opex vsm training module 100711001122 phpapp02

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1 - May 21, 2010

www.Operationalwww.Operational--ExcellenceExcellence--Consulting.comConsulting.com

Operational Excellence – Value Stream Mapping (VSM)

Presented by Frank Adler, Ph.D.www.Operationalwww.Operational--ExcellenceExcellence--Consulting.comConsulting.com

Note: This VSM Training Course is based and supports the VSM Course from Rother, Mike and Shook, John - Learning to See - Value-Stream Mapping to create Value and eliminate Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)



2 - May 21, 2010


Section 1: The Five Lean Principle

Section 2: The Seven Wastes

Section 3: VSM Definition & Benefits

Section 4: VSM Development Process

• Define Product Family

• Establish the Team

• Document Current State

• Design Future State

• Create Implementation Plan

• Execute - Execute - Execute

Section 5: VSM Exercise

Section 6: Summary

Value Stream Mapping – Table of Content



3 - May 21, 2010


Value Stream Mapping – Lean Manufacturing

All Lean Manufacturing is really trying

to do is to get one process to make

only what the next process needs

when it needs it.

Lean Manufacturing links all processes

– from the final Customer back to raw

material – in a smooth flow without

detours that generates the shortest

Lead Time, highest Quality, and

lowest Cost.



4 - May 21, 2010


Value Stream Mapping – Lean Manufacturing

The only way to actually learn lean methods is to apply the techniques

yourself hands-on with a bit of coaching. The willingness to try, fail,

and learn simply goes with the territory when implementing changes

in long-established mass production practices.

Action may not always bring success, but there is no success without action. Benjamin Disraeli



5 - May 21, 2010


Value Stream Mapping – The 5 Lean Principles

Define ValueDefine ValueDefine ValueDefine Value - Specify value from the Customer

perspective.

Map Value StreamMap Value StreamMap Value StreamMap Value Stream - Identify the value stream for

each product or service and challenge all of the

non-value adding steps (wastes) currently necessary

to create and deliver this product or service. Add

nothing than value.

Create FlowCreate FlowCreate FlowCreate Flow - Make the product or service creation and delivery process flow

through the remaining value-added steps.

Establish PullEstablish PullEstablish PullEstablish Pull – Introduce pull between all process steps where continuous flow is

possible.

Pursuit PerfectionPursuit PerfectionPursuit PerfectionPursuit Perfection – Manage toward perfection so that the number of steps and the

amount of time and information needed to create and deliver this product or

service.



6 - May 21, 2010


Value Stream Mapping – The 7 Wastes

Waste elimination is one of the most effective ways to increase the profitability of

any business. Processes either add value or waste to the production of a good or

service. The seven wastes originated in Japan, where waste is known as “muda."

Value Stream Mapping focuses primarily on waste elimination due to inventory,

waiting, and overproduction.

Inventory

Extra ProcessingSteps

Waiting

Transportation

Defects

Motion

Overproduction

The 7 Wastes



7 - May 21, 2010


The 7 Wastes – Extra Processing Steps

Extra Processing Steps Extra Processing Steps Extra Processing Steps Extra Processing Steps

Many organizations use expensive high precision equipment where simpler tools

would be sufficient. This often results in poor plant layout because preceding or

subsequent operations are located far apart. In addition they encourage high

asset utilization (over-production with minimal changeovers) in order to recover

the high cost of this equipment.

Toyota is famous for their use of low-cost automation, combined with

immaculately maintained, often older machines. Investing in smaller, more

flexible equipment where possible; creating manufacturing cells; and combining

steps will greatly reduce the waste of inappropriate processing.



8 - May 21, 2010


The 7 Wastes – Waiting

WaitingWaitingWaitingWaiting

Typically more than 99% of a product's life in traditional batch-and-queue

manufacture will be spent waiting to be processed. Much of a product’s lead

time is tied up in waiting for the next operation; this is usually because material

flow is poor, production runs are too long, and distances between work centers

are too great.

Goldratt (Theory of Constraints) has stated many times that one hour lost in a

bottleneck process is one hour lost to the entire factory’s output, which can

never be recovered. Linking processes together so that one feeds directly into

the next can dramatically reduce waiting.



