Value Stream Mapping Day 1

Value Stream Mapping Day 1
* Welcome the group to the first day of training in Value Stream Mapping. * This is an improved method for identifying the value added content in the total value stream. * Likewise, it helps us identify areas that do not add value. * The final result provides us with the opportunity to apply ArvinMeritor Performance System tools to the waste that exists in the value stream and improve the overall flow of the product through our facilities. Copyright©2000 ArvinMeritorMeritor Inc.

Introductions Jan Vlasak Introduction of participants. Process:
1. Master Facilitator asks the participants to introduce themselves briefly (with above information). 2. Go around room (stand up so everyone can see & hear). 3. Thank the participants for taking time out of their busy schedules to attend the training program.

Agenda Current State Map Future State Map Value Stream Plan
This slide serves as a high level overview of the value stream mapping training program. 1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied. 2. Focus on opportunities to improve the current condition. This is the improved condition or future state map. 3. Point out the direction or plan to turn the future state opportunities into reality.

Agenda Day 1: Topic/Activity Time Opening 8:00 AM Introduction 8:15 AM
Goals of Workshop :30 AM Review of Lean Principles :35 AM Break :00 AM Introduction to Value Stream :20 AM Current State Map :05 AM Exercise 1 – Customer Loop :00 AM Lunch :00 AM Report-outs :45 PM Exercise 2 – Internal Loop :00 PM Report-outs :25 PM Break :40 PM Exercise 3 – Supplier Loop :55 PM Current State Report-outs :45 PM Opportunities In Future State :05 PM Example Future State Map :00 PM Adjourn :45 PM This slide serves as a high level overview of the value stream mapping training program. 1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied. 2. Focus on opportunities to improve the current condition. This is the improved condition or future state map. 3. Point out the direction or plan to turn the future state opportunities into reality.

Agenda Day 2: Topic/Activity Time Introduction Day 2 8:00 AM
Exercise 4 – Customer Loop :15 AM Break :30 AM Report-outs :45 AM Exercise 5 – Internal Loop :00 AM Report-outs :45 AM Lunch :00 AM Exercise 6 – Supplier Loop :45 PM Obstacles :30 PM Value Stream Plan :00 PM Exercise 7 - VSP :15 PM Final Report-outs :00 PM Break :45 PM The Value Stream Team :00 PM Closing Comments :15 PM This slide serves as a high level overview of the value stream mapping training program. 1. Development of a current state map. The purpose of this section is to grasp the current condition of the value stream being studied. 2. Focus on opportunities to improve the current condition. This is the improved condition or future state map. 3. Point out the direction or plan to turn the future state opportunities into reality.

Company Strategy Growth Competitive Position
In 2000 our company embarked on a challenging journey: To double both our sales and earnings within five years. In support of this strategy, we set challenging goals in order to achieve Best In Class levels of performance. Achieving this high level of operational excellence is an imperative to our growth strategy. Growth is by definition risky. Growth takes us outside our comfort zone. Growth tests both our capabilities and our resolve. But, not growing is simply not an option. Growth challenges us and brings out the best in us. .Grow our core business through market share at existing and new customers. .Grow through providing full systems, not just components. .Grow through geographical expansion. .Grow through product extensions and extension of our core products into new markets. (Now while each of these four may involve some acquisition activity, it isn’t the preferred approach) .But we will also grow through adding new products and capabilities through acquisitions Keep this in mind. Our primary goal is to grow internally. It provides greater rewards and entails less risk.

Cost Reductions Customer Price Labor Inflation Increase Earnings
Along with this growth, we must also continue to reduce costs. We must reduce costs at the rate of at least $380 Million annually. The $380M figure represents the amount based on our sales level necessary to offset customer price reductions of greater than five percent per year, our own labor inflation, and to continue to increase our earnings at a double digit rate. In order to achieve these goals, we must continue with our Lean Transformation. To sustain competitiveness, we must become a Lean Company. Not just a company with many independent, lean manufacturing work units. Achieving leanness in manufacturing alone is not enough to reach the $380M per year goal in cost reduction. We must create a lean enterprise by applying the lean principles we have instilled in our production operations to everything we do within the company. Lean manufacturing alone will not allow us to win the race. We must bring leanness to all processes – production, engineering, value chain management, customer satisfaction, and administration.

Keys to Lean Production
Work Place Organization JIT Production Six Sigma Quality Empowered Teams Visual Management Pursuit of Perfection To date we have found success in implementing what we might call “keys to lean production”. We have introduced Work Place Organization, Just In Time Production, Six Sigma Quality, Empowered Teams, and Visual Management. One key to lean production that we must continue to stress is that of the “Pursuit of Perfection”. We cannot afford to be satisfied, and we must continue to find opportunities for improvement.

Key Factors for Lean Success
Strategic Vision Strong Line Management Leadership Expert Training and Support Aggressive Performance Targets and Tracking Impatience Although we have done a great deal to aid in lean production, we must do even more to become a “Lean Company”. .A Strategic vision of what the organization is moving toward. .Strong line management leadership (without its full commitment, failure is certain). .Expert training and support .Aggressive performance targets and tracking .A high level of Impatience!!! (A sense of urgency second to none) Implementing these Lean Company fundamentals will be vital to the accomplishment of our corporate goal. We must institute Leanness throughout our company in order to facilitate our pursuit of perfection. Although we must move forward quickly, the indisputable fact from our certification records is that “we are slowing down” and not reaching the levels of quality, customer satisfaction, and manufacturing excellence that we should be achieving.

“Becoming the Best” The Answer;
Develop a Deep Understanding of Our Processes at their Broadest Levels and Not Just Continue to Improve Individual Work Units Working Together to Add Value to our Company We are an enterprise that understands lean practices and has lean capabilities, but we are far from being a lean company. We don’t use these capabilities on a day in, day out basis. We are better than many, but we are far from the best. What will it take to become a lean enterprise or lean company? What will it take to become the best? The Answer is: We must develop a deep understanding of our processes at their broadest levels and not just continue to improve individual work units. None of our business processes: Production, Value Chain Management, Customer Satisfaction, Product Development and Launch, and Administration are independent—in fact in a lean enterprise they are all highly interdependent. Working together they all add value to our company.

Our Needs Tools to Support Linkages Between Processes
Emphasis on Processes and Systems Horizontal Organization Based on Teamwork Leadership and Followership Commitment and Involvement We need tools to support the improvement of and linkages between these processes. We need much more emphasis on processes and systems rather than functional areas. We need a horizontal organization based on cross-functional teams and teamwork. We need leadership at all levels and followership at all levels. We need a renewed and unwavering commitment to the improvement of our human resources and their true and full involvement in the improvement of our processes. This will require us, as managers, to not only manage, but to lead, motivate, and educate. We must embrace the belief that people can change when properly led and motivated, and we must commit ourselves to leading our employees to new levels of commitment and performance rather than merely accepting the status quo. We must utilize what we are learning in White Shirt to aid in the company’s strategic initiatives.

Performance Operational Performance Determines Financial Results
Lean Enterprise Is the Key to Successful Operational Performance Operational Performance will determine our financial results. However, our transformation into a Lean Company is the key to successful operational performance. Leadership is essential to our achieving this transformation. Leadership cannot be conferred by promotion or appointment. Leadership, like anything, has to be developed through training, encouragement, and opportunity. Value Stream Mapping is one of those opportunities to demonstrate leadership. Value Stream Mapping enables us to see our processes more clearly and broadly and to attack the opportunities for improvement. As we move forward and become better leaders we all must help realize the company’s vision of becoming the standard or leader among automotive parts producers.

The AM of Tomorrow Complete Understanding of Lean Principles
Commitment and Discipline to Live by these Principles Sense of Urgency to Exceed the Targets and Deadlines Commitment to Strive for Perfection We must become the ArvinMeritor of tomorrow “today We must develop: a complete understanding of Lean Principles commitment and discipline to live by these principles a sense of urgency to exceed targets and deadlines and a commitment to strive for perfection (Value Stream Mapping gives us the shortest route to perfection.) In closing, do all you can to see the opportunities that exist within our operations. If we act aggressively on these opportunities, we will achieve our goals. Thank you for your continuing commitment in making ArvinMeritor the leader in our industry.

Potential Benefits 12% Reduction in Overall Cost Inventory Reduction
Quality Improvement Productivity Improvement 12% Reduction in Overall Cost If Value Stream Mapping and the improvements generated can get us to benchmark inventory levels, ArvinMeritor’s inventory level will drop by about 40%. If you believe inventory performance is linked to quality and productivity, then they too should improve by 40%. I will save you a lot of calculations to determine the financial benefits of this kind of improvement because I have already done them. This level of achievement would reduce ArvinMeritor’s total cost by 12%…and that’s pretty exciting. If the benefits of moving to the next performance level are clear to you, then operations can again be the catalyst to lead us where we want to go. In the process of doing this we should strive to become the manufacturing benchmark in our industry. Most important we need elevate this level of performance to give ArvinMeritor a competitive edge in the marketplace.

