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OpEx Value Stream Mapping (VSM) Training Module

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The Operational Excellence Value Stream Mapping (VSM) Training Module includes:

MS PowerPoint Presentation including 133 slides covering History of Lean Management, Five Lean Principles, Seven Lean Wastes, Lean Metrics, Step-by-Step Methodology to Value Stream Mapping.

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OpEx Value Stream Mapping (VSM) Training Module

  1. 1. 1 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Operational Excellence – Value Stream Mapping (VSM) by Operational Excellence Consulting LLC
  2. 2. 3 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Section 1: The Five Lean Principle Section 2: The Seven Lean Wastes Section 3: VSM Definition & Benefits Section 4: VSM Development Process • Develop a Charter • Establish the Team • Document Current State • Analyze Current State • Design Future State • Create Transformation Plan Section 5: Summary Value Stream Mapping (VSM) – Table of Content
  3. 3. 5 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Management – A little Bit of History Eli Whitney developed the concept of interchangeable parts around 1799 when he accepted an order from the U.S. Army for the manufacture of 10,000 muskets at the unbelievably low price of $13.40 each. For the next 100 years manufacturers primarily concerned themselves with individual technologies. During this time engineering drawings developed, modern machine tools were perfected and large scale pro- cesses (e.g. the Bessemer process for making steel) held the center of attention. That changed in the late 1890s.
  4. 4. 7 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Management – A little Bit of History Starting about 1910, Henry Ford fashioned the first comprehensive Manufacturing Strategy. He took all the elements of a manufacturing system -- people, machines, tooling, and products -- and arranged them in a continuous system for manufac- turing the Model T automobile. Ford is considered by many to be the first practitioner of Just-In-Time (JIT) and Lean Manufacturing. Ford's success inspired many others to copy his methods. But most of those who copied did not understand the fundamentals. Ford assembly lines were often employed for products and processes that were unsuitable for them.
  5. 5. 9 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Management – A little Bit of History In 1990 James Womack wrote a book called "The Machine That Changed The World". Womack's book was a straight- forward account of the history of automobile manufacturing combined with a comparative study of Japa- nese, American, and European auto- motive assembly plants. What was new was a term - "Lean Manufacturing“.
  6. 6. 11 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Management – The Five Lean Principles Define Value - Specify value from the Customer perspective. Map Value Stream - Identify the value stream for each product or service and challenge all of the non-value adding steps (wastes) currently necessary to create and deliver this product or service. Add nothing than value. Create Flow - Make the product or service creation and delivery process flow through the remaining value-added steps. Establish Pull – Introduce pull between all process steps where continuous flow is possible. Pursuit Perfection – Manage toward perfection so that the number of steps and the amount of time and information needed to create and deliver this product or service is optimized.
  7. 7. 13 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value-Added Work – A Definition Three criteria for Adding Value 1. Customer wants you to do it (or will pay for it) 2. The material / information is being processed or transformed into final products or services 3. It is done right the first time Key Lean Objectives: Reduce Lead Time & Eliminate Non-Value-Added Activities Process Efficiency Value Adding Work Time Total Process Lead Time = * 100%
  8. 8. 15 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Management – Process Efficiency Benchmarks
  9. 9. 17 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – The 7 Wastes Waste elimination is one of the most effective ways to increase the profitability of any business. Processes either add value or waste to the production of a good or service. The seven wastes originated in Japan, where waste is known as “muda." Value Stream Mapping focuses primarily on waste elimination due to inventory, waiting, over-processing and over-production. Inventory Over-Processing Waiting Transportation Defects Motion Over-Production The 7 Wastes
  10. 10. 19 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. The 7 Wastes – Waiting Waiting Typically more than 99% of a product's life in traditional batch-and-queue manufacture will be spent waiting to be processed. Much of a product’s lead time is tied up in waiting for the next operation; this is usually because material flow is poor, production runs are too long, and distances between work centers are too great. Goldratt (Theory of Constraints) has stated many times that one hour lost in a bottleneck process is one hour lost to the entire factory’s output, which can never be recovered. Linking processes together so that one feeds directly into the next can dramatically reduce waiting.
