Guidelines for a Future State Value Stream The following guidelines should be used when designing the Future

State for your Value Streams. This is primarily aligned to manufacturing Value Streams but elements of the thinking can be equally as applicable in non-manufacturing Value Streams also. Each of these points should be clearly identified on your Future State Value Stream Map as to where they can be found (to help aid understanding and awareness throughout the Value Stream team). 1 Takt Time Definition / Description - The rate of output required from a Value Stream to meet customer demand - The available production time divided by customer demand 2 Finished Goods Strategy Definition / Description - The strategy that the Value Stream will follow in order to best meet the delivery demands of the final customer while holding the minimum of stock and maximising profitability. 3 Continuous flow Definition / Description - Producing and moving one item at a time (or a small and consistent batch of items) through a series of processing steps as continuously as possible, with each step making just what is requested by the next step Sometimes youll want to limit the extent of a pure continuous flow, because connecting processes in a continuous flow also merges all their lead times and down times. A good approach can be to begin with a combination of continuous flow and some pull / FIFO. Then extend the range of continuous flow as process reliability is improved, changeover times are reduced to near zero, and smaller, in-line equipment is developed. 4 FIFO Definition / Description - The principle and practice of maintaining precise production and conveyance sequence by ensuring that the first part to enter a process is also the first part to exit (stands for first-in, first-out) - Often maintained by a painted lane or a physical channel that holds a certain amount of inventory 5 Pull Definition / Description - A method of production control in which the downstream process signals their needs to the upstream process - A downstream process provides information to the upstream process, often via a kanban card, about what part or material is needed. Nothing is produced by the upstream supplier process until the downstream customer process signals a need. - The location from where the material/part is pulled from and replenished into is called a supermarket

150538862.doc

1/2

6 Scheduling only 1 point Definition / Description - Each Value Stream receives a production schedule at only one point within it - By using supermarket pull systems, you will typically need to schedule only one point in your value stream. This point is called the pacemaker process, because how you control production at this process sets the pace for all the upstream processes - The material transfers from the pacemaker process downstream to finished goods need to occur as a flow (no supermarkets or pulls downstream of the pacemaker process). Because of this, the pacemaker process is frequently the most downstream continuous-flow process in the value stream. The pacemaker should be the production process that is controlled by the outside customers orders. 7 Interval (EPEI) Definition / Description - The time interval during which you are able to run through every regular product in the family within a particular production process - Interval is really a measure of the batch size (also of flexibility). The longer the interval the larger the batch sizes that you need to produce to be able to meet the customer demand. - Working out an interval is not a one-time calculation. It is a balancing act of matching demand, available equipment resources, cycle times, and work hours. As continuous improvement activities take place and waste is eliminated the interval can be reduced. 8 Pitch Definition / Description - How often we release and take away work from the pacemaker - It provides us with a management time frame. It is a measurement of how the value stream, or more specifically the pacemaker, is performing to our schedule. The pitch increment should be small enough to allow us to react to problems and still ship to customers on time. - Pitch is often calculated based on the customers ship container quantity, but can be created using other methods. - It is always best when pitch increments are provided by some physical activity happening in the factory. A common way to achieve this is to have a material handler show up every pitch increment, take away the work completed, and provide the schedule for the next pitch increment.

150538862.doc

2/2