1. Lean / Value Stream Mapping Overview
Lean Transformation
The UTC Operations Transformation Conference took place in January 2003.
George David, CEO of UTC, described this conference as a defining moment in UTC history. He will look back on this day, 3 years from now and see significant improvement (inventory, leadtime) across our operations.
There, many different speakers took the stage, including Kevin Duggan, from Kevin Duggan and Associates. He is a consultant who first exposed the many UTC operations executives, directors and managers, P&WC included, to this new tool called Value Stream Mapping.
Upon their return from the conference, our senior operations managers chose 2 projects that we will apply the VSM concepts to: PW500 and its supply chain and the turbine blade value stream.
This one hour session is aimed at providing an awareness of the lean concepts and initiatives.
Lean / Value Stream Mapping Overview

2. Agenda Lean Principles Company Vision What is Value Stream Mapping
Seven requirements of Lean
Building Lean Organization
We will be going through the following six themes:

3. Roots of Lean Thinking Interchangeable parts: 1850’s
Toyoda Weaving: 1902
Ford: Highland Park: 1913
GM: Mixed Model:
Deming Influence: 1950’s
Ohno: American Supermarkets: 1950’s
Toyota Production System: now
Theory of Constraints: 1980’s
“Lean”
“Lean Thinking” did not just pop out of the blue last week. In fact, it is the result of a constant evolution in the concepts that drive manufacturing. Here are some of the key steps.
It started in the 1850’s with the concept of interchangeable parts. French gunsmith Honoré Blanc had made 1000 muskets and put all their parts in separate bins. He called together a group of academics, politicians, and military men. Then he assembled muskets from parts drawn at random from the bins. This was the first time that building a product moved away from handcrafting.
Then, the Toyoda Weaving Company of Japan, later the Toyota Motor Company, worked hard to revolutionize weaving and introduced its first automated loom (weaving machine) that would stop as soon as there was a quality problem.
Henry Ford thought of the revolutionary assembly line moving in continuous flow. It was an ideal situation: high demand and low product mix. Ford offered just one model: the Model T in only one color: black.
GM introduced the concept of offering more than one model.
Deming brought on the importance of high quality systems and statistical control.
Then, Mr. Taiichi Ohno (the future Father of the Toyota Production System) learned of the American supermarkets: to place a small quantity of all the products the customer might want and replenish those items that are used (pull system).
The Toyota Production System was born: Ford+GM+Supermarkets+ other ideas from the West+experimentation. The origin of VSM is in Toyota Material and Information maps.
The Theory of Constraints, brought about by Mr. Eli Goldratt (USA), explores the cause and effect link in manufacturing. His best-selling book called “The Goal”, 1992 explains his view in detail.
And finally, all of this evolved into what the Lean Enterprise Institute, namely Jim Womack, calls “Lean Manufacturing” in his book “The Machine That Changed the World”, 1990.

4. 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
Reference:
Lean Thinking – Banish Waste and Create Wealth in Your Corporation by James Womack and Daniel Jones, Simon and Schuster, 1996
James Womack and Dan Jones are from the Lean Enterprise Institute, USA and UK respectively. These are their “lean” principles.
Jim Womack and Dan Jones,
Lean Enterprise Institute, USA & England

5. Need Company vision Vision Supply Chain Vision (13 weeks)
Current Supply Chain (average in excess of 40 weeks)
Order Cycle
Procurement
Cycle
Assembly Cycle
Delivery Cycle
FINL A
FAB
Customer Order
Manufacturing
Assembly & Test
Raw Material
Shipping
The company’s vision:
Parts & engine to procure, build and deliver to customer within 3 months
- 2-3 days Customer order
- 11 weeks Raw material + Manufacturing
- 1 week for Assembly & test
- 3 days shipping
PW615: 3-month engine (similar)
except assembly & test in 1 shift
3-month engine target includes all elements of the supply chain: sub-tiers, customer order processing and receipt at customer dock.
3 months = 13 weeks x 7 days/week = 91 calendar days
= 13 weeks X 5 days/week = 65 working days
Why the 13 week vision ?
It currently takes OEMs 13 weeks from the start of production to engine installation. If we can start at the same time as them, there will be less cancellation of engines and less variability in the schedule.
Supply Chain Vision (13 weeks)

6. Integration of control systems Material Flow Strategy
Vision
Need Company vision
Integration of control systems
Material Flow Strategy
Engine Core Build
Preparation
Test cell
Component Assembly
The company’s vision:
a flow strategy with a drumbeat throughout the supply chain.
Represented here is the Assembly line of the PW600
A Supply Chain delivering an engine every shift

7. Point Efficiency vs System Efficiency
How fast should we produce?
Fast rower
The question is: how fast should we produce ?
Two boats in a boat race.
We have one fast rower in one of the boats. That should be good, but look at what it’s doing to the boat…it’s making it go in circles.
Similarly, if one cell or workstation in a value stream is operating at peak efficiency and the others are not, the customer will not see any impact on the products or services we provide him.
Synchronization is a key element to effective team work.

