1. 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

2. "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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

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

10. 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!

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

12. 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

13. 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

14. 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

15. 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

16. 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

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

18. 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

19. VSM - Acme Exercise
Draw in Customer and Suppliers data.

20. 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 L R
500 ft coils
Tray = 20 pieces
California State University, Northridge

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

22. 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 L 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

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

24. 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 L 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

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

26. 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 L R
Tray = 20 pieces
2 shifts
State Street Assembly
Michigan Steel Company
California State University, Northridge

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

28. 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 L 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

29. 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 = hours of Inv 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

30. Chapter 2 - The Value Stream
Step 7
Chapter 2 - The Value Stream
MSE507 Lean Manufacturing - Prof. David Shternberg
Acme Steering Bracket Line
90/60/30 day forecasts
State Street Assembly
Production Control
Michigan Steel Company
6 week forecast
Daily Order
Weekly
Fax
18400 pieces/month L 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

31. 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, voic ,
Cycles of activity often are random - little standard work
Confusion about who the customer is and what is value

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

33. 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)

34. 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?

35. 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

36. 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

37. 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
/ voic 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 hr
1 Day .5 Day 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
Design
Log file
Phone
Clarification
-Clarification
Order
1 sales Rep

38. 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

39. 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!”

40. 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

41. 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

44. 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
California State University, Northridge

45. Questions? Comments?