MSE507 Lean Manufacturing CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing MSE507 Lean Manufacturing Learning to See Parts I, II, III A Value Stream Mapping Workshop Mike Rother & John Shook Lean Enterprise Institute

Value Stream Mapping Workshop Goals CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Mapping Workshop Goals To understand the complete value stream To introduce Value Stream Mapping (VSM) To draw a current state map Learn the mapping concepts and icons To be able to design an improved value stream Develop the ability to “see the flow” of a value stream To draw a future state map

Value Stream Mapping Topics CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Mapping Topics Topic Slide No. Overview 5 The Process (Steps 1-3) 12 The Process (Step 4 Case Study) 35 The Process (Step 5) 38 The Process (Step 6) The Process (Step 6 Case Study) The Process (Steps 7-9) The Process (Step 10) Conclusions First, we’ll demonstrate three excel tools using a simple example (Rooming List Example)

Value Stream Mapping Overview

Overview Why? … Learn to See See the big picture, not just individual processes See how the process currently operates See linkages between information and material flow See the waste and the source of waste Establish a common language for improvement Foundation for designing lean flow and the future state

Overview What do you typically see? 80 – 90% of total steps are waste from standpoint of end customer 99.9% of throughput time is wasted time Demand becomes more and more erratic as it moves upstream, imposing major inventory, capacity, and management costs at every level Quality becomes worse and worse as we move upstream, imposing major costs downstream Most managers and many production associates expend the majority of their efforts on hand-offs, work-arounds, and logistical complexity

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Overview Objective Correct specification of value Elimination of wasteful steps “Flow where you can” “Pull where you can’t” Management toward perfection

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Overview Pursue Perfection Every step in each process is: Capable – right every time (6 Sigma) Available – always able to run (TPM) Adequate – with capacity to avoid bottlenecks (right-sized tools & lean system design)

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Overview What is it? A visual representation of all the steps needed for: Concept to launch (design) Order to delivery (build) Delivery to recycle (sustain) All steps: Value Added (VA) Non-value added (NVA) Two flows: Orders traveling upstream from the customer Products traveling downstream to the customer a closed circuit of demand and response

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Overview Who does it? Value Stream Manager Ideally, one person with lead responsibility for the entire value stream reporting to the top person at the site Representatives of every relevant function – operations, purchasing, sales, finance, engineering, etc. (ideally) And you When? Now Before any major improvement activity Constantly updated to the new “Future State”

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Overview Where? In the work area itself How? Directly observe flow of information and physical goods Summarize these flows visually with icons Use pencil and paper And most important… Envision future state No wasted steps Smooth flow Level pull

Value Stream Mapping The Process

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Getting Started Select one value stream - a product family Walk the physical flow of material – no data collection Walk the flow again, collecting data Draw the Current State Map Identify opportunities to eliminate waste and create flow Draw the Future State Map Generate a Value Stream Plan Start making the improvements Conduct Value Stream Reviews Repeat the cycle

Value Stream Step 1 Select a Value Stream CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 1 Select a Value Stream Select one value stream … shared definition of value by customer or customer category by product or product family by plant by service - production, spares, repair A family is a group of items that pass through similar processing steps and over common equipment. Focus on the downstream processes not upstream steps. Upstream processes may serve many product families in a batch mode. Remember: value is defined by the customer Simple definition of a product family: A group of product variants passing through similar processing steps using common equipment just prior to shipment to the customer Some examples: Medium sized electric drills or a family of drill motors; a car platform or an alternator family; an airframe or a product family of major subassemblies (e.g., tails) Note that the concept is fractal: A product family is composed of many components which can also be product families – it all depends on where you start! Hint: Most novice mappers want to follow every part in the product. But you actually learn much more by following only one part on your first map! Remember: The first objective of mapping is to raise consciousness of waste. (You may well want to follow other parts later.)

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

Create a Matrix Complicated Weight part by machine used. 0103-02 Family Matrix.xls

Create a Matrix Complicated Sort by weighted part; Weight machine by part used.

Create a Matrix Complicated Sort by weighted machine.

