Value Stream Mapping

Copyrighted 2005 by Fuss & O,Neill, Inc.

Agenda
What is Value Stream Mapping (VSM)?
Why do VSM? Tools for mapping Creating the Current-State Creating the Future-State

Future-State Plan

What is VSM?

Value Stream
Whenever there is a product for a customer, there is a value stream. The challenge lies in seeing it.

Learning to See Rother and Shook

What is a Value Stream?

All the activities require to complete a product or service, this includes all value added and non-value added activities.

Request for quote to cash received Raw material to finished goods Concept to launch Customer in to customer out
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What is Value Stream Mapping?

Pencil and paper tool Hand drawn representation of activities
Includes process, information, and data about both

Visualizes the flow Service or product Highlights the sources of waste

Lean Transformation
Lean Transformation Process
1 2 3 5 Find a change agent Find a sensei (a teacher whose learning curve you can borrow) Seize or create a crisis to motivate action across firm Pick something important and get started removing waste quickly. Surprise yourself with how much you can accomplish in a very short period. product families.

4 Map the entire value stream for all your

Learning to See Rother and Shook

Why VSM?
Big picture perspective
Improve the whole, not just the parts Eliminates cherry-picking

Information and material flow

Visible connection

Focuses us on the sources of waste Common language of where we are going

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Why VSM?
Current-state helps us see the current situation
Waste, flow, improvement opportunities

Future-state focuses us on a vision

What is the new flow Ideal or improved state

Plan of attack
How are we going to get there?
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Without VSM
Small pieces fixed

Customers dont see any difference!!

Nothing hits the bottom line! People become frustrated
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Product Families
Its not a Marketing Family!!!
Its Products that are processed through common steps

Process Mapping will help identify families

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Process Mapping
Process Map
Name Volume Process A Process B Process C Family

xyz abc aqa frv tge jsu khs

250 600 50 850 1200 300 396

1 3 2 3 1
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2 2 1 2 2 2 2

3 1 1 1 3 1

B A ? A A B A

Using the Tools

Product Family

Current-State Drawing Future-State Drawing

Work Plan
Learning to See Rother and Shook

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Levels of VSM
Across Companies Multiple Locations Single Location Specific Process

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Current-State Mapping Tips

Always draw by hand with a pencil
Without delay
Done by yourself
Fully understand the flow

Drawn on the Gemba Easy to fix mistakes

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Current-State Mapping Tips

See it with your own eyes
Walk the whole thing before you start mapping

Now go get the details

See for yourself
Dont trust the computer

Bring a watch

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Current-State Mapping Tips

Envisioning the future-state
Comes from seeing the current-state yourself
Actual observations

Perfection
Dont get hung up on it
Current-state is always changing Future-state will get clearer

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Drawing the Map

How do we start mapping?

Timeline Information Inputs Processes Customer

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Drawing the Map

Set of Symbols
Represents the flow Consistent
Clear communication
Process

I
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Map Symbols
FIFO

1X per day

Weekly

Outside Resources

Process Box

Shared Process Box

I
C/T= 60 sec. C/O=90 min 3 shifts 5% scrap

Material Flow Icons

Process Box
Shows where a processing step takes place in the flow. If the product flows, without stopping from one operation to another, that is shown as one process box.

Shared Process Box

Same as the process box, but it highlights that several product families share this process. E.g. Heat treat furnaces, plating, etc...

Outside Resources

Outside resources such as a supplier or customer.

C/T= 60 sec. C/O=90 min 3 shifts 5% scrap Data Box

Shows specific information about a process, customer, or supplier. Might include: cycle time (C/T), changeover (C/O), # of shift, # of operators, scrap rate, first pass yield, up time. Whatever is important to you about the process.

Inventory Box

Shows inventory waiting between process or in warehouses. Note the quantity of the inventory under the triangle. Other environment may use a W in the box to show wait time, if inventory does not exist.

