Using Value Stream Mapping to Redesign Engineering Project Work

Dirk Van Goubergen, Hendrik Van Landeghem

Department of Industrial Management
Ghent University
Ghent, B-9052 BELGIUM

Eileen Van Aken

Grado Department of Industrial and Systems Engineering
Virginia Polytechnic Institute and State University
Blacksburg, VA 24061, USA

Geert Letens
CCIS – Dept Technical Studies and Installations
Belgian Armed Forces
Vilvoorde B-1800, BELGIUM

Abstract
This paper describes the application of Value Stream Mapping to analyze and redesign a project-based engineering
process in the Technical Studies and Installation department in the Belgian Armed Forces. VSM provides a
framework to operationalize lean manufacturing concepts to reduce lead-time and improve workflow. This tool
was applied to redesign the department’s core engineering design process, which was part of a larger transformation
effort in the department. The contribution of this paper is to demonstrate how VSM and lean concepts can be applied
to a knowledge-based project work environment.

Keywords
Process reengineering, project management, government organization, military organization

1. Introduction
Organizations of many types are implementing lean manufacturing, or lean production, practices to respond to
competitive challenges. Examples of lean production and improved performance have been documented in the
automotive, aerospace, and consumer goods industries around the world [1,2]. Applications of lean production
techniques in other manufacturing industries [3], and even in service and administrative processes [4] are beginning
to be documented in the literature. A relatively recent tool to support implementation of a lean philosophy is Value
Stream Mapping (VSM) [5], used to define and analyze the current state for a product value stream and design a
future state focused on reducing waste, improving lead-time, and improving workflow. The use of VSM appears to
be increasing, particularly since the publication of Learning to See [5]. One of the unique characteristics of VSM in
comparison with other process analysis techniques is that one map depicts both material and information flow that
controls the material flow. The focus of VSM is on a product “value stream” (all actions required to transform raw
materials into a finished product) for a given “product family” -- products that follow the same overall production steps.
In applying VSM, waste is identified at a high level along the value stream in the form of all elements that prohibit or
hamper flow and in the form of inventory (raw materials, work-in-process (WIP) and finished goods). In future state
design, major issues that create waste in the process are addressed. The future state map forms the basis for the
implementation plan, including “kaizen bursts” for focused improvement initiatives (such as set-up reduction).

Guidance for applying VSM is available in several books (such as in [5], [6], and [7]) and examples have been
documented in the literature (e.g., see review by [8]). However, documented examples of VSM appear to be focused
on production, or manufacturing, processes. The need to improve workflow and reduce waste is relevant not just for
production processes, but also for service and supporting processes, including knowledge-based processes. Often, key
questions in examining these types of processes is: what is the value-added of these supporting processes to the
organization?; and should they remain internal or be outsourced? This paper describes the application of VSM to
project-based engineering work in the Technical Studies and Installation (TSI) Department in the Belgian Armed
Forces. As part of a larger transformation effort, TSI department leadership identified the need to redesign the core
engineering design process [9]. As part of this initiative, the existing process was redesigned with some initial positive
results. VSM was used in a second improvement cycle on this process to explore additional redesign opportunities and
set targets for future performance levels. Next, we provide background information about the TSI Department
including the overall transformation effort.

2. Background on the Department of Technical Studies and Installations (TSI)

As part of a Competence Center of the Army, the TSI Department is responsible for the design and installation of
Communication & Information Systems (CIS) in military vehicles. Two major types of projects are conducted:
reconfiguring CISs from old carriers for use on new carriers and integrating new CISs, such as radio-transmitters,
satellite communication systems and GPS, on existing carriers. A total of 74 military and civilian personnel work in
the Department. At the start of the transformation effort, there were 82 ongoing projects within the Department,
equivalent to an annual budget of approximately US$4 million. The Department was experiencing pressures to
change, driven from both external (outside the Department) and internal factors:
• The Armed Forces overall was restructuring, with a targeted 30% personnel reduction in supporting processes such
as the TSI Department. Thus, the existence of the Department within the Armed Forces (vs. being outsourced) was
being seriously questioned.
• Across CIS users, there was an increasing perception of poor service performance on some projects, specifically
due to excessive lead-times.
• Within the Department, there was evidence of poor morale and satisfaction with the working environment.