Value Stream Step 1 Levels of a Value Stream CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 1 Levels of a Value Stream You can value stream map at different levels Across companies is too complicated to start with Process Level Single Plant (Door-to-door) Start mapping door-to-door within your own facility: This is under your control It is easier to make improvements immediately Expand outward to broaden the value stream later Multiple Plants Across Companies

Value Stream Step 2 Walk the Flow Let the workers know what you are doing. Walk the flow first (no data collection). Walk it yourself. Begin at shipping and work upstream. This begins with the processes that are linked closer to the customer. If it is too confusing, start at the beginning and go downstream. See how the material moves. See the piles of material and WIP. See how people work. Identify the major process steps

Value Stream Step 3 Walk the Flow Again CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 3 Walk the Flow Again Walk the flow again, this time collecting data. Begin at shipping and work upstream. Obtain the data yourself, do not rely on computer printouts. Use pencil and paper. Ask questions and listen. Collect data relevant to the definition of value. Pencil and paper are familiar tools with the workers. Computer printouts carry the connotation of ‘correctness’ and ‘finished’.

Value Stream Step 3 Walk the Flow Again-Typical Data Collected Customer Need Demand … number of units per day the customer wants Available work time … Scheduled work time minus breaks, meetings and clean up time Inventory WIP … Number of units waiting to be worked on or waiting to be moved. Finished Goods … Number of units in stores or waiting to be shipped.

Value Stream Step 3 Walk the Flow Again-Typical Data Collected CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 3 Walk the Flow Again-Typical Data Collected Each Process Step Cycle time – CT … The time between one part coming off the process and the next part coming off. Yield … First Time Yield or scrap% Number of people … Required to operate the process. Uptime … The percentage of time the equipment is available to run, when it is needed to be run Batch Size … typical lot size or minimum Change Over Time – Co … The time from the last good piece of one batch to the first good piece of the next batch EPE … Every part every __. How often do you changeover to produce this part? EPE – Every Part Every ___. This measures how often you produce a full set of parts. If five parts are produced by the process step, and You change over to a new part every 3 days Then it will be 15 days (3 work weeks) before you produce the first part again. EPE would be 3 weeks. EPE measures how long you typically wait before producing the part again. This affects how big a batch you need to produce when you produce the part.

Value Stream Step 3 Walk the Flow Again-Calculated Data Takt Time – TT … How often does the customer need another unit. (Available work time per day)/(demand per day) Inventory … measured in days. (Number of units)/(demand per day) Overall Flow Process Lead Time … The time for a unit to make it all the way through the process (Sum of Inventory Days) + (Sum of Cycle Times) Processing Time … The time spent actually performing work on the unit (Sum of Cycle Times)

Value Stream Step 3 Draw the Current State Map Drawing the future state map begins with the current production situation. Symbols and icons assure a consistent language. Draw the rough draft as you walk the floor in step 3 collecting data. Use pencil and paper, not a computer. Map the whole value stream, not just a segment.

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Example PROCESS BOX ICONS DATA BOX ICONS - C/T time - C/O time - Up time - Scrap

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Example Information Flow INVENTORY ICONS WITH PUSH ARROWS Material Flow

Quiz 1 Circle the best answer CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Quiz 1 Circle the best answer 1. Value Stream Mapping looks at A. The people, materials, and information flow in a value stream B. The material and information flow in a value stream C. The detailed operation steps within a cell D. The steps that people take in designing and producing a product 2. A product family is used to: A. Create a listing of all your products and the steps that are taken to produce them B. Decide which customers are most important to your customers C. Identify and group products into families based upon whether they pass through similar steps in your downstream processes D. Divide the mapping teams up into groups with individual mapping assignments Answers: 1. B 2. C

Quiz 2 Circle the best answer CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Quiz 2 Circle the best answer 3. The best way to draw a value stream map is: A. In pencil on the work floor, mapping the whole value stream B. In your office with a good drawing software package C. In pencil, by dividing the value stream into segments, and assigning each segment to a different mapping team D. In pencil, on the floor using standard times from engineering 4. Data boxes should contain data based on: A. Engineering standards B. The average measurement for a fiscal year C. The measurement on an ideal day D. What you observe as you draw the map Answers: 3. A 4. D

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

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

Mapping 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

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing ACME Stamping Case Study This would be a good time to take a break.

