1 FMS Executive Series FBP-FMS285A Define Value Value Stream Map - Current Sate - Future State

2 Evolution of the Manufacturing Industry Craftsmanship Mass ProductionLean

3 People: Highly skilled/ Multi task Gain seniority through work Master-apprentice relationship Tools: General tools for many tasks Production process: No standardization of parts All products differed slightly BTO the norm for Raw Mat’l Quality: No standard quality All products tested afterwards Volume scalability: Cost for 100 units = 100 x 1unit Organization: Small and decentralized Evolution of the Manufacturing Industry People: Labor division by skill Specialized tasks No room for creativity (follow rules) Tools: Specialized tools for single task Tools in sequence of process Production process: Dedication of resources Focus on speed/infrequent SU High SU costs for new parts High levels of raw material Quality: Standard quality Volume flexibility: Cheaper at higher volumes Organization: Vertical integration Very hierarchical People: Multi functional teams People with variety of skills Team ownership of cells Leadership at all levels Tools: Low/minimal set up times Availability & Maintainability Production process: Demand pull (no schedule push) JIT thinking Quality: Real time quality management Volume flexibility: Mix model assembly Leveled production Organization: Managers as coaches Relationship based

1 Value Fundamentals The Concept of Value The Value Equation Definition of Value Stream Understanding the customer

5 Employee Delight Customer Delight Creating profitable growth Shareowner Delight Reinvesting for the Future THE “VALUE EQUATION” “The Value Equation”

6 Analyzing Value Recognize the benefits of redefining Value in terms of the whole product with Customer Satisfaction in mind Select appropriate methods for educating the workforce about value and relationship to customers Identify examples of obstacles that prevent organizations from defining product value correctly Identify business characteristics that most customers value Eliminating actions that create no value is very significant because it will have a dramatic effect on our company’s bottom line

7 Product and Service Attributes Value = Worth Cost Cost as a function of: Product quality Product variety Delivery response time Availability Performance Reliability Flexibility Complexity Etc… What Value in the product/process do your customers seek? Will customers miss it if you do not provide the service? Worth as perceived from the eyes of the customer Performance Features Quality Look and feel The math is obvious: for a fixed perceived worth, the value decreases as the cost increases

8 Definition of Value Stream? A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer. Concept (Requirements) Design Raw Materials Parts Manufacturing Assembly Plants Distribution Customer T h e V a l u e S t r e a m “Whenever there is a product (or service) for a customer, there is a value stream. The challenge lies in seeing it.”

9 History of Value Stream - Toyota Toyota’s success is based on a different business logic: >Organized to manage the whole value stream for each product family – rather than to manage and optimize each asset in isolation >Pulling the right products through the system quickly as required by the customer – rather than making to forecast and selling from stock >Based on operational capability and joint process analysis - rather than relying on supplier behaviour and big centralized information systems

10 Understanding our customer Lead Time: How long from our receipt of an order to delivery? How long from their receipt of an order to their delivery? Quality:Do we have specific DPPM/DPMO/yield targets from the customer? Do we have targets by process/product? How stable are the products? What are the warranty expectation? Materials:How flexible is the customer to share liability? How much supplier control do they have? Relationship:How open is our communication with the customer? How effective do we perceive to be their internal communication? Do they participate in resolving issues? Do they see Flex as a supplier or a partner? Do we assign resources and provide support as agreed? These type of questions help us align our customer requirements with the value we should be providing

1 Mapping The Value Stream Objective The Value Stream Team Identifying the Value Stream Value Stream Mapping Icons Drawing The Current State Map Establishing the Baseline: FMS Metrics

12 Objectives of Value Stream Mapping Helps you visualize more than a single process level Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniques Develops your ability to see obstacles to flow

13 Identifying the Value Stream The starting point is to learn to distinguish value creation from waste in your whole value stream By putting on “waste” glasses! By choosing a product family By assembling the team and taking a walk together up the value stream And drawing a map of what you find! in a day or less Start Here

14 Value Stream Mapping “See The Flow” 4 Steps for VSM 1. Determine the Product Family 2. Draw your Current State Map 3. Create the Future State Map 4. Develop your plan to get there

15 Current State “Icons” A process Box could be a single station or multiple stations under a continues flow operation. If inventory accumulates at an station, then start a new process box. A VSM may have more than 1 customer, but each one will have specific products flowing to them A Supplier Box represents several suppliers, so draw only one box and write the parts that are being included in the VSM. Focus only on those parts that need to be considered for this analysis Inventory Triangles show locations where inventory accumulates. This inventory can be physical or information The Data Box provides information about an individual process or combination of processes. In a combination box, C/T are for the longest operation per process/unit

16 More Current State “Icons”

17 Current State Map Setup Tips Use A4 size or bigger paper, landscape Use pencil and eraser Draw by hand Don’t waste time putting it on a computer when learning Practice, practice, practice Steps to trace Customer Supplier Process Information flow Materials Flow Calculate process time and lead-time

18 Current State Map Setup

19 Current State Map

20 Current State Map - contd/-

21 Current State Map - contd/-

22 Current State Map - contd/-

23 Current State Map - contd/-

24 Here we go… a Current State Map example

25 Drawing the Current State Map - Recap Document customer information Complete a quick walk through to identify the main processes (i.e., how many process boxes) Fill in data boxes, draw inventory triangles, and count inventory Document supplier information Establish information flow: how does each process know what to make next? Identify where material is being pushed Quantify production lead time vs. processing time

26 Quick Value Stream Mapping Exercise Rules of Engagement Keep an open mind Put on your “wastes” glasses Do not judge, argue or criticize the “wastes” Capture the relevant information and move on Capture and record wastes as you visualize them Rule of thumb: “If this “waste” can happen today, it can happen tomorrow” Ask the operator or supervisor to clarify any doubts If Mix Model capture information on what is running today For raw materials, select parts that are critical or you feel strongly about

27 VSM for the Pilot Lets do it… 45+ min Walk the line Obtain Information Take notes 45+ min Draw the map Verify Data Box information Verify information flows Complete the map You can separate and divide work, but all must walk the whole process

28 Value Stream Mapping Icons