Shows items pushed by a schedule.

Push Arrow

Finished Goods to Customer

Shows goods going to a customer or supplied material coming in.

FIFO First-In-First-Out Sequence Flow

Shows sequenced material which was initiated by a pull signal.

Supermarket are controlled inventory locations, based on lead time and customer demand. They are controlled by Kanban.

Represent a physical pull as needed, from an upstream process.

Supermarket

Physical Pull

1X per day Truck Shipment

Represents shipments by truck, frequency is show on truck.

Represents material movement by a forklift. Distance is sometime shown on map.

4X per year Boat Shipment

Represents shipments by boat, show frequency inside ship.

Forklift

Source Learning to See Rother and Shook

Information Flow Icons

Examples; paper orders or schedules

Manual Information Flow Weekly Schedule Box

Electronic Information Flow

Examples; E-Mail, Computer Info, EDI

OXOX
Load Leveling Box Go See Scheduling

Physically seeing what needs to be produced as a means of scheduling. Not controlled just visual.

Signal Kanban

Withdrawal Kanban

Production Kanban

Kanban Post

Sequenced Pull Ball

General Icons
Shows improvement / kaizen activities needed to achieve the future-state Show operator in the process. Buffer or safety stock, to cover quality, delivery, or equipment problems.

Kaizen Lightening Burst Source Learning to See Rother and Shook

Operator Buffer Stock

Markers Inc.
Product family to be mapped is the Marvelous Marker which is available in red or black Markers are packed in individual packs as well as packs of 5, all orders are multiples of 50 Monthly demand is 28,500 black markers and 8,100 red markers. (20 days per month) Markers Inc. ships to the office store distribution center once a day

Plastic for the markers is provided by Pauls Plastic, which is delivered once a month and stored in their warehouse
Ink is provided by Irenes Ink Co. and is shipped in weekly and stored in the warehouse 23

Markers Inc.
Markers Inc. facility operates 2 shifts/day with 415 minutes available each shift Production Control Department:
Office store sends 6-month forecast (electronically)

This is loaded this into a MRP system

MRP releases 3 month forecast to suppliers and then faxes monthly orders Each production area is issued weekly schedules (generated in MRP) Office store send requirements for the next day by E-mail This is loaded into MRP which send out the order to shipping
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Process Information
Warehouse inventory
Plastic 30 days in stock Ink 12 days in stock

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Process Information
1.) Molding (Shared

2.) Assembly
One operator Insert felt and marker tip 27 sec cycle time 30 min. setup 90% uptime Inventory after Assembly
6,850 black 6,100 red

process)
4 Automated molding machine One operator runs all 4 machines 36 sec cycle time Each cycle produces 6 markers 75% uptime 3 hour setup 30 min color change red to black only Inventory after Molding
15,000 black molded markers 16,000 red molded markers
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Process Information
3.) Ink Filling & Capping
Fill with ink & put the cap on One operator 35 sec cycle time 20 min. setup 90% uptime Inventory after Ink Filling 3,200 black 5,100 red

4.) Labeling
Place label on marker One operator 18 sec cycle time 5 minute setup 95% uptime Inventory after Labeling 1,400 black 800 red

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Process Information
5.) Packing
Pack markers One operator 10 sec cycle time 10 minute setup 100% uptime Inventory after Packing 12,300 black 6,000 red

6.) Shipping (Shared with other Products)

Take product out of finished goods Loads truck for shipment Processes appropriate paperwork for order

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Production Control
3 Month Forecast
6 Month Forecast

Pauls Plastics

Irenes Ink

Monthly Fax Orders

MRP
Daily requirements

Office DC

Weekly
Daily shipping schedule

28,500 Blk 8,100 Red 36,600 total

20 days/month

Molding

Assembly

Ink & Cap

Label

Pack

Shipping

30 days plastic 12 days ink C/T= 6 sec. C/O=180 min 2 shifts UT = 75%

15,000 Blk 16,000 Red C/T= 27 sec. C/O=30 min 2 shifts UT = 90%

6,850 Blk 6,100 Red C/T= 35 sec. C/O=20 min 2 shifts UT = 90%

3,200 Blk 5,100 Red C/T= 18 sec. C/O=5 min 2 shifts UT = 95%

1,400 Blk 800 Red C/T= 10 sec. C/O=10 min 2 shifts UT=100%

12,300 Blk 6,000 Red

30 days

16.9 days

7 days

4.5 days

1.2 days

10 days

Production Lead Time

69.6 days
Value Added Time

6 sec.

27 sec.

35 sec.

18 sec.

10 sec.

96 Seconds

Huntsville
Mike Robert
Draw high level VSM of Welded cylinders

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The 7 Types of Waste

Inventory

Over Production

Waiting

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The Future-State
Which of the seven wastes is the biggest problem?

Flexibility

Lead Time Space Inventory

Stock Outs
Machinery
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Movement

Value Stream Goal

Make only whats needed
When its needed In the amount needed

Link all the processes

Shorten lead times Perfect quality Lowest cost

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Future-State Map
Eliminate sources of waste Achievable in a short period of time First shot:
Take technology, product designs, immoveable items as givens. Remove waste around these first

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Lean

Flow

Takt
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Pull

Takt
Means Meter
Reflex's the rate which products / services are required by customers
Daily Effective Hours = Takt time Daily Customer Demand

Its a reference number for us

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Key Questions for the Future-State

DEMAND What is the takt time? Will you build to a finished goods supermarket, or directly to shipping? MATERIAL FLOW Where can you use continuous flow processing? Where will you need to use supermarket pull systems in order to control production of upstream processes?
Learning to See Rother and Shook

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Key Questions for the Future-State

INFORMATION FLOW At what single point in the production chain (pacemaker process) will you schedule your production? How will you level the production mix at the pacemaker process? What increment of work will you consistently release and take away at the pacemaker process?
Learning to See Rother and Shook

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Key Questions for the Future-State

SUPPORTING IMPROVEMENTS What process improvement will be necessary for the value stream to flow as your future-state design specifies?

Learning to See Rother and Shook

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Value Stream Mappings Role

Lean environment
Remove waste and its sources Link processes to reduce time to customer Only make whats needed When its needed

VSMs
Highlight waste for us Help us see the whole
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Value Stream Mappings Role

Scheduling work
Send schedule to only one process

Pacemaker
Sets the pace Closest to the customer Product or service flows directly to customer

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Future-State Markers Inc.

How do we start the future-state ?
Key Questions Remember the three legs of lean Draw the future-state map

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Business Challenges
Margins reduced need to cut costs Reduce working Capital
No WIP 5 days or less of raw material 2 days of finished goods inventory 1.5 days of molded parts

Quicker thru-put competition delivers faster than Markers Inc.

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What is the takt time?

36,600 pieces / mo. / 20 days / mo. = 1830 / day
415 min. / shift X 2 shifts X 60 sec. = 49,800 sec./day

49,800 sec. / day 1830 / day

= 27.2 sec.

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Where can you use continuous flow processing?

40 35 30 25 20 15 10 5 0

Takt 27.2 seconds

Cycle time

be l
45

C ap

in

bl

ol d

em

A ss

Molding quick shared process

Tough to put into flow Too costly to purchase a dedicated machine Process needs to be controlled

In

&

La

Pa

ck

Where can you use continuous flow processing?

40 35 30 25 20 15 10 5 0

Takt 27.2 seconds

Cycle time

be l
46

C ap

in

bl

ol d

em

A ss

Other processes
Easy to move Dedicated to this process Lets put them together and flow the product

In

&

La

Pa

ck

Where can you use continuous flow processing?

40 35 30 25 20 15 10 5 0

Takt 27.2 seconds

Cycle time

be l
47

C ap

bl

em

A ss

Need to be below takt

Balance out the work Staffing formula

In

&

La

Total Cycle = Staffing required Takt Time

Pa

ck

Where can you use continuous flow processing?

40 35 30 25 20 15 10 5 0
Takt 27.2 seconds

Cycle time

Assembly Ink & Cap Label Pack Total -

27 sec 35 sec 18 sec 10 sec 90 sec

be l La

C ap

bl

em

Pa

ck

Need to be below takt

Balance out the work Staffing formula
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90 sec = 3.3 27.2

A ss

In

&

Where can you use continuous flow processing?

3.3 operators
Design cell to operate with 3 people
Eliminate waste Where are you going to use operator 4?

Pacemaker process
No / little changeover Process reliability

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Where will you need to use supermarket pull systems?

Supermarket Locations
Finished goods Molded parts

Suppliers?
Not ready yet, lets get our own house in order first.

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Where will you need to use supermarket pull systems?

Cards can be collected
Then entered into MRP MRP will order product Card attached to good when they arrive

Move toward partnerships with suppliers

More frequent deliveries Kanban signal directly to suppliers

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Supermarket Example
Production Withdrawal

Supplying Process

Consuming Process

Supermarket

Production Kanban
What to make How much to make Where to send it
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Withdrawal Kanban
Grocery list Where to get it How much you need

Signal Kanban Example

Signal Withdrawal

Supplying Process

Consuming Process

Supermarket

Signal Kanban
When too many cards would be required Ordered when level is reached Set amount ordered
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Will you build to a finished goods supermarket, or directly to shipping?

Current Business
Demand is erratic Process reliability is poor Easy to store markers

Supermarket or Shipping?

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Building to a Supermarket
Customer Requirement

Assembly

Shipping

Learning to See Rother and Shook

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Building Directly to Shipping

Customer Requirement

Assembly

Shipping

Learning to See Rother and Shook

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Markers Inc. Supermarket

Orders are place with 50 markers as a minimum
Good first shot at a size for Kanban Shipping takes 50 Cell produces 50 to replace
Make signal visible and easy to use

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Process Flow
Toyota stopped trying to guess what their customers wanted and focused on; Shorten lead times Installing supermarket Produce only to fill the supermarket And only sending customer orders to one place
Not the MRP system

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Drawing a Future-State Map

Ask the key questions
What is the Takt Time?

Build to demand or a supermarket?

Where can you use continuous flow processing?

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Drawing a Future-State Map

Production Control
3 Month Forecast 6 Month Forecast

Irenes Inks

Pauls Plastics

Fax Orders Mon & Wed

MRP
Daily requirements Daily shipping release

Office DC

28,500 Blk

50 50

8,100 Red 36,600 total

20 days/month

OXOX
50 50

Red Blk
4 Days

Molding

Red Blk

Cell

Red-1

Red-5
Blk-1 Blk-5

Shipping

C/T= 6 sec.

1.5 Days

C/O=15 min 2 shifts UT = 100%

TT= 27.5 sec. C/O=0 min W/C 82 sec UT = 100%

2 days

Red Blk
Ink

4 days

1.5 days

2 days

Production Lead Time

7.5 days
Value Added Time

6 sec.

82 sec.

88 Seconds

Future-State Loops
Pacemaker Loop
Closest to the customer Scheduling point Product flows directly to customer, no stops

Other Loops
Usually from one supermarket to the next Name them
Supplier loop, assembly loop, etc

Goal
Break future-state into manageable pieces
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Loops
Production Control
3 Month Forecast 6 Month Forecast

Irenes Inks

Pauls Plastics

Fax Orders Mon & Wed

MRP
Daily requirements Daily shipping release

Office DC

28,500 Blk

50 50

8,100 Red 36,600 total

20 days/month

OXOX
50 50

Red Blk
4 Days

Molding

Red Blk

Cell

Red-1 Red-5 Blk-1 Blk-5

Shipping

C/T= 6 sec. C/O=15 min 2 shifts UT = 100%

1.5 Days

TT= 27.5 sec. C/O=0 min W/C 82 sec UT = 100%

Red Blk
Ink

4 days

1.5 days

2 days

Production Lead Time

7.5 days
Value Added Time

6 sec.

82 sec.

88 Seconds

Markers Inc. Improvements

Molded Parts 30 Days 16.9 Days
4 Days 86.6% 1.5 Days 91.1%

Plastic

WIP
12.7 Days 0.01 Days 99.9%

Finished Inv 10 Days

2 Days 80%

Lead Time 69.6 Days

7.5 Days 89.2%

Inventory Turns 3.4

32 841%

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What needs to happen?

Break down the objectives and goal for each loop Lets us see what needs to happen Example (Pacemaker Loop)
Create pull from finished goods supermarket Goal 2 days inventory in supermarket

Highlight what needs to happen on the future-state map Use Kaizen bursts to highlight changes

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Kaizen Bursts
Production Control
3 Month Forecast 6 Month Forecast

Irenes Inks

Pauls Plastics

Fax Orders Mon & Wed

MRP
Daily requirements Daily shipping release

Office DC

28,500 Blk

50 50

8,100 Red 36,600 total

20 days/month

OXOX
50 50

Red Blk
4 Days

Molding

Red Blk

Cell

Red-1 Red-5 Blk-1 Blk-5

Shipping

C/T= 6 sec. C/O=15 min 2 shifts UT = 100%

1.5 Days

TT= 27.5 sec.

Red
Blk
Ink

C/O=0 min W/C 82 sec UT = 100%

4 days

1.5 days

2 days

Production Lead Time

7.5 days
Value Added Time

6 sec.

82 sec.

88 Seconds

Obtaining the Future-State

Look for loops with a:
High chance of success Need short term wins People understand the process Something you can control Good return for your time Big bang

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Obtaining the Future-State

OK, youve got a starting point.

Now what do I do?

Start with the key questions
Continuous flow based on takt Implement pull systems Level the mix

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Obtaining the Future-State

How do I get there, from here?

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Future-State Plan
Breaks tasks into manageable pieces Assigns a person to each tasks Defines time frame Clearly states goals Provides overall management of the future-state
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Future-State Plan
Example
FUTURE-STATE VSM PLAN
Value Stream V.S. Loop Marvelous Markers 2002 Year: ____________________ MONTHLY SCHEDULE Person Resp. Date: TODAY Prepared by:

Plant Level Objective

Value Stream Objective

Goal

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11

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Comments

Improve Markers Profit Reduce Lead time Play more golf

Continuous Flow Reduce CT Reduce C/O

Zero WIP 82 sec. or less Zero 100% 2 days FGI

Flow Joe

Need Setup reduction training before Kaizen One piece flow event February And April Find TPM owner and begin Improvement events

Sam SMED Karsten Kanban

Improve Uptime Develop pull system

Pull System at Press

1 day Inventory Pull with no schedule

Pressroom Team

Collect data to calculate Kanban. Purchase returnable containers. Conduct SMED event; include planners to assure lot size decrease along with set-up reduction.

Reduce C/O Reduce Batch sizes

10 minutes or less 570 flat, 175 phillips

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Future-State Plan
This tool will help: Share the vision

Prepare for capital expenditures Plan labor needs Plan Kaizen events Track employee performance
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Value Stream Mapping

Keep us on track to achieve goals Focuses us on the future-state

Management
Champions of the plan Must be committed & knowledgeable

If you always do what youve always done, youll always get what you always got.
Lyn Wiley

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Homework!
Each plant should bring a current state VSM to next session
Forms section

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Value Stream Mapping

What Questions do you have about what youve heard?

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