To address these challenges and improve performance systemically, the TSI Department applied an integrated
enterprise transformation methodology – this effort and more background about the TSI Department is described in [9].
As a result of this approach, one of the major improvement initiatives identified was the redesign (or reengineering) of
the engineering design process (referred to here as the project lifecycle process). Current project performance was
assessed using two measures: project lead-time and effort/lead-time (man-days spent working directly on projects as a
percentage of the total lead-time in days). Almost 40% of all projects completed during the last eight years had
excessive lead-times – between three and nine years – while 70% of the projects required less than 700 man-hours to be
completed, resulting in an average for effort/lead-time of 5%. There were few milestones and evaluation checkpoints in
the current state, making it difficult to understand the evolution of a project, leading to problems with knowledge
transfer given the long lead-times and personnel turnover. Projects were conducted using a sequential approach,
resulting in problems with communication and lack of documented decisions during hand-offs from one functional
group to another. There was a total lack of visibility regarding the current status of projects and no formal planning for
the future.

Based on this assessment, it was clear to TSI leadership that an incremental improvement approach would not lead to
the desired breakthrough in lead-time, thus, more significant changes were examined. Primarily, efforts were focused
on the redesign of the project lifecycle process, resulting in a structured Life Cycle Model (LCM), based on the ISO
15288 standard for systems engineering lifecycle processes, as described in more detail in [9]. In this “stage-gate”
system, project stages are defined very clearly, with formal outputs at each stage. The gates at the end of each
project phase allow the project manager to reach formal decisions on evaluated alternatives, check project goals and
define corrective actions at each phase as necessary, communicate relevant information on project evolution to
stakeholders, and integrate all remaining projects steps in a formal planning and control system that allows
prioritizing over all different projects. A key element of the LCM is the PAR (Project Analysis Report), the primary
output of the conceptual phase. Creating the PAR reduces the risk on budget and time for each project and includes an
assessment of the desired project portfolio for the department overall, in order to lead to the best strategy for in- or
outsourcing remaining project activities (i.e., within TSI or to industry). In the next section, we explain how VSM
allowed the department to assess the performance of this first major improvement cycle, which will be referred to as
the current state. Further, VSM was used to design the future state, including targets for lead-time, number of ongoing
projects, supermarket quantities, etc. Focused improvement initiatives necessary to improve flow were identified.
3. Using VSM in the TSI Department
The application of VSM in the context of a non-production environment had some interesting challenges. First, the
notion of material flow had to be redefined. In the case of TSI projects, a completed project was considered as the
product, meaning that in the first project phase (statement of work and project analysis / feasibility steps), the flow
of information needs to be monitored. Second, it was quite straightforward to define WIP between the process steps
of the LCM, by counting the number of projects waiting in between succeeding steps. But because there is still
waiting within the process step itself, it is also possible that multiple projects are being worked on in the same
timeframe. Therefore, we also had to define WIP within a process step, representing projects that had started a given
project step but not yet finished the step. Finally, with respect to the data box, the same basic philosophy as for a
VSM for a production process was followed; that is, beyond basic characteristics as lead-time and processing time,
all elements that influence the flow were included.

3.1 Current State

Resulting from the LCM effort, all design/installation CIS projects go through the same structured process steps, so
these were considered as the target product family for the VSM. The existing method for conducting the project
lifecycle process (i.e., sequential approach – albeit more structured due to LCM) is reflected in the current state map in
Figure 1. There are essentially two major flows. The first flow, represented in the upper part of Figure 1, goes from
receiving the project assignment, the statement of work, feasibility and project planning until the Project Officer at the
Army Staff makes a “go/no go” decision with regard to further design and development of the project. The
Engineering work group is primarily involved in this flow of information. In a “go” decision, the second flow which
involves both information and material, starts when an actual prototype is developed by one of the three Study work
groups. The Mechanical Prototyping work group develops the mechanical parts for the prototype installation, which
are then integrated into the prototypes by the concerned Study work group. The Engineering work group then checks
the prototypes to see if they meet all technical requirements, followed by a functional test by users. Finally a Technical
Definition File (TDF) is created, which contains all technical information about the configuration elements and their
installation; the TDF is the basis for the production and installation of all items on the targeted carriers of the project.
This last ‘production and installation’ step is outside the scope of the VSM.

The current state, as defined by the different steps of the LCM, is characterized by sequential project steps that are
conducted by functionally distinct work groups. There is also a clear ‘push’ principle, where once a step is finished the
project enters the waiting queue for the next step. The number of projects in WIP are the actual number of projects
when the current state VSM was made. The time data that is added to the VSM is based on average estimates by project
team leaders and were checked with available data on the ongoing projects. A significant amount of waiting is caused
by long delivery times of parts and by interaction with external parties (customer, external advisors, etc.). The ratio
between total lead-time and the processing time is 23 weeks/116 weeks, or about 20%. Comparing this with the
available historical data on project performance, the success of the first improvement cycle is clearly illustrated. At the
same time, analysis of the current state shows even more opportunities for improvement.