Why are we Here? Ask audience why they believe they are here. “What would be the purpose of learning about something called Value Stream Mapping?” The vision has been set and the expectation is clear. Our job is to meet the challenges set before us. We need a good tool to help us meet those challenges.

Goals of the Workshop L E A D R earn to See stablish a Plan
ct on Opportunities rive Change nable Teams educe Lead Time Value Stream Mapping will allow us to take a new form of leadership. With the advent of empowered teams, new opportunities await management with regard to corporate strategy. We must become a lean enterprise in order to reach our company goals. Value Stream Mapping will be an important addition to our Continuous Improvement inventory of tools. We will learn to see the bigger picture within our facilities and ultimately aid in the company’s attainment of its challenging goals. As we begin to see the opportunities, we can begin to establish plans that will allow us to act on those opportunities. By driving this change throughout the organization and enabling teams to excel to their greatest potential, we can reduce our overall customer lead-time.

Think Lean To get things started off right, let’s warm up by getting into a lean frame of mind. How about some basics? We can’t reach our goal of becoming a lean company if we don’t develop a lean frame of mind. Our success will be determined by our ability to make lean thinking and implementation a part of our everyday lives.

Waste Waste is Only the Symptom of a Deeper Problem
Focus on the Source Rather than the Symptom Ask for audience participation in quick discussions on waste. Remember Value Streams will aid us in fighting the source rather than the symptom. As we develop our thoughts towards becoming a truly lean company, eliminating waste will become our number one priority. We will learn to acknowledge the fact that waste is only a symptom of a deeper problem. All of our efforts will then focus on the sources of waste and not the symptom. The result will be a never-ending cycle of continuous improvement. No decisions will be made that allow us to work around a problem. In this training program, we will concentrate our efforts on three of the seven types of waste that exist in our company today. These are wastes associated with inventory, material movement, and overproduction.

Overproduction Definition: Producing More than Needed
Parts Parts Parts Parts Parts Parts Parts Parts Definition: Producing More than Needed Producing Faster than Needed Waste of overproduction is producing more than is required or producing faster than needed. Examples would be producing 500 when the customer needs 450 or running components at a much faster rate than the assembly, if the component line supports only that assembly line. Once we develop a method to find waste in overproduction, we will see opportunities in inventory reduction, better manpower utilization, and overall equipment utilization. Overproduction means that we are not replenishing only what the customer has taken. This indicates that we are not producing to takt time. Note: Interactivity is key, we want to make sure that the audience is “thinking lean”

Takt Time Available Work Time Customer Demand
Producing to Takt time is fundamental to a lean company. Producing to Takt time means that we are producing to the demand of the customer. We will find numerous opportunities when we have the tools to develop systems in our facilities that allow us to produce to customer withdrawal, or Takt time. The closer we produce to Takt time, the easier it will be to implement one piece flow in our facilities.

One Piece Flow Make One, Move One!!! Process A Process B Process C
One Piece Flow is essential to lean production: Reducing inventory and increasing flexibility. ArvinMeritor introduced opportunities to the work units to establish one piece flow. In many cases we can move product through the work units one piece at a time; however, sometimes we create problems within our work units by not balancing work and giving the appearance to the operators that they have to run more pieces inside the line at various points in order to meet Takt time. In order to implement and sustain continuous flow within our work units, we must take time to visit our work units in order to facilitate improvements in standard work and manning. In order to become truly a lean company we must send a clear signal throughout our facilities: We must work together to establish one piece flow in order to produce to Takt time and eliminate overproduction. The bottom line is that we must implement a true pull system. Process A Process B Process C Process D

Pull System Customer Process Supplying Process Supermarket
“Production” KANBAN “Withdrawal” KANBAN Supplying Process Customer Process Product Product Pull systems are an efficient way to prevent overproduction. When a true pull system is established there is no means of moving or producing parts without a kanban card. The mandatory use of cards for the movement and production of product, will identify opportunities in manning, inform us when we are behind schedule, and ensure our inventory remains at minimum levels. Any inventory in our plants signifies an opportunity for improvement, however we must determine what levels of buffer are required to run the system. Once we benchmark our current requirements, we should work to decrease buffer levels by taking advantage of the opportunities that the pull system will show us. Implementing a pull system will allow the movement and production of material to become part of an automatic process. This means that we do not intervene with written or instructed schedules at multiple points in the facility. The true pull system will allow production and movement of material to be pulled from the process most closely tied to the customer. Supermarket

Selecting the Point of Pull
Process A B C D The Point of Pull, or POP, must be tied to the customer. A point of pull closest to the customer is essential for the attainment of a Lean Value Stream. Once we establish a point of pull closest to the customer, this will allow us to produce parts based only on customer withdrawal. We can now identify opportunities further upstream that prevent us from attaining once piece flow. These opportunities for improvement might come in the form of downtime reduction, standard work improvement to meet Takt time, or changeover improvements to increase flexibility. Increases in flexibility, small lot production, are imperative in providing the customer with only what they want and when they want it. FLOW

Why Small Lots? Drive C/O Time Reduction Flexibility Reduce Inventory
Reduce Lead Time Small Lots drive C/O Time improvement, thereby increasing our flexibility, lowering inventory levels…the bottom line = reducing lead time. As we begin to eliminate internal roadblocks, like lengthy changeover times, that prevent us from achieving one piece flow; we can begin to develop systems that level customer fluctuation and allow us to further reduce our inventories.

Leveling Proper leveling techniques will allow us to reduce the effects of customer fluctuation in our inventory. What misconceptions may exist about leveling today? Probably the greatest misconception is the thought that Leveling is nothing more than taking a customer forecast and producing it equally over a period of time. This fails because there is no regard to what the customer is actually pulling on a daily basis. Leveling in the true sense allows us to use buffer stock in times when daily customer demand exceeds the forecasted requirement and the replenishment of the buffer stock is made when daily demand is less than what was forecasted. Take a look at this example, the blue line signifies the forecast the customer provided, the red line represents what the customer is actually taking, and the green line represents our daily production as we begin to implement leveling techniques. Notice that as the red line, customer daily demand, exceeds the forecasted requirement, we can still produce at a fairly even level by pulling from buffer stock. As the customer’s daily demand falls below the forecasted quantity, we are able to replenish what was taken from the buffer stock during times of high demand. This allows us to pull product through our plant, including from our supplier, at a level rate.

A Brief Introduction to
Value Stream Mapping Now that we are in a lean frame of mind, we can begin to discuss this training programs main objective: Value Stream Mapping. Before we discuss it in detail, let’s look at our company’s improvement history.

The Improvement Process
Employee Involvement Training and Development Model Work Unit 20 Keys Assessment Traditional Learning Leading World Class Best in Class The process of improvement at ArvinMeritor started with Employee Involvement. This was followed by the development of Training Programs that continue throughout our organization even today. A good example is CROMS. To support our employee involvement initiatives, CROMS was developed to help all of us strengthen our coaching skills and learn to utilize all of the resources within our company. We also learned to practice our new ArvinMeritor Performance System skills on Model work units that helped develop our implementation capabilities. This was followed by the development of Certification Systems that included: .ArvinMeritor Performance System Level One Certification. .World Class Certification. .Best In Class Certification. This process was designed to ensure that we continue to build on our strengths and make continuous improvement a part of our everyday lives, which in reality, is the true key to success.

Results Factor Improvement PPM .…………………………….. 91.3 %
Improvement on all work units since introduction of the AM Performance System Factor Improvement PPM .…………………………… % Scrap …………………………… % Training hrs./Employee ……… % Suggestions/employee ……..… % Labor cost % of sales ……….… 36.4 % WIP hours ……………………… % Changeover time …………….… 72.5 % Lead time ……………………… % Just take a look at the results of our improvement since the introduction of ArvinMeritor Performance System: .Our defect rate to the Customer has improved by 91.3%. .Scrap has reduced by 57.6%. .Training hours per employee increased by 182.2%. .The ideas that our employees create jumped 347.5%. .Labor as a percentage of sales dropped by 36.4%. .Work in process reduced by 91.6%. .Changeover times decreased by 72.5%. .Overall lead-time improved by 87%. All of these improvements are a result of applying ArvinMeritor Performance System principles to the production work units in our facilities.

Production Space = 30% Entrance R Cut Draw Draw Exit F/A Spin Spin
Operator 1 Operator 2 Exit With the improvements that we have made in our work units, our lead time to produce has greatly improved within our work units. In most cases, we are talking about seconds to produce a single part. However, production work units only take up about 30% of the space in our facilities. So we have made almost all of our improvements over the last few years by focusing on 30% of the overall opportunities. F/A Spin Spin

Opportunities = 70% That means that 70% of the opportunities for improvement are outside of the production work units. We think it is very important to recognize where we have done a good job, but it is more important to know what the opportunities are that we have missed. Applying ArvinMeritor Performance System principles have improved the work units, but we have not improved the inventory between the work units at the same pace. Take a minute and think about your own facility. I think you will agree that movement within the work unit is very fast and very close to a one piece flow. But, between the work units the movement of parts is still very slow. In most cases, we are talking in terms of several days. Some of this waste has not even been removed after we made improvements to the work units. How many times have you walked back to the area in the plant where you ship your final goods to the customer and then walked back to each work unit that supplied parts to the final assembly, counted the inventory, and asked yourself why you needed those parts.

