SCMH Chapter 11.

5
Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

Table of Contents I. II. III. Introduction Key Principles of VSM Process VSM Process Steps 1) Current State 2) Future State IV. Final Reminder

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

Value Stream Mapping

I. Introduction
Manufacturing processes in todays environment are often very complex and span across a number of business areas and functions, with the goal of delivering quality product on time to a Customer at a cost they are willing to pay for. This span of process activities, used to transform raw material into something that has a paying Customer is referred to as a value stream. Value stream thinking is different than process thinking as it is a more holistic, bigger picture view of how we do things. Typically as part of process improvement activities a company makes the mistake of focusing too narrow at improving a particular process step without consideration of how that improvement will affect the entire value stream. Value stream thinking requires us to drive the elimination of process waste by strategically understanding where within the value stream we should apply process improvement activities in order to positively impact quality, delivery and cost as a whole. A tool was developed in the automotive industry in the 1940s to map flow of value for a given part or part family that combines both material and information flows across the whole set of process activities known as Value Stream Mapping (VSM). The VSM establishes a macro view that is used to drive process improvement. The Aerospace industry, given the higher demand for more fuel efficient commercial aircraft over the last several years, is experiencing higher production volumes & rates not seen since the volumes of military aircraft produced during WWII. Aircraft manufactures are requiring their supply base to ramp-up, increase capacity, and produce higher volumes with perfect quality at lower costs. These challenges put forth by the aircraft Original Equipment Manufacturers OEMs require suppliers to take an in-depth look at their value streams, identify where to eliminate waste, so that they can meet the higher rate of demand to support their Customers. Value Stream Mapping is a key and critical tool in the Lean Manufacturing toolbox that can aid suppliers in this mission.

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

Simply stated, a Value Stream Map (VSM) is a graphical representation of the entire value stream which includes material, information and product flow. It contains all of the actions that are required to take a product or service, from order to delivery. VSM differs from conventional process mapping in four ways; 1) it gathers and displays a far broader range of information than a typical process map, 2) it tends to be at a higher level (5-10 boxes) than many process maps (macro view versus micro view), 3) it tends to be used at a broader level, i.e. from receiving of raw material to delivery of finished goods, and 4) it tends to be used to identify where to focus future 6 Improvement Projects and/or Kaizen Events. There are two types of maps created when conducting a VSM event: A Current State Map and a Future State Map. A Current State Map is a snapshot of a value stream as it exists at the time of observation; this sets the baseline for improvement and can provide the following benefits: graphically represents the total value stream provides a shared understanding in a common language highlights waste visualises flow and connection of Lean Techniques identifies process bottlenecks improves the bigger picture rather that the individual processes forms the basis for continuous improvement

A Future State Map graphically represents the optimum product, process and information flow and can provide the following benefits: helps to ensure that the planned changes will produce the desired improvements

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

ensures all processes are linked together and only produce on customer demand ensures the product flows continuously with the shortest lead time, highest quality and lowest cost helps to enforce a discipline of thinking through the impacts of any change

However, it should also be noted that one can apply Value Stream Mapping outside of manufacturing environments and on transactional/business processes.

II.

Key Principles of VSM Process

A VSM should only be performed in a Single Plant not across Multiple Plants or across Companies. A sponsor should be defined for each VSM project launched. The sponsor should hold a senior management position with the ability to influence decisions and people outside their management responsibility; this will ensure the future state requirements are achieved." The sponsor should chair a cross-functional steering committee which is responsible for how well the process is meeting customer requirements and internal goals. The VSM team should represent different cross functional areas, approximately one third should be hands-on process experts who will be impacted by the outcome, one third management who have authority to act (either as a full time member or through sponsorship) and one third should be outsiders from either upstream or downstream of the process who can look at it with fresh eyes. A VSM should only be applied to Product Families. A Product Family is a group of products that pass through similar processes steps using similar equipment and have similar total work content within the chosen value stream. By defining the Product Family the scope of the VSM is clarified and therefore all efforts can be focused in the correct area.

