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Lean Transformation

Lean / Value Stream Mapping Overview

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Agenda
Lean Principles Company Vision What is Value Stream Mapping Seven requirements of Lean Building Lean Organization

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Roots of Lean Thinking


Interchangeable parts: 1850s Toyoda Weaving: 1902 Ford: Highland Park: 1913 GM: Mixed Model: 1930-1940 Deming Influence: 1950s Ohno: American Supermarkets: 1950s Toyota Production System: 1945-1970-now Theory of Constraints: 1980s Lean

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Womack and Jones Lean Thinking 5 principles:


1- Specify value 2- Map the flow of value 3- Make value flow 4- Pull from the customer 5- Seek perfection

Jim Womack and Dan Jones, Lean Enterprise Institute, USA & England

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Vision
Current Supply Chain (average in excess of 40 weeks)
Order Cycle

Procurement Cycle

Assembly Delivery Cycle Cycle


FAB FINL A

Customer Order

Raw Material

Manufacturing

Assembly & Test

Shipping

Supply Chain Vision


(13 weeks)
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Material Flow Strategy

Vision

Engine Core Build

A Supply Chain delivering an engine every shift


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Point Efficiency vs System Efficiency


How fast should we produce?

Fast rower

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The Transformation

Its all about Connecting the Dots

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What is a Value Stream?


All activities both value added and nonvalue added required to bring product from raw material to the customer
Value Stream
CUSTOMER
Producer A Producer B Producer C

Warehouse

Assembly & Text

Customer

Raw Material

Finished Product

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What is Value Stream Mapping?


Implementation Plan

Future State Map

Current State Map

Product Family Definition

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Example of a Current State Map


Raw Material Supplier
6 Week Forecast Weekly Fax

Production Control

90/60/30 day forecasts Daily Order

Customer

Weekly Schedule

Daily Schedule

Producer A

Producer B

Assembly

Shipping

I
2500 parts
1

I
2500 parts
1

I
1800 parts
1

I
1500 parts
Leadtime = 270 days C/T = 46 sec. C/O = 10 min. Uptime = 80%

C/T = 46 sec. C/O = 10 min. Uptime = 80%

C/T = 46 sec. C/O = 10 min. Uptime = 80%

200 days 5 hours

30 days
10 hours

35 days 20 hours

5 days

Processing time = 35 hrs.

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Example of a Future State Map


Raw Material Supplier
6 Week Forecast Weekly Fax

Production Control

90/60/30 day forecasts Daily Order

Customer

Batch

Daily Schedule

Part Producer
Set-up

Assy & Test


Total Work <30 hrs

Shipping

Leadtime = 47 days Processing time = 25 hrs.

25 days 10 hrs

20 days
15 hrs

2 days

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Value Stream Mapping Advantages


Measures value from a customers perspective Focus is on lead time Shows a system view Links the material and information flows Enables the organization to identify waste Provides a roadmap for continuous improvement & change

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Seven Requirements of Lean


1- Takt time 2- Finished goods strategy 3- Continuous flow 4- Pull System 5- Schedule only one point 6- Pitch 7- Interval (EPEI=Every Part Every Interval)

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Requirement #1: Takt Time


Synchronizes the pace of production to the pace of sales The rate of assembly based on customer demand

TAKT Time =

Effective working time per shift Customer demand per shift 460 minutes 460 pieces

TAKT Time =

= 1 min / part
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Requirement #2: Finished Goods Strategy


Build to Stock
Best for mass production
Standard product

Build to Order
More difficult to level load Custom product High value product coupled with uncertain demand

Hybrid
Aids level loading Run as a Build to Order system with inventory for peak loads High value or highly variable demand patterns

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Requirement #3: Continuous Flow


Batch & Queue Processing
Process A Process B Process C

10 minutes 10 minutes

10 minutes

Leadtime : 30+ minutes for total order

One-Piece Flow

Process Process

Process

3 min. Leadtime : 12 min.

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Requirement #4: Pull System


Customer goes to supermarket and gets what they need when they need it Supplier produces to replenish what was withdrawn
production kanban withdraw kanban

supplying process
new product withdrawn product

customer process

supermarket

Purpose: A way to control production between flows without scheduling


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Requirement #5: Schedule Only One Point What & When


Customer

Supermarket

flow
Customer

Pull

FIFO

FIFO

Flow
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Requirement #6: Pitch


Management timeframe: how often we find out and can react to problems It is a takt image for the operators
FIFO KANBAN

In Start

Out

Strategy

Finish
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Requirement #7: Interval


(EPEI = Every Part Every Interval)

G
F

H A

B
C

How long does it take to make parts of every model?


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Future State - What to expect


Drumbeat Set the pace

Pitch

Monitor flow of material

Flow / Pull / Kanban

Reduce inventory levels

Reduce process inefficiencies


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Building the Lean Organization


Every one of us must realize that:
the company is in business because of our customers the customers have choices those choices lay with our competition waste adds cost, time, and service interruption thus giving the advantage to the competition

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Supporting the Lean Organization


At every level
Understand what is important to the customer See the flow of value Recognize waste Solve problems that interrupt the flow of value Continuously improve the flow of value Continuously reduce variation to enable the achievement of lean metrics

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VSM Project Milestone - Typical


Week 1 Week 2 Week 4 Week 5 Week 6

(4 - 9 months)
Identify VSM Expert & Project Leader Team members & commitment Management awareness Team Training & Workshop Present action plan to Mgmt Implement action plan & monitor progress
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A Drumbeat Throughout the Value Chain


Driving
Customer Satisfaction Quality Improvement Inventory Reduction Leadtime Reduction Process Improvement

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