Opportunities in Work Units Opportunities between Work Units
Why??? Opportunities in Work Units Vs. Opportunities between Work Units The reason we ask that question is because so often we get caught up with the problems that exist only on the work unit, we forget to think about the total flow of the product through our plant. We really don’t take the time to investigate the opportunities that exist between the work units. Let me give you an example. About 60% of our work units at ArvinMeritor are world class certified. That means we have less than (4) days of raw material, less than (4) hours of WIP and typically (1.5) days of finished goods. That is a total of (6) days of material. However, our books show a total of (17) days of material. So where are the other (11) days? You can bet money that it’s there somewhere, but we are just not seeing it.

F L O W Stamping C/T = 4 Sec. Sub-Assembly C/T = 60 Sec.
This is a visual example about flow. Think about taking a gallon of water and pouring out the water in a steady stream. Suppose this gallon of water represents raw material from our supplier. What we would like to see as the material enters and exits our facility is a continued steady stream. Let’s suppose the first process in the plant is a stamping line. We will use a funnel to represent the stamping area with a (4) second cycle time. But , because the stamping line has a long changeover time, we start to get a build up of finished goods. The next process is a sub-assembly line that has a cycle time of (60) seconds. However, since we have downtime on the line, we keep extra amounts of inventory and the flow begins to back up in this area. Finally, the material passes through the final assembly line with a (60) second cycle time before being shipped to the customer. Because we have trouble meeting our takt time requirement, we keep extra inventory in this area and the flow begins to back up again. Imagine that the very end of each funnel, the small tube area, is the actual cell in our plant. The rest of the funnel represents the area outside the cell. You may have poured oil into your car before and noticed that the oil backs up as the flow is restricted in the small tube at the end. This is the same thing that happens to us as the flow is restricted in the cell. But that is only part of the point that needs to be made. As we are pouring the oil, we really don’t know how much to pour to keep a steady flow. It might be because we can’t see well under the hood. We are probably not seeing what we need or why we need it. So what will help us to see the opportunities? Final Assembly C/T = 60 Sec.

The Next Chapter in AM’s Success Story
Value Stream Mapping This is the Next Chapter in the ArvinMeritor Success Story. Our opportunities for success will be determined through Value Stream Mapping. This concept is an extension of the concepts of ArvinMeritor Performance System. It will help us to use the same tools that we have in our toolbox, but apply them to not only the cell, but outside of the cell or the whole value stream. Of course, a great deal of the opportunities will lead us back to the cell, but it will help us to learn to ask some important questions such as: 1. Do we understand the true takt time requirements for all of the work units in the value stream? 2. Do we really understand the changeover time and the effects it has on other work units in the value stream? 3. How should we handle work units that produce on one shift, yet supply parts to other work units that work on both shifts? 4. What impact does downtime on a cell have on other work units in the value stream? 5. Probably most important from a general viewpoint, what happens between the work units and how does it affect the entire value stream? What we really want to accomplish is to understand the impact of everything that takes place in the value stream.

All the Actions Involved in Making a Part
What is a Value Stream? All the Actions Involved in Making a Part Now that we understand value stream, or all the actions involved in producing a part, let’s take some time to focus on the concepts of value stream mapping. Value stream mapping is made up of (3) essential components.

Production Flow Establishing Flow Information Material
The first component of value stream mapping is Establishing Flow. We often associate establishing flow with the movement of material throughout the value stream, and of course, this is one component of flow. If we walk out in the plant, it is usually easier for us to follow the flow of material. Inside the work unit it is very easy to follow the material flow. As we walk out side of the work unit it becomes a lot more difficult to follow the flow of material, especially when the material travels out of our sight. In addition to the material flow, there is another key ingredient in the value stream flow. This key ingredient is the flow of information, which we often have a tendency to overlook. If we took time to walk through our plants today and try to identify the information flow, we would have a very hard time. In most cases, schedules are driving our information and we can’t see how the information from one work unit travels to the next work unit or finally to our supplier. The flow of information should be clear and as visible to us as the flow of material. Information Flow and Material Flow are critical for us to understand if we are going to effectively run our business. It is extremely important for us to establish both of these as we see the value stream. Material

Elimination of Waste A Broadened Perspective
Identify and Target the Source of Waste in the Entire Value Stream, rather than Just the Work Unit The second component of value stream mapping is the Elimination of Waste. Elimination of waste is not something new to anyone here today. The practice of waste elimination is a key strength of this entire audience, which is evident with the results that we saw earlier in this presentation. But it is impossible to eliminate waste that we can’t see. We talked about the difference between what we report as inventory and what actually exists. This would be a good indicator that we are not seeing all of the opportunities. There is more waste in the entire value stream and our main objective is to identify this waste in the entire value stream and target the actual source.

Adding Value Establishing the Vision Reducing the Lead Time
The final component of value stream mapping is adding value, the real reason for our existence! Once we are able to establish the true flow of material and information and identify the true sources of waste, we can begin to establish the vision or direction of our efforts. This will provide us with the flexibility to meet the demands of our customer. The final result will provide us with a reduction in our lead-times.

Benefits of Value Stream Mapping
Big Picture Approach Links Material/ Information Flow Team Growth Value stream mapping provides the benefit of helping us see the whole value stream through the big picture approach. Remember that we are interested in seeing the overall flow and not just the flow within the work unit. The mapping approach will develop our skills to fully understand the material and information flow throughout the value stream, and this will allow us to make more informed decisions about the way we utilize our resources to make improvements. It will provide us with the tools necessary to make reductions in our lead time by reducing inventory. Value stream mapping will also provide us with a method to expand the growth of our teams and enable our employees to work together on opportunities that exist outside their own production work unit. After continued practice and use of the mapping process, we will become stronger at managing our operations and the improvement process.

Visionary Tool Planning Communication Implementation
Value stream mapping will help us achieve this goal because we will be better able to see the vision. And after the vision is clear, the mapping tool will provide a method for us to plan our improvements, communicate those plans throughout the organization, and provide us with a system for implementing our plans.

The Current State Map In order for us to identify these opportunities in the value stream, we have to first understand our current or actual status of manufacturing. That is why value stream mapping begins with the development of a Current State Map. The purpose of this activity is to make clear the current production situation by drawing the material and information flow. There is only one method that allows us to accomplish this task. We have to gather information from the plant floor. It is a great deal easier to just run reports that may provide us with this type of information; however, most of the time it does not accurately reflect the current situation. Besides, if we can’t see the actual condition first hand as it actually exists, we do not stand a chance of seeing the direction of improvement. Therefore, value stream mapping always begins with the current state map.

Assembly Sub-Assembly Finished Goods Inventory Supplier Stamping
C/O Time Down Time Stamping Takt Time Customer Let’s take a minute to discuss what we may find as we begin to map the current state. But, let’s look at it from another approach. Suppose we have a river that represents the value stream in our facility. In this example we will start with the supplier. Just before the supplier we have a dam holding back the river representing large amounts of inventory. This may be the result of poor delivery performance, large container quantities, or variations in the orders we send to our suppliers. As the water releases through the dam the material enters a stamping cell shown here as the narrow, fast moving part of the river. The material moves quickly through this area similar to the speed at which we stamp parts on the press. We may also find that because changeover times are high, the material moves very slow once it leaves the press line. The inventory increases due to changeover and becomes stagnant. This would be similar to the wide bend in the river where the water moves slowly. But once the material reaches the next process, or the sub-assembly cell, the movement of material speeds up again to a rapid pace. However, downtime in this area might be increasing the inventory to make us feel safe and another large pool is created in the river. As the material reaches the assembly work unit, the movement increases again to a very fast pace. But look at the pool of water before the dam which represents the customer. Large inventories are held to prevent miss shipping to the customer. However, we don’t really know if the inventory we keep is due to internal problems not allowing us to achieve takt time or fluctuations existing in customer demand. These are the type of things we want to see as we map out the current state. Assembly

The Future State Map Once we begin to see the value stream through the creation of the current state map it is easier to recognize areas of overproduction. However, a current state map and the effort required to create it are pure waste unless we use the map to quickly create and implement a future state map that eliminates sources of waste and increases value for the customer. The goal is to build a chain of production where the individual processes are linked to their customer either by continuous flow or pull, and each process gets as close as possible to producing only what the customer needs when they need it.