  11. 11. 21 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. The 7 Wastes – Defects Defects Having a direct impact to the bottom line, quality defects resulting in rework or scrap are a tremendous cost to organizations. Associated costs include quarantining inventory, re-inspecting, rescheduling, and capacity loss. In many organizations the total cost of defects is often a significant percentage of total manufacturing cost. Through employee involvement and Continuous Process Improvement (CPI), there is a huge opportunity to reduce defects at many facilities.
  12. 12. 23 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. The 7 Wastes – Over-Production Over-Production Simply put, over-production is to manufacture an item before it is actually required. Over-production is highly costly to a manufacturing plant because it prohibits the smooth flow of materials and actually degrades quality and productivity. The Toyota Production System is also referred to as “Just in Time” (JIT) because every item is made just as it is needed. Over-production manufacturing is referred to as “Just in Case.” This results in high storage costs and makes it difficult to detect defects in a timely manner. The simple solution to over-production is turning off the tap; this requires a lot of courage because the problems that over-production is hiding will be revealed. The concept is to schedule and produce only what can be immediately sold/shipped and improve machine changeover/set-up capability.
  13. 13. 25 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. The 7 Wastes – Summary In the latest edition of the Lean Manufacturing classic Lean Thinking, Underutilization of Employees has been added as an eighth waste. Organizations employ their staff for their nimble fingers and strong muscles but forget they come to work everyday with a free brain. It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance. Many changes over recent years have driven organizations to become world class organizations or Lean Enterprises. The first step in achieving that goal is to identify and attack the seven wastes. As Toyota and other world-class organizations have come to realize, Customers will pay for value added work, but never for waste.
  14. 14. 27 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value vs. Non-Value Added Work Work Time Wait Time Walking Time A Typical Process or Process Step  It is not uncommon, when analyzing a process or process step, to recognize that 60 to 70% of the total work time is actual non-value added work – waiting, transportation, walking, and unnecessary motions.  Organizations often focus on the value added activities to further improve productivity and efficiency, ignoring the often huge opportunities if they would focus on eliminating non-value added activities. Process Start Process End
  15. 15. 29 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Process Mapping → Types of Process Maps Process Mapping is an important tool in the “Define” and “Measure” Phase of the Lean Six Sigma Roadmap.  Process Variables Map – Focuses on the inputs and outputs of a process and its steps – Critical first step towards successful process improvement through identifying, reducing, and removing variation – Should be completed in less than a day  Value Stream Map (VSM) – Focuses on the overall product/service and information flow – Critical first step towards successful process improvement through identifying, reducing, and removing waste – May be more complex, as it requires lead times, processing times, staffing levels, inventory levels, scheduling information, …
  16. 16. 31 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Definition & Benefits • It is a business-planning tool. • It is a tool to manage the change process. • It forms the basis of an transformation plan. • It is a communication & socializing tool. • It provides a common language to talk about processes. • It shows the linkage between material flow and the information flow. • It is a powerful tool in identifying waste, so it can be reduced or eliminated, contributing to improved Customer satisfaction • It helps us see and focus on flow with a vision of an ideal or improved state. • Enabling broad participation in shaping the future state. “Value Stream Mapping is primarily a Management Responsibility.”
  17. 17. 33 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – The Three Types • Full Value Stream Map – A good or service is requested by and delivered to an external Customer • Support Value Stream Map – Sometimes called value-enabling value stream – Examples include annual budgeting process; recruiting, hirng, and onboarding process; and performance review process • Value Stream Segment – In general a part of a Full Value Stream, e.g. product design, new product introduction, and service delivery.
