Value Stream Mapping

Introduction
Value stream mapping (VSM) can be an extremely powerful tool, combining material processing steps with information flow as well as other important related data. VSM is one of the most powerful lean tools for an organization wanting to plan, implement and improve on its lean journey. Value Stream Mapping is a method of creating a one page picture of all the processes that occur in a company, from the time a customer places an order for a product, until the customer has received that product (lead time). A value stream map is a simple picture that helps to focus on flow and eliminate waste.

VSM Why, What, When

Value and Non-value Activities

Value Added Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.) For example: machining, assembly, welding, drilling, folding, painting and so on. Non-Value Added Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.) For example: queue, inspection, waiting or counting of parts, testing, obtaining approvals, reworking etc. If you are not adding value, you are probably adding muda, (the Japanese word for waste).

Value and Non-value Activities

Value Added Non-Value Added

Defects Overproduction Waiting Not Utilizing Employees Transportation Inventory Motion Excess Processing

Typically 95% of all lead time is non-value added

An Exercise
Place the activities in appropriate column

Symbols / Icons
There are a number of common icons used in value stream maps, but icons can also be customized to best serve a value stream map. Icons help distinguish different elements of a product line from another. For example, different arrows should be used to distinguish between product and information movement. The figures in next slides contains commonly used icons in value stream mapping

VSM Process Symbols

VSM Material Symbols

VSM Material Symbols

VSM Information Symbols

VSM Information Symbols

VSM Information Symbols

VSM General Symbols

Visual Stream Mapping Steps

Current Process Challenges

Lots of waiting Lots of travel Lack of communication Lack of skills / not trained Too many approvals Too many workarounds Duplication of work Broken interfaces - ineffective or non-existent interfaces Different prioritization rules in different departments High Lead Time (slow throughput/turnaround) High WIP (waste in process bottlenecks / backlogs) Low CT/LT ratio (lots of waiting)

Dead zones - places where work gets held up or lost Lost time - people looking for work and / or re-work loops to correct errors

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Material & Information Flow

Map the whole value stream by conducting a walk through of the actual process and collect information Start with the final step and walk backwards (customer perspective) Outline major process blocks Interview workers to obtain data Cycle time (CT) Lead time (LT) Bring your stopwatch and do not rely on information that you do not personally see Draw by hand and use a pencil

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Data Collection for VSM

Working hours and breaks Inventory Points (location & size) How Operations are scheduled Overtime per week Scrap rate Rework Downtime Demand rates by process (Takt Time) Number of product variations at each step Shipping/Receiving schedules Pack Size the number of items in a shipment EPE (production batch sizes) the batch size expresses in time (days etc). stands for every part every _____ Activity Department performing IT systems used Current backlog/WIP Demand rate Work or Operating Time (minus breaks) Number of people / operators Batch size Run frequency Equipment availability C/T - Cycle (touch) time (observed & effective) C/O - Changeover time & frequency

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Define Customers Demand

Demand = 3,200 pieces / week Type L = 1,000 piece week Type S = 2,200 piece week Plant Operates 1 shift / day Packaging = 60 pieces / Tray Customer Shipment = 1 / day (Truck) Supplier Shipment = 1 / week (Truck)

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Define Data - Work Time Calculation

Day = 1 shift  1 Shift / day = 8 hours = 28,800 seconds / shift ( 8 x 60 x 60 x 1 shift) Breaks  Morning Tea (15 mins) : Lunch (30 mins) : Afternoon Tea (15 mins)  Breaks = 60 mins = 3,600 seconds { (15 + 30 + 15) x 60} Working or Operating Time  Shift Time Break = 25,200 working seconds / shift (28,800 3,600)
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Calculate Current State

1 week Demand = 5 working days = 3,200 pieces / week or 640 pieces / day

Press Process Type L + S = 2,250 pieces (1,000 + 1,250) Duration = 3.5 days (2,250/640)

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Example A - Current State

A Representative Current State Map of a Bearings Manufacturing Company

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Compute Takt Time

1 week = 5 working days Demand = 3,200 pieces / week
Type L = 1,000 piece week (200/day) Type S = 2,200 piece week (440/day)

Total Pieces / Day / Shift = 640 Operating Time or Working Time = 25,200 sec Takt Time = Operating Time / Shift Customer Requirment / Shift 25,200 640
=

Takt Time =

39 seconds
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Total Processing Time

60 Seconds
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Number of Operators
35 35 30 Seconds 25 20 15 10 5 0 Press Pierce & Form Process Finish Grind 3 22

Process Time = 60 Sec

Takt Time = 39 Sec

Process Time / Takt time = Number of Operators Required = 60/39 = 1.54

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Future State Questions

1. What does the customer really need? 2. How often will we check our performance to customer needs? 3. Which steps create value and which are waste? 4. How can we flow work with fewer interruptions? 5. How do we control work between interruptions? How will work be prioritized? 6. Is there an opportunity to balance the work load and/or different activities? 7. What process improvements will be necessary?