3.2 Future State

To improve material and information flow in a second improvement cycle, a concurrent team-based approach was
adopted. In the current state, project phases are conducted by functionally distinct work groups, with these
functional barriers between the different groups (e.g., Engineering, Study work groups, Mechanical prototyping,
etc.) hindering communication. In this concurrent approach, one project manager from the relevant Study work
group leads the project from start to finish while other team members are dedicated to the project team from the
different functional groups (Engineering, Mechanical prototyping, drawing bureau (CAD), and Installation work
groups). Project team members are involved from the beginning, participating in developing an overview of the
project that guides their specific tasks and also enables them to experience direct customer contact. A number of
benefits are associated with this redesigned process. First, development in early phases is improved by anticipating
potential problems. Second, hand-offs between project phases become smoother, with less specification required
because all team members are aware of the project context. Last but not least, some process steps can be performed in
parallel instead of sequentially -- e.g. drawing work can start much earlier when consensus is reached instead of at the
end of the prototyping phase; the same is true for design, testing and experimentation on critical installation elements.
As stated earlier, the future state VSM was used to define targets for critical measures of success such as lead-time and

Figure 1. Current State Value Stream Map

to determine the priorities for the next improvement cycle. First, the TAKT time was determined. An incoming
workload of fifteen projects per year, taking into account the available time that can be spent on these types of projects,
corresponds to a TAKT time of three weeks. The first phase, before the go/no-go decision, is performed by a cross-
functional team, which includes an end-user representative. Given the TAKT time, all steps in the first phase need to
be executed in three weeks. The go/no go decision is an external process and therefore cannot be integrated in the flow.
This can be considered as a decoupling point. The future state is depicted in Fig.2

Figure 2. Future State Value Stream Map

The future state represents a pull system between the steps in the second phase with supermarkets that contain a
maximum of three projects (equivalent to nine weeks of lead-time). Every three weeks a central planning cell
determines the priorities for which projects out of the supermarket need to be handled first. The following kaizen
bursts were identified as necessary to achieve the desired performance in the future state:
• Standardization of parts, including a requirement that 90% of the parts needed for prototyping should be available
in a local inventory. As a consequence only 10% need to be purchased.
• Simplification of the re-supply and purchase procedure using a signal kanban system and yearly supplier contracts.
• Reporting of external advice using email and a standard report layout; in the current state, this process can take up
to 2 months due to how these reports are sent through all hierarchical levels.
• Codification of parts to NATO stock numbers can be eliminated for some projects and for the remaining ones, the
number of parts that need to be codified can be reduced.

Additionally, the following actions needed to support the implementation of the future state are currently undertaken:
• Two additional engineers were recruited since the VSM showed that they were needed in the concurrent team-
based approach. All other personnel requirements for the future state are met or exceeded.
• Current WIP levels needed to be reduced. The current state already showed a reduction from 82 to 62 ongoing
projects. At the time of this writing in the transition to the future state, WIP has been reduced to 25 projects.

The ratio between total lead-time and the processing time as targeted in the future state VSM is 15 weeks/58 weeks or
about 26%. The primary improvement lies not within the reduction of labor hours but within the expected lead-time
reduction (58 week vs. 116 weeks). In addition, assuming that the number of labor hours will remain the same, the
average performance for the metric effort/lead-time will improve dramatically, from 20% (23/116) to 40% (23/58).
Additional results and benefits of the redesigned process, along with other initiatives in the transformation effort, are
described in [9]. Once the future state is fully implemented, the processing time of the different steps will be analyzed
to reduce non-value-added activities at a more detailed level.

4. Conclusions
This paper has demonstrated how Value Stream Mapping (VSM) can be applied to knowledge-based project work –
in this case, to an engineering design process. While some adjustments were made to conceptualizing the elements
of VSMs, the tool proved to be quite applicable to this type of work. Future research on VSM should explore key
factors in applying this tool such as increased variety of contexts in the underlying process targeted, approaches to
applying VSM, and results achieved.

Acknowledgements
The authors would like to acknowledge LtCol IMM Duhamel for sponsoring the overall project and the contributions
of Steven Van Steenkiste for creating the value stream maps used in this paper.

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