Thursday, October 13, 2005

Value Stream Management, Perfection

The fifth and final step in developing a lean system or agency is the pursuit of perfection. Most of the inefficiencies in our system are the cumulative effect of years of making habits out of responses. In a system or agency that has followed the four preceding steps, it is likely that over time, persistent new forms of waste will inevitably develop. The result would likely be a magnificent, transformative improvement eroded over time.

The alternative to this is to continuously address waste through a permanent team. Value Stream Management was pioneered in Japan and two Japanese words are used to describe change in this context. Kairetsu refers to radical change and the expected result of a VSM transformation. Kaizen refers to incremental change. Kaizen teams are a continuous presence bringing representatives from all along the value stream seeking waste, either waste that was not recognized during Kairetsu or new waste that finds its way into the system later. The lean agency commits itself to a permanent war with waste.

The result, in industry, has been a massive reduction in cost at the outset, but also small, incremental reductions in cost forever after. When we talk about cost reductions within this system, the assumption is a reduction in quality. Remember that part of this process is to have the client define quality. Eliminating waste improves quality while reducing costs.

Wednesday, October 12, 2005

Value Stream Management, Pull Value

Traditional models of enterprise are based on production. The producer is at the center of process which also includes vendors and buyers. From the producer to the buyer, we can think of this as a process of pushing goods and services. The firm designs, generates, markets and sells its wares to an end user. The communication between producers and end users consists primarily of the producer convincing the customer that what is offered is valuable and the feedback from a potential customer who chooses to believe and buy or go elsewhere.

I'll argue that most of California's system operates on the push model. The seminal event in the availability of a service or support comes when an agency creates a service design and presents that to the Regional Center for vendorization. The Regional Center may then offer that service, as designed, to a client. Although some agencies (such as ¡Arriba!) submit minimal service designs with the intent that the actual service provided will be designed by the client, the system model is clearly designed according to the old industrial pattern.

In a lean system, this model reverses. The analysis, process and activity are all designed around the idea of pull. In other words, the end user defines the value. Instead of a series of suppliers beginning with miners and farmers and ending with a consumer, we look to a series of customers leading from the consumer back through the value stream. The macro process would look like this, there is a meeting at which the client describes his or her situation and what they want. The professionals attending that meeting would then be responsible for providing the support indicated to the client which they would seek from either their superior or an outside agency. They are now the customer pulling value from up stream. It's like The Lanterman Act only for real.