Value Stream Map (VSM) Example for A Coffee Shop

great welcome back so in this video we're going to look at a value stream map again for our diamond dollars coffee shop and I'm going to present this value stream map in a little bit different way than I did the last one process is still the same but we're going to the order a little different you can do is value stream map for as many processes in the organization as you need okay think of it like this you can actually take the process piece of the sidewalk map and just unpack it because that's what you're doing with this value stream map so the first thing we're going to do is we're gonna look at that whole coffee making thing again okay all we're gonna do is draw the steps in the process first okay that's all we're gonna do so we got step 1 step 2 step 3 step 4 that's all I've done is I've drawn out the steps okay let's identify some steps in making coffee ok maybe the first step is roasting the beans ok all I've done is I've written roasting the beans right up here that's all I've done ok now we're gonna do grinding the beans in order to show that transition of grinding the beans we're gonna take this other marker and we're just gonna make an error and all I'm saying is we've taken the beans that we've roasted and we're moving it over the next step that's all that arrow means okay now we're gonna grind the beans ok once again we're gonna take my purple marker because after we grind the beans we're gonna brew that coffee okay and what do we do after it brew the coffee we give it to customer naw I'm just once again brew cocktail all it does make an arrow we're gonna do it on the next process box here okay okay that's all we've done give to customer just label that box done nothing else okay now we're gonna do after that is we're going to indicate a process metrics right below each step so the first one is P over T all P over T means is how long does it take you to do one iteration of whatever you're talking about okay so let's put PT beneath roasted beans PT beneath dried beans PT beneath brew coffee PT beneath give to customer okay so let me ask you how long does it take for you to roast one batch of beans okay let's say that it happens to take actually two hours to roast a batch of beans therefore my PT is two hours that's all I've done okay let's say to grind the beans it only takes 15 minutes okay it takes me 15 minutes to grind the beans my process time is 15 minutes and to brew the coffee let's say it takes five minutes okay and remember you can make this as elaborate as you want for brewing coffee like the brewing coffee could be like when you stick the espresso thing in the whatever that thing is that these spray hot all over the beans and then you pour the milk and you mix it all together that whole thing could be brew coffee brewing coffee I'm just trying to make this simple for purposes of illustration all right do you make this as complicated as you want give the customer sure give to customer let's say that also takes five minutes okay that's all I've done okay now we're gonna do volume reddit next we're gonna leave that blank for a moment okay okay just gonna leave that blank for now okay then what we're gonna do is we're going to write in the error rate write that in for each one okay why is there a rate important error rate let you know that when you how often you make mistakes in a process and again that's important in fact that's extremely important because when you make mistakes in a process you normally have to redo that entire process so you're better off doing it right the first time in fact mistakes usually cost more than if you just fix the error because you think about especially with a cup of coffee right let's say you make that cup of coffee incorrectly great congratulations you have wasted those roasted beans you have wasted of time grinding the beans you've wasted the time brewing the coffee customer is upset and you have to redo this whole thing so if you catch those errors that's important so let's say the roasting beans let's say I think I said 95 all right 95 percent of time we got that right last time so let's say that our roasting error rate is 5% okay now grinding beans that's a machine you grind it we don't really make mistakes there okay so let's get that as zero and the error rate may be let's say that we got a bunch of new baristas because we just opened and that error rate is gonna be about 25% okay or maybe our machines are bad who knows but the error rate is 25% and then giving to the customer maybe give the wrong the wrong customer you do have about 5% of them okay all I've done is write in the error rates now we're going to get to the little castle things okay okay line down line up line down line up line down and line down okay great I like to keep the math simple there are different ways you can do this but I like to keep it simple okay some people might take the roasting beans and say how long does it take to like if you roast a whole batch of beans though there's some fancy math to say exactly how much time is spent roasting for each each and that little amount of beans that go into each coffee so let's say every time you put the beans in the roaster that's enough beans for 100 cups of coffee they might say well you know we're gonna divide whatever let's say again this in this case this is two hours right so that's 120 minutes and let's say every time I roast beans for two hours at 120 minutes and that's enough for a hundred cups of coffee they'll say well actually it only takes one point I'm sorry one in the third minutes 120 divided by 100 one minute and a third or just over a minute to roast enough beans for one cup of coffee I mean technically that's true but if it takes two hours to roast the beans it doesn't really matter how long it takes to roast beans for an individual cup because the beans are not roasted for an individual cup they're roasted as that batch some people like to get fancy with the math like that I find it totally useless but you can do it if you want if that helps tell your story though let's keep the math symbol so I like to do everything in terms of how much of this war can get done in one hour okay to me I like to keep the maths so if I have down here get over here I'm gonna write one hour a value-added time