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

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

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

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

Value Stream Step 4 Current State Map - 1st View First - Show the Customer Value Stream Step 4 Current State Map - 1st View State St. Assembly 18,400 pcs/mo -12,000 “L” -6,400 “R” Tray=20 pcs. 2 Shifts

Value Stream Step 4 Current State Map - 2nd View Second - add the major Processes, Data Boxes, and Inventory Triangles Value Stream Step 4 Current State Map - 2nd View State St. Assembly 18,400 pcs/mo -12,000 “L” -6,400 “R” Tray=20 pcs. 2 Shifts I I Stamping I S. Weld # 1 I S. Weld # 2 I Assy # 1 Assy # 2 I Shipping Coils 4600 L 1100L 1600 L 1200 L 2700 L 2400 R 600 R 850 R 640R 1440 R 5 days CT=1sec. CT=39sec. CT=46sec. CT=62sec. CT=40sec. Co=0 Co=1 hr. Co=10 min. Co=10 min. Co=0 Uptime=85% Uptime=100% Uptime=80% Uptime=100% Uptime=100% 27,600 sec. avail 2 shifts 2 shifts 2 shifts 2 shifts 27,600 sec.avail EPE=2 weeks 27,600 sec.avail 27,600 sec.avail 27,600 sec.avail The data obtained is put in the data box directly beneath the process box.

Value Stream Step 4 Current State Map - 3rd View Third - Show the Material Flow Value Stream Step 4 Current State Map - 3rd View The supplier of raw material is identified with a factory icon. In this case they deliver 500 ft coils State St. Assembly Michigan Steel Co. 18,400 pcs/mo -12,000 “L” -6,400 “R” 500 Ft. Coils Tray=20 pcs. Tues & Thurs. 2 Shifts A truck icon and broad arrow indicate movement of finished goods to the customer and raw material to the site. 1X Daily I Stamping I S. Weld # 1 I S. Weld # 2 I Assy # 1 I Assy # 2 I Shipping 4600 L 1100L 1600 L Coils 1200 L 2700 L 2400 R 600 R 850 R 640R 1440 R 5 days CT=1sec. CT=39sec. CT=46sec. CT=62sec. CT=40sec. Co=0 Co=1 hr. Co=10 min. Co=10 min. Co=0 Uptime=85% Uptime=100% Uptime=80% Uptime=100% Uptime=100% 27,600 sec. avail 2 shifts 2 shifts 2 shifts 2 shifts 27,600 sec.avail EPE=2 weeks 27,600 sec.avail 27,600 sec.avail 27,600 sec.avail

Value Stream Step 4 Current State Map Information flow is drawn from right to left in the top half of the map space. solid line arrows (paper transfer) arrow with a lightening bolt (electronic transfer) Material movements that are pushed are represented by a striped arrow PUSH A process that produces regardless of the needs of the downstream customer A guess as to what is needed (forecasts) Processes are allowed to set batch sizes and produce at a pace that makes sense from its perspective not the customers.

Value Stream Step 4 Current State Map – 4th View Fourth - show Information Flows & Push Arrows Value Stream Step 4 Current State Map – 4th View 90/60/30 day Forecasts 6 WEEK Forecast Production Control State St. Assembly MRP Weekly Fax Daily Order Michigan Steel Co. 18,400 pcs/mo -12,000 “L” -6,400 “R” 500 ft. Coils WEEKLY SCHEDULE Tray=20 pcs. 2 Shifts Tues & Thurs. 1X Daily I Coils Stamping S. Weld # 1 S. Weld # 2 Assy # 1 Assy # 2 Shipping 5 days I I 4600 L I I I 1100R 2400 R 1600 L 2700 L 600 R 1200 L 850 R 1440 R CT=1sec. CT=39sec. CT=46sec. CT=62sec. 640R CT=40sec. Co=0 Co=1 hr. Co=10 min. Co=10 min. Co=0 Uptime=85% Uptime=100% Uptime=80% Uptime=100% Uptime=100% 27,600 sec. avail 2 shifts 2 shifts 2 shifts 2 shifts 27,600 sec.avail EPE=2 weeks 27,600 sec.avail 27,600 sec.avail 27,600 sec.avail