A Lean Stream!!! Sub-Assembly Finished Goods Inventory Stamping
Cycle Time C/O Time Down Time Stamping In the same type of example that we used earlier to depict our current state map, our future state might take this form. Notice the improvement points that we have made to make the flow of product more smooth. As we identified opportunities in leveling of production and the ability to meet takt time through improved cycle time, downtime and changeover time, these items that once prevented us from achieving a continuous flow are now minimized and the total lead-time to travel the river is much shorter. Wide bends in the river where product might become stagnant have become less of an issue. As you may recall from lessons in geography, the smaller rivers are known for the winding way they travel. The larger, more powerful rivers have less bends as they have continued to wear away the land that prevents their straight path and continuous flow. As a strong company, we have the same power to to eliminate those items that impede our ability to achieve continuous flow. However, we can only accomplish this task as we develop the ability to see the whole river. Final Assembly

Annual Value Stream Plan
This Plan Visually Displays: Step-by-Step Implementation Plan Measurable Goals Clear Checkpoints with Listed Deadlines, Ownership, and Named Reviewers The Value Stream Plan will Play a Fundamental Role in the Optimization of your Value Stream All of the information completed to this point, the current state map and the future state map will lead to the development of the value stream plan. This plan shows: exactly what you plan to do and by when, a step-by-step approach measurable goals clear checkpoints with real deadlines and named reviewer(s) When executed correctly, the value stream plan will play a tremendous role in the overall optimization of the entire value stream. You might say it is our map of the river that prevents us from running ashore. Therefore, time well spent in developing the implementation plan will increase the probability of success. Think about another example. Let’s say we want to take a trip from Columbus, Indiana to Detroit, Michigan. There are several routes that we can take, but we want to arrive at the customer before our competition. To make sure we get there quickly we drive on the interstate because we can move at a more rapid pace. The same pace that we move product through our work units. But at different points along the way, we have to get off the interstate and onto two lane roads because of construction. The traffic begins to back up and our pace slows way down. This would be similar to product moving outside of the cell. By executing the value stream plan, we can eliminate the construction, maintain our speed, and beat the competition.

Management’s Role Make Sure Everyone Understands! See Overall Flow
Develop the Vision Lead Implementation Support EI Teams Make Sure Everyone Understands! Making the value stream mapping process work requires strong management support. Therefore, we as a group of management must be able to see the overall flow. It is imperative that we dedicate the time to really learn the process of value stream mapping to the point that we can actually teach it and use it in our daily interactions. In reality, management has the perspective to see the total flow as it cuts across departmental and functional boundaries, and therefore, we have to pull our resources to develop the vision of an improved, lean flow for the future and support the implementation. This will provide us with the opportunity to pull employees from different teams to interact and understand how their areas affect the flow in the entire value stream. As a coach, our role is to make sure that everyone understands.

Management’s Commitment
Eliminate Overproduction Support Lean Principles Willingness to Take Risks Understanding the management role of value stream mapping brings about the commitment to support the process. Constant efforts must be made to eliminate overproduction by producing to takt time, which means that we have to manage our operations around takt time requirements. We must have a firm conviction to adapt the ArvinMeritor Performance System principles throughout the entire value stream. And finally, we must understand that there is always a learning process of trial and error. In other words, we have to be able to accept the fact that we will go through the process of trying, sometimes failing, but most important learning. The final outcome will lead us to victory.

“Whenever there is a product for a customer there is a value stream The challenge lies in seeing it”
The race against the competition continues for all of us at ArvinMeritor. If we are going to keep ahead of the pack, we need to find an easier way to see the opportunities. In closing, I would like to make a challenge to all of you here today. First of all, when you return to your plant, pick a product in your operations and walk through the entire value stream. Think about the things that we talked about today and see if you can identify the flow of material and information throughout the value stream. Take the time to ask yourself why the things you see exist.

Practice Makes Perfect
The Current State Map Practice Makes Perfect The first few times you practice mapping in your facilities, you may find it difficult; however, with practice you will find it a very simple and effective tool to use.

It’s Time to Practice At this Time Please Read through the Example Data Set for General Exhaust We will Begin Drawing the Example Current State Map in Just a Few Minutes In the packet you have been provided you will find a data set for a fictional company called General Exhaust. Please take a few minutes to review this material, and then we will begin to develop a current state map.

Data Set for General Exhaust
Customer General Auto Customer Information 20,000 pieces per month Container size = 300 pieces Customer operates on two shifts Two deliveries to customer per week

Data Set for General Exhaust (continued)
General Exhaust Production Control Department Electronically receives General Auto’s 13 week forecast and enters into MRP Electronically issues 13 week forecast to General Components Receives daily firm order fax from General Auto Secures components through daily fax to General Components Generates daily departmental schedule based on MRP

Production Process: Sub-Assembly Sub-Assembly Final Assembly Work Time: 20 Days per months 2 shifts in all production departments 8 hours per shift 2 ten minute breaks per shift and unpaid lunch

Final Assembly 3 operators Takt Time = 55.2 seconds Cycle Time = 55 seconds Total Work Content = 146 seconds Changeover Time = N/A Uptime = 85% Observed Inventory .75 Days work in progress 3.5 Days finished goods Shipped to truck from final assembly finished goods

Sub-Assembly 2 3 operators Takt Time = 55.2 seconds Cycle Time = 55 seconds Total Work Content = 130 seconds Changeover Time = N/A Uptime = 90% Observed Inventory .5 Days work in progress 1 Day finished goods

Sub-Assembly 1 1 Operator Takt Time = 27.6 seconds Cycle Time = 24 seconds Total Work Content = 24 seconds Changeover Time = 30 minutes Uptime = 97% Observed Inventory 2 days raw material .25 days work in progress 1 day finished goods

Supplier General Components Supplier Information Stampings Delivery to General Exhaust (1) time per day Container size = 300 pcs Two shift operation

Always Start With the Customer!!! Work Upstream from There
When going through the mapping process, in order to fully gain an understanding of the value stream, we need to start with the customer.

What to Look For... Information Flow from the Customer
Forecasts Firm Order Instruction to Produce Movement of Material Inventory Future Opportunities! In this exercise it is important for us to understand the information flow from the customer. This would include the forecast as well as firm orders. What we are interested in is how this information flows from the customer to the assembly line. In other words, what tells us to produce and move material to the customer. How do we understand what our inventory levels should be? Don’t forget to look for future opportunities.

Exercise 1: Customer Loop
Walk through the Entire Process (Upstream) Sketch Value Streams for the Customer Loop Gather Data for the Customer Loop Worksheet Capture Information Flow Return to Room In order to fully understand the value stream, it is important to start at the shipment of material and walk back to the receipt of supplied parts. The objective is to be able to sketch out the value stream, which would include all of the data required to complete the customer loop. Don’t forget to capture the information flow.

Worksheet Exercise 1: Customer Loop
1. Who are the customers and where are they located? 2. How many pieces does the customer require per month? 3. What is our delivery frequency? 4. What is the container size (pieces per container)?

5. How many shifts does the customer run? 6. In detail, describe how customer orders are placed (Kanban, MRP, forecasts, firm orders, etc.) 7. Where is the point of pull? 8. How much finished goods inventory did you find (count it!)?

9. Does any safety or buffer stock exist? 10. How is buffer and safety stock distinguished from finished goods inventory?

11. Map the Material and Information Flow
Customer Loop

Report Outs Customer Loop

What We’ve Accomplished
Understanding Customer Requirements Established Current State of Information and Material Flow Have Started to Think About Future Opportunities Hopefully this exercise provided us with an understanding of the current state of information and material flow. Completing this exercise allows us to see what really takes place from the time the customer orders a part until the time that we ship the part. This also helps us to see opportunities.

Internal Loop Tie the Customer Loop to Internal Processes
Establish the Relationship between Internal Processes Our next step is to tie our customer loop to our internal processes. We want to be able to develop and understand the relationship among the internal processes.

What to Look For... Define Plant Level Processes Data Box Information
Takt Time, # of Operators, C/O Time, Work Unit Cycle Time, Total Work Content, Uptime %, # of Shifts, Available Operating Time Capture All Inventory What Initiates Production? Future Opportunities! As we enter this exercise there are key items of information that we need to identify. This would include a complete understanding of all of the plant level processes in the value stream. In each of these plant level processes, or work units, we need to fully understand the takt time requirements, current level of manning, changeover time, work unit cycle time, total work content, uptime %, # of shifts, and available operating time. We must also capture all the inventory. And just as important, we need to understand what information initiates production. Don’t forget to think about future opportunities.

Exercise 2: Internal Loop
If Needed, Walk through the Entire Process (Upstream) Sketch Value Streams for the Internal Loop Gather Data for the Internal Loop Worksheet Capture Information Flow Return to room If needed, it is okay to walk through the entire process again to refresh our memories. Remember the purpose of this session is to grasp information that allows us to sketch the value stream for the internal loop. The data gathered during this step will also be applied to the current state map. Think about the flow of material, but don’t forget about the flow of information.