and I see my volume is just gonna be a half okay because in one hour I've only roasted or done half of the work for roasting those beans okay I cannot complete a full iteration in an hour grinding beans it takes me 15 minutes to grind beans okay so one hour I'm gonna grind four batches of beans again you could say that the bean grinder can grind enough coffee for you know 15 cups and therefore it's about a minute you know four but again I find that not very helpful okay brewing the coffee okay in one hour I can brew 12 cups okay once again one hour for the customer one hour I can brew enough for with one hour I can find I can get 12 customers their coffee okay now let's say there's some waiting time that's what we're going to put on these things on top let's say those beans get roasted every night okay and then guess what happens at night after the beans are roasted they just sit there thank maybe they sit there for eight hours because it's an overnight job okay that's your that's your waiting time then grinding the beans let's say these beans get ground and then they just sit there before anybody does anything with them and that's a 30 minute thing let's say the coffee gets brewed and it takes about two minutes to get to the customer okay so the customers wait for two minutes after its brewed before we can actually give it to the customer so what we're going to do is we're going to add everything on the bottom here never on the top so value at a time is one two three four hours and non-value-added time is eight eight and a half eight hours 32 minutes okay so that tells me in this process I spend a lot more time waiting around than I do actually doing anything that is a value of value added to the customer okay now what you're gonna do here is you're gonna start with the customer and indicate that the customer places an order okay okay and that that's all that arrow means okay I placed the order in the store hopefully you can see that yeah so places the order in the store I've got that arrow down there okay all this process goes through and we're gonna do is going to do an arrow all the way back we're gonna say hands to customer okay maybe there's some supervising going on we've got the manager what's the manage you're going to do every time you see a thing that looks like a lightning bolt that into kids some form of checking up or communication so maybe they yell about roasting the beans okay if I drop the little glasses that means they're checking to make sure those beans have been ground okay they're probably gonna do a little visual check on the coffee and maybe they give it to the customer themselves handoff okay now what do you do with this value stream map okay you communicate this to maybe a venture capitalist or business owner you're trying to communicate that there's something that you need help with okay well let's think about what you might do first this is a tough one okay I'm gonna be honest this is a toughy where might you focus your efforts well maybe say I think this error rate of 25 percent is killing us because we brew the coffee incorrectly each time therefore all this other work is wasted so from you mr. or mrs. venture capitalist or bank loan or whatever I think I either need to buy a brewing machine that makes it easier to operate so our baristas don't make as many mistake too many mistakes maybe we need more money for training so our baristas don't make any mistakes we need to spend our money first here to try to get this error rate as close to zero as we can okay once you get that done you're looking you say well look at my error rate for I'm good with grinding beans we're flying there but my error rate for roasting beans is five percent error rate to the customers also five percent huh well you know what maybe mathematically it's not really possible to get those beans 100 percent roasted correctly because maybe comes in bad from the supplier who knows maybe it's just not possible for some reason but a bit with a little extra training we get that down to zero percent maybe need some money for that okay great now the next thing you look at what's the slowest thing going on in your process it's definitely this roasting beans - grinding beans right it takes two hours to roast those beans okay so if you've run out of beans you've got to wait a full two hours okay that could be a problem and even worse is you've got to be roasting those things all night and then they just sit there maybe that's not fresh so maybe you say you know what I need a second roaster okay so that in one hour so my PT goes down to one hour because I'm I got two machines operating simultaneously and I can get that volume to one and therefore maybe I can reduce this time to four hours because I'm also roasting beans during the day okay and maybe you just keep expanding here or maybe you say you know what I'm really not happy with the fact that the reinder is so slow I need some more money for another grinder right and so maybe you decide that you're going to get Oh three more grinders so the vine turns into twelve and this turns into five minutes now your process is starting to look balanced because every time as soon as you get that stuff out of the roaster all this stuff moves it relatively the same pace maybe from the grinding to the brewing you optimize this process to get this as close to zero as possible and you don't like that 2-minutes thing by the way because the coffee gets cold and you try to focus on getting this as close to zero as possible and then you go back again and look at your roasting so that's kind of how you would reason through this I hope this examples helpful feel like and make sure you give me a thumbs up that's like a like subscribe down below excuse me give me a thumbs up that's like a like comment below and make sure you subscribe awesome I'll see in the next video we're gonna look at a university cool

Channel: Dr. D University

Views: 6,524

Rating: 4.852941 out of 5

Keywords: business, plan, SIPOC, suppliers, supplier, input, inputs, output, outputs, process, processes, customer, customers, operation, operations, e-ship, entrepreneurship, enterpreneur, entrepreneurs, small, planning, lean, six, sigma, value, stream, map, VSM, coffee

Id: X48cnxN-OfU

Length: 16min 31sec (991 seconds)

Published: Mon Apr 13 2020