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

A Product Family Matrix can be used to group products into families by highlighting the process steps the parts follow and then identifying which are similar (see below). Process Step 1 Process Step 2 Process Step 3 Process Step 4 Product A Product B Product C Product D Product E X X X X X X X X X X X X X

The process map needs to be captured on one piece of paper and the standard format for the diagram should be used. The standard symbols need to be used for the diagram. Capture all the data yourself. Walk the process to understand and validate the process. Involve as many people as practical. Use paper, pencils, calculator, and sticky notes. It is not necessary that any attribute data is 100% precise. It is necessary that the information is at least directionally correct e.g.: o Knowing that the up time 82.7% vs. 82% is normally not necessary. o An assumption of 80% when reality is 65% can be detrimental as it may misdirect the future state development and prioritization of improvement activities.

III. 1)

VSM Process Steps Current State

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

The Key Steps to help map the Current State VSM are:

i. Identify Customer Requirements

What is the customer demand? Identify number of shifts the customer operates, the number of parts required and when they should be delivered and break this down into the different types. Also identify the packaging and number of parts per pack. e.g. 18,400 parts/month, 12,000 Part A, 6,400 Part B, Tray=20 Parts and 2 Shifts.

ii. Draw Process Steps

Map the actual process steps that the product will flow through during its manufacturing lifecycle.

iii. Enter Process Data

This is the data collected as you walk the flow on the shop floor and entered into a data box drawn under each process box. Typical process data can be Cycle Time, Changeover Time, Uptime, Production Batch Sizes, Number of Operators, Number of Product Variations, Pack Size, Working Time (minus breaks) and Quality Rate (yield percentage, scrap/rework/repair rate etc.).

iv. Enter Inventory Count

There will be points within the flow where inventory accumulates. These points are important as they tell you where the flow is stopping. Record this at the beginning and between each process step. A Warning Triangle Icon is used to capture the location and the amount of inventory.

v. Draw Material Flow, Supplier to Manufacturer and Manufacturer to Customer

Show movement of raw material and components from the supplier indicating how often the shipments are and the suppliers pack size e.g. 500 foot roll of coiled steel twice a week on a Tues. and Thurs. Also show the movement of finished goods to the customer including the shipping schedule e.g. once daily.

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes vi. Draw Information Flow and Internal Material Flow
Show the routes of information flow from receipt of the customer order through to instructions to the shop floor, how does the shop floor know what to make and when. Show how often the information flows, e.g. weekly/daily schedule, 90/60/30 day forecasts, whether it is electronic or paper and any tools or systems which are used such as a Manufacturing Resource Planning (MRP) tool. Show material movements that are pushed by the producer not pulled by the customer.

vii. Calculate Processing Time, Lead Time and Maximum Value Add %age
Draw a time line under the process boxes and the inventory triangles and add the Cycle Time and Lead Time at each process box and inventory triangle. The Processing time is the sum of all the cycle times. The Lead time is the Processing Time and the sum of all the inventory times, the Inventory Time is the Inventory Quantity/daily Customer Demand. The Processing Time and the Lead Time should be displayed at the end of the timeline. The Maximum Value Add % (or percentage) is (Processing Time/Lead Time) multiplied by 100.

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes Current State VSM Example

2)

Future State
The Key Questions to help design a Future State VSM are:

i. What is the Takt Time?

The Takt Time is the time that a part needs to be produced in to meet customer demand e.g. if the Takt Time is 60 seconds then one part needs to be produced every 60 seconds to meet customer demand. This is calculated by the Working Time/Customer Demand.

ii. Can the completed item be passed directly to shipping?

Or is a finished goods supermarket (storage area) required? Identify if

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

it is necessary to hold a minimum amount of finished goods to help smooth out production volumes and provide agility to changing customer demands or, can the product be shipped directly to the customer as soon as it is completed.

iii. Where Can Single Piece Flow be achieved?

Where possible implement a single piece flow, process one, pass one. This can reduce production lead times and Work In Progress inventory.

iv. Where are Pull Systems required?

