MSE507 Lean Manufacturing Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg MSE507 Lean Manufacturing Chapter 2 The Value Stream "Whenever there is a product for a customer, there is a value stream. The Challenge lies in seeing it” PHILIP (PHIL) M. CONDIT Chairman and Chief Executive office The Boeing Company California State University, Northridge

"There is only one boss: the customer "There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else." Samuel M. Walton Wal-Mart Stores, Inc. Chairman & Chief Executive Officer

Why Map A Value Stream? Lean Manufacturing is: the relentless elimination of waste Waste is using resource… …without adding value Waste is all around us, but it can be very hard to see Value Stream Maps (VSM) help us see waste

Value Streams A Value Stream is the entire set of activities running from raw material to finished product for a specific product or product family In a typical enterprise, value streams can intersect with other value streams, branch apart or Y together

Value Stream Maps Value Stream Maps are powerful visual tools to help see waste and understand the flow of material and information Especially powerful for illustrating the wastes of Overproduction, Idle Material & Transportation Value Stream Maps show all actions required to deliver a product… Value Added…as well as Non-Value Added

Other Benefits Of VSM Provides a big picture perspective that helps focus on improving the whole process, not just optimizing bits and pieces Shows the linkage between the information flow and material flow Helps to see across the functional boundaries over which a product’s value stream flows

Other Uses For VSM To help understand how your business actually works (you don’t understand the current process if you can’t draw it) A tool for establishing a vision and implementation plan for a new business or product line A visual tool and common language for talking to others about your manufacturing process

Mapping Process Product Family Define the Value Stream Current State Drawing Understand how the value currently flows Future State Drawing Design a LEAN flow Plan how to get there and execute the plan Work Plan & Implementation

Value Stream Step 1 Create a Matrix Create a matrix if your mix is complicated

IMPLEMENT FUTURE STATE! A Reminder The point of value stream mapping is not the maps, but to understand the flow of information and material and see waste ...and then use that understanding and insight to improve your process IMPLEMENT FUTURE STATE!

Current State Maps (CSM) Value Stream Mapping Current State Maps (CSM)

The Current State Map A pictorial view, drawn with pencil and paper while observing the process on the factory floor, that shows how material and information currently flow Creates a baseline for future improvements to be measured against Clarifies understanding of how the current production system actually operates

Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg Example Information Flow Customer Start with the Customer INVENTORY ICONS WITH PUSH ARROWS Material Flow California State University, Northridge

Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg PROCESS BOX ICONS DATA BOX ICONS - C/T time - C/O time - Up time - Scrap 28 days 15 sec 7.6 days 10 7 1.5 3 395sec 501 sec 150 sec 60 sec PLT = 57.1 days PT = 18.7 minutes Time Line-PLT- Process Lead Time PT- Process Time California State University, Northridge

Material Flow Icons I FIFO Assembly C/T=45 sec. XYZ Corporation C/O=30 min. 300 pieces 3 Shifts. 1 day 2% Scrap Process Box Supplier/ Customer Data Box Inventory Supermarket Mon + Wed FIFO Shipment Push Physical Finished Goods First-In-First-Out Pull to Customer

Information Flow Icons Weekly Schedule Sequenced-Pull Ball Electronic Information Flow OXOX Load Leveling Box Manual Information Flow Kanban Post Withdrawal Kanban Production Kanban Signal Kanban

General Icons Kaizen Lightning Burst Operator Buffer or Safety Stock Uptime Changeover Kaizen Lightning Burst Buffer or Safety Stock Operator “Go See” Production Schedule

Value Stream Map - Acme Exercise (Use the Handout Data Sheet) Use a pencil and small Post-it notes on 11” x 17” paper. Use the following colors BLUE - Process YELLOW - Inventory (tear in half) PINK - Master schedule / Production control GREEN - Supplier & Customer Fill in a Post-it notes for each process/data and symbol Remember “Always start with the Customer” Build the map, leave enough room between process boxes to show inventory and enough space on the bottom to draw the time line

VSM - Acme Exercise Draw in Customer and Suppliers data.