  18. 18. 35 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Section 1: The Five Lean Principle Section 2: The Seven Lean Wastes Section 3: VSM Definition & Benefits Section 4: VSM Development Process • Develop a Charter • Establish the Team • Document Current State • Analyze Current State • Design Future State • Create Transformation Plan Section 5: Summary Value Stream Mapping (VSM) – Table of Content
  19. 19. 37 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Develop a Charter The charter serves as planning, communication, alignment, and consensus building tool. Key element of a Value Stream Mapping Charter include: • Scope → Value Stream – Specific Conditions – Demand Rate – Trigger – First Step & Last Step – Boundaries & Limitations – Improvement Time Frame – … • Current State Issues & Business Needs • Measurable Target Conditions • Benefits to External Customers & Benefits to Business • Accountable Parties • Logistics • …
  20. 20. 39 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Define Product/Service Family A product or service family is a group of products or services that pass through similar processing steps in the value stream, as thus can be analyzed using the same value stream map. 1 2 3 4 5 6 7 A X X X X B X X X X X C X X X X D X X X X E X X X X X F X X X X Processing Steps & Equipment Products Product/ Service Family 1 Product/ Service Family 2 ProductorService Process Step or Activity
  21. 21. 41 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Establish the Team Value Stream Mapping teams must include leaders who can influence and authorize change along the value stream to be improved. • Executive Sponsor → An individual who oversees the entire value stream. May or may not participate in the event. • Value Stream Champion / Owner → An individual who oversees a significant part of the value stream and is accountable for the performance of the entire value stream. • Event Facilitator → An individual neither overseeing nor working in the value stream, serving as teacher, timekeeper, skilled change agent, provocateur, … . • Logistics Coordinator → An individual responsible for booking the room, ordering lunches, organizing supplies, … . • Briefing Attendees → Individuals (no more than 5 to 7) participating in the daily briefing sessions to ensure common understanding of the current state, and alignment of the organization around the future state value stream map and transformation plan. • Mapping Team Members → Individuals (no more than 10) from all key functions across the value stream participating in the event full-time.
  22. 22. 43 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping → “Western Union Video” Observations & Comments: “New Agent Process - Current State” (00:00 – 5:31)
  23. 23. 45 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – 3. Document Current State 3.1 Depict the Customer requirements !!! 3.2 Follow the flow of the product from shipping to the raw material stage 3.3 Draw the processing steps used to process, move and store the product 3.4 Input the process and inventory data 3.5 Draw the information flow 3.6 Draw a time line depicting the lead and processing time
  24. 24. 47 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Process Icons
  25. 25. 49 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Information Icons
  26. 26. 51 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Other Icons
  27. 27. 53 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Time Metrics Definitions Changeover Time (CO) • The time it takes to changeover (to reset or change equipment) from one part to another (Change Over Matrix). Queue Time (QT) • The time between sub-processes that the part gets shuffled around or sits around waiting for someone to work on it. Up Time (UT) • The ratio of the actual available production time of a process to the available working time. Expressed as a percentage, uptime is calculated by dividing actual available production time by the available working time. Working Time (WT) • To calculate Working Time - deduct breaks, meetings, beginning of shift set- up, end of shift clean-up, planned maintenance, and other planned non- working time. Do NOT deduct unplanned downtime or changeovers.
  28. 28. 55 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Process Efficiency Benchmarks
  29. 29. 57 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Pitch For many transactional processes, it is not practical to perform the work according to the Takt Time, e.g. credit card application processing. In these situations work is been performed in batches and the concept of “Pitch” is being adopted. Pitch = Takt Time x Number of Units per “Pitch” Let us assume, on average, 5,500 credit card applications need to be processed in a day and the duration of the shift is eight hours with 30 minutes for breaks. Takt Time = _________ seconds Number of Units per “Pitch” = _________ units Let us assume that we decided to move application forms every 30 minutes from one process step to the next. So, the Pitch is set to 30 minutes.
  30. 30. 59 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping → Some Guidelines  Start with as few symbols as possible and add other symbols over time as needed and as you become more experienced  Do not waste too much efforts and resources on mapping details before they are needed  It often helps to begin from the end of the process and trace the steps backwards  Begin with a quick walk along the entire door-to-door value stream  Bring your stopwatch and do not rely on standard times or information that you do not personally obtain  Always prepare the map based on real observations  Always verify your Value Stream Map by walking and observing the actual process  …
  31. 31. 61 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – ACME Example Current State
  32. 32. 63 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Common Findings Based on our experiences in leading and facilitating Value Stream Mapping events and activities, common non-value added activities and improvement opportunities include: Loopbacks No documented standard work Unnecessary handoffs Excessive inspection (review, approval, audits, …) Rework due to errors and lack of clarity Overspecialization of staff Batching Existing technology not fully leveraged Functions missing or getting involved too early or too late in the process Underutilization of skills Redundant activities Compliance overkill High variation in how work is performed Delays due to juggling multiple responsibilities Push and overburden …
  33. 33. 65 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Focus of the Future State During the future state development activity, the team shifts now from fact-finding (current state) to the discovery, innovation and creativity phase (future state). At the macro level, there are three considerations to address when designing the future state for a value stream map: 1. Determining the work that adds value and should be done, 2. Making the “right” work flow, and 3. Managing the work to achieve continuously improved performance (time, cost, quality, safety).