Worksheet Exercise 2: Internal Loop
1. Define the processes involved in the production of the part from a plant level (bird’s eye) perspective. Ex. Stamping Work Unit Sub-Assembly Final Assembly 2. For each of the plant level processes find the Takt Time, # of Operators, Work Unit Cycle Time, Total Work Content, Changeover Time, Uptime %, Number of Shifts, Available Operating Time (in seconds).

Worksheet Exercise 2: Internal Loop
3. For each of the plant level processes count and calculate the finished goods, work in progress, and raw materials inventory. 4. How do the production work units know when and what to produce? (Be very specific about this process)

Internal Loop

Report Outs Internal Loop

What We’ve Accomplished
Understand Relationship between Internal Processes Current State of Information and Material Flow Identified Future Improvement Opportunities At this point, we have gained an understanding of the relationship between our internal processes. We have mapped out the information and material flows associated with these processes, and most importantly, we have identified opportunities for improvement.

Supplier Loop Tie Internal Loop to Supplier
Understand Flow of Information and Material We will now work to tie our internal loop to our supply base. To do this, we must capture the flow of information and material.

What to Look For... Capture All Inventory
Establish Current Information and Material Flow From Storage to the Work Unit From Supplier to Storage Understand Raw Material and Component Requirements Future Opportunities! In this step we want to begin by capturing all of the inventory. To accomplish this, we have to understand the flow of information and material from our storage area to our work unit and from the supplier to storage. Most importantly we have to gain an understanding of what the raw material and component requirements are in order to meet demand. If we have considered the opportunities that might exist in the customer loop and internal loop, we will be able to identify many opportunities that exist in the supply loop.

Exercise 3: Supplier Loop
If Needed, Walk through the Entire Process (Upstream) Sketch Value Streams for the Supplier Loop Gather Data for the Supplier Loop Worksheet Capture Information Flow Return to Room As always, feel free to walk through the entire value stream. This always seems to make it easier to sketch out the value stream for the supplier loop. There is a great deal of information to gather in this exercise in order to complete the supplier loop worksheet. Be sure to capture the information flow.

Worksheet Exercise 3: Supplier Loop
2. Describe in detail how we decide we need more material and how we inform our supplier of our needs (MRP, Kanban, Forecasts, Firm Orders). 3. How do we decide how much raw material inventory we need?

Supplier Loop

Current State Map (Putting It All Together)
Report-Outs Current State Map (Putting It All Together) After the report outs, we will focus our attention on opportunities that exist for us in the future. The real benefits from the mapping process begin by looking at our actual condition and seeking out opportunities for improvement. In the pursuit of perfection, the only thing that is really necessary is an open mind and the determination to be better than we are today.

Practice Makes Perfect
The Future State Map Practice Makes Perfect Mapping the future state takes practice. We have to think about all the tools that we have learned from ArvinMeritor Performance System and apply them throughout the entire value stream. None of these tools are intended to work alone. They all have their place in the overall improvement process. The key to success is knowing how they interact to achieve the end result.

It’s Time to Practice Please Review the Example Current State Map
We will Begin Drawing the Future State Map Shortly Let’s take a few minutes and review the example current state map we prepared yesterday. After you have had a chance to refresh your memory, we will begin drawing the future state map.

Opportunities in Containerization
Small Container Quantity Increases Flexibility Reduces Customer Fluctuation Overall Benefit Reduces Inventory Dollars Packaging is often an area that we have a tendency to overlook as an improvement opportunity. In fact, container size can actually cause us problems in manufacturing without us even knowing. In reality, bigger is not always better. Small container quantities actually provide us with increased flexibility and can reduce the fluctuations that we see in Customer orders. The end result is a reduction in inventory and the cost associated with carrying additional inventory. How can small container quantity provide us with such a benefit?

Available Operating Time
Takt Time Available Operating Time Pieces Takt Time = 28,800” - 1,200” 500 pcs = 55.2” per piece = The answer is in the time it takes the Customer to consume all the pieces in a container and the time that is required for us to replenish what has been withdrawn from our processes. This brings us back to the most fundamental component of manufacturing which is takt time production. The reason is very simple. Takt time sets the pace in our production processes to match the demand of the Customer. This is true not only for the time it take us to make one single piece based on the usage of the Customer. It is also true for the time it takes for the Customer to use a full container and for us to replace it. In the example current state, our takt time was 55.2 seconds. After we calculate takt time, we can study the affects that container size has on our ability to be flexible and the problems it can cause in the fluctuations of Customer orders. Sets Pace of Production to Match Customer Demand

Effects of Container Size
Current State Example (takt time * container size) = min per container 60 seconds (55.2” * 300 pieces) minutes (4 hrs 36 m) 60 seconds minutes Let’s start with our own ability to be flexible. We can start by determining how long it takes us to produce a single container. If we take our takt time and multiple it by the quantity in one container, it will give us the total seconds required to produce a single container. If we divide it by the equivalent of one minute, or sixty seconds, it will tell us how many minutes are required to produce a single container. In our example, the time to produce a single container is (4) hours and (36) minutes. Let’s suppose that we produce (3) different parts on a single line and we have the capability to changeover in a single cycle or 55.2 seconds. If a truck picks up parts from our facility every two hours, can we produce every part number for every truck. Of course the answer is no, since it takes us over (4) hours just to produce a single container of one part number. In this example, our strength in changeover did not provide us with the ability to reduce our inventory, since our container quantity was so large. The smaller the quantity per container, the more flexible our operations become.

Effects of Container Size
Future State Example (takt time * container size) = min per container 60 seconds (55.2” * 25 pieces) = 23 min If we were to reduce our quantity per container to (30) pieces, we could produce a container every (27) minutes and (36) seconds. This would allow us to produce at least one container of every part for each truck. We have just become more flexible in our ability to supply the Customer on a just-in-time basis.

Small Containers = Improved Flexibility
Container Size It should always be our goal to reduce the number of parts per container. After all, we are searching for continuous flow. As the delivery frequency increases from our Customer, the reduction in container quantity becomes more of an issue if we are to become flexible. Delivery Frequency

Fluctuation Caused by Container Size
What effect does container quantity have on the fluctuations in the orders that we receive from our Customer? This graph does a good job of illustrating the problem. Keeping our current state example, the Customer builds 1000 vehicles a day. Since our container quantity is 300 pieces, this does not allow the Customer to pull only the quantity they need to produce each day. To produce the required 1000 pieces on the first day, the Customer will have to order (4) containers or 1200 pieces. At the end of the day, the Customer has 200 pieces remaining. To complete the production on the second day, the Customer only needs to order (3) containers or 900 pieces, since the balance of 200 plus the order of 900 equals 1100 pieces. As the same pattern continues, we can see the fluctuation in the Customers orders. It’s really not the Customer’s fault. The Customer just doesn’t have the flexibility to order in smaller lots.

Fluctuation Caused by Container Size
Now look at the reduction in fluctuation if the container quantity is only 30 pieces. The Customer now has the flexibility to order closer to the number of parts that will be built in one day. Check this example more in detail by doing the math.

Opportunities in Delivery Pitch
Even Delivery Pitch Drives Constant Takt Time Reduces Fluctuation Overall Benefit Reduction in Inventory How does even delivery pitch provide us with a benefit? Even delivery time supports takt time production and helps us to reduce the amount of fluctuations in Customer demand based on our abilities to produce. The more frequent the Customer pulls our parts, combined with an even withdrawal or pick-up of those parts, a benefit of inventory reduction can be realized. It should be a common practice for us to encourage the Customer to have frequent deliveries at even intervals.

Time between shifts 460 min M T W Th 60 400 min min F
Pick-Up (2,500 pcs/truck) :00 am Wednesday 7:00 am Friday Truck 1 = 2,760’ = 165,600” Takt = 66.24” Truck 2 = 1,840’ = 110,400” Takt = ” This slide helps to clarify the benefits of even delivery pitch. This example provides us with the delivery frequency, the times for pick-up, and the forecast quantity for each truck. Remember that the takt time based on demand is 55.2 seconds. However, the Customer is picking up our parts only 2 times per week and the time to replace those parts for each truck is different. If truck 1 arrives at 7:00am Wednesday, the time to produce or replace the parts previously taken by truck 2 would be from 7:00am on Friday until 7:00am on Wednesday. The time available would be 165,600 seconds. If the trucks take equal quantities, the takt time to produce for truck 1 would be seconds. However, if we perform the same calculations for truck 2, we find that the takt time is much less at seconds. Therefore, we have to hold additional inventory in order to ship the required parts for truck 2. Our best option would be to equal the time available to produce for each truck.

Opportunities in Kanban
Pull System Links Production to Customer Demand Aids in Visual Control Identifies Opportunities for Improvement Overall Benefit Improves Material Control Prevents Overproduction Reduces Inventory One of the opportunities we identified in the current state was to develop a pull system of production. Production instruction was being accomplished through a push system based on production schedules. In order to establish a pull system of production we have to link the customer’s actual usage with our production processes. Meaning, we will replenish only what the customer takes. This provides us with the opportunity not only to produce exactly what the customer wants, but it provides visual control of the movement and production of material. More importantly, it points out opportunities. The overall benefits comes in the form of improved material control, the prevention of overproduction, and the reduction of inventory.