Value Stream Step 4 Current State Map The timeline summarizes the current condition of the value stream Production Lead-Time is the time it takes for a part to make its way through the shop floor beginning with the raw material Inventory Lead-time( shown with the inventory triangles)is calculated as follows: Inventory quantity divided by the daily customer requirements. Then add all process inventory lead-times. Inventory Quantity Daily Customer Requirement

Value Stream Step 4 Current State Map – 5th View Fifth (Final) - Show Timeline Value Stream Step 4 Current State Map – 5th View 90/60/30 day Forecasts 6 WEEK Forecast Production Control State St. Assembly MRP Weekly Fax Daily Order Michigan Steel Co. 18,400 pcs/mo -12,000 “L” -6,400 “R” 500 ft. Coils WEEKLY SCHEDULE Tray=20 pcs. 2 Shifts Tues & Thurs. 1X Daily I Coils Stamping S. Weld # 1 S. Weld # 2 Assy # 1 Assy # 2 Shipping 5 days I I 4600 L I I I 1100R 2400 R 1600 L 2700 L 600 R 1200 L 850 R 1440 R CT=1sec. CT=39sec. CT=46sec. CT=62sec. 640R CT=40sec. Co=0 Co=1 hr. Co=10 min. Co=10 min. Co=0 Uptime=85% Uptime=100% Uptime=80% Uptime=100% Uptime=100% 27,600 sec. avail 2 shifts 2 shifts 2 shifts 2 shifts 27,600 sec.avail EPE=2 weeks 27,600 sec.avail 27,600 sec.avail 27,600 sec.avail (PLT) 5 days 7.6 days 1.8 days 2.7 days 2 days 4.5 days=23.6 days 1 sec (PT) 39 sec 46 sec 62 sec 40 sec =188 sec

Value Stream Step 4 Current State Map – Complete View Fifth (Final) - Show Timeline Value Stream Step 4 Current State Map – Complete View State St. Assembly 18,400 pcs/mo -12,000 “L” -6,400 “R” Tray=20 pcs. 2 Shifts Stamping 4600 L 2400 R CT=1sec. Co=1 hr. Uptime=85% 27,600 sec. avail EPE=2 weeks S. Weld # 1 CT=39sec. Co=10 min. Uptime=100% 2 shifts 27,600 sec.avail CT=40sec. Co=0 I Coils 5 days CT=46sec. Uptime=80% CT=62sec. Shipping 1100R 850 R 640R 600 R 1200 L 1440 R 1600 L S. Weld # 2 Assy # 2 Assy # 1 2700 L 1X Daily 90/60/30 day Forecasts Order Production Control MRP 6 WEEK Forecast Michigan Steel Co. Weekly Fax Tues & Thurs. WEEKLY SCHEDULE 500 ft. Coils 1 sec 7.6 days 39 sec 1.8 days 46 sec 2.7 days 62 sec 2 days 40 sec 4.5 days=23.6 days =188 sec (PLT) (PT)

What’s wrong with Acme’s Value Stream? CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing What’s wrong with Acme’s Value Stream? 3 VA processes Traditional mass production thinking about economies of scale Batches pushed through => waste Look at VA time compared to time in plant

What Makes a Value Stream Lean? Primarily the elimination of the number one waste… OVERPRODUCTION!!! Since this material is not yet needed it must be handled, counted, stored. Defects remain hidden in inventory queues Overproduction results in shortages, because processes are busy making the wrong things.