When Single Piece Flow is not possible use Pull Systems to control inventory and manage inventory. This is where the demand of the upstream process controls the supply. Typically a pull system is needed anywhere in the process where the flow of product stops.

v. Which Process is the pacemaker production trigger?

The Pacemaker Process is the point at which product flow begins. The Pacemaker sets the pace for the value stream, which is controlled by the customer demand. This is where the drumbeat is initiated (i.e. work to Takt Time) and is typically the final step, therefore the point where production will be scheduled from.

vi. How is production levelled (mix and volume) at the Pacemaker?

Level the production mix and volume at the Pacemaker to try and make every product, every day. The goal is to limit excess inventory of a specific product and to provide agility to rapidly respond to changing customer demands.

vii. What Further Improvements are required?

Identify what further improvements are required to make the future state VSM reality. Use Kaizen Bursts to identify areas for improvement, i.e. reduce changeover time, change shop layout etc. Run brainstorming sessions focusing on the seven wastes;

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

TIM WOOD: Transport Transporting material further than necessary or temporarily relocating and moving them Inventory - All components and finished product not being processed Motion Any movement of people, material or machinery that does not add value Waiting Waiting for anything, people, machines, material, information, or for the next production step. Overproduction Producing more than what is needed to meet customer demand or producing faster than needed. Over Processing Putting more work into the product than is required by the customer. Defects - The effort involved in inspecting for and correcting defects

The Seven Steps to help design a Future State Map are: 1) Validate the Customer Demand Customer demand should be validated to ensure accuracy and that consideration has been given for future business. 2) Draw the Future State Process Flow 3) Draw the Future State Material Flow 4) Draw the Future State Information Flow 5) Calculate the Total Product Lead Time 6) Detail Offline Activities Consideration should be given for the improvement of any offline activities required to support the Future State. In many cases, these changes will be necessary to sustain improvements in flow. 7) Define a Plan

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

Divide your future state map into segments to help break your implementation into steps and envision it as a process of building a series of connected flows. Develop achievable objectives and goals and have a well defined plan.

IV.

Final Reminder
VSM is a paper and pencil tool that helps you to see and understand the flow of material and information as a product or service makes its way through the value stream and to visualize the future state. Always draw by hand in pencil and use sticky notes begin with a rough sketch right on the shop floor as the current state is analyzed. Clean up later (again, by hand) and resist the temptation to use computer software. Some examples:

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

Using the value stream approach means working on the big picture not just individual processes or work tasks. It means improving the whole, not just optimizing the parts. Remember that a value stream map takes into account not only the product/service activities or steps, but the management and information systems that support the processes. VSM is a fundamental Lean tool. VSM is particularly suited to reducing cycle time, through the identification and subsequent elimination of all types of non-value adding time, excess inventory, queues (wait times) and bottlenecks. VSM is the first step to eliminate waste. However, in order to meet the future state lead time reduction goals, it is important to implement quality enablers within the value stream. The following additional tools available in the Lean Manufacturing toolbox are useful for this purpose. 1. Standard Work: Ensure there are clear, user-friendly work instructions prepared for executing the process steps. 2. Root Cause Corrective Action System: As problems arise within the value stream, they must be dealt with quickly and thoroughly. A visual alert system, often know as Andon, which alerts value stream operators, engineers and managers should be employed. This system creates a sense of urgency to solve problems that stop the flow of value. Part of this enabler is to ensure the value

SCMH Chapter 11.5

Revision Letter: New Revision Date: 16-JAN-2014

Value Stream Mapping for Manufacturing Processes

stream management includes a process that encourages operators to identify problems and a support system for resolving problems through the use of root cause corrective action tools. 3. Process Control for Key Characteristics: Key product & process inputs & features that affect the quality of product fit, form, function, and manufacturability should be identified throughout the product family value stream as candidates for process control techniques such as Statistical Process Control (SPC) or mistakeproofing methods. This will help to control the long-term variability of the product output over time. 4. 5S & Total Predictive Maintenance (TPM): Workplace organization, control of Foreign Objective Debris (FOD) and maintenance of equipment are foundational activities that enable a value stream to meet the companys performance objectives.