Pull System Customer Process Supplying Process Supermarket
“Production” KANBAN “Withdrawal” KANBAN Supplying Process Customer Process Product Product This example visually enforces what we have just discussed. Withdrawal of product from the customer is signaled through the use of Withdrawal Kanban. After the customer withdraws product, its replenishment is signaled with Production Kanban. Supermarket

Selecting the Point of Pull
Process A B C D Remember, in order to fully implement a pull system, our production instruction must originate from the point closest to the customer. In our current state example we were dispatching schedules to all processes in the value stream. Opportunities in the future state will be realized when production is signaled from a point in the value stream closest to the customer. FLOW

Opportunities in Leveling
Leveling Post Reduces Customer Demand Fluctuation Reduces Delivery Pitch Fluctuation Pulls Product Based on Takt Time Overall Benefits Eliminates Scheduling Levels Customer Demand To assist in the pull system we must compensate for customer fluctuation through the use of a leveling post. Unlike our traditional thoughts on leveling, where we simply divided the customer’s forecast into equal quantities and produced parts based on a forecast, this type of leveling refers to the use of buffer stock in periods of high demand which is replenished during periods of low demand. In addition, this type of leveling compensates for differences in customer pick up time. Furthermore, we are now able produce according to customer pull or Takt time. The benefits of this system are the elimination of scheduling and the leveling of customer demand.

Forecast Week 1 2 3 4 Average Part A 5300 4700 5200 4800 5000 Average 5000 5000 5000 5000 Difference 300 -300 200 -200 Let’s look into leveling a little bit deeper. By comparing our forecast to actual customer demand, we can calculate the actual amount of buffer inventory required to run the system. In this example, on week 1 the customers actual pull was 300 pieces greater than forecast, therefore we would be required to pull these pieces from buffer stock. However, during week 2 we can see that the customer’s actual pull was 300 less than forecast, this gives us an opportunity to replenish what was used from buffer.

Customer Fluctuation Let’s look at this example as an illustration. In week 1 we see that the customer took more than what was forecasted (illustrated by the red line over the blue), so at this time we would pull the difference from buffer stock. However, in week 2 we see that the customer pulled less than what was forecasted, so at this time we would replenish what was taken from buffer stock. In both of these two weeks we would produce at the required customer demand.

Leveling Post Average Avail. Sec Takt Time Container Size # Containers
1000 55,200 55.2 25 40 The tool for leveling is a post that is illustrated in this example. Keep in mind that we now have one customer pick up each day. Based on Takt time and container size we know that the customer can pick up up to 40 containers a day from regular production stock, anything over this amount must be taken from buffer stock. The cards removed from buffer stock would stay in the leveling post in the buffer location until customer demand falls below the required number of pieces.

Opportunities in Takt Time Production
Takt Time Post Produce to Takt Time Enables Visual Management Prevent Overproduction Overall Benefits Identifies Labor Opportunities Lowers Inventory Eliminates Scheduling Once we level production through the leveling post we want to make sure that we send signals for production to the cell based on Takt time requirements. This provides us with the opportunity to see our actual demand, improving our ability to manage when problems appear, and more importantly it will prevent any opportunities for overproduction. By delivering to Takt time and following the rules of kanban, production can not start with an actual card. If the work unit has to stop production until the next kanban is delivered, this is an indication of too much manpower. In addition, we have the ability to maintain lower levels of inventory since it is human nature to overproduce. One of the greatest benefits is that the system becomes automatic and the need for scheduling becomes obsolete. Even though it is important to monitor the system to identify problems, the people in our organization today who spend most of their time deciding what to produce can now spend their efforts making improvements towards one piece flow.

Takt Time Post 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 1st Shift 1 1 2 3 3 4 4 5 1 1 2 3 6 2 8 4 6 2 8 4 6 2 8 4 Part A This is an illustration of a takt time post set up in 6 minute increments. If our container quantity is 25 pieces and our takt time is 55.2 seconds, we can complete a container every 23 minutes. That means our first kanban would go in the 6:00 am time slot and the next kanban would be delivered at 6:18 am. Remember, this is a great tool for visual management to understand if a line is on schedule.

Opportunities in the Work Units
Uptime TPM BOS Charting Team Problem Solving Overall Benefits More Capable Processes Employee Involvement In the current state example, we can see opportunities to reduce the amount of downtime that exists on the work unit. Even though value stream mapping provides us with opportunities that exist outside the work unit, many of the improvement opportunities will point us back inside the work unit. We should make use of the training programs in ArvinMeritor Performance System that provide us with opportunities to improve our uptime percentage. TPM is a prime example. In addition, tools such as BOS charts allow us to understand our problems and provide useful information for the teams to solve problems. We benefit from having more capable processes and at the same time create stronger teams.

Track Downtime and Improvement Activities on BOS Chart
Key Measurable Target Trend Line Improvement Activities Data Analysis Pareto Improvement As we challenge the teams in our facilities to make improvements in our operations, we should take the time to follow-up on this type of reporting information. Asking questions related to progress and coaching through obstacles will provide the team with a sense of management support, which they well deserve. Tracking

Opportunities in and between Work Units
Continuous Improvement Tools Standardized Work Work Balance Bottleneck Improvements Overall Benefits Adding Value/ Removing Waste Improving Flexibility ArvinMeritor Performance System provides us with some valuable tools to make improvements in our production work units. In fact, we have a (3) day course that concentrates on continuous improvement. The CIT class actually contains a mapping process for inside the production work units. This map is called Standardized Work and provides us with the movement of operators as they perform the tasks required to produce a part. It contains information on the manual work time, walk time by the operator moving inside the work units any waiting or wasted time involved with producing a part, and the time required for a machine to process a part. The real benefit is that it provides us with the current condition for producing a part and without this information, it becomes very difficult to make improvements. If we have this information, we can begin to balance the work among operators and search out the waste that exists in the individual steps. We can also understand if we have capacity constraints that prevent us from meeting the required takt time set by the Customer. As we begin to use the tool on a regular basis, we improve our ability to remove waste and increase the true value we add to the product. We also become more flexible in our ability to meet Customer requirements.

Work Balance Current State
Sub-Assembly 2 Final Assembly In these work balance chart examples of the current state map, we have the opportunity to compare the actual time required to produce a part compared to the takt time requirements. At first glance, we can quickly realize an opportunity to balance the work of operators in both the sub-assembly and final assembly work units. If we do a little more investigation, we can identify the possibility of combining these work units and make improvements in labor utilization.

Work Balance Future State
Final Assembly This example illustrates the combination of the two work units. Granted, this type of improvement does not happen all at once, but as we begin to see the opportunities, we can prepare plans that will lead us towards improvement in our operations. This can only be accomplished through the continuous efforts of improving the standard work in our work units. In order to keep this a high priority, we should analyze the standard work with the use of combination tables on a quarterly basis if not monthly. We will be surprised at what we find!!

Pull System Withdraw Only What you Need Replenish What is Taken Overall Benefits Flexibility in Production Prevents Overproduction Reduces Inventory In our current state example, we found out that we were actually pushing our product to the next operation. There was not a replacement system based on the usage of the downstream customer. When this occurs, we have no system in place to prevent overproduction. However, if we establish a pull system, our movement of material to the next process will be based on what was consumed and we will replenish only what has been taken. This will increase our flexibility since we are not producing something that the customer does not need, which in turn prevents overproduction and reduces inventory.

Pull System Production Kanban Withdrawal Kanban Preceding Process
Assumptions: Production Schedules Will Always Change Production Will Never Go According to Schedule It Is Human Nature to Overproduce Production Kanban Withdrawal Kanban Preceding Process Store Following Process When it comes to recognizing the need for a pull system of production, this slide tells it all. We have to recognize that demand of our product will change and that production will never go according to schedule. Of course, the more consistent our operations become, the less of an impact this will become. It will be our nature to overproduce until we begin targeting the true source of waste that we feel requires us to carry extra inventory. New Product Needed Product

Changeover Decrease Changeover Time Increase # of Changeovers Drive Small Lot Production Overall Benefits Flexibility in Production Reduction in Inventory Better Inventory Turns In the current state example, we know that the inventory between sub-assembly one and sub-assembly 2 could be reduced if we could reduce our changeover time to become more flexible. Suppose that we cut our changeover time in half. We could then increase the number of changeovers. By doing so, we could also reduce the inventory required between the work units The drive towards small lot production will always provide us with more flexibility and lower levels of inventory. This will have a positive effect on our inventory turns.