9 - May 21, 2010


The 7 Wastes – Transportation

TransportationTransportationTransportationTransportation

Transporting product between processes is a cost incursion which adds no

value to the product. Excessive movement and handling cause damage and

are an opportunity for quality to deteriorate. Material handlers must be used

to transport the materials, resulting in another organizational cost that adds

no Customer value.

Transportation can be difficult to reduce due to the perceived costs of

moving equipment and processes closer together. Furthermore, it is often

hard to determine which processes should be next to each other. Mapping

product flows can make this easier to visualize.



10 - May 21, 2010


The 7 Wastes – Defects

DefectsDefectsDefectsDefects

Having a direct impact to the bottom line, quality defects resulting in rework

or scrap are a tremendous cost to organizations. Associated costs include

quarantining inventory, re-inspecting, rescheduling, and capacity loss.

In many organizations the total cost of defects is often a significant

percentage of total manufacturing cost. Through employee involvement and

Continuous Process Improvement (CPI), there is a huge opportunity to

reduce defects at many facilities.



11 - May 21, 2010


The 7 Wastes – Motion

MotionMotionMotionMotion

This waste is related to ergonomics and is seen in all instances of bending,

stretching, walking, lifting, and reaching. These are also health and safety

issues, which in today’s litigious society are becoming more of a problem for

organizations. Jobs with excessive motion should be analyzed and redesigned

for improvement with the involvement of plant personnel.



12 - May 21, 2010


The 7 Wastes – Overproduction

OverproductionOverproductionOverproductionOverproduction

Simply put, overproduction is to manufacture an item before it is actually

required. Overproduction is highly costly to a manufacturing plant because it

prohibits the smooth flow of materials and actually degrades quality and

productivity. The Toyota Production System is also referred to as “Just in Time”

(JIT) because every item is made just as it is needed. Overproduction

manufacturing is referred to as “Just in Case.” This results in high storage costs

and makes it difficult to detect defects in a timely manner. The simple solution

to overproduction is turning off the tap; this requires a lot of courage because

the problems that overproduction is hiding will be revealed. The concept is to

schedule and produce only what can be immediately sold/shipped and improve

machine changeover/set-up capability.



13 - May 21, 2010


The 7 Wastes – Inventory

InventoryInventoryInventoryInventory

Work in Progress (WIP) is a direct result of overproduction and waiting. Excess

inventory tends to hide problems on the plant floor, which must be identified

and resolved in order to improve operating performance.

Excess inventory consumes productive floor space, delays the identification of

problems, and inhibits communication. By achieving a seamless flow between

work centers, many manufacturers have been able to improve Customer

service and slash inventories and their associated costs.



14 - May 21, 2010


The 7 Wastes – Summary

In the latest edition of the Lean Manufacturing

classic Lean Thinking, Underutilization of

Employees has been added as an eighth waste.

Organizations employ their staff for their

nimble fingers and strong muscles but forget

they come to work everyday with a free brain.

It is only by capitalizing on employees'

creativity that organizations can eliminate the

other seven wastes and continuously improve

their performance.

Many changes over recent years have driven organizations to become world

class organizations or Lean Enterprises. The first step in achieving that goal is to

identify and attack the seven wastes. As Toyota and other world-class

organizations have come to realize, Customers will pay for value added work,

but never for waste.



15 - May 21, 2010


Value Stream Mapping – Definition & Benefits

• Value stream mapping is a lean manufacturing technique used to analyze the flow of materials and information currently required to bring a product or service to a consumer.

• A sophisticated flow charting method that uses symbols, metrics, and arrows to help visualize processes and track performance. This method helps determine which steps add value and which do not.

• The Value Stream represents the actions taken to bring a product into existence, from the raw material stage to the finished good stage.

• The Value Stream Map is a pictorial representation of the flow of material and information as the product is being built.

• A pencil-and-paper tool used: a) to follow a product or information (or both) activity path from beginning to end and draw a visual representation of every process (value and non-value) in the material and information flows. b) then to design a future state map which has waste removed and creates more flow and c) to end up with a detailed implementation plan for the future state.



