value stream mapping for administrative functions

Value Stream Mapping for Administrative Functions

November 29, 20121

Pat JohnstonBrenda SchultzDavid Peterson

Ariens VisionAriens VisionAriens VisionAriens Vision

Passionate People…Astounded Customers!

2

Customers!

Ariens Core ValuesAriens Core ValuesAriens Core ValuesAriens Core Values

Be Honest

Be Fair

Keep Our Commitments

3

Keep Our Commitments

Respect the Individual

Encourage Intellectual Curiosity

Process

15Principles

of the

ARIENSManagement

System

4

TEC

39 10

Culture

People

I. Culture

• Principle 1 – Core Values

• Principle 2 – Long-Term

15Principles

of the

ARIENSManagement

System

5

TEC

39 10

• Principle 3 – Leaders

• Principle 4 – Technology

II. People

• Principle 5 – Development

• Principle 6 – Learn

15Principles

of the

ARIENSManagement

System

6

TEC

39 10

• Principle 6 – Learn

• Principle 7 – Quality

III. Process

• Principle 8 – Flow

• Principle 9 – Pull

• Principle 10 – Level Load

15Principles

of the

ARIENSManagement

System

7

TEC

39 10

• Principle 10 – Level Load

• Principle 11 – Standard Work

III. Process

• Principle 12 – Visual

• Principle 13 – Supply Chain

• Principle 14 – Just Get Dirty

15Principles

of the

ARIENSManagement

System

8

TEC

39 10

• Principle 14 – Just Get Dirty

• Principle 15 – Think

Why Map?

David Peterson

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Value = Any activity that changes the physical characteristics of material to meet customer demand.

Value Stream = The movement of material between value adding processes.

Flow = Reduces cost, decreases lead time, improves

Five Principles of Lean

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Flow = Reduces cost, decreases lead time, improves quality.

Pull= Produce per customer demand.

Perfection = Strive for perfection to drive continuous improvement.

Manufacturing Focus

Betty’sPete’s

1500 lb

coils

500 lb

Box

3 mo.

ForecastDaily OrdersMRP

Production Control

Weekly Schedule

Daily Ship Schedule

Weekly FAX

Home

Center

11,400 Flat

3,500 phillips

14,900 / mo.

Box = 20

11

10 days

1.5 sec 40 sec 71 sec 54 sec 59 sec

24.1 days 5.8 days 4.3 days 7 days 7 days

Production Lead Time

58.2 days

Value Added Time

225.5 sec.

4,400 flat

800 phillips

SHIPPING

Staging

AssemblyMark

1.5 sec CT

90 min c/o

80% U/T

2 shifts

Press

Material

Stores

Area

Coils

10 days

Handles

6 days

10,000 flat

8,000 phillips

3,200 flat

1,100 phillips

2,200 flat

1,000 phillips

1,200 flat

4,000 phillips

111

Sub Assy 2Sub Assy 1

1

II IIII

40 sec CT

5 min c/o

100% U/T

2 shifts

71 sec CT

5 min c/o

100% U/T

2 shifts

54 sec CT

10 min c/o

90% U/T

2 shifts

59 sec CT

5 min c/o

100% U/T

2 shifts

“Seeing” means knowing – Where you are today.

“Seeing” means understanding – Why you got there.

Effective Management Tool

“Seeing” means visualizing – How to get where you need to be.

Variable MethodsNot aligned

Intangible Deliverables

DecisionsAnalyses

Strategies or Tactics

Home

Center

11,400 Flat

3,500 phillips

14,900 / mo.

Box = 20

Press

Material

I

Sub Assy 1

1I

Challenges for Admin:

Variable MaterialsInconsistentUncontrolled

Removed from work area

Not alignedVariable

Overlapping

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1.5 sec CT

90 min c/o

80% U/T

2 shifts

Material

Stores

Area

Coils

10 days

Handles

6 days

40 sec CT

5 min c/o

100% U/T

2 shifts

Three Types of Maps

Value Stream Map

High-level view

Connects suppliers to customers

Useful for activity planning

Process Map

Detailed look at one process

Captures methods and materials

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Consumption Map

High-level view

Shows how customers interact with processes

Focuses on delivery

Captures methods and materials

Focuses on tasks, sequences, specific resources

Common Traits

Customer Focus

Define the customers

Specific Area Focus

What is the problem or issue we need to solve?What is the scope of my project?

What things can and cannot be changed?