1996 YTD LAST MO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 C/O #1 C/O #2 C/O #3 C/O #4 C/O #5 C/O #6 C/O #7 C/O #8 AVG. 16.3 14.7 13.2 GOAL 18.0 10.0 CHANGEOVER Work Unit__________ SHIFT_____ - 2.0 4.0 6.0 8.0 12.0 14.0 16.0 LAST MO DAY MINUTES One easy tool to check the progress of our activities to reduce changeover times is the 31 day chart. It takes very little time to complete the chart and provides the team with a clear understanding of their efforts to improve changeover time.

In addition, we can use the video tape to identify opportunities to improve changeover and utilize this chart to plan our improvements. If changeover time is an obstacle for us to overcome, we need clear documentation to make the improvements.

Dance Chart Example 3 6 3 6 Game Board Supply Table 5 4 1 2 5 4 2 1
The use of a dance chart is also a method of mapping out the movements required to make a changeover. When we take the time to map out our current condition, we can begin to identify opportunities for improvement. On a Dance Chart, the dotted or broken lines represent walking empty handed and a solid line with something in your hand.(tools, tooling, material, a die) Can you see why we call this a Dance Chart? 1 Tool Storage Die Storage Paper Storage Dance Chart Example

Opportunities in the Supplier Loop
Supplier Development Identify Key Suppliers Reduce Container Size Increase Delivery Frequency Kanban!!! Overall Benefit Inventory Reduction Cost Reduction We also have opportunities in the supplier loop of the current state example. After we identify the suppliers in the mapping process, we can review items such as container size, delivery frequency, and the use of kanban to pull material based on demand to make the same types of improvements we did in the customer loop. This will provide us with a reduction in inventory and an overall cost reduction.

The Future State Map It is Time To Draw
Mapping the future state takes practice. We have to think about all the tools that we have learned from ArvinMeritor Performance System and apply them throughout the entire value stream. None of these tools are intended to work alone. They all have their place in the overall improvement process. The key to success is knowing how they interact to achieve the end result.

Value Stream Mapping Day 2

Exercise 4: Customer Loop
Step 1 Review Takt Time Calculation Step 2 Opportunities with Containerization Effect of Container Time Fluctuation due to Container Quantity Future State Proposal for Container Quantity Now that we have taken a look at preparing a future state map for the example, its time to apply what we have learned to our plant exercise yesterday. To do this, we will start with the customer loop. As you try to think of the improved future state, don’t limit yourselves on ideas. Begin by placing your ideas on the current state map (customer loop). The next step will be to review your takt time calculations. Everything begins with the withdrawal of parts from the customer in increments of time. The second step will help determine if you have opportunities in container size. In this exercise, you will calculate the time to complete one container and check the impact it has on the customer’s flexibility to order parts. Then you can decide if you want to make any changes for the future state.

Exercise 4: Continued Step 3 Step 4 Identify Delivery Pitch
Opportunities with Customer Pull Timing Identify Delivery Pitch Calculate Inventory Held Due to Pitch Future State Delivery Frequency/Timing Step 4 Opportunities with Leveling Calculate Leveling Post Develop Point of Pull Future State Leveling System The third step of this exercise will identify the opportunities in customer pull by determining the delivery pitch. This can be done by calculating the inventory needed to prevent fluctuations in pick up time from the customer. Then decide what you would like to change in terms of delivery frequency and timing. Step 4 will focus on opportunities with leveling. Calculations of the leveling post will be required. Develop your point of pull, a single source, and decide your future state leveling system.

Exercise 4: Continued Step 5 Step 6
Opportunities in Takt Time Production Determine Kanban Delivery Frequency to Cell Future State Takt Time Post Step 6 Map the Future State Customer Loop Step 5 will determine your ability to produce by takt time. You will identify the delivery frequency to the cell and develop your future state takt time post. The final step in this exercise is completing the future state map in the customer loop.

Worksheet 1 Takt Time Calculation
1. Formula: Available Operating Time Takt Time = Pieces 2. Takt Time Results:

Worksheet 2 Opportunities with Containerization
1. Effect of container time: 2. Fluctuation due to container quantity (Graph): 3. Future state proposal for container quantity

Worksheet 3 Opportunities with Customer Pull Timing
1. Identify delivery pitch: 2. Calculate inventory held due to pitch: 3. Future state delivery frequency and timing:

Worksheet 4 Opportunities with Leveling
1. Calculate leveling post: 2. Develop point of pull: 3. Future state leveling system:

Worksheet 5 Opportunities in Takt Time Production
1. Determine kanban delivery frequency to the work unit: 2. Future state takt time post:

Worksheet 6 Map the Future State Customer Loop

Future State Map Customer Loop
Report-Outs Future State Map Customer Loop

Exercise 5: Internal Loop
Step 1 Are BOS Charts Being Used? Identify the Main Causes of Downtime What Steps Can We Take to Achieve Best-in-Class Levels of Uptime (97%)? You will need to visit the production work units in the value stream for this exercise. In step one, you want to determine if there are opportunities to improve uptime in the work units. Are BOS charts being used to track and improve the main causes of downtime? What steps can be taken to achieve a BIC level of performance?

Exercise 5: Continued Step 2 Identify Manual and Walk Time
Identify any Bottlenecks Calculate Labor Requirements Does this Labor Requirement Reflect what You Witnessed on the Line? Do Opportunities Exist to Combine Work Units in the Value Stream Based on Labor Requirements? Step 2 will prepare us to identify manning requirements. You will need to calculate the manual and walk time. Identify any bottlenecks and determine your manpower. Are the number of people on the line the same as your manning calculations? Are there potential opportunities for combining work units?

Exercise 5: Continued Step 3 Map the Future State Internal Loop
You will want to finish this exercise by mapping your future state loop. As you prepare your future state map of the internal loop, you want to be forward thinking and prepare for continuous flow.

Worksheet 1 Uptime % 1. Are BOS charts being used? 2. Identify the main causes of downtime: 3. What steps can we take to achieve Best-in-Class levels of uptime (97%)?

Worksheet 2 Standardized Work
1. Identify manual and walk time: 2. Identify any bottlenecks: 3. Calculate the labor requirements: 4. Does this labor requirement reflect what you witnessed on the line? 5. Do opportunities exist to combine work units in the value stream based on labor requirements?

Worksheet 3 Map the Future State Internal Loop

Future State Map Internal Loop
Report-Outs Future State Map Internal Loop

Exercise 6: Supplier Loop
Step 1 Opportunities with Kanban Are Parts Ordered Based on Usage? Are Supplier Kanbans Being Used to Order Parts? Are Move Cards Used to Deliver Raw Materials to the Work Units? Step 2 Opportunities with Delivery Frequency Can Inventory be Reduced with an Increase in Delivery Frequency? This exercise will focus on the supplier loop. The first step is to identify opportunities with kanban. Are parts being ordered based on usage? Are supplier cards being used to order parts? Are move cards being used to deliver raw material and components to the work units. Step 2 will focus on the delivery frequency. Do you see any opportunities to reduce inventory through an increase in delivery?

Exercise 6: Continued Step 3 Step 4
Opportunities with Containerization Do Component Container Sizes Match Finished Goods Container Size? Step 4 Map the Future State Supplier Loop Step 3 will focus on containerization. Do component container sizes match the quantities of finished goods. Step 4 requires the completion of the supplier loop for the Future State Map.

1. Are parts ordered based on usage?
Worksheet 1 Kanban 1. Are parts ordered based on usage? 2. Are Supplier Kanbans being used to order parts? 3. Are move cards used to deliver raw materials to the work unit?

Worksheet 2 Delivery Frequency and Containerization
1. Can inventory be reduced with an increase in delivery frequency? 2. Do component container sizes match finished goods container sizes.

Worksheet 3 Map the Future State Supplier Loop

Future State Map Supplier Loop
Report-Outs Future State Map Supplier Loop

Understanding the Future State Drawing the Map
Put Pencil to Paper!!! Remember: Start with the Customer Include Material and Information Flows Data Boxes!!! The last exercise of the day requires us to put all of our information together to complete a future state map. We will link the entire system of information and material flow from customer to supplier in this exercise. Remember to start with the customer loop. Include the material and information movement. Don’t forget to use Data Boxes in this exercise.

Future State Map (Putting Opportunities Together)
Report-Outs Future State Map (Putting Opportunities Together)

Making the Future State a Reality
Implementation Making the Future State a Reality The process of mapping the current state is to provide us with a clear understanding of the way we are doing things today. Mapping the future state opens the door for opportunities in the overall improvement process. However, completing these steps alone provide us with little benefit unless we develop a system for implementing the future state. In fact, you might say that this is the most difficult part of the entire process. It is probably more difficult than the process of actual implementation. The reason is pretty simple. If we don’t develop a sequence of events that need to take place in order to make the future state a reality, we will not be able to identify, coordinate, and support the resources in the implementation process. We must clearly indicate the obstacles to overcome and direct these resources to help eliminate those obstacles.

