Page 321 - The Handbook for Quality Management a Complete Guide to Operational Excellence

308 C o n t i n u o u s I m p r o v e m e n t A n a l y z e S t a g e 309

Many companies use quality function deployment (QFD), or simpler
matrix diagrams, as a useful tool for defining this voice, and ensuring that
the value stream is designed to meet these needs.
Once value has been determined for a given product or service, its
value stream can be identified. The value stream represents the steps
taken to deliv er the specific product or service. (In this way it is different
from a value chain, which is usually defined over broad functional areas
rather than a specific product.) Value streams may be generated a number
of ways. A process map is a use ful tool for displaying the value streams,
particularly when movement into functional departments is displayed
via swim lanes. Once the processes are mapped out, each process step will
fall into one of the following categories:

1. Steps that create value for the customer.
2. Steps that create no customer value, but are required by one or
more required activities (including design, order processing, pro-
duction, and delivery). These are termed type 1 muda (or more
commonly business value added activities).
3. Steps that create no customer value. These are termed type 2 muda,
and represent the proverbial low hanging fruit. They should and
can be eliminated immediately.

Cycle times should also be included to assist in the analysis. Measure
the “hands-on” time to complete the process step, which is best estimated
using a control chart for task time. Also of interest is the “downtime” for
the activity: the amount of time items sit in queue.

• If we have a dedicated process line, so that input to each process
step comes only from the steps immediately preceding it in this
value stream analysis, then calculate the number of items in
queue, as determined through control charting.
• If the process step receives input from multiple sources, and is
multitasking so that item must wait until the resource is again
available, then measure the time that the item or customer waits in
queue for this process step. This is best determined using a control
chart for queue time.
After summing the average times, we can calculate the average pro-
cess lead time and velocity. Lead time is the time needed to process all the
work in progress, before new orders can be started. Velocity, sometimes
known as flow, refers to the speed of process delivery. Speed provides flex-
ibility and improved responsiveness to customer demands. By reducing
process lead times, we can quickly respond to new orders or changes
required by the customer.
Lead time is reduced, and velocity increased, when work in progress is
reduced. (Work in progress, aka work in process, or more simply WIP, refers

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