8. “It’s all about Connecting the Dots”
The Transformation
“It’s all about Connecting the Dots”
So, it’s all about connecting the dots.
Each of the dots represents a process, department or a cell.
P&WC has achieved tremendous results with its continuous improvement initiatives throughout the years. We’ve been working hard at polishing our dots, at making each cell efficient. That’s good and that should continue.
In order to further improve, we have to start looking at what happens between the dots and start linking all of these local improvements together. And that’s what we hope the value stream mapping tool will help us do.

9. What is a Value Stream?
All activities both value added and non-value added required to bring product from raw material to the customer
Value Stream
Customer
Producer A
CUSTOMER
Raw Material
Finished Product
Producer B
Producer C
Warehouse
Assembly & Text
So, what is a value stream ?
If you will, I’ll read you the definition, so that we can all have the same vocabulary and the same understanding of this concept.

10. What is Value Stream Mapping?
Implementation Plan
Future State
Map
Current State
Map
Product Family
Definition
Value Stream Mapping is a tool to help us identify and eliminate waste in our value stream.
There are 4 key steps to Value Stream Mapping: define the product family, map the current state, map the future state using the lean principles, prepare an implementation plan.
The arrows going back and forth represent the dynamic link between the current and the future state maps…it is a constantly evolving exercise.
You can see here the real maps that were developed by the PW500 team. They are available in the Elephant Room on the 2nd floor of the west wing.

11. Example of a Current State Map
Raw Material Supplier
90/60/30 day forecasts
Customer
6 Week
Forecast
Production Control
Weekly Fax
Daily Order
Weekly Schedule
Daily Schedule
Producer A
Producer B
Assembly
Shipping I
2500 parts I I I
2500 parts
1800 parts
1500 parts 1 1 1
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%
Leadtime
= 270 days
200 days
30 days
35 days
5 days
Processing time = 35 hrs.
This is just a simplified example of what a current state map looks like.
Different symbols are used to represent different functions.
The bottom part of the map is for material flow, the top part is for information flow.
Outside functions are represented by a jagged symbol.
We always start from the right hand side: the customer’s perspective.
The boxes here represent processes or activities that take place inside our own walls.
Underneath these boxes are data boxes in which we put any data that we deem appropriate.
Inventory is symbolized this way:
Leadtime calculation is equivalent to sticking a red dot on a part and measuring the time it takes to get to the end of the process.
The lead time ladder is used to see the difference between value added processing time and non-value added time - this is an example:
5 hours
10 hours
20 hours
C/T = 20 hrs
C/O = 1.5 hrs
Uptime = 80% I

12. Example of a Future State Map
Raw Material Supplier
90/60/30 day forecasts
Customer
6 Week
Forecast
Production Control
Weekly Fax
Daily Order
Daily Schedule
Batch
Shipping
Part Producer
Assy & Test
Total Work
<30 hrs
Set-up
Leadtime
= 47 days
25 days
20 days
2 days
Processing time = 25 hrs.
This is an example of a future state map.
Other symbols are used. Basically here, there is a supermarket pull system with kanban cards (which we will see later).
The bursts indicate workshop activities or quality clinic activities that have been identified and need to take place if we want the future state to be implemented. We use the known ACE tools for that.
The new lead time is : 47 days.
We have eliminated waste, for example the inventory in between the processes.
10 hrs
15 hrs

13. Value Stream Mapping Advantages
Measures value from a customer’s 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
Value stream mapping has some specific advantages:
It measures value from a customer’s perspective - it puts itself in the customer’s shoes
It focuses on lead time as a metric to track
It provides a way to look at the “big picture”, a system level view of any value stream.
It links the material and the information flows on a single document and shows how they are linked and how they are codependent.
These maps allow the organization to identify where there is waste.
It provides a roadmap for continuous improvement and change - it shows us where it would be best to deploy the other ACE tools.
Value stream improvement is a continuous process ….

14. 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)
There are 7 requirements of lean: which we will go through separately in a moment.
The first two address the customer, how to satisfy his/her requirements.
The last two address the operations, i.e. tools to optimize specific operations.
The three in the middle (3-4-5) address how to link them together.

15. Requirement #1: Takt Time
Synchronizes the pace of production to the pace of sales
The rate of assembly based on customer demand
Effective working time per shift
Customer demand per shift
TAKT Time =
460 minutes
TAKT Time =
= 1 min / part
460 pieces
The first requirement is calculating Takt Time.
Very simply, takt is the speed at which parts must be manufactured to satisfy demand. It is a concept that is central to the development of our future state process. (It is the rhythm or beat of the factory)
Once we understand customer demand, we need to identify ways to satisfy demand most effectively. Changes in Takt must be managed carefully because the value stream needs to be driven logically according to takt. If this is neglected, waste will be generated.
This is where we begin to design our future state processes.