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Incoming Orders
Weekly Fax
Receive Order
IN

What does the customer really need?

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

All orders will be processed within one hour Review & Checkof receipt (6 Enter Order processed each hour). Credit Reconcile Order Confirm Order orders
IN IN IN IN

Finalize Order
IN

Fax

FIN

MRP

MRP

Phone

MRP

P/T = min Batch = 4 hours

How often will we check our P/T = 1 min P/T = performance min customer needs? min 1 min P/T = 10 to P/T =7 %C&A = 75% % Accept = 90% % C&A = 60% %C&A = 85%
Batch = 4 hours Batch = 1.6 hours Batch = 1.6 hours Batch = 2 hours

P/T = 5 min Batch = 1day

.5 days min 1 min

.5 days

Each hour.
10 min 1 min

.2 days

.2 days 7 min

.25 days 5 min

1 day

Takt Time =

460 minutes 46 Orders

= 10 minutes/order

Total Lead Time = 2.65 days Total Processing Time= 24.5 min

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Incoming Orders
Phone Or WEB
Weekly Fax
Receive Order

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

Fax

Stop walking to Check Credit the FAX IN thats FIN waste!!!

P/T = 1 min % Accept = 90% Batch = 4 hours

Rework
Review & Enter Order
IN IN

Over Processing
Confirm Order
IN IN

Reconcile Order

Finalize Order

Waste
MRP MRP Phone

Waste
MRP

IN

P/T = min Batch = 4 hours

Which = 10 min create min steps value?P/T =7 min P/T = 1 P/T %C&A = 75% % C&A = 60% %C&A = 85% Which are waste? Batch = 1.6 Batch = 1.6 Batch = 2 hours
hours hours

P/T = 5 min Batch = 1day

.5 days min 1 min

.5 days 10 min

.2 days 1 min

.2 days 7 min

.25 days 5 min

1 day

Takt Time =

460 minutes 46 Orders

= 10 minutes/order

Total Lead Time = 2.65 days Total Processing Time= 24.5 min

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Incoming Orders On-Line Order Entry

Weekly Fax
Receive Order
IN

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

How can we flow work with fewer interruptions?

Check Credit
IN

Review & Enter Order

IN

Reconcile Order
IN

Confirm Order
IN

Finalize Order
IN

Fax

FIN

MRP

MRP

Phone

MRP

Finance Cross Train

.5 days min

P/T = min Batch = 4 hours

P/T = 1 min % Accept = 90% Batch = 4 hours

Link Finance / MRP

.5 days

P/T = 10 min % C&A = 60% Batch = 1.6 hours

P/T = 1 min %C&A = 75% Batch = 1.6 hours

P/T =7 min %C&A = 85% Batch = 2 hours

Auto Confirm

P/T = 5 min Batch = 1day

.2 days 10 min 1 min

.2 days 7 min

.25 days 5 min

1 day

1 min

Takt Time =

460 minutes 46 Orders

NEW = 10 minutes/order METRICS!

Total Lead Time = 1.25 days Total Processing Time= 11.5 min

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Incoming Orders

Order Entry Process Future State - Sept. 2007

Semi-Weekly Ship Schedules

Phone / Web
Receive / Credit Check / Reconcile Confirm

MRP

Schedule MRP Production Production Kanban Schedule

Implement Kanban Kanban will: Schedule Production to real time demand. Optimize (level) and Control Inventory. Link Production to Customer Demand.

MRP/FIN P/T < 10 min % accept = 90% Batch = 1

How can we control work between interruptions?

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Incoming Orders

Order Entry Process Future State - Sept. 2007

Semi-Weekly Ship Schedules

Phone / Web
Receive / Credit Check / Reconcile Confirm

MRP

Schedule Production via FG Kanban

I.T. Link to Order Entry

MRP/FIN P/T < 10 min % accept = 90% Batch = 1

Direct Schedule Shipping

FG kanban determines the amount of a product to be kept on hand at any given time. Removal of material from the Finished Goods Kanban acts as a signal for more of that product to be manufactured.

If FG Kanban is implemented what improvements can be made to Shipping?

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Incoming Orders

Order Entry Process Future State - Sept. 2007

Phone / Web
Receive / Credit Check / Reconcile Confirm

MRP

Schedule Production via FG Kanban

Shipping

MRP/FIN P/T < 10 min % accept = 90% Batch = 1

Total Lead Time < 10 Minutes

Future State Metrics!

Total Processing Time < 10 Minutes

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Software Tools
One main purpose is to deepen one's understanding of a value stream by drawing a map of it. In current-state mapping this is done while observing the actual value stream in situation. Value stream maps are often drawn by hand in pencil; to keep the mapping process simple and iterative by allowing for simple correction. However, software tools can also be used. A variety are available either as stand alone products or stencils/addons to products such as Microsoft Visio, Dia and IGrafx.

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