value stream management principles of lean. all rights reserved, juran institute, inc. (slide name...

Value Stream Management

Principles of Lean

All Rights Reserved, Juran Institute, Inc. (slide name here) 2 .PPT

Value Stream Management

Value Stream Management is NOT just Lean Manufacturing! Value Stream = the set of all actions required to bring a

product or service (or combination) through three critical business processes:

– Problem solving task—running from conception to commercialization of the product or service

– Information management task—forecasting, demand planning, order taking, master scheduling, etc. of the product or service

– Physical transformation—proceeding from materials or assemblies to final product

Value Stream Management creates a Lean Enterprise(adapted from Lean Thinking-Womack and Jones)


Key Principles of VSM Thinking

Specify value in the eyes of the customer. Identify the Value Stream for each product—this can be

goods, information, services, critical business process, etc. Make value flow without interruptions. Reduce defects in products and deficiencies in processes. Let customers pull value. Pursue perfection. Drive out variation (short and long term).

(adapted from Lean Thinking-Womack and Jones)


The VSM Mission

Value Stream Management Creates: The safest system The shortest possible lead times The optimum level of inventory The highest practical customer order service levels The highest possible quality (low defect rate) The lowest possible waste (low cost)

…throughout the entire supply chain

VSM is used to win in the marketplace

and drive business performance.

VSM is used to win in the marketplace

and drive business performance.


What Does This Mean for Companies?

Cutting inventories by 90% Improving on-time delivery to >98% Reducing lead time from months to days Providing more and more value to customers, and getting

paid for it Creating greater profitability and expanded customer

acceptance of products Protecting jobs and establishing a rewarding work

environment for employees


How Can Companies Do This?

Synchronize Processes– Internally – Externally– To the “beat” of the customer’s requirements

Drive Out Waste– Time– Material– Labor– Space– Motion

Reduce and Manage Variation Improve Safety


What Is Value?

VSM starts with defining value in terms of products and capabilities provided to the customer—at the right time and appropriate place.

Value is created by the customer This is why a producer exists


What is a Value Stream?

Inputs Modul

e

Inputs Modul

e

Supplier Module

Supplier Module

Customer ModuleCustomer Module

Process ModuleProcess Module

Outputs

Module

Outputs

Module


Defining Values of VSM

Value Added Activity: An activity that transforms or shapes material or information to meet customer requirements.

Non-value Added Activity: Those activities that utilize time or resources, but do not add value to the customer’s requirement (but maybe to meet company requirements).


The Eight Deadly Wastes (continued)

1. Overproduction—making or doing more than is required orearlier than needed.

2. Waiting—for information, materials, people, maintenance, etc. 3. Transport—moving people or goods around or between sites.4. Poor process design—too many/too few steps, non-

standardization, inspection rather than prevention, etc.5. Inventory—raw materials, work-in-progress, finished goods,

papers, electronic files, etc.6. Motion—inefficient layouts or poor ergonomics at work-

stations or in offices.7. Defects—errors, scrap, rework, non-conformance.8. Underutilized personnel, resources, and creativity—ideas

that are not listened to, skills that are not utilized.

adapted from Taiichi Ohno

value stream management principles of lean. all rights reserved, juran institute, inc. (slide name...

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