Value Analysis/ Flow Analysis The Lean Enterprise Value Analysis/ Flow Analysis Welcome and introductions. Allow ½ hour to cover this material. Module provided as a checklist for investigative analysis after Mapping. (Please retain the free lean site reference with the materials.) Lean Foundations Continuous Improvement Training freeleansite.com

The Causes of Waste in most Processes Focus on reduction Types of Waste (7W’s) Problems/ Causes Incorrect layouts Lack of proximity of machines Off-line resources Waiting workers, machines, materials Long set-ups and lead times Large batches, raw material stocks High WIP, finished goods stocks Making for the sake of it Ignoring customer demands Long cycle times- process, itself Reduced efficiency- over processing High overall lead times Long delays for rectification Costly rework Dissatisfied customers Approvals of approvals High number of verification steps Reliance- Mass inspection techniques Unnecessary movement Extra handling Value Added Waste Motion Waiting time Overproduction Processing time Defects Inspection Transportation People Non- Value Added, but necessary Process This is probably the most important principle and is based upon the categorization of activities into the following: Value added - Those activities that: 1) Alter the product; 2) Are completed right the first time and 3) The customer is prepared to pay for Non-value added - Those activities that are essential, but add no value to the product (payroll preparation or in-process quality inspection are examples) Waste - Those activities which do not add value and are not essential Progressive reduction of non-value added or elimination of waste activities places a greater focus on what is important to the customer. The waste activities can be addressed in several ways: through improved process layout, better product design from a manufacturability standpoint, improved production scheduling, and more efficient shop floor production techniques through adoption of best practice principles. In the following viewcells, which focus on the best practices in use today in manufacturing, the common thread is the focus on the elimination of waste. In JIT manufacturing, you will often hear the term "continuous improvement" or "continuous process improvement." Continuous improvement aims at the gradual elimination of waste through improvements in product design, process design, production planning and production control. This concept is applied seriously by progressive manufacturers to their internal operations and with respect to their suppliers as well, whom they expect to adopt continuous improvement programs to improve the quality and reduce the costs of raw materials. Product freeleansite.com freeleansite.com

Value Analysis Overview freeleansite.com

Methodology For Reducing Muda (waste) Value-Added Flow Analysis (VA/ FA) A Group of Practices (using rigor and discipline) which evaluates the individual steps or activities in a process to determine if they ‘add value’ to the output VA/ FA can be used to improve the process or aid in the creation of a new process freeleansite.com freeleansite.com

Definitions Value Added Any activity or operation performed that helps transform a product or service from its raw state into its finished form. Completed right the first time. Any activity customer is prepared to pay for. Activity required to ensure that a product or service is delivered in conformance to specification. Non-Value Added Any activity that doesn’t help to transform a product or service into its final form. Activity not performed right. Activity customer not willing to pay for. This includes: Unnecessary process steps Movement of inventory, paperwork, etc. Re-work, corrections, etc. Storage between operations, batching inventory Queue – Wait times, delay times, idle times (reference: Time-Value Analysis ) 3 “unique” parts of the VA definition… 1) TRANSFORMS PRODUCT/ SERVICE 2) DONE RIGHT the FIRST TIME 3) CUSTOMER WILLING TO PAY FOR freeleansite.com freeleansite.com

VA/ FA Steps Define and describe process to be analyzed Project charter Clearly define goals Cost benefit analysis Signatures – Champion, Controller, Belt (minimum) Time Frame for completion freeleansite.com freeleansite.com

VA/ FA Steps Map the process and determine major and minor activities Start with the customer Customer – receiving department of an output, the next person in line, or the (external) Customer Conduct detail inquiry of what occurs Use investigative questions freeleansite.com freeleansite.com

VA/ FA Steps Identify value-added activities or processes Utilize investigative questions What does it do? Why does it work? What must it do or accomplish? How does it relate to other systems, units, or components? What requires this step to be done? freeleansite.com freeleansite.com

VA/ FA Steps Step 4 Calculate the time spent on value-added activities or processes (Value Stream Map) Spread Sheet Analysis (VA to NVA ratios) Time-Value Analysis freeleansite.com freeleansite.com