Chapter 2 - The Value Stream Step 1 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg State Street Assembly State Street Assembly Michigan Steel Company 18400 pieces/month -12000- L - 6400- R 500 ft coils Tray = 20 pieces California State University, Northridge

VSM - Acme Exercise Draw in process boxes and data. Add a shipping box Draw in the Inventory triangles and data

Chapter 2 - The Value Stream Steps 2 & 3 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg State Street Assembly State Street Assembly Michigan Steel Company 18400 pieces/month -12000- L - 6400- R 500 ft coils Tray = 20 pieces Shipping Ass’y #1 Ass’y #2 Stamping S. Weld #1 S. Weld #2 I I I I I I 1 Coils 5 days 4600 L 2400 R 1 1 1600 L 850R 1 1 2700 L 1440R Staging 1100 L 600R 1200 L 640R C/T=1 sec Uptime =85% 27,600 sec. avail. C/T=39 sec C/T=46 sec C/T=62 sec C/T=40 sec C/O=1 hour C/O=10 m C/O=10 m C/O = 0 C/O = 0 Uptime = 100% Uptime = 80% Uptime = 100% Uptime = 100% 27,600 sec. avail. 27,600 sec. avail. 27,600 sec. avail. 27,600 sec. avail. California State University, Northridge

VSM - Acme Exercise Draw in Customer and Suppliers delivery schedules and method.

Chapter 2 - The Value Stream Steps 4 & 5 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg State Street Assembly State Street Assembly Michigan Steel Company 18400 pieces/month -12000- L - 6400- R 500 ft coils Tray = 20 pieces 2 shifts Tues. & Thurs. 1x Daily Shipping Ass’y #1 Ass’y #2 Stamping S. Weld #1 S. Weld #2 I I I I I I 1 Coils 5 days 4600 L 2400 R 1 1 1 1 2700 L 1440R Staging 1100 L 600R 1600 L 850R 1200 L 640R C/T=1 sec Uptime =85% 27,600 sec. avail. C/T=39 sec Uptime = 100% 27,600 sec. avail. C/O=10 m C/T=46 sec C/T=62 sec C/T=40 sec C/O=1 hour C/O=10 m C/O = 0 C/O = 0 Uptime = 80% Uptime = 100% Uptime = 100% 27,600 sec. avail. 27,600 sec. avail. 27,600 sec. avail. California State University, Northridge

VSM - Acme Exercise Put in production control and schedules Draw in Information flows Internal and external

Chapter 2 - The Value Stream Step 6 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg Production Control MRP Weekly Schedule Daily Ship Schedule Daily Order 90/60/30 day forecasts 6 week forecast Weekly Fax 1x Daily Tues. & Thurs. 500 ft coils Coils 5 days I Stamping 4600 L 2400 R S. Weld #1 C/O=1 hour 1 S. Weld #2 Ass’y #1 Ass’y #2 Shipping Staging 1100 L 600R 1600 L 850R 1200 L 640R 2700 L 1440R C/T=1 sec Uptime =85% 27,600 sec. avail. C/T=39 sec Uptime = 100% C/O=10 m C/T=46 sec Uptime = 80% C/T=62 sec C/O = 0 C/T=40 sec 18400 pieces/month -12000- L - 6400- R Tray = 20 pieces 2 shifts State Street Assembly Michigan Steel Company California State University, Northridge

VSM - Acme Exercise Material flows between processes (push, pull, kanban)

Chapter 2 - The Value Stream Step 7 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg 90/60/30 day forecasts State Street Assembly State Street Assembly 6 week forecast Production Control Michigan Steel Company Daily Order Weekly Fax 18400 pieces/month -12000- L - 6400- R 500 ft coils MRP MRP Tray = 20 pieces Daily Ship Schedule Weekly Schedule Weekly Schedule 2 shifts Tues. & Thurs. 1x Daily Shipping Ass’y #1 Ass’y #2 Stamping S. Weld #1 S. Weld #2 I I I I I I 1 Coils 5 days 4600 L 2400 R 1 1 1100 L 600R 1600 L 850R 1 1 2700 L 1440R Staging 1200 L 640R C/T=1 sec Uptime =85% 27,600 sec. avail. C/T=39 sec Uptime = 100% 27,600 sec. avail. C/O=10 m C/T=46 sec C/T=62 sec C/T=40 sec C/O=1 hour C/O=10 m C/O = 0 C/O = 0 Uptime = 80% Uptime = 100% Uptime = 100% 27,600 sec. avail. 27,600 sec. avail. 27,600 sec. avail. California State University, Northridge

VSM - Acme Exercise Draw production lead time/value-added timeline Calculate production lead time for inventory triangles by dividing quantity of inventory by the customer daily requirement This is a really neat trick! It turns a count of inventory into the number of production days that inventory represents Stamping / Weld 18,400 pieces/mo / 20 days = 920 pieces/day 920 / 16 hours (2 shifts) = 57.5 pieces/hour 7000 pieces (total Inv.) / 57.5 pieces/hour = 121.7 hours of Inv. 121.7 hours of Inv. / 16 hours = 7.6 days of Inventory Finish the rest of the calculations. What is the inventory production lead time? Title and date the map