  34. 34. 67 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Adding Work Effort • Improving an organization's value stream may sometimes mean adding new process steps or activities to the existing value stream. For example: • To reduce the order-to-cash lead time it may be beneficial to add a customer credit check or some other screening process upstream into the value stream to reduce the time and resources currently consumed to collect outstanding payments from errant customers. • Value Stream Mapping improvements almost always requires a holistic approach and therefore the breakdown of siloed thinking in the organization. Here is where utilizing an experienced facilitator can be very beneficial. • Remember: if the overall process lead time is reduced and the customer experience has improved, the value stream design phase has been successful – even if the time and effort of some departments increases.
  35. 35. 69 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation.  Lean Standard Work (often also called Standardized Work) is one of the building blocks or cornerstone of any Lean implementation.  Lean Standard Work is a tool centered around human movement that combines the elements of a job into the most effective sequence, without waste, to achieve the most efficient method of performing a specific task.  Lean Standard Work effectively combines people, product, and process under the current conditions to improve quality, cost, safety, ease of operations, etc.  Lean Standard Work is an excellent tool to introduce an organization to some basic Lean concepts such as value added vs. non-value added work, 7 Wastes, takt time, cycle time, work balancing, and Kanban methods.  When implemented successfully, Lean Standard Work leads naturally to the implementation of other Lean methods and tools, including 5S Visual Workplace, Value Stream Mapping, Level-Loading, Mistake-Proofing, or Total Productive Maintenance. Value Stream Mapping – Lean Standard Work
  36. 36. 71 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Standard Work – Benefits  Lean Standard Work enables an organization to ensure that improvement made are institutionalized and that best practices are identified, documented and implemented.  Documentation of the current process for all shifts results in  a predictable process through the reduction in variability,  easier training of new operators, and  reductions in injuries and strain.  It forms part of the base for Just-In-Time production by preventing over- production.  Standard work also adds discipline to the culture, an element that is frequently neglected but essential for Lean to take root.  A learning tool that supports audits, promotes problem solving, and involves team members in developing mistake-proofing solutions.
  37. 37. 73 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Standard Work – Implementation Process Identify Product or Part Identify Process or Process Step Identify Process Steps or Work Elements Determine Takt Time Determine Cycle Times for each Process Step or Work Element Create Standard Work Process Study Sheet Create Standard Work Process Capacity Sheet Identify & Implement Work Balancing Opportunities Identify & Implement Changeover Reduction Opportunities Create Standard Work Chart Determine Work Sequence Determine Standard Work-in- Process Inventory Identify & Implement Kanban Opportunities Create Standard Work Combination Table
  38. 38. 75 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Lean Standard Work – Process Study Sheet Time Study Tips  Collect the data real time observing the actual process  Position yourself so that you can see the operator's hand motions  Time each work element separately  Time several (6 to 10) cycles of each work element  Observe an operator who is qualified to perform the job  Always separate operator time and machine time  Select the lowest repeatable time for each element  Remember shop floor courtesy
  39. 39. 77 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Planned Cycle Time  Planned Cycle Time is the required production rate to satisfy the Customer demand allowing for scrap, rework, downtime, change-overs and other inefficiencies (wastes).  The objective of other Lean methods and tools is of course to minimize these losses and reduce the gap between Takt Time and Planned Cycle Time. 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 1 Step 1 Step 1 Step 1 Step 2 Step 2 Step 2 Step 2 Step 2 Step 3 Step 3 Step 3 Step 3 Step 4 Step 5 Step 4 Step 4 Planned Cycle Time (18s) Process Flow
  40. 40. 79 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Work Balancing 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 6 Step 10 Step 13 Step 17 Step 2 Step 7 Step 11 Step 14 Step 18 Step 3 Step 8 Step 12 Step 15 Step 4 Step 5 Step 9 Step 16 BeforeAfter 0 5 10 15 20 25 30 1 2 3 4 5 Time(s) Operator Takt Time (20s) Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12 Step 13 Step 14 Step 15Step 16 Step 17 Step 18 Work Balancing Work Balancing
  41. 41. 81 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. 1. Reduction of Waste (mainly defects, motion, waiting, & transportation) results in lower costs ! 2. Reduction in equipment breakdowns results in higher equipment availability ! 3. Reduction in delays results in a higher fill rate and on-time deliveries! 4. Reduction in defects results in less rework ! 5. Reduction in complaints results in greater Customer satisfaction ! 6. Reduction in injuries results in lower costs ! 7. Reduction in changeover time results in less downtime ! 8. A cleaner work environment results in higher employee satisfaction ! 5S Visual Workplace - The Benefits Ownership Moral Productivity Safety Shareholder Satisfaction 9. Lower costs and higher shareholder satisfaction result in improved profitability !!!