Value Stream Step 5 Eliminate Waste CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Eliminate Waste Overproduction Waiting Transportation Unnecessary Processing Inventory Unnecessary Motion Correction Wasting A Person’s time or talent

Value Stream Step 5 Eliminate Waste CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Eliminate Waste Overproduction - The primary waste Making parts faster than is required Excess Inventory Time wasted, that could be used to make product that is required Waiting An operator waiting for a long machine cycle to end Transportation Moving parts and products does not add value - it just adds cost

Value Stream Step 5 Eliminate Waste CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Eliminate Waste Unnecessary Processing Booking work into a store and then having to book it back out again to use. Inventory There is a cost to the Company for carry inventory There is always the risk it can become obsolete It covers up other inefficiencies e.g. Long set-up times

Value Stream Step 5 Eliminate Waste CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Eliminate Waste Unnecessary Motion Any motion of a person that does not add value Operators / Setters looking for tooling Correction Reworking defective materials Things to remember about waste It is a symptom rather than a root cause of the problem It points to problems within the system, at both process and value stream levels We need to find and address the causes of the waste

Value Stream Step 5 …And Create Flow CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 …And Create Flow We are concerned with system efficiency rather than the efficiency of an individual process The question is, how fast should we produce?

Value Stream Step 5 Takt Time CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Takt Time We should match the rate of production to the rate of sales Takt is the German word that means “beat” or “pace” Takt Time = Effective working time per day Customer requirement per day = 27,000 sec = 59 sec 460 pieces What is the effective working time per day? What do we do about machine down time? Why is cycling faster than takt expensive?

Value Stream Step 5 What is Flow? CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 What is Flow?

Value Stream Step 5 Where Do We Use Flow? Use continuous flow wherever possible Where can’t we use continuous flow? Long set-ups Large distances Downtime problems Long lead-times

Value Stream Step 5 Alternatives to Continuous Flow Kanban A signal that provides an instruction to regulate the sequence and timing of production Two-bin Bins used to regulate production Buffer stock Standard work Curtain operation Supermarket Controlled quantity of inventory Visual controls Owned by the supplier

Value Stream Step 5 Supermarket Pull System CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Supermarket Pull System A SUPERMARKET PULL SYSTEM PURPOSE: Controls production at supplying process without trying to schedule. Controls production between flows Supplying Process A Customer B PRODUCT Supermarket Production KANBAN Withdrawal KANBAN 1) CUSTOMER WITHDRAWAL Kanbans trigger the movement of parts PRODUCTION Kanbans trigger the production of parts. NOTE: The withdrawal kanban resides in the “process cell” and is given to the supermarket. The production Kanban resides in the supermarket and is given to the next upstream production process.

Value Stream Step 5 Supermarket Pull System A pull system between processes… gives accurate build instructions to the upstream process without trying to predict downstream demand instead of forecasting the upstream process. The pull by the downstream process determines what the upstream produces when and in what quantity. Should be located near the supplying process Are only used when continuous flow will not work. There is a cost - inventory and material handling

Value Stream Step 5 Schedule Only One Point CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Value Stream Step 5 Schedule Only One Point If pull systems schedule upstream process we can try to schedule only one point in the value stream - Pacemaker No supermarkets downstream of the schedule point (except finished goods) schedule schedule

Quiz 3 Circle the best answer CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Quiz 3 Circle the best answer 5. Takt time is: A. The customer demand rate B. The rate at which the Sales departments plan to sell products to customers based upon promotions C. The fastest rate at which your individual operations can produce the products D. The average amount of product brought by your customers in a week 6. A supermarket is used where: A. Processes are close together but have different cycle times B. A customer requires specialised products from a finished goods warehouse C. Continuous flow is not possible due to distance, unreliability, or where processes serve multiple product families D. Pull can be implemented throughout the door-to-door value stream Answers 5. A 6. C

Quiz 4 Circle the best answer CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Quiz 4 Circle the best answer 7. A pacemaker process: A. Ensures that all processes downstream are controlled by supermarket pull systems B. Receives its products from supermarkets controlled by MRP systems C. Is always a bottleneck, requiring constant supervision and staff adjustment D. Responds to the external customer, and is usually the point at which production is scheduled in the door-to-door value stream Answer: 7. D

CSUN - Prof. David Shternberg MSE595LM - Lean Manufacturing Homework Assignment Questions: Describe the ways a business could use Value-stream mapping. What will be the benefits? You are visiting a production plant that has achieved excellence and is a model site to bench mark in the industry. List what you are likely to see when visiting a lean plant? How will their current Value Stream might look like? Read Leaning to See Parts IV and V Pages 57-101

Questions? Comments?