Continuous Improvement Cycle
Plan Developing the Improvement Plan Do Support the Implementation Check Analyze the Results Act Standardize the Process The planning phase is start of the improvement cycle. Time well spend in this area will determine the speed and success of the implementation cycle. Depending of the skill level of the organization, much of the time in the implementation phase will be spent coaching. Monitoring the results along the way will make the checking phase or analysis period much easier to accomplish. Acting on the results, either by standardizing the final outcome or redirecting efforts actually leads us towards the entire process again. Keep in mind that the plan will determine the results of the other categories.

How Do We Implement? Break Implementation Into Steps Customer Loop
Internal Loop Supplier Loop The implementation of the future state should take place in small increments. While it is acceptable to work on projects throughout the entire stream at the same time, breaking the implementation into steps or loops makes the process a little easier to manage. In addition, the pull system starts with the customer and working upstream from that point is a logical sequence of events.

...How Do We Implement... Develop Implementation Packet
Current State Map Future State Map Supporting Documentation (Standard Work Studies, etc.) Value Stream Plan Your implementation system should include several items. It would include the current state map, the future state map, any supporting documentation that has been prepared to support the implementation, and the value stream plan. You will find this to be a very organized and effective method for making improvements. In fact, it is a good idea to arrange this information in a room and when you have meetings, it is easy to discuss the progress you are making. But you can’t forget that seeing the actual results on the plant floor is essential to the overall improvement cycle.

Value Stream Plan The Plan Visually Displays:
Step-by-step Implementation plan Measurable Goals Clear Checkpoints with Listed Deadlines, Ownership, and Named Reviewers Let’s talk a little more about the value stream plan. This is really putting all of the opportunities together. The value stream plan is a visual method to display the step-by-step process of implementation. It consists of measurable goals, clear checkpoints with completion dates, as well as, the people responsible for implementing and following up the entire process.

Key Points for Planning
Produce to Takt Time Eliminate Overproduction Pull Product Based on Customer Demand Kanban Point of Pull Leveling Establish Continuous Flow There are some important points to remember when preparing the value stream plan. The first point is takt time. It is critical to understand that there are many options, some more successful than others, in operating a facility. As you prepare your plans, make sure you ask yourself if the overall direction you are taking supports the principles of just-in-time. Above all, prevent overproduction. This can be accomplished by producing to takt time and developing a pull system of production that replenishes only what the customer has taken. The final steps of the improvement process will lead us closer to a continuous flow of product throughout our facility. Information will be clear for everyone in the organization.

Outline the Plan For Each Value Stream Loop Establish the Objectives
Determine the Measurable Goal The outline of the value stream plan is a good starting point. It can be combined with the preparation of the overall plan. The important point is to include the objectives of what you want to accomplish with goals that are easy to measure.

Goal Measurable Reduce lead-time 9 Days to 4 Days
Plant Level Objective Goal Measurable Reduce lead-time Days to 4 Days In our example, we may have set a goal to reduce the overall lead-time from (9) days to (4) days. This would be the plant level objective.

Customer Loop Goal Measurable
Decrease Container Quantity 300 Pieces to 25 Pieces Increase Delivery Frequency 2 per Week to 1 per Day Finish Goods Pull System Days of F/G Inventory The goals we set in the customer loop included decreasing the container quantity from 300 pieces to 25 pieces per container to improve our flexibility. Another goal was to increase the frequency of pick up from the customer from 2 times per week to 1 time per day. This would help us to improve our flexibility to meet customer demands. Finally, we set a goal of implementing a finished goods pull system and set our level at 1.75 days as a starting point.

Internal Loop Goal Measurable Increase Uptime % Best in Class - 97%
Establish Continuous Flow (0) Inventory Between Work Units Reduce Changeover Time (30) to (15) Minutes Internal Pull System Production/Move Cards The internal goals were as follows: To improve our uptime percentage to a BIC level of 97%. To establish continuous flow between the sub-assembly work unit and final assembly work unit with no inventory between the work units. To reduce our changeover time from 30 minutes to 15 minutes, which would allow us to reduce our inventory. Develop an internal pull system utilizing production and move cards.

Supplier Loop Goal Measurable Implement Kanban Supplier Cards
Increase Delivery Frequency times per Day Decrease Container Quantity Pieces to 25 Pieces In the supplier loop, we decided to set the goals of implementing kanban with supplier cards, increase the delivery frequency to once per day, and to decrease the container quantity from 300 pieces to 25 pieces.

Yearly Value Stream Plan
Date: Product Family: Champion: Plant-Level Value Stream Value Stream Goal Specific Scheduling Deadlines Owner Reviewer and Objective Loop Objective (Measurable) ( on Monthly Basis) Review Dates Loop 1 Customer 2 Internal The items that we just covered would be placed in the value stream plan. This is what a blank copy of the value stream plan would look like. 3 Supplier

Date: 10/29/99 Yearly Value Stream Plan Champion: Bill Green Plant-Level Objective Value Stream Loop Goal (Measurable) Specific Scheduling Deadlines ( on Monthly Basis) Owner Reviewer and Review Dates 1 Customer 2 Internal 3 Supplier Product Family: Sub-Muffler Dec Cont. Qty. Inc. Del. Freq. FG Pull System Reduce Finished Goods Inventory 300 to 25 2 /wk to 1/D 1.75 Days Finished Goods Gold Team Joan Smith 2/28/00 4/15/00 5/29/00 Inc. Uptime % Cont. Flow (S/A 2 to F/A) Reduce C/O Time Int. Pull Sys. BIC 97% 0 Inv. Between work units 15 minutes Prod. Move Cards Kanban Dec. Cont. Qty. Supp. Cards 4/Day Blue Red John Doe 5/30/00 7/30/00 8/30/00 Jim Smith 9/30/00 10/15/00 12/30/00 This is what the completed value stream plan would look like. It contains information that is easy to follow and provides us with a clear timing for when we will complete our plan. Frequent follow-up is the key to success.

Exercise 7: Value Stream Plan
Step 1 Develop Value Stream Plan Step 2 Discuss Roadblocks to Implementation How Do We Eliminate Roadblocks In this exercise, we want to practice putting together the value stream plan. This will come from the information included in the future state map. As we prepare the plan, we should discuss any roadblocks that may prevent us from achieving the future state and what we can do to overcome those roadblocks. When the plan is completed, there should be commitment by all to achieve the timing and results identified in the plan.

Date: Yearly Value Stream Plan Champion: Plant-Level Objective Value Stream Loop Goal (Measurable) Specific Scheduling Deadlines ( on Monthly Basis) Owner Reviewer and Review Dates 1 Customer 2 Internal 3 Supplier Product Family: Value Stream Map for Exercise 7.

The Value Stream Plan (Putting Ideas Into Action)
Report-Outs The Value Stream Plan (Putting Ideas Into Action)

The Value Stream Team Prepare the organization to see opportunities for improvement and turn those opportunities into reality No one individual can improve the value stream. It will take a concentrated effort by a group of people.

Identify the Value Streams
End of the Chain Completion of the final product Next move is to the Customer Move Upstream Identify the internal suppliers Final step is supplied parts The first task of the value stream team is to identify the value streams. This initial team may be responsible for reviewing the value streams in the entire facility. A different team may be assigned to each value stream.

Choose the Model Practice Makes Perfect!
Begin with the less complicated Move to the more difficult Choose the initial model and get started. Make sure you begin with the less complicated and move to the more difficult. It is also important to let others in the organization know about the project. Keep everyone informed of the progress and results. This will help to get volunteers as you move to other value streams.

Establishing the Team Selecting the Team Function of the Team
Who are the people in the value stream What type of resources are required Function of the Team Analyze Value Stream Together Hold Frequent Meetings to Monitor Progress Eliminate Obstacles Together When you select the teams, make sure the team is part of the value stream and that you have a wide range of knowledge and skills on the team. They should spend time to analyze the value stream together, as we have in the last 3 days. Frequent meetings will be required, as well as, input to eliminate any obstacles that prevent the team from completing their plan.

Transfer the Knowledge
Check Understanding Clear Up Confusion Get Commitment Start the Process Current State Map Future State Map Develop the Plan Transferring knowledge is the key to success. Transfer the skills required to develop the current state map, the future state map, and develop the value stream plan. Most important, make sure everyone understands and commits to the improvement process.

Things to Remember Benchmark the Current Condition
Dedicate the Resources Monitor the Progress Evaluate the Results Celebrate Success Continue the Pursuit of Perfection!!! Don’t forget to benchmark your current condition when you start. Take pictures to remember the beginning. Dedicate the resources you need to make your plan a success. Monitor the progress and evaluate the results. Don’t forget to celebrate your success. The process is never ending, so continue the pursuit of perfection.

Be Impatient! Be impatient, you will find that it will get you to the end result sooner and never give up.

Value Stream Mapping Day 1

Similar presentations

Presentation on theme: "Value Stream Mapping Day 1"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Value Stream Mapping Day 1

Similar presentations

Presentation on theme: "Value Stream Mapping Day 1"— Presentation transcript:

Similar presentations

About project

Feedback