Improve Your Bottom (Line). Take the Stairs.

BY: DAVE NELSON

We have all heard the advice to take the stairs to get extra steps in throughout the day. This effort, although small, can increase your well-being, get your heart pumping, and help you lose some weight. Losing weight and improving your overall well-being can be a tough journey. Taking the stairs is an easy way to start. Improving your company’s or your department’s bottom line is also a challenging journey. So once again I suggest take the stairs.

The stairs I am talking about refers to Value Stream Mapping (VSM). Value Stream Mapping is the “steps” leading into the “House of Lean.”

What is Value Stream Mapping?

Value Stream Mapping is a powerful, Lean tool that enables you to visualize, analyze and improve all the steps in a product delivery process. VSM engages the team that is involved with certain processes within the organization. For example, who interacts and works together to get a new client order to the manufacturing floor?

VSM Steps Simplified:

• The first step in a VSM engages that team to create a visual map identifying all the CURRENT STEPS for that activity. This map can help identify waste such as delays, restrictions, inefficiencies and excess inventories, making opportunities for improvements visual, readily apparent and able to be discussed by everyone. 
• The second step of a VSM is to incorporate these ideas to create a visual map of the FUTURE STATE. This identifies on how that value steam should operate, giving the organization a working plan to achieve lean efficiency. 
• The final step of a VSM is to create an action plan to implement changes. Prioritize the projects that will move your organization from the current state to the future state.   

Like taking the stairs instead of the elevator at work, this extra VSM work adds up and can uncover some significant opportunities for improving your bottom line. 

EXAMPLE: A manufacturer who produces expensive testing equipment implements a VSM on their invoicing process. Over recent years, this company had grown significantly. They went from shipping 1-2 machines per month to shipping 10-12 per month. While working on the current state, the team learned that the invoicing for each machine was triggered once they received the sign off from the team that certifies each machine. This certification team would visually mark each machine they certified, which then triggered shipping to send them out.

The VSM identified that the calibration team waited until the end of the month to submit all their certifications (which triggered invoicing). This was sufficient when the company was doing 1-2 machines per month but was problematic now that they were producing more than 10. This impacted cash flow by millions of dollars. The future state put in place changes that greatly streamlined the process.

Value Stream Mapping can be an effective tool in optimizing your manufacturing processes and business. I challenge you to take the VSM stairs. This little bit of effort can improve your bottom (line).  If you need assistance The Center can help. For more information about The Center’s Lean services or to speak with a Lean expert, click here or contact us at 888.414.6682.
 

MEET OUR EXPERT: Dave Nelson, Senior Business Solutions Manager
Dave Nelson is a Senior Business Solutions Manager with the Michigan Manufacturing Technology Center. Joining the The Center in 2013, Dave works directly with manufacturers in Wayne and Monroe counties. He is a seasoned professional with expertise at identifying/opening new market opportunities and increasing market penetration in existing markets. Dave also has extensive experience in generating/growing new business and selling intangible services.

Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.