16 - May 21, 2010


Value Stream Mapping – Definition & Benefits

• It is a business-planning tool.

• It is a tool to manage the change process.

• It forms the basis of an implementation plan.

• It is a communication tool.

• It provides a common language to talk about processes.

• It shows the linkage between material flow and the information flow.

• It is a powerful tool in identifying waste, so it can be eliminated,

contributing to improved Customer satisfaction

• It helps us see and focus on flow with a vision of an ideal or improved state.

• Enabling broad participation in shaping the future

““““ValueValueValueValue----Stream Improvement is primarily a Management Responsibility.Stream Improvement is primarily a Management Responsibility.Stream Improvement is primarily a Management Responsibility.Stream Improvement is primarily a Management Responsibility.””””



17 - May 21, 2010


Value Stream Mapping – The Development Process

1. Define Product Family

2. Establish the Team

3. Document Current State

4. Design Future State

5. Create Implementation Plan

6. Execute - Execute - Execute



18 - May 21, 2010


1 2 3 4 5 6 7

A X X X X

B X X X X X

C X X X X

D X X X X

E X X X X X

F X X X X

Processing Steps & Equipment

Pro

du

cts

Value Stream Mapping – 1. Define Product Family

Customers care about their products, not every product made by an organization.

Therefore, Value Stream Mapping focuses on walking and drawing the processing

steps for on product family from product delivery to raw material shipping. A

product family is a group of products that pass through similar processing steps in

the process.

ProductProduct

Family 1Family 1

ProductProduct

Family 2Family 2



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20 - May 21, 2010


Value Stream Mapping – ACME Current State Example

3. Information Flow

4. Timeline

2. Material Flow

1. Customer

Requirements



21 - May 21, 2010


Value Stream Mapping – 3. Document Current State

3.1 Depict the Customer requirements !!!Depict the Customer requirements !!!Depict the Customer requirements !!!Depict the Customer requirements !!!

3.2 Follow the flow of the product from shipping to the raw

material stage

3.3 Draw the processing steps used to process, move and store

the product

3.4 Input the process and inventory data

3.5 Draw the information flow

3.6 Draw a time line depicting the lead and processing time



22 - May 21, 2010


Value Stream Mapping – 3. Document Current State

A few Value Stream Mapping RulesA few Value Stream Mapping RulesA few Value Stream Mapping RulesA few Value Stream Mapping Rules:

• Always collect current-state information while walking along

the actual pathways of material and information flows yourself.

• Begin with a quick walk along the entire door-to-door value

stream, ...

• Begin wit the shipping end and work upstream, ...

• Bring your stopwatch and do not rely on standard times or

information that you do not personally obtain. ...

• Map the whole value stream yourself, ...

• Always draw by hand in pencil, ...



23 - May 21, 2010


Value Stream Mapping – Process Icons



24 - May 21, 2010


Value Stream Mapping – Material Icons



25 - May 21, 2010


Value Stream Mapping – Information Icons



26 - May 21, 2010


Value Stream Mapping – Information Icons



27 - May 21, 2010


Value Stream Mapping – Other Icons



28 - May 21, 2010


Value Stream Mapping – Time Metrics Definitions

Working Time (WT)Working Time (WT)Working Time (WT)Working Time (WT)

• To calculate Working Time - deduct breaks, meetings, beginning of shift set-up, end of shift clean-up, planned maintenance, and other planned non-working time. Do NOT deduct unplanned downtime or changeovers.

Cycle Time (CT)Cycle Time (CT)Cycle Time (CT)Cycle Time (CT)

• The average time between two consecutive parts coming out of a process.

ValueValueValueValue----Add Time (VT)Add Time (VT)Add Time (VT)Add Time (VT)

• The average time between two consecutive parts coming out of a process that actually transform the part in a way that the Customer is willing to pay for.

Changeover Time (CO)Changeover Time (CO)Changeover Time (CO)Changeover Time (CO)

• The time it takes to changeover (to reset or change equipment) from one part to another (Change Over Matrix).

