Value Stream Mapping Gaining Traction, Getting Results

Paul Bolesta, Project Manager VPMEP - Richmond 804-323-2226 x231

Agenda

1 Obstacle to Traction - WASTE 2 Benefits of Value Stream Mapping 3 What is Value Stream Mapping? 4 A Road Map for Improvement

What is WASTE?
Any Activity that DOES NOT increase the Market Form or Function of the Product or Service based on the Critical Customer Requirements.

These are things the customer is NOT willing to pay for.

Definition of Value Added

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.)

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.)

Lean = Eliminating the Wastes

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
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Where is the Waste?

Defects incomplete or incorrect information Overproduction releasing work before next
incomplete information, approvals process can work on them, unbalanced work loads

Waiting unbalanced work loads, slow system response,

Not Utilizing Employees old guard thinking, politics, high
turnover, low investment in training

Transportation poor layout, poor flow Inventory large batches, complexity to complete task Motion poor organization, no standard work Excess Processing excess communication, lack of
communication, unnecessary approvals, customer requirements are not clearly understood

All processes have waste.

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Without Change There Can Be No Improvement

The definition of insanity is doing the same thing over and over and expecting different results. Albert Einstein

The Lean Process

Identify waste

Current state

Measure & Adjust

Continuous Incremental Improvement

Future state

Implement

Benefit of Value Stream Mapping

Understanding the Process Information and Material Flow

Data Driven Decision Process

94% if Failures are due to Poor Systems 6% are caused by Worker Mistakes
Deming

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Look for Value Streams

Whenever there is a product or service for a customer, there is a value stream. The challenge lies in seeing it.
Examples:
Raw Materials to Customer - Manufacturing Concept to Launch - Engineering Order to Cash Services including Support Processes
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Value Stream Mapping is a Key Process Diagnostic Tool

Kaizen

Continuous Improvement
Pull/Kanban Quality at Source Standardized Work 5S System POUS Cellular/Flow TPM

Quick Changeover Teams Value Stream Mapping

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Batch Reduction Visual

Layout

Value Stream Mapping Steps

Product / Service family Select product / service family Draw Current State map. Understanding how the process currently operates. Identify opportunities for elimination of waste and areas of improvement to meet customers needs. Draw the Future State map. Design a lean flow using lean techniques. Develop action plan and implement it.

Current state drawing

Future state drawing

Plan and Implementation

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Incoming Orders
Weekly Fax

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

Information
Check Credit
IN

Receive Order
IN

Review & Enter Order

Reconcile Order
IN IN

Confirm Order
IN

Finalize Order

IN

Fax
P/T = min Batch = 4 hours

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

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

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

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

MRP
P/T = 5 min Batch = 1day

Material
.5 days min 1 min .5 days 10 min .2 days 1 min .2 days 7 min .25 days 5 min 1 day

Total Lead Time = 2.65 days Total Processing Time= 24.5 min First Pass Yield = 34.4%

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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

What does the customer really need?

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

Receive Order
IN

All orders will be processed within one hour Review & Checkof Credit Reconcile Order hour). Confirm Order receipt (6 Enter orders each Order processed
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 1 min P/T = 10 min P/T =7 min to customer needs? %C&A = 75% % Accept = 90% % C&A = 60% %C&A = 85%
Batch = 4 hours Batch = 1.6 hours Batch = 1.6 hours

P/T = 5 min Batch = 1day

Batch = 2 hours

.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 First Pass Yield = 34.4%

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Incoming Orders
Phone Or WEB
Weekly Fax

Order Entry Process Current State - Sept. 2007

Semi-Weekly Ship Schedule

MRP

MRP Production Schedule

Receive Order

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

Waste
MRP

IN

MRP

Phone

P/T = min Batch = 4 hours

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

P/T = 5 min Batch = 1day

.5 days min 1 min

.5 days

.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 First Pass Yield = 34.4%

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Incoming Orders On-Line Order Entry

Weekly Fax

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 Review & Enter Order
IN IN

Receive 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 1 min

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

Takt Time =

460 minutes 46 Orders

NEW = 10 minutes/order METRICS!

Total Lead Time = 1.25 days Total Processing Time= 11.5 min First Pass Yield = 90%
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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 via Schedule FG Kanban

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

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

I.T. Link to Order Entry Direct Schedule Shipping

Shipping Training

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 First Pass Yield > 90%

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Implementation Road Map

Clarify Business Drivers and Key Customer Metrics Assess and Map Current Capabilities (Baseline) Identify Opportunities for Improvement including the elimination of WASTE Create a Vision for the Future Based on Voice of the Customer and Voice of the Business Analyze Gaps and Create Action Plan to Succeed
- Use Robust Set of Tools (i.e. Lean Six Sigma)

Determine Priorities and Resources Necessary

- Structured Process Improvement

Track Impact through Metrics Celebrate Wins

- With Customers - With Employees - With Suppliers
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Summary:
ALL processes have WASTE that cost you MONEY. Improvement requires change. To change a process you have to understand the process.

Process Excellence will not be achieved without involving people at all levels of the organization.
It is Not about Starting. It is about Getting Things Done!
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Questions?

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Parting Thought

Learning is not compulsory

neither is survival.
Dr. Deming
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