Chapter 2 - The Value Stream Step 7 Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg Acme Steering Bracket Line 3-15-2002 90/60/30 day forecasts State Street Assembly Production Control Michigan Steel Company 6 week forecast Daily Order Weekly Fax 18400 pieces/month -12000- L - 6400- R 500 ft coils MRP MRP Tray = 20 pieces Daily Ship Schedule Weekly Schedule Weekly Schedule 2 shifts Tues. & Thurs. 1x Daily Shipping Ass’y #1 Ass’y #2 Stamping S. Weld #1 S. Weld #2 I I I I I I 1 Staging Coils 5 days 4600 L 2400 R 1 1 1600 L 850R 1 1 2700 L 1440R 1100 L 600R 1200 L 640R C/T=1 sec Uptime =85% 27,600 sec. avail. C/T=39 sec Uptime = 100% 27,600 sec. avail. C/O=10 m C/T=46 sec C/T=62 sec C/T=40 sec C/O=1 hour C/O=10 m C/O = 0 C/O = 0 Uptime = 80% Uptime = 100% Uptime = 100% 27,600 sec. avail. 27,600 sec. avail. 27,600 sec. avail. 7.6 days 1.8 days 2.7 days 2 days 4.5 days 5 days PLT = 23.6 days 1 sec 39 sec 46 sec 62 sec 40 sec PT = 188 sec. California State University, Northridge

The Office Office functions support many shop floor value streams - purchasing, payroll The rate of customer demand is often hard to “see” Inventory can be forms, paperwork, in-baskets, out-baskets, voicemail, email Cycles of activity often are random - little standard work Confusion about who the customer is and what is value

HOWEVER, THE OBJECTIVE IS TO ELIMINATE WASTE! The Office HOWEVER, THE OBJECTIVE IS TO ELIMINATE WASTE!

The Office Current State Define boundaries of your value stream “There has to be a ‘product’ or ‘service’ to follow - like a purchase order or payroll document - otherwise use a normal flowchart” (LEI)

The Office Current State What capability do you provide? Is the demand stable? If not, what is the range ? What is the customers expectation of performance?

Constructing Office Current State Outbox 1 Day w Waiting 1/2 Day at meeting Inbox Waiting should be recorded if there is no apparent ‘end’ takt time and the next process is far away Use Cycle Time of customer process to understand total lead time

Constructing Office Current State State Street Assembly Supplier State Street Assembly Customer Make notes where you see obvious Waste on the Map Poor workplace Organization Duplication: Many Signatures Re-enter Data: Legacy System Paper Form Rework: Incomplete Data

Constructing Office Current State State Street Assembly Michigan Steel Company Customer Central database Engineering I Outbox 2 files 1 Day w Waiting 1/2 Day at meeting Inbox 3 files 1/2 Day Customer 10 files 1 Day 4 files 1/2 Day Purchasing quote 7 files Clarify Email / voicemail W 3 hours Meeting 4 Estimates .5 hours Total 10 Days Total CT 8 hrs 20 min 60 min 3 hrs 20 min 4 hrs 10 min .5 hr 3 hr 1 Day .5 Day 1 Day 1 Day .5 Day 1 Day .5 Day 1 Day 1 Day 1 Day 1 Day Order Receipt Manf. Eng. Review Quote Prep BOM Validation 1 Sales Rep 1 Eng. 1 sales Rep Email Design Log file Phone Clarification Email -Clarification EmailOrder 1 sales Rep

Mapping Tips Use Colored Post-it notes paper for Mapping (Easier to move Post-it notes than redraw) Use roll of butcher paper so you can use a wall and see the whole VSM Use string or ribbon to show material & information flows Decide whether to count all parts or sample

Mapping Tips Best to map production lines between Tuesday and Thursday Use someone from the line or process to walk you through it first, post-it note process, come back and get Real Data and Times If you plan on using the times to balance your process then do not take shortcuts - you will be way off (Embarrass yourself!!) See with your hands. No “Armchair Lean!”

Mapping Steps Gather customer information Get with the process owners and talk / draw - through the process sequence and capture the sequence on a Post-it note Walk the process - Post-it note process boxes (up versus down stream?) Fill in data boxes and inventory levels. (Get Real Times) Document how goods are delivered to the customer Gather supplier information Add information flows Sketch how material moves between processes. Draw production lead time/value-added timeline

Mapping Tips Calculate production lead time for inventory triangles by dividing quantity of inventory by the customer daily requirement This is a really neat trick! It turns a count of inventory into the number of production days that inventory represents Add a title and date the map

Chapter 2 - The Value Stream MSE507 Lean Manufacturing - Prof. David Shternberg Homework Assignment Questions: Use slide 30 as a template and construct a value stream of your choice (product or service) Explain the advantages and possible disadvantages of using Value Stream Maps to improve the business Read Lean Thinking Chapter 3 - Flow Pages 50 - 66 California State University, Northridge

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