Value Analysis Investigative Techniques freeleansite.com

VA/ FA Questions DECISION POINTS Does the decision point represent as appraisal, a review, or an inspection which could be eliminated if prevention were built into the process at an earlier point? Is this a necessary decision or can the process proceed without a decision here? Is there repetition of decision within the process? freeleansite.com freeleansite.com

VA/ FA Questions VALUE ADDED Does each activity within the process add value to the output, the product, or service which the customer receives? Is the activity necessary to meet the customer’s requirements and expectations? Would the customer be willing to pay for that step of the process if the customer knew it existed? freeleansite.com freeleansite.com

VA/ FA Questions ACTIVITY FLOW Does the process move frequently back and forth between various units of the organization? Can any of these movements be eliminated? DUPLICATION OF ACTIVITY Are some of the activities duplicated or repeated? Can any activities be removed from the process while meeting the customer’s valid requirements for outputs? freeleansite.com freeleansite.com

VA/ FA Questions TIME REQUIRED What is the time required for each of the steps or activities within the process? Can the time be shortened for any of the steps or activities? Is unnecessary time wasted on transportation, storage, or delays? How much time is used between activities? Can time activities be reduced? freeleansite.com freeleansite.com

VA/ FA Questions MATERIALS Are the supplies and materials used in this activity effective? Have new materials been developed that would perform the function at less cost? Has there been any price, delivery, or quality problems? TECHNOLOGY What is the cutting edge? Is there related technology which could be adapted to improve this process? freeleansite.com freeleansite.com

VA/ FA Questions Why are you doing this? PROCESS USERS Why are you doing this? What document controls this activity? How were you trained? Was the training adequate? How do you know you are performing the activity correctly? Where do you get the inputs you need to perform this activity? What types of errors come to you? Do you have any problems related to this? What makes the job difficult? freeleansite.com freeleansite.com

VA/ FA Best Practices KEY POINTS ASK the person if they have any suggestions on how to improve to process! Value can be viewed as a relationship of functionality or effectiveness over cost VALUE = Functionality Cost freeleansite.com freeleansite.com

VA/ FA Best Practices KEY POINTS The VALUE of the output can increase by either reducing costs or by increasing effectiveness EVALUATE alternatives based on their impact on both efficiency and effectiveness Achieving a minor increase in functionality at a major cost is not justified A major increase in functionality with a minor cost could be acceptable freeleansite.com freeleansite.com

Value Engineering Overview freeleansite.com

VA/ VE = Continuous ‘Cost’ Improvement Attacks the Total Cost of Producing a New Product Overhead Costs Manufacturing Costs Part Costs Assembly Costs Tooling Costs = + + + Overhead Part Costs Material Finishing Design Dimensions & Tolerances Tooling Type Process Volume Standardization Packaging Assembly Costs Assembly Time Parts Handling Levels of Assembly Labor Rate Volume Design Standardization Tooling Costs Volume Process Tooling Material Dimensions & Tolerances Standardization freeleansite.com freeleansite.com

Approach for Reducing Costs Design for Assembly (DFA) A Group of Practices which Minimizes Manufacturing Costs Minimize the Number of Parts Avoid Separate Fasteners Establish Assembly Surfaces Eliminate or Simplify Adjustments Reduce Handling freeleansite.com freeleansite.com

Design for Assembly Benefits Fewer Drawings Less Assembly Less Handling, Inventory Less Inspection Improved Quality (Fewer Problems) Less Purchasing freeleansite.com freeleansite.com

Methodologies for Reducing Waste Value Engineering Occurs During the Design Process. Examines the Function of the Design. Documents the Cost of Each Function. Explores Alternatives for how the Same Function can be Provided at a Reduced Cost. Maintains the Focus on Customer Satisfaction. Value Analysis Occurs on After the Design has been Completed or on Carryover Products. Existing Designs are Evaluated to Increase Function or Reduce Cost. freeleansite.com freeleansite.com

Value Analysis/ Flow Analysis The Lean Enterprise Value Analysis/ Flow Analysis Lean Foundations Continuous Improvement Training freeleansite.com