  42. 42. 83 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. 5S Visual Workplace - Implementation Process Step 1 Establish a 5S Organization Step 2 Establish a 5S Implementation Plan Step 3 Create 5S Campaign Material Step 4 In-House 5S Education Step 6 5S Evaluation, Scoring and Follow-Up Step 5 5S Implementation SORT (Red-Tag Strategy) SHINE SET-IN-ORDER (Signboard Strategy) STANDARDIZE SUSTAIN
  43. 43. 85 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Kanban System Kanban is a Japanese word that means signboard or signal card. Kanban systems were first introduced by Toyota in the 1950s as a scheduling system to determine what to produce, when to produce it, and how much to produce. Kanban systems lead to an improved process flow, reduced scheduling activities and can result in significant inventory reduction. Kanban scheduling systems are useful when • lot sizes differ between process steps, • processes are unbalanced, or • when distance introduces time lag or variability
  44. 44. 87 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Basic Kanban Concept The basic concept of a Kanban system can be easily observed in a supermarket. In a supermarket, every item has a defined inventory location that holds a specific quantity of the item. Customers select the required quantity of a specific item and proceed to the checkout counter. At the checkout counter, the cashier scans each item and a signal will be transmitted to the supermarket’s database, indicating the items part number and quantity that has been “consumed”. Once a certain quantity of a specific item has been consumed, a supermarket employee will take for example a carton of that item from the warehouse and refill the shelf-space in the store.
  45. 45. 89 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Single-Card Kanban In a single-card or one-card Kanban scheduling system, a “Signal” Kanban card is taken from the Kanban location once a defined minimum stock quantity has been reached. The card is then for example placed on a Kanban board, signaling the need for a stock replenishment order. The “supplier” process responsible for the replenishment of the Kanban location schedules its production based on the Kanban board and replenishes the Kanban location. The minimum stock quantity that signals or triggers the replenishment request needs to assure that the remaining on hand inventory is sufficient until the replenishment stock arrives and is based on the average consumption, consumption fluctuation, and replenishment lead time.
  46. 46. 91 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Dual-Card Kanban A dual-card or two-card Kanban scheduling system uses "Withdrawal" and "Production" Kanban cards. One card is attached to each container holding a pre-defined quantity of items. To relocate or move a container from the “supplier” process to the “customer” process for consumption, the attached “Production” card is removed from the container and placed on the Kanban board. The “Withdrawal” card is then attached to that container and the container is moved to the “customer” process for consumption. The “supplier” process schedules production based on the cards on the Kanban board and pre-defined scheduling rules. Once a container of items has been produced, a “Production” card is removed from the Kanban board and attached to the container.