16. 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
The second requirement is choosing a finished goods strategy:
- build to stock: think of any mass-produced part: Coca-cola, post-it notes, toothpaste,…
- build to order: only based on an order from a customer (example: custom made Porsche)
-hybrid: like P&WC: we build engines to order, but also a little stock (load leveling, even-flow, summer schedule,…)

17. Requirement #3: Continuous Flow
10 minutes
Batch & Queue Processing
Leadtime : 30+ minutes for total order
Process A B C
One-Piece Flow
3 min.
Leadtime : 12 min.
Process B A C
Requirement number 3 discusses continuous flow
“Flow where you can”
When material is produced in batches, inventory tends to accumulate and lead time rises, as material waits in queue for its turn to be processed.
Our goal is to establish flow, ideally one-piece flow, and to synchronize process steps so inventory can’t accumulate.
Continuous flow is the best method to manufacture because it has the least waste and inventory does not have an opportunity to accumulate.
This academic example shows that batches of 10 give more than 30 minutes of lead time for 10 parts.
If we do one-piece flow, the lead time drops to 12 minutes for 10 parts.

18. Requirement #4: Pull System
Customer goes to supermarket and gets what they need when they need it
Supplier produces to replenish what was withdrawn
supermarket
supplying
process
customer
production
kanban
withdraw
withdrawn
product
new
Purpose: A way to control production between flows without scheduling
In some cases, it is not possible to flow, so that is when “pull” takes place. This brings us to requirement #4. “Flow where you can, Pull where you must”.
For example, when the process uses a shared resource or shared equipment, we can’t flow, so we “pull”.
In a pull situation, supermarkets are established so the next step in the process can”pull” the required material to satisfy its need.
Supermarkets control inventory between upper and lower limits.
Replenishment is signaled based on consumption and predetermined factors, such as demand variability and replenishment lead time.
Supermarket levels must be calculated to buffer against variability in the system.
Leveling of demand and reducing replenishment lead time allows us to reduce the quantity of parts (upper limit) in the supermarket.

19. Requirement #5: Schedule Only One Point - What & When
flow
Customer
Supermarket
Flow
FIFO
Pull
The idea is to schedule the least number of points possible and let the rest be “scheduled” automatically.
The first example here shows that if the last station is scheduled, the rest of the supply chain will be automatically scheduled based on what is missing in the supermarkets.
The second example here shows that it the second station is scheduled, the rest will flow, because it runs in FIFO (first in first out).
So, these examples illustrate that it is possible to reduce the number of points that require scheduling. These are strategies and are all good choices, but by definition, the FIFO lanes (example 2) have less waste than the supermarkets.

20. 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
Out
Start
Strategy
Finish
Requirements #6 and #7 show specific concepts that can help on the shop floor.
Pitch is a takt image.
It is a management tool that we implement on the shop floor to see if things are running smoothly or not. For example, instead of waiting until the end of the week or the end of the month to find out and react to problems, we want to know more quickly and more often if there is something that needs to be addressed.
One way is to break down the work into smaller chunks (for example 4 hours) and bring 4 hours of work to a workstation. Four hours later, a material handler could come by and pick up the empty truck of parts and drop off another truck containing 4 more hours of work. If the first truck is not empty, then there is a problem and we already know that we are running behind.

21. Requirement #7: Interval (EPEI = Every Part Every Interval)H A B C D E F G
How long does it take to make parts of every model?
Finally, requirement #7 can be used for a specific machine.
Every part, every interval is a measure of batch size.
How long does it take to serve all of our customers ? For example, if these are part families, how long will it take for me to make a little bit of each of the parts ?
We should always be able to make a little bit of each, instead of a huge batch of just one type of part (example a big batch of A that runs for 3 days on the machine).

22. Future State - What to expect
Drumbeat
Set the pace
Pitch
Monitor flow of material
Flow / Pull / Kanban
Reduce inventory levels
Reduce process inefficiencies
So, there are three main action items to expect from the future state:
The value stream principles apply to the P&WC environment because the tool is adapted to mixed model production.

23. 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
VSM is a process improvement tool with the customer in mind.
When a process is analyzed with VSM, we start with the customer and work the process upstream.
VSM is another tool to add to our continuous improvement tool box. All those tools serve the same purpose: eliminating waste.
Continuously improving the way we produce our products and provide our services will delight our customers.
This is how we will secure present and future business.

24. 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
Some of you will be asked to actively participate in a VSM workshop. As you will see on the next slide, there will be many opportunities.
Independent of the VSM workshop, all of you are asked to continue using all the ACE tools.
As Dominique Dallaire said it: “ VSM is about connecting the dots, and while working at connecting the dots, you still have to work at improving your dot!”

25. 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
Implement action
plan & monitor progress
Present action
plan to Mgmt
A typical project or VSM activity would include the following milestones.
Each project follows a predefined general process which includes additional support and the training required to perform value stream mapping events.
Over and above driving value stream mapping to radical leadtime and inventory reduction, each project will ensure that a healthy, autonomous quality clinic is in place to follow up on QCPC’s throughout the value stream.
The objective: 80% of the actions must be implemented after 4 months. 100% after 6 months.

26. A Drumbeat Throughout the Value Chain
Driving…
Customer Satisfaction
Quality Improvement
Inventory Reduction
Leadtime Reduction
Process Improvement
Back to our drumbeat…the image of having continuous flow at a specific rhythm…
This would help drive: