Do Two Things before starting your Transformation Project
Considering a business transformation project? Before you invest in an expensive, technology-led transformation effort, consider first the low cost, high-return approach of using lean to transform your enterprise.
Not quite sure where to begin? Here are two suggestions:
Define your company’s value streams
Standardize work to deliver value to your customers consistently
Defining Your Company’s Value Stream
In its simplest form, a value stream is the sum of all the actions required to transform a customer request into a good or service. Companies can have one single value stream, or depending on their product or service offerings, they can have many.
For companies that make products, value streams are clearly identifiable: they represent the process steps and machinery on the factory floor where material is transformed into a finished good. For example, for a company that manufactures hammers, some of the steps in the value stream would consist of:
Designing the hammer
Gathering and prepping the raw materials
Forming the head
Heat treating the head
Forming the handle
Assembling the hammer
For service companies, the value stream is a little less obvious. For example, a bank’s value stream for providing a loan product to a customer would consist of:
In both examples, the value stream represents a series of high level steps that, when put together, result in a product or service your customer will pay for. When uncertain whether to include a process in your value stream, ask yourself this question: would my customer get value out of this step? Often asking this question is enough to determine whether it should be omitted.
Once you have defined your company’s value stream you can begin standardizing how you consistently deliver value. In this regard, creating standard work is often a two-step process. First model out how work is currently being done. Next, eliminate wherever possible non-value added steps such as:
Finding and eliminating these 7 types of waste alone can tremendously improve operations by helping you move faster, reduce errors, and free up working capital. However, when combined with standard work, your improvements can scale.
After undertaking these two low cost initiatives your enterprise will be on firm footing to begin a technology-based transformation project.
For example, by knowing what your value streams are, and defining the standard way to deliver value, you will eliminate much of the upfront costs associated with the blueprinting phase of installing or configuring a software solution.
At OpEx Digital Consulting, we believe in the disruptive power of technology to help companies deliver customer value. But we also firmly believe that enterprise transformation can be achieved by changing how employees work together.