Queue Time (QT)Queue Time (QT)Queue Time (QT)Queue Time (QT)

• The time between sub-processes that the part gets shuffled around or sits around waiting for someone to work on it.



29 - May 21, 2010


Value Stream Mapping – Time Metrics Definitions

Up Time (UT)Up Time (UT)Up Time (UT)Up Time (UT)

• The ratio of the actual available production time of a process to the available

working time. Expressed as a percentage, uptime is calculated by dividing

actual available production time by the available working time.

Lead Time (LT)Lead Time (LT)Lead Time (LT)Lead Time (LT)

• The average time it takes for one part to go through the entire process - from

start to finish - including time waiting between sub-processes.

Processing (or Touch) Time (PT)Processing (or Touch) Time (PT)Processing (or Touch) Time (PT)Processing (or Touch) Time (PT)

• The time it takes to actually do the work from beginning to end, if one is

able to work on it uninterrupted.

Takt Time (TT)Takt Time (TT)Takt Time (TT)Takt Time (TT)

• Planning drumbeat. How often completed parts NEED to come out the end

of the pipe - as established by Customer demand.



30 - May 21, 2010


Value Stream Mapping – ACME Example Current State



31 - May 21, 2010


Value Stream Mapping – ACME Example Analysis I

Review the Current State of the ACME Example and document your findings.



32 - May 21, 2010


Value Stream Mapping – Exercise Current State

Exercise based on the “TWI Industries” exercise in Rother, Mike and Shook, John -

Learning to See - Value-Stream Mapping to create Value and eliminate

Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)

TWI Industries TWI Industries –– Case Study (Part 1)Case Study (Part 1)

60 Minutes

Develop a Current State Value Stream Map for TWI Industries.

Document your initial findings.



33 - May 21, 2010









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34 - May 21, 2010


Value Stream Mapping – 4. Design Future State

The goal of value-stream mapping is to highlight sources of waste and

eliminate them by building a chain of production where the individual

processes are linked to their customers either by continuous flow or by pull.

The first iteration of a future-sate map should take product designs, process

technology, and plant location as given and seek to remove as quickly as

possible all sources of waste not caused by these features.

“What can we do with what we have?”



35 - May 21, 2010


Value Stream Mapping – Key Guidelines & Concepts

4.1 Produce at your Takt Time

4.2 Develop Continuous Flow wherever possible

4.3 Use Supermarkets to control & schedule Production

4.4 Determine the Pacemaker Process

4.5 Level the Production Mix

4.6 Level the Production Volume (Paced Withdrawal)

4.7 Ability to make “Every Part Every Day”



36 - May 21, 2010


Value Stream Mapping – Withdrawal & Production Kanban

• KanbanKanbanKanbanKanban means “visible record”, "signboard“, or "billboard". Kanban is a signaling system to trigger action. Kanban uses cards, plastic markers, balls, an empty part transport trolley, or simply a floor location to trigger the movement, production, or supply of a unit in a factory. Kanban cards, describe the parts, supplier and quantity. When the bin is emptied, the Kanban is used to order more.

• “Withdrawal" kanbans are used to relocate items from one workplace to another.

• “Production" kanbans are used to replace the material when it is used or sold.

• “Signal” kanbans are used to initiate production of a predetermined batch size of a specific part.



37 - May 21, 2010


Value Stream Mapping – Supermarket

• Customer Process goes to the Supermarket and withdraws what it needs when it needs it. Supplying Process produces to replenish what was withdrawn.

• PurposePurposePurposePurpose: Controls production at supplying process without trying to schedule. Controls production between flows.

Supplying

Process

Customer

Process

"Production" Kanban "Withdrawal" Kanban

SUPERMARKET

Product ProductA B



38 - May 21, 2010


Value Stream Mapping – FIFO Lane

• In some cases a FIFO Lane between two decoupled processes can be used to substitute for a Supermarket. A FIFO Lane is like a chute that can hold only a certain amount of inventory, with the supplying process as the chute entrance and the customer process at the exit.

• If the FIFO Lane gets full, the supplying process must stop producing until the customer process has used up some of the inventory.