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Cross-Functional Team

Stakeholders in the processBalance people doing the work, customers, managers

Familiar with work and work space

Define the customersUnderstand value the customers get from the process

Understand what the customer does not need

Consumption Map

Customer Steps

Product Research

Company Research

Phone Company

Ask Questions

Give Address

Receive Product

Literature

60 mins 30 mins 15 mins 10 mins 1 mins 7200 mins

1616

Total Customer Time: 7316 mins

What’s the value? At best, 101 minutes.

Consumption Map

Internal Provider Steps

Answer Phone

Review

Answer Questions

Take Address

Collect Marketing Lit

Send Lit Package

1 mins 1 mins 10 mins 10 mins2 mins

1717

Review Product

Literature

8 mins

Total Provider Time: 32 mins10 mins

At best, value added: 12 minutes

Consumption Map

Product Research

Company Research

Phone Company

Ask Questions

Give Address

Receive Product

Literature

60 mins 30 mins 15 mins 10 mins 1 mins 7200 mins

Answer Phone

Answer Questions

Take Address

Collect Marketing

Send Lit Package

18

1 mins Review Product

Literature

10 mins

1 mins

Marketing Lit

10 mins

Package

10 mins

Operations Map

Info,

FrequencyMRP

Ariens Company

Schedule

Frequency Customer

Data Box

Supplier

Process 1

Data Box

Relevant Data

Info,

Frequency

Relevant Data

1919

Time

Process Time (sec)

Time Time Time Time

Lead Time

days

Value Added Time

sec.

I

Process Time (sec)

1

Process 1

Process Time (sec)Process Time (sec)

1

Process 2

1

Process 3

1

Process 4

I I

Data BoxData Box Data Box

Data Box

I

Operations Map

MRP

Ariens Company

Schedule

USPTOMarketing

Data Box

Potential Trademarks

Status, email

3mos.

Application, Fee

Delivery Method

Frequency

Specimen of Use

List of Goods

First Use Date

20

1 day

Process Time (sec)

1-2 days 2-3 days 1-2 days 7 days

Lead Time

days

Value Added Time

sec.

I

Process Time (sec)

1

Search

Process Time (sec)Process Time (sec)

4

Decision

4

Approval

1

Application

I I

Data BoxData Box Data Box

IList of

names

Mark

Product

Analysis

Avail.

3600

Mark

Product

Market

Top two

marks

7200

Mark

Design

Products

4800

Design

12

Data Box

Mark

Design

Products

3600

19200

File Transfer

1x each mark

Municipal Cash Flow (Simplified)

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23


24


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Kaizen Process

Customer Focus

Define the customers

Document Current Conditions

What is the problem or issue we need to solve?What is the scope of my project?

What things can and cannot be changed?

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Cross-Functional Team

Stakeholders in the processBalance people doing the work, customers, managers

Familiar with work and work space

Define the customersUnderstand value the customers get from the process

Understand what the customer does not need

Kaizen Process

Document Current Conditions – Change Case

Why are doing this? How will it help?Who are my customers? What do they value?

What are our risks? What mistakes cannot be made?

How do we measure success? How do we collect it?

What is the ideal condition?

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Kaizen Process

Document Current Conditions – Map the Process

Map the process, starting at the customer.Collect data and record in data boxes for each process.

Go to gemba; walk the process to verify process steps.

Correct the map.

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Kaizen Process

Identify and Eliminate Waste

Ask why five times.Define what is required to support the process.

Identify barriers to flow.

Identify sources of quality problems.

Draw the future state map that eliminates the waste.

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Kaizen Process

Make Big Changes

Identify the changes required to achieve the future state.

Prioritize the changes for effectiveness.

Create a plan to implement the changes.

Use 3P and Pugh Analyses to narrow solutions.

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Follow up on the plan.

Kaizen Process

Verify the Results

Visually track the measures identified in the change case.

Adjust as necessary.

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Kaizen Process

What does this look like?

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Kaizen Process


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Kaizen Process


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Purchase Order to Payment

Pat Johnston

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Only Eight Processes

Quote PartSet up PartSelect Supplier

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Select SupplierCreate Purchase OrderSet up Replenishment ForecastPart InspectionReceipt of Part into InventorySupplier Payment


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Receiving Data:

78,802 receipts against 3,944 P.O.s

6,588 parts

418 different vendors

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418 different vendors


Accounts Payable Data:

220,897 lines vouchered

105,676 vouchered manually in AP

1,645 errors with 3-way match

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1,645 errors with 3-way match1,431 price errors55 quantity errors73 surcharge errors86 other errors

Takt time: 64 seconds.