  47. 47. 93 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Dual-Card Kanban – Phase 2 “Supplier” Process “Customer” Process Kanban Board Phase 2: “Customer” process places the “Production” card of a full container on the Kanban board and replaces it with the “Withdrawal” card from the empty container. Standard Container (full) Standard Container (empty) “Production” Card “Withdrawal” Card
  48. 48. 95 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Dual-Card Kanban – Phase 4 “Supplier” Process “Customer” Process Kanban Board Phase 4: “Supplier” process produces new items and attaches the “Production” card from the Kanban board to the full container. Standard Container (full) Standard Container (empty) “Production” Card “Withdrawal” Card
  49. 49. 97 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Kanban Example A very effective application for a dual-card Kanban scheduling system is the “decoupling” of two very different sub-processes, for example a machining process and an assembly process. A machining process is often fairly automated, resulting in high depreciation costs, and requires significant setup time to change over from one product to another, resulting in low utilization when producing small batches of different items. An assembly process is often less capital intense and requires no or very little changeover time.
  50. 50. 99 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – FIFO Lane • In some cases a FIFO Lane between two decoupled processes can be used to substitute for a Supermarket. A FIFO Lane is like a chute that can hold only a certain amount of inventory, with the supplying process as the chute entrance and the customer process at the exit. • If the FIFO Lane gets full, the supplying process must stop producing until the customer process has used up some of the inventory. Supplying Process Customer Process SUPERMARKET FIFO Lane max. 20 pieces A B FULL ? Kanban
  51. 51. 101 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Sequenced Pull • Sometimes one can install a “Sequenced Pull” between 2 processes, instead of a complete Supermarket or a FIFO Lane. • Sequenced Pull means that the supplying process produces a predetermined quantity of parts (e.g. one subassembly) directly to the customer process’ order. This works if lead time in the supplying process is short enough for “production- or build-to-order”, and if the customer process follows strict “ordering” rules. • Sequenced Pull is sometimes called the “Golf Ball System” because colored balls or disks (that roll nicely down a chute to the supplying process) are sometimes used to provide production instruction.
  52. 52. 103 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Quick Changeover or SMED  Quick Changeover or Single-Minute Exchange of Die (SMED) provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product.  Rapid changeovers are a key to reducing production lot sizes and improving flow.  The phrase "single minute" does not mean that all changeovers and startups should take only one minute, but that they should take less than 10 minutes (in other words, "single-digit minute").
  53. 53. 105 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Quick Changeover Process There are seven basic steps to reducing changeover using the SMED system: 1. OBSERVE the current methodology (A) 2. Separate the INTERNAL and EXTERNAL activities (B). 3. CONVERT (where possible) internal activities into external ones (C) (pre-heating of tools is a good example of this). 4. STREAMLINE the remaining internal activities, by simplifying them (D). Focus on fixings – For example, it is only the last turn of a bolt that tightens it - the rest is just movement (waste). 5. STREAMLINE the external activities, so that they are of a similar scale to the internal ones (D). 6. DOCUMENT the new procedure, and actions that are yet to be completed. 7. DO IT ALL AGAIN: For each iteration of the above process, a 25-35% improvement in set-up times should be expected, so it may take several iterations to cross the ten minute line.
  54. 54. 107 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Quick Changeover – 2. Separate Activities 2. Separate the Internal and External Activities  Once the team has a clear understanding of the key activities involved in a changeover, each step needs to be classified using one of the following three categories.  Waste – Activities which do not add value to the changeover or setup  Internal - Activities that can only be performed while the equipment is shut down  External - Activities that can be performed without shutting down the equipment  The results will be documented in the same spreadsheet created in Step 1.
  55. 55. 109 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Quick Changeover – 4. Internal Activities 4. Streamline and simplify the remaining Internal Activities  In Step 4 the team focuses on those activities that currently need to be performed during the equipment shut down, means the internal activities, and develops solutions to simplify or speed up those activities.  Examples include,  it is only the last turn of a bolt that tightens it - the rest is just movement (waste)  usage of quick-release fasteners instead of bolts and nuts  usage of stoppers to quickly position jigs  usage of locating pins and holes to eliminate time consuming adjustments
  56. 56. 111 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Quick Changeover – 6. Document & Standardize 6. Document and implement the new Changeover Process  Once a new and improved Changeover Process has been established, it needs to be properly documented, all employees involved need to be trained, and a new baseline for the new reduced total changeover time needs to be established.