Supplying

Process

Customer

Process

SUPERMARKET

FIFO Lanemax. 20 pieces

A B

FULL ?FULL ?FULL ?FULL ?

Kanban

STOP !

STOP !

STOP !

STOP !



39 - May 21, 2010


Value Stream Mapping – Pacemaker Process

• Try to send the Customer schedule to only one production process, the pacemaker process.

• A process is called the pacemaker process, because it is used to control production and sets the pace for all upstream processes.

• Note, the material transfer from the pacemaker process downstream to finished goods need to occur as a flow.

Supplying

Process

Supplying

Process

Customer

Process

Customer

Process

Pull max. 20 pieces

DFIFO Lane CUSTOMERAmax. 50 pieces

FIFO LaneB C

SCHEDULE = Pacemaker ProcessSCHEDULE = Pacemaker ProcessSCHEDULE = Pacemaker ProcessSCHEDULE = Pacemaker Process

FLOWFLOWFLOWFLOW DownstreamUpstream



40 - May 21, 2010


Value Stream Mapping – Sequenced Pull

• Sometimes one can install a “Sequenced Pull” between 2 processes, instead of a

complete Supermarket or a FIFO Lane.

• Sequenced Pull means that the supplying process produces a predetermined quantity

of parts (e.g. one subassembly) directly to the customer process’ order. This works if

lead time in the supplying process is short enough for “production- or build-to-order”,

and if the customer process follows strict “ordering” rules.

• Sequenced Pull is sometimes called the “Golf Ball System” because colored balls or

disks (that roll nicely down a chute to the supplying process) are sometimes used to

provide production instruction.



41 - May 21, 2010


Value Stream Mapping – Leveling Production Mix

• Leveling the Product Mix means distributing the production of different products evenly

over a time period. For example, instead of assembling all the “Type A” products in the

morning and all the “Type B” products in the afternoon, leveling means alternating

repeatedly between smaller batches of “A” and “B”.

• The more you level the product mix at the pacemaker process, the more able you will be

to respond to different Customer requirements with a short lead time while holding little

finished-goods inventory. This also allows the upstream Supermarket to be smaller.

Inventory &Inventory &Inventory &Inventory &

Customer DissatisfactionCustomer DissatisfactionCustomer DissatisfactionCustomer Dissatisfaction

COSTCOSTCOSTCOST

Changeovers &Changeovers &Changeovers &Changeovers &

ProductivityProductivityProductivityProductivity

COSTCOSTCOSTCOST



42 - May 21, 2010


Value Stream Mapping – SMED

• SingleSingleSingleSingle----Minute Exchange of DieMinute Exchange of DieMinute Exchange of DieMinute Exchange of Die (SMEDSMEDSMEDSMED) provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. This rapid changeover is key to reducing production lot sizes and improving flow.

• The phrase "single minute" does not mean that all changeovers and startups should take only one minute, but that they should take less than 10 minutes (in other words, "single-digit minute").

• There are seven basic steps to reducing changeover using the SMED system:1. OBSERVE the current methodology (A)

2. Separate the INTERNAL and EXTERNAL activities (B). Internal activities are those that can only be performed when the process is stopped, while External activities can be done while the last batch is being produced, or once the next batch has started. For example, go and get the required tools for the job BEFORE the machine stops.

3. Convert (where possible) Internal activities into External ones (C) (pre-heating of tools is a good example of this).

4. Streamline the remaining internal activities, by simplifying them (D). Focus on fixings – For example, it is only the last turn of a bolt that tightens it - the rest is just movement (waste).

5. Streamline the External activities, so that they are of a similar scale to the Internal ones (D).

6. Document the new procedure, and actions that are yet to be completed.

7. Do it all again: For each iteration of the above process, a 45% improvement in set-up times should be expected, so it may take several iterations to cross the ten minute line.



43 - May 21, 2010


Value Stream Mapping – Takt Image & Pitch

• Takt Image is any sort of visual way to monitor process performance to takt time.

• For example we can use a hand-drawn chart, a digital display board, a material delivery trolley that comes around every multiple of takt time, or a signal given off by a machine when a product is completed on-time to takt time.

