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Wednesday, February 1, 2012

Seeing the Whole Value Stream Expanded Second Edition

What a difference a decade makes. It has been nearly a decade since Daniel Jones and Jim Womack wrote Seeing the Whole in which they expand on Learning to See. They created a tool to allow change-agent managers to tackle higher, more extended value streams across multiple plants and across multiple companies. Now the two have combined to make a very necessary update to Seeing the Whole Value Stream.

When the first edition of Seeing the Whole was published the world was in a mad rush to outsource and offshore in pursuit of suppliers with drastically lower piece prices. Today the situation is very different; currencies have shifted, labor costs in many low-wage countries have risen, and the potential for squeezing further price reductions from suppliers is largely exhausted. Seeing the Whole Value Stream answers this by providing a proven method for understanding and improving the value-creating process that suppliers share with customers.

The workbook goes step-by-step through an improvement process that converts the traditional supply chain of isolated, compartmentalized operations into an ideal future-state value stream in which value flows from raw materials to customer in a fraction of the time previously needed.

About 80-85% of the book remains largely unchanged from the 1st edition but the new material that is added provides examples in other sectors and answers questions about how to understand supply chain costs more accurately. The additions come in the form of 5 essays added at the end of the workbook in combination with additional contributors. The first essay extends the value stream of the wiper blade factory used in the original workbook to cover a service business with distributions centers. Next is Tesco’s candy bar value stream and Acme Alliance’s turfmower value stream which provide insight into a retail chains. Another essay looks at adding realistic costing to value streams to more accurately understand total cost by looking at the situation of a US supplier versus a Chinese supplier. The final essay covers mapping a global supply chain and understanding how to analyze whole system.

These additions demonstrate a commitment by LEI to continuous learning and improvement. They weren’t omissions from the first edition but rather reflection from a decade of massively complex value streams that come from the endless search for lower cost suppliers. I found the sections on total cost and mapping the global supply chain particularly valuable as they relate directly to the business I manage. Depending on your experience and current situation you may find other section more valuable.

I have learned from experience that you (your business) is only as good as your last supplier. Therefore it is critical to optimize the entire value stream. I recommend you start with your own house and for that I would use Learning to See. But when you are ready to review your extended value stream I recommend you get Seeing the Whole Value Stream to guide your improvement.

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