  57. 57. 113 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Level Production Volume • A tool that some organizations use to help level both the mix and the volume of production is a load-leveling box. • A load-leveling box has a column of Kanban slots for each pitch interval, and a row of Kanban slots for each product type. In this system Kanban indicate not only the quantity to be produced, but also how long it takes to produce that quantity (based on Takt Time). • Kanban are placed (loaded) into the leveling box in the desired mix sequence by product type. Supplying Process Customer Process Customer Process C max. 50 pieces FIFO LaneB max. 20 pieces DFIFO Lane CUSTOMER Schedule for Pacemaker Process
  58. 58. 115 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Managing the Work • The third consideration that should drive the future state design and development focuses on the stabilization and sustainability of the implemented changes and improvements. • Continuous performance review and improvements need to be imbedded into the management of the value stream. • Many organizations fail with the transformation of a value stream because they don’t put a robust system and measures in place to address the above challenges. • Every value stream needs at least three to five relevant, accurate and precise Key Performance Indicators (KPIs) that are tracked on a regular basis. • Common indicators include Time, Cost, Quality, Safety, and Satisfaction/ Morale.
  59. 59. 117 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – The Development Process 1. Develop a Charter 2. Establish the Team 3. Document Current State 4. Analyze Current State 5. Design Future State 6. Create Transformation Plan 7. Execute - Execute - Execute
  60. 60. 119 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Future Design Questions The Future State Design Questions include … • General Questions • What are the business issues we like to address? • What does the customer want? • How will we monitor value stream performance? • Which process steps or activities add value or are necessary non-value-adding? • How can we reduce delays between activities or process steps? • How can we reduce work effort and other expenses across the value stream? • How can we improve the quality of incoming work at each activity or process step? • … Think “What”, not “How”.
  61. 61. 121 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Sequencing and Pacing • Are process steps being performed too early or too late in the value stream? • Are key stakeholders engaged at the proper time? • Can process steps be performed concurrently (in parallel)? • Would staggered starts improve flow? • Can we balance the workload to achieve greater flow (via combining or dividing activities)? • Do we need to consider segmenting the work by work type to achieve greater flow (with rotating but designated resources for defined periods of time)? • …
  62. 62. 123 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Future Design Questions The Future State Design Questions include … • Specific Questions • Technology • Is redundant or unnecessary technology involved? • Is the available technology fully utilized? • Are the systems interconnected to optimize data entry and movement? • Quality at the Source • How can higher-quality input be received by each process step in the value stream? • Is there an opportunity to standardize or mistake proof activities? • Labor Effort • How can we eliminate unnecessary non- value-adding work, reduce the labor effort in necessary non-value-adding work, and optimize value-adding work?
  63. 63. 125 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Activity Ranking Matrix 10 9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 EFFORT IMPACT Size of the Ball = Size of the Risk 1 2 3 4 5
  64. 64. 127 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – ACME Example Future State
  65. 65. 129 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – The Development Process 1. Develop a Charter 2. Establish the Team 3. Document Current State 4. Analyze Current State 5. Design Future State 6. Create Transformation Plan 7. Execute - Execute - Execute
  66. 66. 131 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Value Stream Mapping – Transformation Plan Execution • Final approval of Transformation Plan within one week of final briefing session • Executive Sponsor and Value Stream Champion/Owner lead the socializing of the Future State Map and the Transformation Plan • Value Stream Champion/Owner • drives overall implementation & change initiative, • support work teams working on realizing the future state map, • troubleshoots roadblocks & obstacles, and • runs scheduled review meetings. • Value Stream Champion/Owner also provides periodic updates to Executive Sponsor (more frequent than review meetings) • Executive Sponsor remains fully engaged, attends review meetings, monitors transformation progress, “goes to the gemba”, address policies, resolve political issues, … • No Execution – No Improvement !!!
  67. 67. 133 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. The End … “Perfection is not attainable, but if we chase perfection we can catch excellence.” - Vince Lombardi
  68. 68. 134 January 23, 2015 – v6.0 This is a partial view only. Please, visit our website www.oec-us.com to review the complete presentation. Terms & Conditions After you have downloaded the training material to your own computer, you can change any part of the course material and remove all logos and references to Operational Excellence Consulting. You can share the material with your colleagues and re-use it as you need. The main restriction is that you cannot distribute, sell, rent or license the material as though it is your own. These training course materials are for your — and your organization's — usage only. Thank you.

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