• One of the most common types of takt image is called Pitch. When used in the context of conveyance, pitch is also a calculated number. Typically used at the pacemaker process, pitch is calculated as takt time multiplied by the pack out quantity. In other words if the takt time is 3 minutes per piece and the pack out quantity is 10 pieces per container the pitch is 30 minutes per container.

– Takt time = 3 minutes / piece

– Pack-out quantity = 10 pieces / container

– Pitch = 10 pieces x 3 minutes / piece = 30 minutes

– Takt image = 30 minutes / container

– Every 30 minutes a material handler would arrive to remove the box and also replenish material.

• Pitch is extremely useful when managing large or bulky items that need to be removed from the line periodically. Pitch also functions as takt image because the filling and removing of a box every 30 minutes is a very visual way of letting you know if you are meeting takt.



44 - May 21, 2010


Value Stream Mapping – Level Production Volume

• A tool that some organizations use to help level both the mix and the volume of production is a load-leveling box.

• A load-leveling box has a column of Kanban slots for each pitch interval, and a row of Kanban slots for each product type. In this system Kanban indicate not only the quantity to be produced, but also how long it takes to produce that quantity (based on Takt Time).

• Kanban are placed (loaded) into the leveling box in the desired mix sequence by product type.

Supplying

Process

Customer

Process

Customer

Process

Cmax. 50 pieces

FIFO LaneBmax. 20 pieces

DFIFO Lane CUSTOMER

Schedule for Pacemaker ProcessSchedule for Pacemaker ProcessSchedule for Pacemaker ProcessSchedule for Pacemaker Process



45 - May 21, 2010


Value Stream Mapping – The 8 Basic Questions

1. What is the Takt Time ?

2. Will you build to a finished-goods supermarket from which the

Customer pulls, or directly to shipping ?

3. Where can you use continuous flow processing ?

4. Where will you need to use supermarket pull systems ?

5. At what single point in the production chain (the “pacemaker”

process) will you schedule production ?

6. How will you level the production mix ?

7. What increments of work will you consistently release ?

8. What process improvements will be necessary ?



46 - May 21, 2010


Value Stream Mapping – ACME Example Analysis II

Apply “The 8 Basic Questions” on the ACME Example and document your findings.



47 - May 21, 2010


Value Stream Mapping – ACME Example Future State



48 - May 21, 2010


Value Stream Mapping – Exercise Future State

Exercise based on the “TWI Industries” exercise in Rother, Mike and Shook, John -

Learning to See - Value-Stream Mapping to create Value and eliminate

Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 2009)

TWI Industries TWI Industries –– Case Study (Part 1)Case Study (Part 1)

90 Minutes

Develop a Future State Value Stream Map for TWI Industries.

Document your findings.



49 - May 21, 2010









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50 - May 21, 2010


Value Stream Mapping – Action Planning

Action planning is the process of planning what needs to be done, when it

needs to be done, by whom it needs to be done, and what resources or inputs

are needed to do it.

Most action plans consist of the following elements:

• a statement of what must be achieved what must be achieved what must be achieved what must be achieved (the outputs or result areas that come out of

• the strategic planning process);

• a spelling out of the steps that have to be followed the steps that have to be followed the steps that have to be followed the steps that have to be followed to reach this objective;

• some kind of time schedule for when each step must take place and how long it is

• likely to take (whenwhenwhenwhen);

• a clarification of who will be responsible for making sure that each step is

• successfully completed (whowhowhowho);

• a clarification of the inputs/resources clarification of the inputs/resources clarification of the inputs/resources clarification of the inputs/resources that are needed.



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Value Stream Mapping – Excellence in Execution

Gordon Eubanks - “Strategy gets you on the playing field, but execution pays

the bills.”

Larry Bossidy - “The trouble is there are too many companies that basically

believe in socialism. They give stock options to everybody, give pay increases

that are the same to everybody within the same salary scale. If you don't

differentiate, you can't possibly be an execution company! And if you don't

single out for reward the people who get things done for you, then you

won't keep the people who will ultimately run the company successfully.”

Geoffrey Moore - “A large number of execution problems are really direction

problems.”



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