Problem Solving = 28% of AP time

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What to do?

Reduce the errors AP was dealing with.

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Accounts Payable

Brenda Schultz

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Accounts Payable

Change Case : Why do you want to do this and how will it help?

1) Streamline process

2) Reduce overtime/temp. employee

3) Automate future process

Value Statement : Who is the customer and what is the value the customer expects?

1) Vendors/Employees (Exp. reports) - accurate and timely payment based on agreed upon terms

2) A/P - quality information on a timely basis

Key Requirements : What is the risk and what are the mistakes that cannot be made?

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Key Requirements : What is the risk and what are the mistakes that cannot be made?

1) Interrupted material flow2) Lost documents

3) Payment errors

Metrics : What are the measurements for success and failure and how are they collected?

1) First pass yield

2) Number of manually handled invoices

3) Number of days to process invoices

What is the ideal condition?

1) Pay vendor after collecting $ from customer

2) Electronic receipt and payment of invoices


Problem Solving = 28% of AP time

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Accounts Payable

How many steps does it take to pay an invoice?

57 Steps


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Accounts PayableEight Classes of Waste

1 Waste of inventory: Packing sheets

Checks and envelopes

Postage

2 Waste of transportation: Walking to receiving, mailroom, and computer room

Travel to Post Office and Plant 3

Temp. employee walking to A/P

3 Waste of processing: Multiple checks and balances

Printing, stuffing and mailing checks

Filing, scanning, alphabetizing

Manual 3 way match

Void checks, deleted and changed checks

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4 Waste of waiting: Scanner speed

Waiting for packing sheets, invoices, checks, etc…

Waiting for mail and Plant 3 documents

Waiting for return phone calls and reports

5 Waste of motion: Unnecessary keystrokes

Walking to get information (Receiving, mailroom, computer room)

6 Waste of over-production: Print checks, then void and wire

Feeder checks at beginninbg of check run

7 Waste of a defect: Voided checks, deleted checks and changes

Missing invoices and packing sheets

Keying errors

Negative checks

8 Waste of a person: Temporary employee and overtime

Accounts Payable

Inventory Items

Description Process Steps MCT TCT (60 days) V.A. %

Current State 57 steps 3,677 sec. 5,184,000 sec. 0.07%

Future State (03/11) 37 steps 1,877 sec. 5,184,000 sec. 0.04%

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Future State (03/11) 37 steps 1,877 sec. 5,184,000 sec. 0.04%

Improvement 20 steps 1,800 sec. 0 sec.

% Decrease 35% 49% 0%

Accounts Payable

Description Process Steps MCT TCT (60 days) V.A. %

Current State 57 steps 3,677 sec. 5,184,000 sec. 0.13%

Future State (07/01) 8 steps 412 sec. 5,184,000 sec. 0.01%

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Future State (07/01) 8 steps 412 sec. 5,184,000 sec. 0.01%

Improvement 49 steps 3,265 sec. 0 sec.

% Decrease 86% 89% 0%

Accounts Payable

Policy Changes :

1) One line item/receipt per P.O. (No multiple deliveries)

2) P.O. number is the key for all deliveries/tracking

3) Terms reflect Receipt Date vs. Invoice Date

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3) Terms reflect Receipt Date vs. Invoice Date

4) A/P vendor to expand and obsolete Purchasing vendor #

Lessons Learned

Brenda, Pat, David

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Lessons Learned

• Pugh Analysis and Pareto Charts are invaluable supporting tools

• Plan-Do-Check-Adjust problem solving supports the mapping process

• Keep the team focused on the action plan

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Lessons Learned

• Do the whole process (trigger to done), don’t squish the water balloon

• Don’t worry about what to do first, don’t worry about training everybody, don’t worry about fancy forms, don’t let inertia get in the way … get startedlet inertia get in the way … get started

• Don’t cut corners because sitting in a conference room is tedious

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Lessons Learned

• Best is the evil enemy of better

• Be hard on the process, soft on the people

• Four keys to successful kaizen events: preparation, • Four keys to successful kaizen events: preparation, knowledge, communication, commitment

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Thank You !

What Questions Do You

Have?

Ariens History Presentation Version 07 18 08

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value stream mapping for administrative functions

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