, there might be a third or fourth round of samples. Importantly, each shipment was adding two-to-four days of lead time: The actual transit time, as well as the time spent waiting for Fedex to both pick up and deliver the package. In total, the back-and-forth shipping of samples could add weeks to the product development timeline.

When the VSM made this non-value-added wait time shockingly clear, the leadership team decided to integrate video into the process to eliminate shipping altogether. Now

when a sample is complete, the design and development teams review it with the factory by video conference, and the factory can immediately begin work on the next round. This not only cuts weeks out of the process, it increases clarity and reduces communication errors. Better yet, the president of the company estimates that they will save several hundred thousand dollars in shipping charges alone over the course of a year.

Value Stream Mapping revealed SELLING AND MERCHANDISING. an additional drag on this company: the sales process. As is common practice, the sales team would take dress samples on the road to visit accounts. Flying around the country is both costly and time consuming, but it’s the way business has always been done, and until recently it has seldom been questioned.

COVID-19 travel restrictions made these customer visits impossible. Consequently, like most companies, this firm began making customer presentations online, through video. But they made an important change to the sales process: Rather than having the salespeople show the line, the merchandising and design team created a standardized presentation for each customer. The salespeople still served as the voice of the customer, maintained the relationship with the accounts, set up the meetings, and managed the orders, but it was the designers who merchandised the line for the accounts.

The VSM highlighted another obvious inefficiency in the old process: The designers would explain the line to the sales team, and then they had to relay the design inspiration and vision to the customer. In essence, it was a ‘game of telephone’, with predictable results. The designers’ overall vision wasn’t communicated clearly through the intermediary of the sales team. Even more problematic, when faced with any buyer skepticism, the salespeople would suggest bringing back older styles, which compromised the design consistency of the overall line. Design may not be important when your business is industrial equipment, but it’s everything in fashion.

The VSM helped this company identify — and separate — the different types of information flows that were needed for success. The direct line from designer to customer has increased customer understanding and appreciation of the brand. It has also improved the designers’ morale and redirected the sales team’s efforts in a more productive way.

The camping goods manufacPICKING, PACKING, AND SHIPPING. turer I worked with used a VSM to attack a different problem: Its inability to meet the desired shorter shipping window of its biggest customer, Amazon. Amazon ordered once per week, on Mondays, and in the past, it allowed this company up to four days to deliver its order. But now Amazon was demanding that orders be received within three days, or the company would face a penalty charge. With the current process, there was no way to meet this new condition.

Figure Two shows a simplified version of the VSM for processing Amazon’s order (or any order that arrives via electronic data interchange). The map made several problems immediately visible:

1. Re-sorting and reprinting the order created unnecessary errors.

2. There was a long delay between receipt of the order and approval to build, because the Director of Operations was in a regular Monday morning meeting for three hours.

3. The three-day lead time to build products killed any chance of meeting Amazon’s requirements.

Of course, when everyone looked at the VSM together — both literally and metaphorically from the same side of the table — the problems were obvious, as were the solutions.

The discussions that arose out of the mapping process revealed that the picking team didn’t need the order to be resorted and reprinted. The Director of Operations pushed his weekly meeting back by one hour so that he could approve the build plan as soon as it was ready. And the company scheduled small batches of manufacturing every weekday

(instead of one large batch of production on Wednesdays), so that they almost always had stock for the Amazon order. Now the company ships Amazon’s order on the same day, or at worst, the following day.

Key VSM Terms

Value Stream Mapping is blissfully light on jargon. You don’t need to be an expert in statistical analysis to evaluate the quality and efficiency of the process you’re mapping. The three key terms are:

Lead time is the time from when work is • LEAD TIME (L/T): handed to one person until the time it’s handed off to the next person. Lead time includes all the periods of inactivity, including machine downtime, changeovers, waiting for a batch process (like Fedex pickup or a database update), interruptions, etc.

Sometimes called ‘touch time,’ pro• PROCESS TIME (P/T): cess time is the time it would take to complete the task if the person faced no delays — no interruptions, no computer crashes, no searching for parts, no waiting for information, etc.

Equivalent to • PERCENT COMPLETE AND ACCURATE (%C&A):

‘first-pass yield’ in a manufacturing environment, this is a measurement of the quality of the work done at each step in a service setting. %C&A is evaluated by the downstream person, not by the person doing the work. In an office/admin/service environment, directional

correctness is more important than statistical precision: It doesn’t really matter whether the mortgage application is correct 80 per cent of the time or 85 per cent of the time — either way, we know there’s room for improvement.

Best Practices

Mapping a value stream is as much art as skill. Nevertheless, there are several best practices to keep in mind.

• Mapping is a participatory exercise requiring involvement with both front line workers and executives. Front line workers are needed because they’re the experts — they know how the process actually runs. Executives are needed because any change will require their approval, and it’s important that they understand what the mapping team has learned.

• Walk through the value stream to see how the work actually flows through the company. You want to map the reality, not what’s supposed to happen or what you think is happening.

• Don’t judge! The VSM is designed to show the messy reality of work as it is currently being done. Don’t criticize people if work isn’t being done ‘right.’

• When evaluating the VSM, look for the following signs of improvement opportunities:

- Large discrepancies between process time and

lead time;

- Low % complete and accurate (i.e., high error rate); - Dead-end or disconnected information flows; and - Inventory buildups between steps.

Mapping a value stream for your organization can be labourious and time-consuming. It often takes several days (and several passes) to create an accurate current-state map, and it takes additional time to devise improvements so that the value stream will flow faster and with fewer errors.

The global pandemic presents a tremendous opportunity for improvement for organizations of all types. COVID-19 has involuntarily forced massive change upon everyone. Workers have lost all the props and crutches — their workstations, in-baskets, pencil sharpeners, coffee buddies, pet peeves, and their cannot-live-withouts — that anchored them to the old way of working. This seismic shift means that people can no longer say, ‘But we’ve always done it this way. I can’t do without that step.’ Without these anchors, resistance to change is significantly lower. There is nothing to hold on to, because the old way of working no longer exists.

Amidst all the uncertainty, one thing is clear: Thriving in the POST-COVID world will require organizations to be more nimble, and to execute more quickly, with fewer errors. The pandemic has changed our way of working dramatically, and perhaps permanently. But that also means it can serve as an accelerant to change, and a golden opportunity to move forward.

There is nothing to hold on to, because the old way of working no longer exists.

Daniel Markovitz is a consultant and author of Building the Fit Organization: Six Core Principles for Making Your Company Stronger, Faster, and More Competitive (Mcgraw-hill Education). Based in San Francisco, his clients have included Intel, Clif Bar & Company, Microsoft, and Stanford Law School. He blogs at markovitzconsulting.com.